Incafe Restaurant Pty Ltd v Complete Coffee Pty Ltd

Date of orders: 15 October 2025

Decision date: 15 October 2025

Jurisdiction: Common Law

Before: Cavanagh J

Decision: (1) Pursuant to s 140 of the Civil Procedure Act 2005 (NSW), the proceedings before the Local Court bearing case number 2024/255800 (including the cross-claim) be transferred to the Supreme Court.
(2) Pursuant to s 65(1)(b) of the Civil Procedure Act, InCafe Restaurant Pty Ltd and Ruoliu Xie be granted leave to rely upon the amended cross-claim filed without leave on 18 September 2025.
(3) InCafe Restaurant Pty Ltd and Ruoliu Xie to pay Complete Coffee Pty Ltd’s costs thrown away by reason of the vacation of the hearing date in the Local Court.
(4) The costs of this application be costs in the cause.
(5) Complete Coffee Pty Ltd is to serve any additional evidence on which it relies by 14 November 2025.
(6) InCafe Restaurant Pty Ltd and Ruoliu Xie are to serve any evidence in reply by 28 November 2025.
(7) List the matter for hearing on 9 February 2026 with an estimate of two days.
(8) Make the usual orders for hearing.

Catchwords: CIVIL PROCEDURE – jurisdiction – transfers to and from other courts – application to transfer proceedings from Local Court to the Supreme Court – whether sufficient cause shown to justify the transfer – where the Local Court does not have jurisdiction to deal with aspects of the defence and cross-claim – proceedings transferred
COSTS – party/party – costs thrown away by reason of the vacation of the hearing date – costs where the plaintiff seeks an indulgence – transfer of the matter to a court with appropriate jurisdiction not an indulgence – costs in the cause

Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 140

Cases Cited: Riaz v Technical and Further Education Commission [2024] NSWSC 474

Texts Cited: Nil

Category: Procedural rulings

Parties: InCafe Restaurant Pty Ltd (First Plaintiff)
Ruoliu Xie (Second Plaintiff)
Complete Coffee Pty Ltd (Defendant)

Representation: Counsel:
R Size (First and Second Plaintiff)
P Farrell (Defendant)
Solicitors:
Legal Vision (First and Second Plaintiff)
Lionheart Lawyers Pty Ltd (Defendant)

File Number(s): 2025/00376661

Publication restriction: Nil

REVISED EX TEMPORE JUDGMENT

1. Pursuant to a summons filed on 1 October 2025, the plaintiffs, who are defendants in Local Court proceedings, seek orders pursuant to s 140 of the Civil Procedure Act 2005 (NSW) that the proceedings be transferred from the Local Court to the Supreme Court, and further that they be granted leave to rely on an amended cross-claim and defence dated 18 September 2025.

2. Mr Size appears for the plaintiffs and Mr Farrell appears for the defendant. Both counsel provided helpful written and oral submissions.

3. The plaintiffs rely on an affidavit of their solicitor Jodie Thomson, affirmed 30 September 2025. The defendant relies on an affidavit of its solicitor Nazih Touma, affirmed on 10 October 2025.

Background

4. The background to the dispute is that the plaintiffs, who I will call InCafe operates a cafe in Haymarket. The defendant, who I will call Complete Coffee, has been supplying coffee to that cafe for a considerable period.

5. It is asserted by InCafe that at least prior to 2022, Complete Coffee had supplied a coffee machine for free, so long as InCafe ordered coffee beans from Complete Coffee.

6. In or about 2022, Complete Coffee replaced the equipment at the cafe.

7. It is asserted by a representative of InCafe that, at that time, there was a conversation between her and a representative of Complete Coffee to the effect that the trading terms would be extended with some slight variation.

8. Based on the case pursued by InCafe, it seems that the slight variation actually involved InCafe being required to pay a weekly sum of $514 in respect of hire charges for the equipment.

9. This weekly sum was not paid by InCafe. In due course Complete Coffee commenced proceedings in the Local Court against InCafe seeking to recover the debt being an amount which, by this time, has risen to approaching $90,000.

10. Those proceedings were commenced on 11 July 2024. On 30 August 2024, InCafe filed a defence raising claims under the Australian Consumer Law. The matter was case managed in the Local Court including exchange of evidence and a hearing date being set for 11 September 2025.

11. On 1 April 2025, Complete Coffee wrote to InCafe suggesting that there were jurisdictional issues with the defence. There followed further exchanges about these jurisdictional issues.

12. On 25 June 2025, Complete Coffee filed a reply to the defence pleading that the Local Court did not have jurisdiction to deal with aspects of the defence filed by InCafe.

13. Thereafter, InCafe filed an amended defence and cross-claim including an allegation of fraudulent misrepresentation and seeking damages under s 236 of the Australian Consumer Law.

14. The matter was then prepared for hearing and listed for hearing on 11 September 2025. Unfortunately, the hearing did not occur and has been stood over for further hearing in the Local Court next week, 21 October 2025.

15. On 16 September 2025, InCafe sought the consent of Complete Coffee to the transfer to the Supreme Court and to file an amended cross-claim. That consent was not forthcoming and on 1 October 2025, InCafe filed a summons seeking a transfer under s 140 of the Civil Procedure Act.

16. Importantly, Complete Coffee continues to assert that the Local Court does not have jurisdiction to deal with the substantive issues raised by InCafe’s defence. The legal representatives of InCafe agree with that or for more abundant caution have decided to transfer the matter to the Supreme Court so that the substantive issues raised in the defence may be determined.

17. Despite the general agreement between the parties that the Local Court does not have jurisdiction to deal with the substantive part of the defence, Complete Coffee opposes the transfer on four grounds, being:

18. the significant delay in bringing the application;

19. the failure to offer any explanation for the delay;

20. reliance on the overriding purpose of just, quick and efficient disposal of proceedings; and

21. the merits of the defence.

Principles

18. The principles which apply to an application for transfer under s 140 are well known. Those principles were summarised by McNaughton J in R**iaz v Technical and Further Education Commission [2024] NSWSC 474 at [44] (citations omitted):

“The well-established principles informing a discretionary decision pursuant s 140 of the [Civil Procedure Act] are as follows:

(1) A transfer from the Local Court to the Supreme Court is precluded unless the Supreme Court is satisfied there is sufficient reason for hearing the proceedings in the higher court.

(2) The discretion is to be exercised having regard to the circumstances of the case, and so that justice is best served between the parties. It is necessary to consider all relevant facts and circumstances.

(3) The applicant for transfer bears the onus of satisfying the Court that there is ‘sufficient cause’, ‘sound ground’ or ‘good reason’ so that justice is best served between the parties. Such matters typically include a risk that a jurisdictional limit affecting the lower court would be exceeded; where there are complex and important issues; and where the proceedings involved allegations of significant notoriety or public importance.

(4) The test should be considered in accordance with s 56 of the CPA, that is that the overriding purpose of the CPA and rules of the court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(5) ‘Sufficient reason’ permits a wide range of considerations, including impressionistic matters (such as the likely award of damages) and an evaluation of the matters in issue.

(6) Absence of jurisdiction in the lower court provides a reason for transfer.

(7) The possibility of inconsistent findings between courts can justify transfer.

(8) The possibility of findings by lower courts on the proper interpretation of significant and widely used provisions can warrant transfer.”

19. As is often said, the essential question is whether sufficient cause has been shown to justify the transfer. In circumstances in which the cause for the transfer is that the defendant in the Court below will be precluded from pursuing its defence and cross-claim because of the jurisdictional limits of the Local Court ordinarily, there would be little doubt about sufficient cause being shown.

20. This is because, if the application is not successful, the matter will be proceeding in the Local Court and InCafe will be deprived of any substantive defence because there is a written contract which appears, on the face of it (I am not making any actual determination about that), to justify the claim for a debt being pursued by Complete Coffee.

21. It is thus necessary to consider the factors raised by Complete Coffee further to determine whether, in the exercise of my discretion, those factors are sufficient to cause me to reject the application.

Determination

22. Firstly, Complete Coffee raises the significant delay. This dispute has been going on for a number of years. Proceedings were commenced on 11 July 2024. The matter has already been listed for hearing on one occasion in the Local Court when, seemingly, InCafe was prepared to proceed. The matter was listed for hearing next week.

23. The point made by Complete Coffee is a good one in the sense that there has been a significant delay and little explanation is offered for the delay. Having said that, the significant delay, at least in part being the delay between the commencement of the proceedings and this application, only became a live issue and an issue of contention between the parties in mid-2025.

24. It appears to have been Complete Coffee who alerted InCafe to the jurisdictional problem (it maybe that those representing InCafe were aware of it in any event) but once the reply was filed by Complete Coffee, it is plain that InCafe was aware of the issue and needed to make a decision as to what to do about it.

25. The fact that InCafe did not do anything about it before the matter was first listed for hearing in September is also of some significance. I am not sure why InCafe decided not to apply for a transfer before the first date for hearing in the Local Court. Having said that, an inference might be drawn that those representing InCafe have now accepted this, have accepted the point raised by Complete Coffee, or have decided that they are not prepared to take the risk of proceeding with the matter in the Local Court in the circumstances of the defence raised.

26. Further, the real delay is not the delay from July 2024 but the delay from when the reply was filed in June 2025. That is not a delay of years but a delay of a few months. The point about delay is well made by Complete Coffee but it is not a significant delay.

27. In terms of the other issues raised by Complete Coffee, that is, s 56 of the Civil Procedure Act and the merits of the defence, the problem is that whilst it is important that the proceedings be determined in a quick and efficient manner, I must do justice between the parties. If I do not make the orders sought, InCafe will be shut out of running any substantive defence.

28. Further, in terms of the merits point raised by Complete Coffee, it may be that the matters raised by InCafe have no merit, but that is not something I must determine. It seems to me that based on the information provided, this is an issue which must depend on both the terms of the written contract and the terms of any conversations between the parties at the time of entry into that written contract.

29. There is plainly a dispute between the parties as to the terms of those conversations and the effect of those conversations. I am satisfied that InCafe has demonstrated, at least for the purposes of this application, that there is a reasonably arguable case depending of course on any factual findings made by the Court.

30. Further, subject to the readiness of the parties and the willingness of the parties to get on with this case, there really will not be much delay at all, as I can list this matter for a one day hearing in December or a two day hearing in February. This is not a matter where the parties will have to wait a year for an outcome.

31. In all these circumstances, I am satisfied that sufficient cause has been shown to justify the transfer, and I propose to order a transfer.

32. Further, InCafe seeks to amend its cross-claim. The effect of the amendment is really to plead as an alternative, innocent misrepresentation rather than a fraudulent misrepresentation.

33. Whilst Complete Coffee says they may need to get further evidence, it is difficult to anticipate that there will be much by way of time and expense in obtaining that further evidence.

34. In all the circumstances, I make orders 1 and 2 in the summons.

35. Complete Coffee seeks two orders for costs, being:

36. InCafe pay costs thrown away by reason of the vacation of a hearing in the Local Court on 21 October 2025; and

37. as InCafe is seeking an indulgence from the Court, InCafe ought to be ordered to pay the costs of this application.

38. InCafe does not oppose the order that it pay costs thrown away by reason of the vacation of the hearing date in the Local Court (although submitting there may not be any costs) but seeks costs of this application on the basis that it was successful.

39. In terms of the costs thrown away, I consider that InCafe should pay the costs thrown away by reason of the vacation of the hearing date in the Local Court. It is a matter for agreement or assessment as to what those costs might be.

40. In terms of the costs of this application, Complete Coffee relies on a decision of Young v Woodc**ock [2020] NSWSC 415 in which Bellew J suggested that as the party was seeking an indulgence, even though successful, that party should pay the costs.

41. I respectfully take a different approach to his Honour. In circumstances in which, because of the legal issues raised and jurisdictional limitations in the Local Court, it is necessary for the defendant in the Local Court, in this case InCafe, to apply to transfer the matter to a court with appropriate jurisdiction, that party is not really seeking an indulgence. It is something it is required to do to allow it to pursue its defence.

42. Having said that, I do not agree that just because InCafe succeeded on the motion that it should be entitled to costs. The reality is that an application such as this is part of the normal processes of the litigation in particular circumstances such as these, and costs should be costs in the cause.

43. So, the orders I make are orders 1 and 2 in the motion.

Orders

42. I make the following orders:

43. Pursuant to s 140 of the Civil Procedure Act 2005 (NSW), the proceedings before the Local Court bearing case number 2024/255800 (including the cross-claim) be transferred to the Supreme Court.

44. Pursuant to s 65(1)(b) of the Civil Procedure Act, InCafe Restaurant Pty Ltd and Ruoliu Xie be granted leave to rely upon the amended cross-claim filed without leave on 18 September 2025.

45. InCafe Restaurant Pty Ltd and Ruoliu Xie to pay Complete Coffee Pty Ltd’s costs thrown away by reason of the vacation of the hearing date in the Local Court.

46. The costs of this application be costs in the cause.

47. Complete Coffee Pty Ltd is to serve any additional evidence on which it relies by 14 November 2025.

48. InCafe Restaurant Pty Ltd and Ruoliu Xie are to serve any evidence in reply by 28 November 2025.

49. List the matter for hearing on 9 February 2026 with an estimate of two days.

50. Make the usual orders for hearing.

**********