Dembo & Frampton v Vaisman, Vaisman, Ha, Aaron & Sallis [1997] QSC 34

30323 IN THE SUPREME COURT OF QUEENSLAND Brisbane No.9232 of 1996 Before the Hon. Mr Justice Mackenzie [Dembo & Frampton v. Vaisman & Ors.] BETWEEN: AND: DAVID DEMBO & PETER FRAMPTON JACK V AISMAN, PYOTR V AISMAN, DR QUOC HUAN HA, DR GARY AARON AND DR RAMSAY SALLIS JUDGMENT - MACKENZIE J. Plaintiffs Respondents Judgment Delivered 7 March, 1997 CATCHWORDS: Counsel: Solicitors: Hearing Date: This only, it is PRACfICE AND PROCEDURE - Jurisdiction of Courts (Cross- Vesting) Act 1987, s.5(1) and (2) - Rules of the Supreme Court 0.12 r. 22, 0.22 r. 3, 0.98 r. 5&6 - whether summons under 0.98 r. 6 or setting aside of defendant's conditional appearance should be the first step - whether defendant delayed in applying to have selVice set aside - whether is convenient court - whether filing material relating to facts raising tJiable issues constitutes a submission to the jurisdiction. G. Radcliff for the applicants. P. Corkery for first, second and fifth respondents. Gilshenan & Luton as Town Agent for Reynolds for the applicants. Dunhill Madden Butler as Town Agent for Gillan Lawyers for the first, second and fifth respondents. 26 February, 1997 is/O :: c~pied for the purpos~ o! re~earch private ~tudy ~)e I vvold or fo~ r~publlcatlon In any other way without ---_________2Permlsslon. --------------------~ -- 1 of 5 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane No.9232 of 1996 Before the Hon. Mr Justice Mackenzie [Dembo & Frampton v. Vaisman & Ors.] BETWEEN: AND: DAVID DEMBO & PETER FRAMPTON JACK VAISMAN, PYOTR VAISMAN, DR QUOC HUAN HA, DR GARY AARON AND DR RAMSAY SALLIS JUDGMENT - MACKENZIE J. Judgment Delivered 7 March 1997 Plaintiffs Respondents On 31 October 1996 a writ for moneys due and owing pursuant to an agreement to sell and purchase shares in a company which operates impotence clinics in New Zealand was filed. On 29 November 1996 the first, second and fifth defendants entered a conditional appearance denying the jurisdiction of the court to entertain the action without their consent. The writ contains the following paragraph:- "5. Further or in the alternative, if necessary, the plaintiffs commence these proceedings in this Honourable Court by virtue of the Jurisdiction of Courts (Cross- Vesting) Act 1987(Q)." Under the cross-vesting scheme the Supreme Court of each State is invested with jurisdiction with respect to matters within the jurisdiction of another State Supreme Court or of the Federal Court (subject to the provision relating to "special federal matters"). There is reciprocal legislation in other States and Federal legislation similar in principle to the Jurisdiction -- 2 of 5 -- 2 of Courts (Cross-Vesting) Act 1987 which achieves this. Where a matter has been commenced in the Supreme Court of Queensland ss.5(1) and (2) require the court to transfer proceedings to the Federal Court or the Supreme Court of another State if the circumstances referred to III para.(b) of those sub-sections exist. Because the cross-vesting laws were invoked a contention arose between the parties as to whether the plaintiffs were obliged, pursuant to 0.98 r.6, to take out a summons for directions as a first step or whether having filed a conditional appearance, the defendants who had done so should have moved promptly to have service set aside. Failure to do so renders a defendant liable to have a conditional appearance set aside (0.22 r.3). A summons to set aside the conditional appearance and for judgment against the defendants was filed on 5 February 1997. A South Australian solicitor with the principal carriage of the matter on behalf of the defendants who entered a conditional appearance pressed the plaintiffs' Brisbane solicitors as to whether they proposed to make an application to have this matter heard within the Queensland jurisdiction. The interpretation of the conversation in para.2 of the solicitor's affidavit was in dispute. In any event, a letter was sent on 7 February to like effect and a further letter dated 12 February 1997 referring to the summons specifically referred to 0.98 r.6 and alleged non- compliance with it. There was no evidence before me as to any response to those letters. However I do not place significance on that as the affidavit was sworn on 24 February in Adelaide and read by leave before me. Mr Radcliff for the applicant plaintiffs submitted that there had been inordinate delay in applying to have service set aside. Ordinarily delay of the extent that has occurred in the present case would be unjustifiable. However while there may have been some mutual misunderstanding of the effect of the conversation on 12 December 1996 the South Australian solicitor has acted on the premise that the plaintiffs had the primary responsibility to seek directions and there is no -- 3 of 5 -- 3 evidence to suggest that he was warned that the present application was to be made. Further, while not overlooking the qualification in para. 5 of the writ that the cross-vesting laws are being invoked "if necessary", 0.98 r.5(2) and (3) require the question whether the court is a "convenient court" in which to determine the matter- to be considered if no unconditional appearance has been entered. The question whether a court is a "convenient court" is posed with a view to preventing at the outset abuse of the cross-vesting scheme. (cf. Callinan & Ors v. De Kantzow & Ors, 975 of 1990, unreported, Mackenzie J. 2 August 1990, where the question is discussed in more detail. ). The conditional appearance and rules relating to cross-vesting raise the question which may be broadly described as whether the action should be in this court or elsewhere. It is inherently inefficient for consideration of the question to be fragmented. In my view the most sensible course is for all jurisdictional issues to be dealt with at the one time. In my view a practical course is for the plaintiffs to apply for leave to proceed under 0.98 r.5 and for directions, in the event that leave is granted. The defendants who have entered a conditional appearance should apply to have service of the writ set aside and if so advised make an application under s.5(1) or (2) of the Jurisdiction of Courts (Cross-Vesting) A ct for the transfer of the proceeding of another court. All applications should be heard at the same time. The material in support of the respective applications should thoroughly expose all issues relevant to the question of where the action should be tried. In devising this solution I have found it unnecessary to resolve finally who ought to have made the first move. Since a submission was made that the filing of Mr Vaisman's affidavit constituted submission to the jurisdiction because it traverses facts raising a triable issue, I record that in my view, while it raises a number of issues pertaining to the transactions, it is directed towards the issue of appropriateness of Queensland as a jurisdiction, and does not constitute a submission to the jurisdiction. -- 4 of 5 -- 4 The following orders are made:- l. Within 21 days. the plaintiffs file and serve an application for leave to proceed under 0.98 r.5 of the Rules of the Supreme Court, and for directions in the event that leave is granted (all necessary extensions of time being granted for that purpose). 2. Within 21 days the first, second and fifth defendants file and serve an application to have service of the writ set aside and, if so advised, an application under s.5(1) or s.5(2) of the Jurisdiction of COUlts (Cross-Vesting) Act 1978. 3. The respective summonses be made returnable on a date to be agreed upon by the plaintiffs and the first, second and fifth defendants or, failing agreement, the first available chamber day following the expiration of 21 days from the making of this order. 4. Liberty to apply. 5. Otherwise the summons filed on 5 February 1997 be adjourned to a date to be fixed. 6. Costs are reserved. -- 5 of 5 --