Adelaide Concrete Cutting & Drilling Pty Ltd v Marino

Background: the parties and the proceedings

1. Mr Marino is self-represented and lives on the Gold Coast in Queensland. In support of his application, Mr Marino relies on his affidavits sworn on 19 May and 19 July 2021 and an affidavit of Mr Craig Bax sworn on 19 July 2021.
2. The first plaintiff, Adelaide Concrete Cutting & Drilling Pty Ltd (Adelaide Concrete Cutting), carries on business and has its registered office in Adelaide, South Australia. Its sole director, Mr Sergio Pacifico, is resident in South Australia, as is the second plaintiff, Mr Giovanni Parrella, who carries on business in that state. Adelaide Concrete Cutting and Mr Parrella (the plaintiffs) oppose the motion. They rely on two affidavits sworn by their solicitor, Mr Simon Chen, on 8 July and 23 July 2021.
3. The second defendant, Mr Renaldo Polo, is a solicitor with a practising certificate issued in New South Wales. Although he neither opposes nor consents to Mr Marino's application for transfer, Mr Polo read an affidavit he had sworn on 27 July 2021 to correct some factual matters.
4. Mr Polo is the principal of Oracle Law, a legal practice that is registered in New South Wales. Oracle Law's head office is located in Horsley Park, Sydney. Mr Polo has always maintained an office in New South Wales and a sub-office on the Gold Coast, although Oracle Law is not presently registered in Queensland or any other state apart from New South Wales. According to a business card in evidence, Mr Marino was, at one time, a Business Development Manager at Oracle Law.
5. In the proceedings, the plaintiffs allege that Mr Marino was an employee or office holder of Oracle Law, he had provided legal services to Adelaide Concrete Cutting, and represented that he was the owner of that firm and had investment opportunities available for the plaintiffs. The plaintiffs claim that, on or about 23 August 2018, in reliance on representations made by Mr Marino, they each into entered into an Asset Management Agreement with Mr Marino that provided for each of them to invest, and Mr Marino to manage, an amount of their funds (Agreements). They allege that, pursuant to the Agreements, Adelaide Concrete Cutting paid $10,000 and Mr Parrella paid $200,000 to Mr Marino by way of an initial capital investment.
6. The plaintiffs claim that Mr Marino has breached the Agreements and is liable to them under guarantees that were given personally by him as warranties collateral to the Agreements. They also allege that Mr Marino has breached his fiduciary duties and certain financial services provisions under the Corporations Act 2001 (Cth), engaged in conduct in contravention of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (Australian Consumer Law), and acted negligently in breach of his duty of care by failing to act in the manner of a reasonable and responsible asset manager.
7. The plaintiffs further allege that Mr Polo, as the principal of Oracle Law, is responsible for failing to take steps to ensure that legal services were provided in accordance with the relevant laws and is directly liable for Mr Marino's contraventions, including his dissemination of promotional material of Oracle Law which was false or misleading and deceptive and contrary to law. They also claim that Mr Polo is vicariously liable for the negligence of Mr Marino, that he has contravened the Australian Consumer Law by representing that Mr Marino was entitled to engage in legal practice, and that he has breached his duty of care owed to them as clients or prospective clients of Oracle Law.
8. The plaintiffs seek relief by way of damages in the amount of $210,000 against Mr Marino and a declaration that the Agreements are rescinded. As against Mr Polo, the plaintiffs seek an order under the inherent jurisdiction and power of the Supreme Court in the relation to the control and discipline of solicitors that Mr Polo compensate the plaintiffs for the loss and damage caused to them due to his breaches of legal professional obligations or, alternatively, damages in the amount of $210,000.
9. The plaintiffs' claims are defended. Mr Marino contends that he was not an employee or officer of Oracle Law and denies engaging in any conduct in breach of the Agreements or as otherwise alleged. Mr Polo also denies that Mr Marino was an employee or officer of Oracle Law or that Mr Polo has any liability to the plaintiffs as alleged.
10. The proceedings were commenced by the plaintiffs by statement of claim filed on 14 October 2020.
11. On 27 October 2020, the plaintiffs' Sydney-based solicitors, William Roberts Lawyers, instructed a process server to serve the statement of claim on Mr Marino in Queensland and sent emails attaching the statement of claim to Mr Marino at his Oracle Law email address and another email address used by him at the Crystal Blue Group.
12. On 28 October 2020, Mr Marino sent a letter to William Roberts Lawyers in which he acknowledged receiving a copy of the statement of claim but insisted that service be effected on him personally as required by the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), noting that he would respond to the pleading when service had been effected in accordance with those Rules. Mr Marino did not provide an address for personal service and indicated that future correspondence should be addressed to his email address at CBWealth.
13. The website of CBWealth identifies Mr Marino as a member of CBWealth's "New South Wales team" and its "founder and CEO". CBWealth's head office is located in Sydney. Mr Marino is also the sole director, secretary and member of Crystal Blue Group Pty Ltd, a company whose registered office is located in New South Wales. Mr Marino gives evidence that CBWealth and Crystal Blue Group Pty Ltd have not traded in New South Wales since late 2018 and 2019, although I note that he continues to use his CBWealth email as his contact address in these proceedings.
14. After the statement of claim was served on Mr Polo, Sparke Helmore Lawyers were instructed by Lawcover, Mr Polo's professional indemnity insurer, to act for Mr Polo and Mr Marino. On 27 November 2020, Sparke Helmore filed a notice of appearance for each of them.
15. According to the emails in evidence, Sparke Helmore wrote to Mr Marino on 8 December 2020 and informed him of their appointment by Lawcover to investigate and report on Mr Marino's interests pending a grant of indemnity and that they had filed a notice of appearance to protect his interests. Sparke Helmore received no response from Mr Marino.
16. Sparke Helmore again wrote to Mr Marino on 8 and 11 March 2021 to advise that Lawcover would not indemnify him in relation to the plaintiffs' claims, they would be informing the Court of their intention to cease to act, that orders had been made for the filing of his defence by 26 March 2021 and that the proceedings were listing on 1 April 2021.
17. Mr Marino did not accept that Sparke Helmore was authorised to act for him or accept service of the statement of claim on his behalf. He wrote to them to that effect on 16 and 24 March 2021, while also reserving his rights to make a claim upon the policy should he elect to do so.
18. On 24 March 2021, Sparke Helmore served a notice of intention to file a notice of ceasing to act for Mr Marino. On 1 April 2021, they filed a notice of ceasing to act for Mr Marino.
19. Also on 1 April 2021, Registrar Walton made an order under r 10.14(3) of the UCPR that the statement of claim be taken to have been served on Mr Marino on 27 October 2020, being the date on which the document was brought to his attention, and for him to serve a defence by 29 April 2021.
20. On 15 April 2021, freezing orders were made by Slattery J in relation to Mr Marino's assets up to the value of $300,000 on an ex parte application by the plaintiffs. On 19 April 2021, Slattery J made ancillary orders to the freezing orders.
21. Mr Marino filed his defence on 21 April 2021.
22. On 19 May 2021, Mr Marino filed his notice of motion seeking a transfer of the proceedings.

Consideration and determination

1. Section 5(2) of the Cross-Vesting Act provides: (2) Where: (a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court (in this subsection referred to as the first court), and (b) it appears to the first court that: … (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory, the first court shall transfer the relevant proceeding to that other Supreme Court.
2. Section 5(2)(b)(iii) of the Cross-Vesting Act does not confer a discretion but requires this Court to transfer proceedings to another Supreme Court if it appears to be in the interests of justice to do so. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum or that the jurisdiction of the transferor court was irregularly invoked; it is both necessary and sufficient that, in the interests of justice, the other Supreme Court is more appropriate: BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14] (Gleeson CJ, McHugh and Heydon JJ), [62]-[63] (Gummow J) (BHP v Schultz).
3. The interests of justice are not the same as the interests of one party. They include matters relevant to both parties, such as the costs and efficient management of the proceedings. They may also involve a consideration of the connecting factors with one forum which might make it the most appropriate or natural forum for the dispute in that it is the jurisdiction with which the action has the most real and substantial connection: BHP v Schultz at [15], [18]-[19] (Gleeson CJ, McHugh and Heydon JJ), [170] (Kirby J); Valceski v Valceski [2007] NSWSC 440 at [69].
4. The applicant bears the "persuasive onus" of showing that the transfer to the other Supreme Court is appropriate in all the circumstances: James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353 at [100]; Slater v Smith (No 3) [2021] NSWSC 763 at [25].
5. Mr Marino submits that there is no reason for the proceedings to remain in New South Wales as there is little or no connection with this state other than the presence of the plaintiffs' lawyers. He submits that Queensland is the most appropriate forum as it is where he, Mr Polo and the potential witness identified by the plaintiffs reside and is the state for the determination of disputes as provided for by the governing law and jurisdiction clause in the Agreements. Mr Marino also contends that his application for a transfer was brought as soon as practically possible as required by r 44.5 of the UCPR, pointing to the fact that the ex parte substituted service order was made on 1 April 2021 and the transfer application being filed only seven weeks later.
6. In resisting the application, the plaintiffs submit that the proceedings have no connection to Queensland other than the fact that Mr Marino lives there. They submit that the governing law and jurisdiction clause in the Agreements did not preclude them commencing proceedings in New South Wales as it provided for the parties to submit to the non-exclusive jurisdiction of the Queensland courts. They also say that the clause is of little significance as this Court is the more appropriate forum in circumstances where it is alleged that Mr Polo has breached his professional conduct obligations and the relief sought invokes the inherent jurisdiction of the New South Wales Supreme Court to supervise officers of this Court.
7. The plaintiffs submit that there has been significant delay in Mr Marino bringing his application as it is made some seven months after the proceedings were commenced and that it has been brought solely for Mr Marino's convenience, noting that Mr Polo does not join or support the application. They further argue that, as Mr Marino is unrepresented, he does not face the cost or prospect of having to obtain new legal representatives or pay for any legal representatives to travel interstate for the final hearing of the matter, unlike the plaintiffs.
8. In this case, what arises for determination is a dispute between parties who are located or resident in South Australia and Queensland. While accepting that there is some uncertainty about whether Mr Polo will permanently move back to New South Wales or to continue to live in Queensland, he currently resides on the Gold Coast and spends less time in New South Wales than he ordinarily would due to the COVID-19 pandemic. In addition to the location of the individual parties, it is also unclear on the evidence on this application whether the only other potential witness identified by the plaintiffs, Mr Kamkolkar, resides in New South Wales or in Queensland, or whether he will, in fact, be called.
9. While the location of the parties and witnesses may not point in favour of New South Wales being the more appropriate forum for these proceedings, in my view, the balance of convenience based on this factor is of less import than it may have been in the past. It is well accepted that witnesses may give evidence remotely and, in the context of the current COVID-19 pandemic, it is entirely possible that there would be no requirement for the parties and their legal representatives to appear in person, with the proceedings being conducted through audio-visual link. That said, I accept the plaintiffs' submission that they would be inconvenienced if the proceedings were to be transferred to Queensland and heard in person. A change of venue would result in some cost to them from having to retain new lawyers or, alternatively, from transporting their current legal team to appear in Queensland.
10. In my view, the issue of delay is a relevant factor but not of great weight in this case. While accepting the plaintiffs' submission that Mr Marino could have brought on his application for transfer earlier, the proceedings are at a relatively early stage and have not yet been set down for hearing. Nor do I place much weight on the fact that freezing orders have been made in this case, as the plaintiffs submitted. There is no reason why the Queensland Court could not supervise and manage those orders going forward if the case were transferred.
11. Other than the location of Mr Marino, there appear to be no substantive connections to Queensland. The representations were alleged to have been made by Mr Marino in emails using his Oracle Law email address and during an in-person meeting in Adelaide in 2018. There is no evidence as to the place of execution or performance of the Agreements.
12. As to the choice of forum and governing law clauses of the Agreements, cl 11.1 of the Adelaide Concrete Cutting Agreement and cl 12 of the Parrella Agreement state: Governing Law This Agreement must be governed by and construed in accordance with the laws of Queensland, AUSTRALIA and the parties submit to the non-exclusive jurisdiction of the courts of Queensland, AUSTRALIA. This clause shall survive termination of this agreement.
13. Insofar as these clauses provide for the contractual choice of law to be the laws of Queensland, the claims pleaded in respect of the Agreements do not raise any issues of law that are unique or peculiar to that state such that it would make that forum more appropriate than New South Wales. There is one common law of Australia that will govern the contractual claims made in this case which, in essence, will raise issues regarding the proper interpretation of the Agreements, whether Mr Marino is in breach and what, if any, relief should be granted. The agreed choice of law is also of no application to the non-contractual claims made in the proceedings, such as the statutory claims under the Corporations Act and the Australian Consumer Law, the fiduciary duty and negligence claims, and the claims made against Mr Polo.
14. A choice of law clause accompanied by an agreement for the parties to submit to the non-exclusive jurisdiction of the same jurisdiction has, in some cases, been considered to carry particularly persuasive weight and be decisive on an application to transfer under s 5(2) of the Cross-Vesting Act: see, for example, Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652 at [18]-[20]; Taurus Funds Management Pty Ltd v Aurox Resources Ltd [2010] NSWSC 1223 (Taurus Funds Management) at [38]-[39]; Finstro Securities Pty Ltd v Gosatti [2021] NSWSC 635 (Finstro Securities) at [29]-[30].
15. Relevantly, in each of Taurus Funds Management and Finstro Securities, the applicants sought to transfer proceedings away from the jurisdiction identified in the non-exclusive jurisdiction clauses to which the parties had agreed to submit.
16. In this case, Mr Marino seeks to transfer the proceedings to the nominated jurisdiction. The plaintiffs referred me to cases in which courts have treated a non-exclusive jurisdiction clause as being of limited weight in a transfer application where a party had properly commenced proceedings in a jurisdiction different to that nominated: see, for example, Techtronic Industries Pty Ltd v Mitre 10 Australia Ltd [2008] NSWSC 740 (Techtronic); Santos Ltd v Helix Energy Services Pty Ltd (2009) 28 VR 595; [2009] VSC 282; Plantagenet Wines Pty Ltd v Lion Nathan Wine Group Australia Ltd [2006] FCA 247 (Plantagenet Wines); PEP Community Services Inc (t/as PEP Community Services) v Job Futures Ltd [2008] FCA 1264.
17. In my view, the cases to which I have referred highlight that the existence of a non-exclusive jurisdiction clause is one of various factors that go towards determining whether it is in the interests of justice to transfer proceedings. Where there is no suggestion that the court in which the proceedings have been commenced cannot properly deal with the dispute, there is no distinguishing feature that makes the governing law to be applied by the nominated court significant to resolution of the controversy, and the other objective factors are finely balanced, little weight may be given to the agreed non-exclusive jurisdiction clause: Techtronic at [13]; Plantagenet Wines at [61].
18. In my view, this is such a case. The non-exclusive jurisdiction clause represents an agreement between the parties concerning their preferred venue. However, as the plaintiffs submit, it does not mandate that all disputes are to be determined in the nominated jurisdiction. The evidence does not disclose the reason as to why Queensland was chosen as the non-exclusive forum, although I would infer that it was chosen simply because of the location of Mr Marino given there are no other factors or substantive laws raised by the Agreements that disclose a connection with that state
19. Further, the claims made and the relief sought against Mr Polo seek to invoke the inherent jurisdiction of the Supreme Court of New South Wales in relation to the control and discipline of its solicitors. The plaintiffs' claims against Mr Polo relate to his conduct as a lawyer registered in New South Wales and a principal of a legal practice that is also registered here. The summary supervisory jurisdiction of this Court over solicitors in this state is well established. The compensatory limb of that jurisdiction extends beyond the control of solicitors who have acted in litigation and may apply to cases of breaches of professional duty by negligence of a culpable quality: McIlraith v Ilkin [2007] NSWSC 911 at [10]-[11].
20. Under Queensland law, Mr Polo is not a local practitioner. His home jurisdiction is New South Wales, being the state in which his Australian practising certificate was issued: Legal Profession Act 2007 (Qld), s 8(1). While s 13(2)(a) of the Legal Profession Act 2007 (Qld) provides that the Queensland Supreme Court has inherent jurisdiction and power in relation to the control and discipline of interstate legal practitioners, it does so only where the interstate practitioner is "engaged in legal practice in this jurisdiction", namely in Queensland. As the plaintiffs submit, Mr Polo's evidence on this application, to the effect that he had spread his work for clients equally between New South Wales and Queensland, is a non-specific statement that may or may not suggest he was sufficiently engaged in legal practice in Queensland at the relevant times to enliven the Queensland Supreme Court's inherent jurisdiction to grant the relief sought. It is also not pleaded that Mr Polo engaged in legal practice in Queensland at the relevant times, although there are allegations of breaches by him of the Legal Profession Act 2007 (Qld) based on the existence of an associated office of Oracle Law in Queensland.
21. Relevantly, no direct relief is sought against Mr Polo under the Legal Profession Act 2007 (Qld). Even if there was, based on the pleadings and the limited evidence on this application, I am not satisfied that Mr Polo would be subject to the control and discipline of the Supreme Court of Queensland based on its inherent jurisdiction or that that Court would necessarily have the power to grant the relief sought by the plaintiffs against Mr Polo if the proceedings were transferred: Legal Profession Act 2007 (Qld), ss 13(2)(a), 78.
22. It follows that I accept the plaintiffs' submission that the Supreme Court of New South Wales was an appropriate forum in which to have brought their claims for relief against Mr Polo and there are substantive law issues which make it an appropriate forum to hear and determine the dispute. In my view, the existence of the governing law and non-exclusive jurisdiction clause should be given little weight in this case and the presence of Mr Marino and Mr Polo in Queensland is outweighed by the other factors in this case. Those factors are the jurisdictional and substantive law issues raised by the claims made and relief sought against Mr Polo, the fact that the transfer application was made more than seven months after the proceedings were commenced and, if granted, would likely result in additional costs to the plaintiffs and further delay to the proceedings. While not determinative, it is also relevant that Mr Polo did not support Mr Marino's application or seek to raise a change of forum to Queensland himself. As Mr Polo acknowledged in his written submissions, he has an office in New South Wales and it would not be proper for him to argue that the matter should be transferred on the basis that he is resident in Queensland.
23. Ultimately, the Court must make a "nuts and bolts management decision" as to which court, in the pursuit of the interests of justice, is the more appropriate forum to hear and determine the substantive dispute: Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 714, cited in BHP v Schultz at [13]. Where, as here, the proceedings were properly commenced and have been conducted in this state for over ten months and there is no preponderance of connecting factors to the other forum, I am not satisfied that it is in the interests of justice for the proceedings to be transferred on the basis that the Supreme Court of Queensland is the more appropriate forum. Accordingly, Mr Marino's application for transfer under s 5(2) of the Cross-Vesting Act is refused.
24. The usual order under the UCPR is that costs follow the event: r 42.1. While Mr Marino submitted that costs should be in the cause, I see no reason why that usual rule should not apply given the discrete nature of the contested application and the plaintiffs' success. I note that, although he appeared at the hearing, Mr Polo did not seek any order for costs against the first defendant.
25. For these reasons, I make the following orders: 1. The notice of motion filed by the first defendant on 19 May 2021 be dismissed. 2. The first defendant to pay the plaintiffs' costs of the motion, as agreed or assessed.

Amendments 17 August 2021 - 17 August 2021 - coversheet amended DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 August 2021