Conveyer & General Engineering Pty Ltd v T&F All States Pty Ltd [2007] QDC 197

DISTRICT COURT OF QUEENSLAND CITATION: Conveyer & General Engineering Pty Ltd v T&F All States Pty Ltd [2007] QDC 197 PARTIES: CONVEYER AND GENERAL ENGINEERING PTY LTD Respondent/Plaintiff T&F ALL STATES PTY LTD Applicant/Defendant FILE NO/S: No 95 of 2007 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane DELIVERED ON: 4 September 2007 DELIVERED AT: Brisbane HEARING DATE: 7 June 2007 JUDGE: Rackemann DCJ ORDER: Application Dismissed CATCHWORDS: Practice and Procedure – s 20 Service and Execution of Process Act – Application for a stay of proceedings – whether District Court of New South Wales is the appropriate Court – Onus COUNSEL: Mr Kidston for the Plaintiff/Respondent Mr Salisbury for the Defendant/Applicant SOLICITORS: Porter Davies Lawyers for the Plaintiff /Respondent Deacons Lawyers for the Defendant/Applicant -- 1 of 8 -- 2 Introduction/the law [1] The applicant/defendant seeks a stay of proceedings pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth) (“SEPA”)1 which provides, in part, as follows: - “(3) the court may order that the proceeding be stayed if it is satisfied that the court of another state that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters. (4) the matters that the court is to take into account in determining whether the court of another state is the appropriate court for the proceeding include: (a) the places of residences of the parties and of the witnesses likely to be called in the proceeding; and (b) the place where the subject matter of the proceeding is situated; and (c) the financial circumstances of the parties, so far as the court is aware of them; and (d) any agreement between the parties about the court or place in which the proceeding should be instituted; and (e) the law that would be most appropriate to apply in the proceeding; and (f) whether a related or similar proceeding has been commenced against the person served or another person; but do not include the fact that the proceeding was commenced in the place of issue.” [2] The applicant contends that the matter should be determined in the District Court of New South Wales. Both that and this court would each appear to have jurisdiction to determine all of the matters in issue between the parties. The determinative issue is whether the District Court of New South Wales is “the appropriate court” to determine the matters in issue, such that the discretion should be exercised in favour of granting a stay. I was referred to a number of authorities concerning the approach to determining an application of this kind. [3] The onus of demonstrating that the court of another state is the appropriate court to determine the matter and that the current proceeding ought to be stayed lies on the applicant. The respondent’s submissions described that onus as “heavy”. Reliance was placed on cases which state that what must be shown is a “clear and compelling” basis for the relief sought (Rick Cobby Pty Ltd v Padesta Transport Pty Ltd (1997) 139 FLR 54 at 58, Programmed Maintenance Services Ltd v The Shell Company of Australia Ltd [2000] QDC 249). That formulation was referred to, but neither endorsed nor expressly disproved of in St George Bank Ltd v McTaggart [2003] 2 QdR 568 where McPherson JA said, at 575: “The question is whether the District Court of Queensland or of Western Australia is the one with which the action has the most real 1 The application sought relief, in the alternative, pursuant to r 16(g) and/or 16(e) of the UCPR’s, but that was not separately pursued on the hearing, and would not lead to a different outcome in any event. -- 2 of 8 -- 3 and substantial connection, and which can therefore be regarded as the natural forum.” And after referring to the “clear and compelling” formulation, said at 574: “It is enough here to say (that the onus is)…satisfying the court on the balance of probabilities that the proceeding ought to be stayed.” [4] I respectfully adopt the formulation of McPherson JA. There will, of course, be cases where the factors which weigh in favour of competing jurisdictions are evenly balanced, such that the applicant for a stay might fail to satisfy the court, on the balance of probabilities, that a stay ought to be granted. That is not to say that the onus on the applicant is any heavier than the balance of probabilities nor is it to say (contrary to s 20(4)), that the fact of the place of issue of the proceedings is taken into account in determining whether the court of another state is the appropriate court. It is simply to recognise that the applicant might fail to discharge the onus, with the consequence that the matter remains where it is. [5] In Colt Industries v Spuds Surf Chatswood [2006] QDC 95, McLauchlan QC DCJ said: “I agree with the submission of the respondent that the issue to be determined in this application is whether the New South Wales District Court has jurisdiction to determine all matters in issue between the parties and whether, on the balance of probabilities, having regard to the factors set out in s 20 (4) (SEPA), that court is the court with which the proceedings has the most real and substantial connection and which could therefore be regarded as the natural forum. It is also correct to say, as it was submitted, that the defendants bear the onus of proof, and that identifying the matters in issue is a prerequisite to determining which court is the appropriate court: See St George Bank Ltd v McTaggart (2003) 2 QdR 568.” His Honour dismissed the application on the basis that: “In the end I am not aware of any factor which to any material degree tips the scales in favour of either court as constituting the appropriate court for the proceedings. It follows that I am not satisfied that the District Court of New South Wales can be so described, as between it and the District Court of Queensland.” The s 20(4) factors (a) Residence of parties and likely witnesses [6] The registered office and principal place of business of the applicant is in New South Wales 2 and, in the case of the respondent, is in Queensland3 . The residence of the parties is balanced. [7] The likely witnesses are mainly in Queensland and a number have indicated that Queensland would be the more convenient forum from their perspective4 . Of the 2 Affidavit of R Benn, Ex RB – 3. 3 Affidavit of L How, Ex LTH – 3. -- 3 of 8 -- 4 twenty-one potential witnesses identified in the material,5 twelve reside in Queensland while only seven reside in New South Wales. One resides overseas while one potential expert witness has yet to be appointed. [8] While acknowledging the numerical balance in favour of Queensland, counsel for the applicant/defendant sought to reduce the weight of that factor by reliance on an assertion, in the affidavit of a director of his client, that a number of the witnesses identified by the plaintiff would likely be called by it, with the consequence that expense and inconvenience to the plaintiff would be reduced. There was also a suggestion that expert witnesses would have to visit the site in New South Wales in order to prepare their evidence. [9] Section 20(4)(a) focuses upon the place of residence of the witnesses, rather than on the identity of the party which might call them. Counsel for the applicant/defendant submitted, in reply, that the identity of the person calling the witnesses might be relevant to the financial circumstances of the parties (s 20(4)(c)). I am also conscious that the list of considerations in s 20(4) is not exclusive. Accepting, for the purpose of the argument, the potential relevance of the identity of the party who might call the witness, it is not a matter to which I am prepared to attach substantial weight in this case. As was submitted for the respondent/plaintiff, it is not for the defendant to dictate to the plaintiff which witnesses it will call in its own case nor can a party, in effect, ‘buy’ the forum of its choice, by offering to transport witnesses from one state to another. In any event, regardless of which party might call them, the costs of Queensland witnesses attending upon trial in New South Wales would form part of the costs of the proceedings, which might be visited upon either the plaintiff or the defendant, depending upon the cost order made upon judgment. [10] In so far as expert evidence is concerned, the defendant has yet to engage its expert and the degree of inconvenience involved in an expert or experts reportedly having to inspect the property in New South Wales, but then give evidence in Queensland, is unclear. It is however, not a matter which in my view, is sufficiently significant in this case to tip the balance, which otherwise favours Queensland. (b) Place of subject matter of the proceedings [11] The matter was argued on the basis that this consideration includes, but also goes beyond, where the causes of action arose 6 . [12] By its statement of claim the plaintiff alleges that, on or about 18 July 2006 it entered into a written agreement with the defendant pursuant to which it would supply, fabricate, galvanise or paint and erect structural steel work for the defendants construction project in New South Wales. The agreement was said to comprise a three page ‘trade contract’ dated 18 July 2006 and a number of earlier documents being an exchange of communications (by facsimile or email) between the parties. 4 See Affidavit of McKechnie. 5 I accept that they are potential witnesses. 6 See paras 23-29 of the applicant’s outline and paras 45-83 of the respondent’s outline. -- 4 of 8 -- 5 [13] The plaintiff also alleges that on or about 16 August 2006 it entered into an oral agreement with the defendant to perform additional work. It is also pleaded that there were eight other agreements to vary. [14] The plaintiff’s claim is for money said to be owed to it for work done pursuant to the agreement/s and for loss and damage consequent upon non-payment. It also has other claims, for costs incurred by reason of what is said to be the defendant’s failure to promptly and/or properly perform some of its work7 and by reason of changes which the defendant is said to have made to relevant drawings8 . It claims damages for breach of contract and/or negligence. [15] The defendant has filed a conditional notice of intention to defend. The affidavit of its director foreshadows that the proceedings will be defended on the following basis: - (a) The defendant denies the existence of a number of the alleged variations to the agreement; (a) The defendant claims a right of set off for the plaintiff’s alleged contravention of the Trade Practices Act, breach of contract, misrepresentation and/or negligence; (b) The plaintiff falsely represented to the defendant that the works would be: (i) completed by 26 September 2006; (ii) conducted in a proper and workmanlike manner; (iii) entirely procured and undertaken within Australia. (c) The plaintiff failed to complete the works on time; (d) The plaintiff failed to provide “connection points” to facilitate addition work by the defendant; (e) The defendant, as a consequence, incurred significant losses, costs and damages in excess of $100,000.00. [16] The works identified in the statement of claim were carried out for the benefit of the defendant’s project in New South Wales and included work on that site. On the other hand, the vast majority of the work performed by the plaintiff pursuant to the agreements was undertaken in Queensland, with less than 15% of the contract sum being referable to work performed in New South Wales 9 . [17] The various alleged agreements and variations thereto were mostly formed in Queensland. There is a dispute as to where the first agreement was concluded. The agreement was effected in the course of a series of communications between the plaintiff in Queensland and the defendant in New South Wales. The applicant/plaintiff contends that the first agreement was concluded in New South Wales, upon the plaintiff’s communication to it of the executed trade contract dated 18 July 2006. The plaintiff contends that the agreement was concluded in Queensland before that point. The additional work agreement, as pleaded, was concluded in Queensland as were the majority of the variation agreements10 . 7 See parts D and E of the Statement of Claim 8 See parts F and G of the Statement of Claim 9 Affidavit of L How, paras [16] – [19]. 10 See paras 59-64 of the respondent’s outline. -- 5 of 8 -- 6 [18] Any loss or damage suffered by the plaintiff was suffered by it in Queensland. Any loss or damage suffered by the defendant was suffered in New South Wales. [19] The causes of action mainly arose in New South Wales. It was submitted for the applicant (and was not disputed by the respondent) that the debt upon which the plaintiff sues is situated in New South Wales, on the basis that the debtor resides there11 (albeit that the money was allegedly payable to a Queensland company, and such payments as had been made had been received from the defendant by way of direct deposit to the plaintiff’s bank account in Queensland). The cause of action against the defendant for the other breaches of contract arose at the time of breach12 , which occurred in New South Wales. The plaintiff’s claim for negligence arose in Queensland, being the place where the loss was suffered, as a consequence of alleged breaches of duty which occurred in New South Wales. The defendant’s claims in contract, negligence and pursuant to the Trade Practices Act would also appear to have arisen in New South Wales. [20] It was submitted, for the plaintiff/respondent that the balance, in respect of this factor, is either balanced or marginally favours Queensland. In my view however, the balance falls somewhat the other way. (c) Financial circumstances of the parties [21] There is insufficient evidence about the financial circumstances of the parties to give weight to this factor. (d) Any agreement about the forum [22] There is no express agreement between the parties about the forum for any dispute. I do not consider that the applicant/ defendant has established that was an implied agreement about that. That conclusion would remain, even if I accepted the applicant’s submission (discussed below) in relation to the express terms allegedly incorporated into the first contract. (e) The law that would be most appropriate to apply [23] The claims in these proceedings relate to: (a) breach of contract; (b) negligence; (c) the Trade Practices Act; and (d) negligent misrepresentation. The Trade Practices Act applies uniformly in Queensland and New South Wales. The law of contract and tort is part of the common law, subject to any statutory change. [24] The applicant’s submission, in this regard, focussed upon the first contract entered into between the parties. It was submitted that the proper law of the contract is New 11 Programmed Maintenance Services v The Shell Company of Australia (supra) at [8]. 12 Gibbs v Guild (1881) 8 QBD 296; Ward v Lewis (1896) 22 VLR 40. -- 6 of 8 -- 7 South Wales. In support of the submission that the parties had evidenced an intention that the law of New South Wales was to govern the contract, it was pointed out that that contract was a standard trade contract issued by the Master Builders Association of New South Wales and incorporated conditions which contain a number of clauses which refer New South Wales legislation. The plaintiff, on the other hand, says that those conditions were not incorporated in the contract. [25] The dispute in relation to the proper law of the contract and, in particular, whether the conditions were incorporated or not arises from the fact that, on the material presently before the court, it would appear that the document transmitted to the plaintiff in Queensland (and then executed and returned), was a three page document consisting mainly of various schedules. Those schedules made reference to other clauses, but it would appear that the three page “conditions of contract”13 was not attached. [26] In identifying express terms of a contract, the search is for any document purporting to set out terms which, the evidence suggests, has been adopted by the parties as “contractual”. Signature is one method of adoption, but is not the only one. It was submitted, for the applicant/defendant, that the conditions were incorporated by reference. [27] I do not propose to resolve that dispute in the context of this interlocutory application. Even if it were accepted that the conditions were, or might be, incorporated and that the law of New South Wales was, or might be, the proper law of the contact, that would not change my conclusion. While the conditions of contract make some reference to statutory requirements and/or New South Wales legislation14 , it was not shown that those references are germane to the dispute between the parties. The applicant did not demonstrate that, with respect to the matters in issue, the New South Wales law which might apply to the contract is substantially different from that which applies in Queensland. I do not consider that this factor carries a lot of weight in the context of this application. (f) Related or similar proceedings [28] There is no evidence of any related or similar proceeding. (g) Other factors [29] The list of factors in s 20 (4) is not exhaustive. All relevant matters in this case have been considered in the context of one or other of the sub-paragraphs to s 20 (4). Nevertheless, to the extent any matter might be thought not to properly fall within the purview of a particular sub-paragraph to s 20 (4), it could still have been considered, so long as it was relevant to determining the appropriate court in the circumstances. 13 See affidavit of How filed 4 June 2007. 14 E.g. Clause 9 (b) requires compliance with “all provisions and requirements, statutory or otherwise”, Clause 14 (a) requires insurance under the Worker’s Compensation Act, clause 18 provides that the dispute resolution clause does not prejudice the right to place a dispute dealt with pursuant to the Building and Construction Industry Security of Payment Act 1999. -- 7 of 8 -- 8 Conclusion [30] The identification of the appropriate forum is not straight forward in this case. There are matters which go either way. I am, on balance, ultimately left unpersuaded that the applicant/defendant has discharged the onus of demonstrating that the District Court of New South Wales is the appropriate forum and that the discretion to grant a stay should be exercised. [31] The application is dismissed. -- 8 of 8 --