JUDGMENT
1 HIS HONOUR: By a statement of claim filed on 5 January 2007 Ryner Pty Limited (the plaintiff) seeks an order for the possession of unit 2, 1 Erskineville Road, Newtown, in the State of New South Wales (the land). Veronica Roller as the registered proprietor of the land is the defendant in these proceedings (the Supreme Court proceedings).
2 On 12 August 2004, the plaintiff commenced proceedings in the District Court of New South Wales (the District Court proceedings) by way of a statement of liquidated claim against E-Lawnet.com.au (as first defendant), Scott Hepburn (as second defendant) and Veronica Roller (as third defendant). The District Court proceedings are listed for hearing in that Court on 14 May 2007 for five days.
3 Veronica Roller (conveniently referred to as the defendant) by a Notice of Motion filed on 23 March 2007 seeks orders removing the District Court proceedings to this Court and that Scott Hepburn be joined as the second defendant.
4 Scott Hepburn (conveniently referred to as the second defendant) consents to the transfer of the District Court proceedings to this Court. E-Lawnet.com.au (conveniently referred to as the first defendant) was wound up on 21 November 2006.
5 The defendant's application is founded on the contention that the District Court proceedings may give rise to issue estoppel in the Supreme Court proceedings and the claims to be made in the proposed cross-claims exceed the jurisdiction of the District Court.
6 The plaintiff opposes the application for the following reasons:
(a) the District Court proceedings are listed for hearing for five days from 14 May 2007;
(b) the District Court proceedings is a money claim based on a Deed of Loan and Guarantees;
(c) the defendant has admitted liability to the plaintiff;
(d) the defendant has been in repeated default of the District Court proceedings to prevent the progress of its prosecution by the plaintiff;
(e) the defendant's application is unsupported by evidence; and
(f) the interests of justice weigh against the granting of the application.
7 Section 140 of the Civil Procedure Act 2005 (the CP Act) confers upon the Supreme Court a discretionary power to transfer proceedings from the District Court to the Supreme Court. The discretion is to be exercised having regard to the circumstances of the case and so that justice is best served between the parties: see, for example, Parry v WGE Engineering [2003] NSWSC 337, Trilogy Corporate Solutions Pty Ltd and Anor v Fitzroy Shopfitting & Building Pty Ltd [2006] NSWSC 1026. The onus rests on the party seeking the order.
8 The defendant bears the onus of persuading this Court that, in the particular circumstances of this case, the interests of justice will be best served by transferring the District Court proceedings to the Supreme Court.
9 In the District Court proceedings, the plaintiff claims that on 21 August 2001 the plaintiff lent to the first defendant the sum of $700,000.00 which the defendant and the second defendant agreed jointly and severally to guarantee and that the defendant by way of added security gave a mortgage to the plaintiff over the land. A payment of $460,420.00 was made by the first defendant to the plaintiff on 21 December 2001 and the plaintiff claims the balance said to be owing with interest in the total sum $430,770.00.
10 In the Supreme Court proceedings, the plaintiff seeks to assert its rights under the mortgage over the land claiming that the defendant breached the mortgage by her failure and refusal to pay the monies due under the mortgage.
11 The District Court proceedings are a money claim and the Supreme Court proceedings are a claim for possession of land.
12 The principal contentions for the defendant in the defences to both actions are that the extent of her liability under the guarantee was $500,000.00 and an amount of $131,155.00 (round figures) was not offset by the plaintiff. The defendant contends that her liability under the mortgage and guarantees was discharged when the sum of $460,420.00 was paid on 21 December 2001.
13 It appears to me that there are similar, if not identical, issues in these actions. The plaintiff could not succeed in either action if the defendant's contentions are successful. Furthermore, assuming proceedings in the District Court came to be heard next month an issue estoppel may be created in favour of the successful party in that Court.
14 A further issue arises from the cross-claims which, I am informed, have been filed in this Court and the defendant proposes to file in the District Court. The cross-claims join additional cross-defendants who are solicitors. Declarations are sought that the deed of loan and mortgage be declared void and/or unenforceable. The defendant contends that the District Court does not have jurisdiction to make the declarations sought whereas the plaintiff asserts that the District Court has sufficient power to grant 'equitable relief' (including a declaratory order) provided the underlying cause of action otherwise qualifies under sub-section 134(1)(h) of the District Court Act 1973 as a 'claim or demand for recovery of money or damages'.
15 The attitude adopted by the plaintiff on this issue is curious. The plaintiff was successful before Johnstone DCJ in having the defendant's amended cross-claim (exhibit 1) struck out. The defendant in the amended cross-claim (exhibit 1) claimed damages pursuant to s 82 of the Trade Practices Act 1974 (the TP Act) and orders at law, in equity, or alternatively, under s 87 of the TP Act. The Judge agreed with the submissions of the plaintiff and found that the cross-claims as pleaded did not disclose any cause of action in respect of which the District Court had jurisdiction.
16 Should the defendant be unsuccessful in this motion, it seems to me that similar arguments against the defendant's proposed cross-claims could be successfully advanced in the District Court by the plaintiff.
17 In supplementary submissions the defendant has emphasised that reliance is placed upon s 87 of the TP Act and will amend its cross-claims to make that clear. It appears that there is no dispute that the District Court, as an inferior Court, does not have power to make orders under s 87 of the TP Act: see s 86(2) of the TP Act. The plaintiff, it seems, will object to the proposed amendment.
18 In any event it is unnecessary for the resolution of the present application to determine the extent of the jurisdiction of the District Court. The jurisdictional argument confirms, in my mind, the desirability of both cases being heard by the one Court and preferably at the same time. This Court is the only Court which has the jurisdiction to hear possession cases and the Court's equitable jurisdiction is uncontroversial.
19 Contrary to the plaintiff's argument, the outline of evidence of Michael Ralph Purchas provides, to my mind, support for the defendant's cross-claims.
20 I have considered the material concerning the defendant's delay in the District Court proceedings advanced in the affidavit of Hamish Matthew Cockburn sworn on 4 April 2007. Although the defendant's delay may be partially explained by difficulties experienced in obtaining information from the Australian Crime Commission, the defendant properly acknowledges responsibility for delay. I note with particular disapproval the defendant's failure to comply fully with the consent orders made by Garling DCJ on 6 February 2007. The defendant's explanation for her failure to pay the total amount of the plaintiff's costs is unacceptable.
21 The plaintiff has, however, not been substantially prejudiced by the delay as the asserted debt is secured by the mortgage over the land and there is interest which is payable should the plaintiff succeed. Moreover, the plaintiff decided whilst the District Court proceedings were on foot to commence the proceedings in this Court. It should have come as no surprise to the plaintiff that it is faced with the present motion.
22 The plaintiff's contention of admission of liability is founded upon the execution by the defendant of the Deed dated 21 August 2001. The issue of admission by deed is a matter for determination by the trial Judge and not upon the limited material presently available in this application.
23 The Court when exercising a power conferred upon it by the CP Act must give effect to the overriding purpose of the Act "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" : see s 56 of the CP Act. The objects of the CP Act are best served in having both cases heard by the Supreme Court which has the jurisdiction to hear all the issues in dispute and it is preferable that the cases are heard at the same time.
24 The defendant has persuaded the Court that, in the particular circumstances of this case, the interests of justice are best served by transferring the District Court proceedings to the Supreme Court.
25 The plaintiff contends that, on an order being made to transfer the District Court proceedings, the defendant should be required to pay the amount claimed by the mortgagee into court. The amount claimed by the plaintiff as at 6 February 2007 is $599,767.72. The plaintiff places reliance on Inglis v Commonwealth Trading Bank of Australia (1971-1972) 125 CLR 161. In that case, Barwick CJ [at 168 - 169], with whom the other members of the High Court agreed, dismissed an appeal from the refusal of Walsh J to grant an interlocutory injunction. The circumstances of that case were held to fall within the general rule that an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and, in particular, a power of sale, unless the amount of the mortgage debt, if not in dispute, is paid or unless, if the amount is disputed, the amount claimed by the mortgagee is paid into court.
26 The present application is to be distinguished from 'Inglis'. The motion seeks the transfer of proceedings and is not an application to restrain the plaintiff from exercising its rights under the mortgage. Furthermore, a fact in issue is the amount of the mortgage debt. I do not propose to order that the defendant pay the amount claimed by the mortgagee into court.
27 A further contention of the plaintiff is that the defendant should bear all the plaintiff's costs incurred in the District Court proceedings. The defendant was ordered to pay a substantial amount of costs in the consent orders made by Garling DCJ. Little information has been provided as to how that amount was calculated. The plaintiff, moreover, shares some of the responsibility for the present application by commencing Supreme Court proceedings. I am not persuaded to make the order sought. The defendant should, however, bear the plaintiff's costs in the District Court proceedings incurred after the consent orders were made on 6 February 2007.
28 It is an inevitable consequence of the order for the transfer of the District Court proceedings that the plaintiff will suffer a loss of priority in the hearing of those proceedings. The dictates of justice require an allowance of sufficient time for the cross-defendants to file defences to the cross-claims. Both proceedings will be listed for directions before the Registrar at an early date to enable them to expeditiously proceed in tandem.
29 I do not propose to make an order joining Scott Hepburn as the second defendant in the Supreme Court proceedings as no good reason has been advanced for such an order to be made. An order for the possession of the land is sought by the plaintiff and there is no evidence presently before this court that the second defendant has a relevant interest in the land.