Getex Pty Ltd v National Association of Testing Authorities Australia Limited & Ors

Judgment 1HIS HONOUR : This is an application by the fourth defendant, Mr Jason North, for an order that proceedings on a cross-claim in the Local Court brought by the plaintiff in these proceedings, Getex Pty Limited ("Getex"), be transferred to this court to be consolidated with proceedings instituted in this court by Getex against four defendants including Mr North. 2Proceedings in the Local Court were commenced by Reed Business Information Pty Limited ("Reed Business Information") against Getex in 2009. In those proceedings, Getex has filed a cross-claim against Mr North. The cross claim seeks to incorporate by reference certain claims made by Getex in a defence it has brought to a second cross-claim in the Local Court brought by Mr North. 3Mr North was a director of Getex up to about January or February 2010. Getex alleges he ceased to be a director on 11 January 2010. In its cross-claim in the Local Court, Getex alleges that Mr North spent approximately $43,000 on advertising where the board had resolved that his authority was limited to spending no more than $5,000 a year in aggregate, unless the order for the advertising was signed with multiple signatures. Getex alleges that Mr North made contracts with Reed Business Information for amounts that exceeded his authority; that he failed to obtain multiple signatures; and failed to have the advertising text approved as it said he was required to do. 4Getex also alleges that Mr North had made an agreement with a Ms Kerrie Ford, a director and manager of Getex, to refund money spent on advertising in excess of his authority. 5By the defence to the second cross-claim, which is sought to be incorporated as part of Getex's cross-claim against Mr North, Getex also alleges that during the period of his employment, Mr North was overpaid; that he claimed personal expenses which did not relate to his employment, and was paid those expenses; that he procured payments of two sums on condition that he provide an explanation for the purpose of the payments, but failed to provide it; and that he received payment to undertake a university qualification that he was obliged to refund because he failed to complete the course. Additional amounts totalling about $35,000 are claimed in respect of these matters, in addition to the amount of $43,692 claimed in respect of alleged expenditure on advertising without authority. 6None of these claims appear to have any relationship to the claims brought by Getex against Mr North in a further amended statement of claim recently filed in this court. In that further amended statement of claim filed on 27 October 2011, Getex alleges in substance that Mr North whilst a director and employee of Getex used an opportunity only available to him as a result of his employment with Getex to cause a third party to quote for some work, for which Getex was also to quote. It is alleged that he diverted a number of Getex's clients and corporate opportunities to competitors of Getex, including the third defendant in the Supreme Court proceedings, Parsons Brinckerhoff Australia Pty Limited ("Parsons Brinkerhoff"). Parsons Brinckerhoff is sued for enticing employees, including Mr North, to leave employment with Getex. 7In the Supreme Court proceedings Getex alleges that Mr North used confidential information to divert client contacts and opportunities. It alleges that confidential information so used included information about the plaintiff, including its clients' projects, pricing, tendering, working methods, staff and general operations of the plaintiff's business. Getex also alleges that Mr North made misrepresentations to potential clients about the plaintiff. 8None of these allegations seems to have any relevance to any of the claims in the Local Court that I have hitherto described. 9The Local Court proceedings are listed for hearing next week. I am told that two days have been set aside. 10There are four defendants in the Supreme Court proceedings. The first is National Association of Testing Authorities Australia Limited. The second is a Mr Torley. The third and fourth are Parsons Brinckerhoff and Mr North. Counsel for Mr North submits that the Local Court proceedings should be transferred to be heard with the existing claim in the Supreme Court, because that will be quicker and cheaper and will allow all claims to be heard at the one time. 11It will certainly not be a quicker procedure because the claims in the Supreme Court are not at all advanced, whereas the Local Court proceeding is ready for hearing. Nor do I think it would be a cheaper course, because it would require three parties, namely, National Association of Testing Authorities, Mr Torley and Parsons Brinckerhoff, to attend whilst claims that have no relevance to them are litigated. 12But for one matter, I think it would be clear that there is no overlap between the proceedings and no ground for staying or transferring Local Court proceedings. I do not accept that the fact that the transactions the subject of both proceedings may have occurred over the same period of time, or the fact that in both proceedings it is alleged that Mr North breached duties he owed as employee and director, shows any overlap of the real issues. 13The qualification is this. Another of Getex's claims in the Local Court proceedings is a claim that when Mr North's employment with Getex ceased, he took items of company property with him and failed to return them. The property he is said to have taken and not returned is alleged to be: " a. Documents comprising client lists, price lists and contact details; b. A memory card from a mobile phone handset; c. A Company shirt bearing its logo; d. 'electronic' documents comprising: i. Details of an investigation of equipment for setting up asbestos air monitoring laboratory; ii. Course notes; and iii. Copies of ARCP's [sic] ; iv. Voluminous quantities of copies of various Company documents including typical reports v. A desktop computer. e. A rotameter marked R12 and bearing a sticker showing it was due for calibration on 20/5/10. (the Property). " 14There may be a factual overlap in relation to this claim and the claims in the Supreme Court. Thus, it may be Getex's case that Mr North misused the property he is said to have retained after termination of his employment, and that that was a misuse of confidential information as alleged in the Supreme Court proceedings to divert corporate opportunities from the plaintiff to Parsons Brinckerhoff. In the Local Court proceedings, the question of what use Mr North made of any of the items he is said to have retained would not be a relevant issue. But it is possible that findings might be made as to what documents he did keep that could be relevant to the Supreme Court proceedings. The question is whether that is a sufficient reason either to transfer the whole of the Local Court proceedings or to order a stay of that part of Getex's claim in the Local Court, assuming that there is power to make such an order. 15I do not think that that single issue warrants a transfer of the entire Local Court proceedings. That is because for the reasons I have given the balance of the Local Court proceedings raised discrete matters, and it would create delay and involve an increase in costs for them to be transferred to be heard with the Supreme Court proceedings. 16Section 142 of the Civil Procedure Act 2005 gives this Court power to order a stay of the proceedings in the Local Court. That raises a question as to whether there is a power to stay a particular claim made in the proceedings in the Local Court. The word " proceeding " takes its meaning from the statutory context in which it appears, and the objects of the legislation in question. It may mean the whole of the process that comes before the court under the umbrella of one court file number. It may mean a cause of action, or it may mean a step in an action. 17Sections 140 and 142 of the Civil Procedure Act should be given a purposive construction consistent with achieving the objects in s 56. Consistently with attaining those objects, the power to order a transfer of proceedings or to stay proceedings should be understood as including a power to transfer or stay part of proceedings. 18On balance, I do not think that the just, quick and cheap resolution of the issues between these parties would be advanced by staying or transferring this particular part of the proceedings in the Local Court. It may well be the case that the Local Court makes a finding as to what property of the company, if any, Mr North retained. I accept that that could then be relevant to the Supreme Court proceedings. If that creates an issue estoppel, then so be it. The very purpose of the doctrine of issue estoppel is to prevent re-litigation of the facts once they have been subject to judicial determination. 19The claim in question appears to be only a small part of the various claims to be decided in the Local Court, and any decision by the Local Court as to what property was retained and should be returned would not be a decision as to whether any improper use of the material was made. Any factual finding made by the Local Court on these questions, which might give rise to an issue estoppel, should not embarrass the determination of the issues in this court. 20For these reasons, I order that the fourth defendant's notice of motion filed on 23 November 2011 be dismissed with costs. 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: 20 December 2011