McIver Transport v Byrne [1999] NSWSC 1010 | Case summary

1 HER HONOUR: The plaintiff, McIver Transport Pty Limited, by summons filed on 9 July 1999 sought orders, firstly, that proceedings number 5277/98 pending in the Local Court at Sydney be transferred to this Court and, secondly, an order that those proceedings be then transferred to the Supreme Court of Queensland. 2 It was the plaintiff's submission that power to transfer the proceedings from the Local Court to this Court was to be found in s 8(1) of the Jurisdiction of Courts (Cross-Vesting) Act (1987). 3 By agreement dated 14 May 1997 the defendant agreed to design, manufacture and sell to the plaintiff and the plaintiff agreed to buy twenty-one trailers and four dollies in accordance with specifications set out in a schedule. The defendant agreed to manufacture the equipment in accordance with designs approved by Road User Research Pty Limited. The trailers and dollies were to be delivered to the plaintiff in accordance with a schedule which set out staged delivery dates. The final delivery, being a consignment of four A trailers and two B trailers and one dolly (collectively described as an Icon unit) was to be effected on or before 1 March 1998. Delivery was to be at the plaintiff's premises in Cloncurry, Queensland. The defendant is a resident of New South Wales. The trailers and dollies were manufactured at the defendant's premises in Wagga Wagga. The plaintiff is a resident of Queensland. The agreement was expressed to be governed by the law of Queensland. 4 In early April of 1998 it appears that there was some reluctance on the part of plaintiff to accept delivery of the final Icon unit. Prior to that time modifications had been carried out by the defendant to items of equipment delivered under the agreement. In particular, the trailer bins required modification. The plaintiff contended that they were subject to cracking and warping. The process of strengthening the bins was said to have led to a reduction in their capacity. 5 The plaintiff required the Icon units for the purpose of hauling lead and zinc from the BHP Cannington mine to a rail head at Cloncurry. 6 By letter dated 17 April 1998 the defendant's solicitors wrote to the plaintiff demanding payment of the purchase price of the final Icon unit. By summons filed on 18 April 1998 in the Commercial Division of this Court the defendant claimed damages or, alternatively, an order for specific performance. The defendant pleaded that the agreed purchase price was $575,382. 7 On 8 May 1998 the parties handed up to the court a document headed Terms of Interim Settlement. The parties' agreement was that the plaintiff would take delivery of the final Icon unit and pay to the defendants the sum of $575,382. The plaintiff further agreed to pay to the defendants the sum of $2,181 being the balance of certain invoices referred to in a schedule. The defendants specifically reserved their rights to pursue claims in relation to two invoices numbered 102251 and 102378. The plaintiff reserved its rights as against the defendants. 8 As at the date of the settlement of the proceedings no defence had been filed. It is clear that the plaintiff, at a meeting between the parties and their solicitors on 22 April 1998, had made reference to a claim against the defendants for breach of contract, negligence and breaches of the relevant provisions of the Sale of Goods Act (Qld). The reservation of plaintiff's rights should be viewed in the light of that history. 9 The proceedings came on before Giles J on 22 May 1998. The terms of interim settlement had earlier been handed up but there had been no agreement how the proceedings might be finally disposed of. His Honour heard evidence going to that issue and submissions on 22 May. His Honour noted that the defendants had, by the terms of the interim settlement, obtained the substance of that which they had claimed in their summons. His formal order was that the summons be dismissed but that the plaintiff (the defendant in the subject proceedings) pay the defendant's costs. 10 Prior to the final disposal of the proceedings before Giles J, but after the terms of settlement had been handed up, and consistent with the reservation of their rights in relation to the two invoices, the defendant commenced proceedings in the Local Court by statement of liquidated claim seeking payment of two sums of $16,200 relating to invoices numbered 102251 and 102378 together with the sum of $2,181. The plaintiff had agreed to pay the latter sum in the agreement of 24 April 1998 which led to the settlement of the proceedings in the Commercial Division. It appears that the principal was paid consistent with that agreement, but that as at the date of filing in the Local Court the outstanding amount of $2,181 had not been paid. Subsequently, it appears that sum was paid and that which remains in issue in the Local Court is the sum of $34,400. It is alleged that that sum represents the agreed costs of carrying out modifications to sixteen trailer tubs. The modifications were carried out in two batches and it is contended by the defendants that on or about 31 March 1998 the plaintiff agreed that the sum of $16,200 was a fair price in respect of the modifications of eight of the trailers. In the event it is contended identical modifications were carried out to sixteen trailers. 11 After the commencement of the proceedings in the Local Court, by writ issued on 16 June 1998 the plaintiff commenced proceedings in the Supreme Court of Queensland by Statement of Claim against the defendants seeking damages for breach of the contract entered into on 14 May 1997. The plaintiff claimed a breach of an implied term in that agreement that the design and manufacture of the Icon units would be carried out with due care and skill. It was further pleaded that the units were not of merchantable quality nor fit for the purpose for which they were supplied. It was also pleaded that the defendants had been negligent in the design and manufacture of the units. 12 The defendants applied to have the Queensland proceedings stayed upon the basis that the plaintiff could have asserted its claims by way of defence or cross-claim in the proceedings before the Commercial Division of this Court. 13 The defendants relied on the authority of Port of Melbourne v Anshun Pty Ltd (No 2) (1981) 147 CLR 589. Atkinson J dismissed the defendant's application. She found that there was no possibility that the Queensland proceedings would give rise to conflicting judgments. Her Honour noted that there had been no adjudication on the merits. She further found it had not been unreasonable for the plaintiff not to have raised its present claim by way of defence or cross-claim in the New South Wales proceedings. In that regard her Honour reviewed the authorities and concluded that there is no necessity for a party sued for the price of goods to set up in those proceedings a claim by way of breach of warranty or lose the opportunity to subsequently assert such a claim. 14 On 11 June 1998 the plaintiff filed a notice of grounds of defence in the Local Court proceedings. The plaintiff did not in that defence plead the matters which form the basis of its claim in the Queensland proceedings. 15 On 19 June 1998 the plaintiff prepared a Notice of Motion in the Local Court proceedings seeking to have those proceedings stayed pending the determination of the Queensland proceedings. Craig McIver, the plaintiff's solicitor, swore an affidavit on 17 June 1998 setting out the basis upon which the application for a stay was made. It was contended that the Local Court in Sydney was not an appropriate Court in which to deal with the issues raised by the defendant's Statement of Claim because there was insufficient connection with the Local Court district. Further, the plaintiff submitted that it wished to raise a counter-claim which exceeded the jurisdictional limit of the Local Court. The Queensland Supreme Court was suggested to be the more appropriate court in which to deal with the matter. Finally, it was asserted that the Queensland proceedings involved the same facts and circumstances as the Local Court proceedings. 16 The application for a stay pursuant to s 20(3) of the Service and Execution of Process Act came on before Magistrate O'Shane on 15 January 1999. Her Worship refused the application. It appears that following that refusal the plaintiff sought to appeal against her Worship's determination. The affidavit of Meredith Louise Cridland, a solicitor in the employ of the plaintiff's solicitors, sets out the history of the purported appeal. Apparently there was some difficulty in obtaining a copy of her Worship's reasons and an extension of time in which to lodge the appeal was sought. In the meantime, amendments to Pt 5 of the Justices Act (1902) came into effect. 17 The plaintiff commenced proceedings by way of appeal against Magistrate O'Shane's determination of 15 January 1999 in conformity with the procedures set out in Pt 51B of the Supreme Court Rules pursuant to the newly inserted provisions of Pt 5 of the Justices Act 1902. Those provisions govern appeals from the Local Court arising out of determinations on or after 1 March 1999. 18 The plaintiff's summons came on before Adams J on 12 April 1999. His Honour was constrained to dismiss the proceedings, taking the view that they were misconceived. It was after that determination that the plaintiff commenced the present proceedings seeking orders under the Jurisdiction of Courts (Cross-Vesting) Act. 19 The matter came before me for hearing on 20 August 1999. The proposed transfer of the Local Court proceedings to this Court and the further transfer of those proceedings to the Queensland Supreme Court was opposed by the defendants. Mr Aitken, who appeared for the defendants, submitted that the Local Court proceedings had been commenced well over a year ago and it was likely they might be disposed of in the near future. It was Mr Aitken's submission that the Local Court proceedings are a discrete claim and that his clients ought not be denied the opportunity to have it heard promptly. In particular, Mr Aitken placed emphasis on the fact that the plaintiff's defence did not in terms raise the matters the subject of the Queensland proceedings. 20 Mr Parker, who appeared for the plaintiff, conceded that to be the case. Mr Parker sought an adjournment to obtain instructions as to whether the plaintiff wished to seek leave to amend its defence in the Local Court or to raise by way of cross claim the matters raised in the Queensland proceedings. 21 The application was stood over for further hearing to today. When it came on this afternoon Mr Parker sought leave to file an amended summons together with an affidavit of his solicitor, Mr McIver, annexing thereto a draft of a proposed cross-claim. Leave was granted to file the amended summons. By that summons the plaintiff claims, firstly, an order that proceeding No 5277/98 pending in the Local Court at Sydney be transferred to this Court. Secondly, leave to file the cross-claim, being Annexure A to the affidavit of Craig Douglas McIver, sworn on 24 August 1999, in the proceedings so transferred. Thirdly, an order that the proceedings so transferred be then transferred from this Court to the Supreme Court of Queensland. 22 Mr Aitken relied on a further affidavit of Warwick Archibald Colbron sworn on this date. That sets out something of the progress of the Local Court proceedings over the past week. Relevantly, it establishes that no application has to date been made in the Local Court to file an amended defence. Further, that at a call-over on 23 August 1999 Mr Hield, appearing for the plaintiff, provided an estimate to the court that the hearing would take between one-half day to one day. The matter has been stood over to 1 September 1999. The Registrar has indicated that the proceedings may be heard in the week commencing 22 November 1999. 23 Mr Aitken opposes the making of the orders sought in the amended summons. Again, he relies on the circumstance that the proceedings were commenced in the Local Court in May 1998. It is submitted that his clients ought not be denied the opportunity to have their claim resolved promptly. On the last occasion Mr Aitken drew my attention to the circumstance that Road User Research Pty Limited had been joined as a defendant in the Queensland proceedings. It was Mr Aitken's submission that the Queensland proceedings were likely to be lengthy and to raise issues quite outside the scope of the Local Court proceedings. 24 On the face of things, the proceedings in the Local Court are wholly distinct in the sense that they raise discrete legal and factual issues when viewed in comparison with the claims advanced in the Queensland proceedings. 25 Mr Parker accepts, in a sense, that this is so, but submits that the proper approach is for the Court, pursuant to s 8(1)(b)(ii) of the Jurisdiction of Courts (Cross-Vesting) Act, to transfer the proceedings to this Court and give leave to file the cross-claim. 26 It is Mr Parker's submission that there is a real area of factual overlap and that proceeding in this way would enable all issues to be efficiently disposed of by the one Court. In that respect Mr Parker places reliance on the observations of Rogers J in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 725: "It is important that full effect be given by the courts to the imaginative and detailed code for ensuring that throughout Australia disputes are dealt with by the one court and that be the court most appropriate for the particular dispute." 27 The power of this Court to transfer proceedings pending in another court in this jurisdiction in order that they might be transferred to the Supreme Court of another State is discussed by Austin J in Heath Group Australasia v Hanning [1999] NSWSC 719. That case involved an application to remove proceedings from the Chief Industrial Magistrate to this Court in order that those proceedings might be heard together with related proceedings transferred to this Court from the Federal Court. His Honour held that by reference to the powers under ss8(1) and 5(1) of the Act "the Supreme Court may remove a proceeding from another court of the State so that it becomes a proceeding of the Supreme Court, in order to transfer the proceeding to the Federal Court". 28 I accept his Honour's analysis and consider that I have the power to transfer the Local Court proceedings to this Court with a view to the transfer of them to the Supreme Court of Queensland. 29 The issue that arises for my determination, consistent with the observations of Rogers J in Bankinvest, is a consideration of where the interests of justice lie. 30 I note, having regard to the pleadings in the Local Court which were completed by the filing of a notice of grounds of defence in June of 1998, that the legal issues raised are discrete. They do not seem to me to overlap with the issues raised in the plaintiff's Statement of Claim in the Queensland proceedings. 31 The factual issues, having regard to the pleadings, do not involve a large measure of overlap, although I accept Mr Parker's submission that the witnesses are likely to be the same. 32 As noted, the defendants oppose the making of the orders sought. The fact that both parties do not consent to a transfer of proceedings under the Jurisdiction of Courts (Cross-Vesting) Act is by no means determinative, but it is a matter to be taken into account. However, the critical issue remains a consideration of where the interests of justice lie. 33 I place more significance on the fact that the defendants moved promptly to commence proceedings in the Local Court. Those proceedings involve a limited and distinct issue which, on the evidence, is likely to be resolved in a hearing occupying not more than one day at the Local Court. 34 The plaintiff has delayed in bringing the present application. The reasons for that may be explained having regard to the application for a stay and the abortive appeal. Nonetheless there has been delay and it has the effect of putting off the defendants' claim. 35 I consider, on balance, that the interests of justice do not favour the making of the orders sought by the plaintiff and, accordingly, I propose to dismiss the amended summons. 36 On the matter of costs I note that on the last occasion, that is on 20 August 1999, I made an order that the plaintiff pay the defendant's costs of that day. I was proposing making an order simply in terms that the plaintiff pay the defendant's costs of these proceedings. To that Mr Parker makes two submissions. Firstly, he observes that on the last occasion the issue of my power to transfer the Local Court proceedings to this Court was contested. He says that since I am of the view that I have the power, I ought structure the costs order to take into account time taken up in consideration of this aspect. 37 Secondly, Mr Parker points to the circumstance that a Notice of Motion was filed by the defendants seeking to have these proceedings struck out as an abuse of process. Though I have not granted the relief Mr Parker seeks he submits that there was no basis for an application of that sort. 38 The basis for Mr Aitken's submission that I did not have the power to transfer the Local Court proceedings to this Court related to a contention as to the relationship between the Service and Execution of Process Act (1992) and the Jurisdiction of Courts (Cross-Vesting) Act1987 (NSW). Had I been minded to grant the plaintiff the relief it seeks, Mr Aitken would have sought an adjournment in order to serve notices pursuant to s 78B of the Judiciary Act 1903 (Cth) in order to ventilate that matter. In the event, that was not necessary. I do not consider the way the proceedings were developed before me that it is appropriate to structure the order for costs to take account of the submission by Mr Aitken that I did not have the power to grant the relief that the plaintiff seeks. 39 Accordingly, my order is that the plaintiff pay the defendant's costs of the proceedings. That order does not include any costs incurred in relation to the defendant's motion but it seems to me, on such material as is available, that the proceedings, when they first came before Grove J, being the summons proceeding, went over in what I would describe as the ordinary course. The defendant is entitled to his costs of the proceedings. The only item excluded is the preparation of the Notice of Motion.

McIver Transport v Byrne

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