These proceedings concern a claim in contract for payment of legal fees for work performed by the Plaintiff for the Defendant between January 2013 and May 2016. The Plaintiff is a firm of lawyers which conducts its practice in George St, Sydney. The Defendant is a company incorporated in Hong Kong.
The Defence filed in the proceedings in June 2017 raises by way of defence that the work undertaken was not carried out efficiently or with due care and skill and that unnecessary costs were incurred in breach of the implied terms of the costs agreements.
The proceedings were commenced in May 2017 and have proceeded efficiently to this stage with current orders in place for the Defendant to complete service of its evidence by 26 October, the Plaintiff having completed service of its evidence by 28 September 2017. The proceedings are listed for further directions on 2 November 2017.
The Defendant, by way of Notice of Motion filed 22 September 2017 (and as amended in Court on 11 October 2017) seeks transfer of the proceedings to the Local Court of New South Wales. By way of secondary order, it seeks a notation that the preferred venue is Wyong. The order is sought pursuant to s 146(1) of the Civil Procedure Act 2005 (NSW), and the venue of Wyong is sought pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 8.2(1).
Section 146(1) of the Civil Procedure Act 2005 (NSW) provides as follows:
146 Transfer of proceedings to lower court
(1) If the Supreme Court is satisfied, in relation to proceedings before it:
(a) that the proceedings could properly have been commenced in the District Court or the Local Court, and
(b) that any cross-claim in the proceedings could properly have been brought as a cross-claim in the District Court or the Local Court,
the Supreme Court may order that the proceedings, including any such cross-claim, be transferred to the District Court or to the Local Court, as the case requires.
Rule 8.2 of the UCPR provides as follows:
8.2 Change of venue generally
(1) If it appears to a court:
(a) that a fair or unprejudiced trial of a question arising or likely to arise in or in connection with any proceedings cannot otherwise be had, or
(b) for any other reason it is appropriate for the venue of any proceedings to be changed,
the court may, subject to this Part, make an order changing the venue of the proceedings.
(2) The judicial officer before whom proceedings are being heard by the court may direct that proceedings commenced at one location be continued at another location at which he or she is authorised to hear those proceedings.
Also relevant to the application are ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW) which provide relevantly as follows:
56 Overriding purpose
(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
…
57 Objects of case management
(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects:
(a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).
58 Court to follow dictates of justice
(1) In deciding:
(a) whether to make any order or direction for the management of proceedings, including:
(i) any order for the amendment of a document, and
(ii) any order granting an adjournment or stay of proceedings, and
(iii) any other order of a procedural nature, and
(iv) any direction under Division 2, and
(b) the terms in which any such order or direction is to be made,
the court must seek to act in accordance with the dictates of justice.
(2) For the purpose of determining what are the dictates of justice in a particular case, the court:
(a) must have regard to the provisions of sections 56 and 57, and
(b) may have regard to the following matters to the extent to which it considers them relevant:
(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case.
In support of its application, the Defendant relies on the affidavit of Michelle Aitken, sworn 22 September 2017. That affidavit deposed to the asserted connections with Wyong that comprised in essence, the place of business of the solicitors for the Defendant, the address of a possible witness for the Defendant, and the Defendant's business interests in the area, which their main witness, Mr Charlesworth, attends when he is in Australia.
In opposition to the application, the Plaintiff relied on the affidavit of Nathan Thomas Mattock, sworn 5 October 2017. That affidavit comprised a combination of evidence and submissions.
[2]
Applicant's argument
Written submissions were provided by counsel for the Defendant. In short, the Defendant argued that whilst it may well have been appropriate to commence proceedings in the Supreme Court of New South Wales in order to use the Pt 11 service provisions of the UCPR to effect overseas service, there was now no reasonable basis to continue the proceedings in the Supreme Court. It was argued in summary that:
1. It is in the interests of justice that the proceedings be transferred to the Local Court, given the size of the damages sought (namely $46,093.35 plus interest);
2. There is no prejudice to the Plaintiff in having the matter transferred to its "proper jurisdiction" because it will have available to it the common law procedure for enforcing foreign judgments in Hong Kong.
3. Balance of convenience considerations are close to neutral given "technological and transport options" and the prejudice claimed by the Plaintiff does not withstand scrutiny.
In oral argument, it was submitted by the Defendant that the overriding purpose rule and principle set out in s 56 combined with the objects of case management in s 57 and the discretionary considerations set out in s 58(2)(b) of the Civil Procedure Act 2005 (NSW) militates towards transfer of the matter to the Local Court, particularly given the impact of the proceedings on other Supreme Court users and the efficient use of available judicial resources. In support of this submission, reliance was placed on Bodenstein v Hope Street Urban Compassion [2014] NSWSC 174. In that matter, Justice Beech-Jones determined that it was appropriate to transfer defamation proceedings to the District Court given the sum in issue (approximately $180,000), the lack of apparent involvement of any novel principle or new point of law, the likely delays if the matter remains in the Supreme Court, and whether the case should have been commenced in the District Court in the first place. In making that determination, his Honour dealt with the interaction of the object of ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW) and determined the matter should be transferred to the District Court. This decision illustrates the principles relevant to the discretion to transfer.
The parallel argument put forward by the Defendant here was to the effect that the judges of the Common Law Division of this Court sit as judges in criminal cases, they hear personal injury cases of some complexity, and deal with complex insurance and possession claims, and therefore (implicitly) their time would be better spent dealing with those matters rather than these proceedings, involving as they do, a small sum.
It was also argued that there were ways to have the judgment enforced in Hong Kong should that become necessary, in that the common law of Hong Kong will entertain proceedings to recognise and enforce a foreign judgment provided that a foreign court of competent jurisdiction gave the judgment, that the judgment is final and conclusive and the identity of the parties is the same.
It was submitted that there was no evidence that enforcing a judgment by way of the common law as opposed to utilising the Foreign Judgments (Reciprocal Enforcement) Order process was more difficult, however in oral submissions, counsel for the Defendant properly conceded that the statutory procedure "may be more convenient than the other". Counsel for the Defendant then went on to submit that is only one factor this Court should take into account, and that pursuit of enforcement by way of the common law of Hong Kong is not "radically more difficult or complex a proceeding" than the Reciprocal Enforcement Order process.
[3]
Respondent's argument
The Plaintiff made three key submissions. First, on one analysis of s 146, the proceedings did not meet the requirement of s 146(1)(a) in that the proceedings could not have properly been commenced in the Local Court because service of the proceedings outside Australia was required. The Defendant is incorporated in Hong Kong and service would not have been able to be effected in a streamlined way without the ability to use Pt 11 of the UCPR.
It was submitted that part of the question of proper commencement of proceedings includes the capability to serve the initiating document using relevant available court process. Given that there was no agreement that service would be accepted by the Defendant in New South Wales, there was no clarity that substituted service through the Local Court would be successful given the absence of the Defendant from the jurisdiction, and there being no current address for service with a solicitor in New South Wales because the Defendant's previous solicitor was the Plaintiff in these proceedings, the proceeding could not "properly have been brought" in the Local Court.
The second submission was that this Court should not exercise its discretion to transfer the proceedings to the Local Court because if and when the time comes for enforcement of a judgment, there are two potential regimes for enforcement in Hong Kong. The first is statutory, and requires an application to be filed and certain automatic things will follow, whereas the second requires fresh proceedings to be filed, potentially a defence to be filed, evidence regarding jurisdiction of the Local Court to be prepared and served, and a formal determination to be given. It was submitted that whilst those matters may proceed without a hitch, problems can occur when there needs to be an additional analysis and determination by a court in Hong Kong when enforcement is pursued. Supplementary to this point it was argued that it is not consistent with s 56 of the Civil Procedure Act 2005 (NSW) to exercise discretion in favour of transfer of proceedings to a court where there is no corresponding statutory enforcement regime.
The third submission made was that should the Court be minded to transfer the proceedings to the Local Court, a more appropriate venue would be Sydney (rather than Wyong) given that was the location of the transactions that base the statement of claim, it is the location of the Plaintiff and the balance of convenience considerations favour Sydney.
In reply, counsel for the Defendant noted that the Local Court would have been able to deal with an application for substituted service, but not if the Defendant was overseas, and that s 56 considerations are relevant to proceedings in this state managed by courts of this state but those considerations do not necessarily apply to proceedings in another jurisdiction after proceedings in this jurisdiction have been finalised.
[4]
Determination
Whilst it is understandable why it was thought to be appropriate to apply for transfer of the proceedings to the Local Court given the size of the judgment, other concerns militate towards refusal of the application. It appears that there was an (understandable) concern that whilst commencement of these proceedings in the Supreme Court so that overseas service could be effected was reasonable, the continuation of those proceedings in this Court could spark negative comment given the comparatively small amount of the debt sought, but there are other overriding considerations relating to enforcement that suggest the Supreme Court is the appropriate place for proceedings to remain.
Section 57 of the UCPR highlights that consideration should be had to the needs and interests of other litigants and not just those conducting the proceedings in question, as noted by Beech-Jones J in Bodenstein at [8]. However, that consideration is more directed towards the wasting of any court's time with delays and unproductive applications, not just the time of one court in favour of another. The amount of the claim is well within the jurisdiction of the Local Court, that limit being currently $100,000 plus interest, however, a necessary part of the just, quick and cheap disposal of proceedings includes the enforcement of judgments, as dealt with extensively in Pts 39 and 40 of the UCPR.
Commencement of proceedings in a court where there is a corresponding statutory recognition of judgment regime which allows foreign judgments to be registered for enforcement is consistent with an overriding purpose of just, quick and cheap resolution of the real issues in the proceedings. It is not consistent with that purpose to remove the proceedings to a New South Wales court where no such reciprocal enforcement arrangement is in place, necessitating the Plaintiff, if successful, having to commence new proceedings for enforcement in a Hong Kong court to enforce any such judgment.
The matter has progressed efficiently in the Supreme Court. It is almost ready for hearing and can probably be allocated the necessary 1-2 day hearing date shortly.
Whilst the Supreme Court does deal with matters of significance and complexity, it also deals with appeals from decisions of the Local Court which, on occasion, involve amounts less than the amount of judgment sought in these proceedings. It deals with applications for costs of different types and also deals with appeals which involve points of principle but sometimes very small amounts of damages less than the sum sought in these proceedings.
It seems to me on application of the overriding purpose rule that the proceedings were properly commenced in the Supreme Court and, in view of the potential enforcement issues, there are persuasive reasons as to why the proceedings should remain in this Court and not be transferred to the Local Court.
Accordingly, the Defendant's notice of motion is dismissed.
[5]
Costs
On the question of costs, both parties agreed that the usual costs order should follow, namely that costs follow the event. Accordingly, I order that the Applicant Defendant pay the costs of this notice of motion.
[6]
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Decision last updated: 21 February 2018