Seymour v Jaeger

Supreme Court of NSW|2017-01-30|Before: Fagan J

Solicitors: Mr Ian Gregory, Shaddick's Lawyers File Number(s): 2016/310394

Judgment

The plaintiff seeks leave to appeal from a decision of the Local Court at Sydney pursuant to which a permanent stay was ordered under s 20 of the Service and Execution of Process Act 1992 (Cth) of proceedings which he had commenced in that court. His claim in the Local Court was for a sum alleged to be owing to him under a contract. Twenty-one grounds of appeal are set out in the plaintiff's summons. I will summarise those grounds after recording the context of the proceedings.

The defendant's defence in the Local Court

On 16 August 2016 the defendant verified a defence. Therein she admitted that she had authorised the plaintiff to make certain limited inquiries on her behalf but denied that she had agreed to pay the plaintiff a commission or success fee for doing so. The defendant pleaded that the plaintiff's demands for payment in early June 2016 were forceful and intimidating and that he had at that time threatened to bring legal proceedings in respect of them.
In those circumstances, she alleged, her son undertook negotiations on her behalf with the plaintiff. These resulted in the parties agreeing that $10,000 would be paid by the defendant "in full and final settlement of all and any claims which the plaintiff might have against the defendant".
It is common ground that $10,000 was paid by the defendant to the plaintiff on 15 June 2016 but the defendant says that this was in full settlement under the compromise which she alleges, not as part payment of the liability for commission which the plaintiff asserts. The defendant denies that she agreed to reimburse the plaintiff the cost of his airfare from Sydney to Perth and return in mid 2016.

The defendant's s 20 stay application

The plaintiff's Local Court statement of claim was served in accordance with s 15 of the Service and Execution of Process Act. It had attached to it the notice which is required by s 16 of that Act and by reg 4 of the Service and Execution of Process Regulations 1993 (Cth). That notice advised the defendant of her right to apply to the Local Court in Sydney for a stay of the proceedings if she contended that a court of a State other than New South Wales was the appropriate court to determine the claim against her.
On 18 August 2016 the defendant signed an application to the Local Court at Sydney under s 20 of the Service and Execution of Process Act for an order staying the proceedings. Section 20 provides as follows: "20 Stay of proceedings (1) This section does not apply in relation to a proceeding in which the Supreme Court of a State is the court of issue. (2) The person served may apply to the court of issue for an order staying the proceeding. (3) The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters. (4) The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include: (a) the places of residence of the parties and of the witnesses likely to be called in the proceeding; and (b) the place where the subject matter of the proceeding is situated; and (c) the financial circumstances of the parties, so far as the court is aware of them; and (d) any agreement between the parties about the court or place in which the proceeding should be instituted; and (e) the law that would be most appropriate to apply in the proceeding; and (f) whether a related or similar proceeding has been commenced against the person served or another person; but do not include the fact that the proceeding was commenced in the place of issue. (5) The court's order may be made subject to such conditions as the court considers just and appropriate in order to facilitate determination of the matter in issue without delay or undue expense. (6) The court may determine the application for an order without a hearing unless the applicant or a party objects. (7) For the purposes of determining the application, the court may hold a hearing by audio link or audiovisual link. (8) A person who is entitled to practise as a barrister, solicitor or both before a court in: (a) the place of issue; or (b) another State in which a person is participating in the hearing by audio link or audiovisual link; has a right of audience before the court at the hearing. (9) This section does not affect the court's power to stay a proceeding on a ground other than the ground mentioned in subsection (3). (10) This section does not affect the operation of: (a) the Jurisdiction of Courts (Cross‑vesting) Act 1987; or (b) a corresponding law of a State."
The defendant's application included a request that it should be determined without a hearing as provided for in subs (6) of s 20, or alternatively that if a hearing were to take place it should be by telephone link or by the appearance of counsel on behalf of the defendant only. If the Court required a hearing the defendant sought an order that the plaintiff lodge security for the costs of it.
The s 20 application was supported by an affidavit of the defendant sworn 17 August 2016 at her solicitor's office in Busselton, Western Australia. The defendant deposed that most of the work of tending to the cattle on her property at Burekup is carried out by herself and one contract worker. She deposed that this requires her continuous attendance at the property so far as possible and that having to attend Court in Sydney would be difficult for her. At the least it would involve the expense of engaging a temporary manager for the duration of her absence.
The defendant's age is 74 years and the plaintiff is of similar age. From the defendant's affidavit it appears that her son would be a relevant witness because on her case he negotiated the alleged "full and final settlement" with the plaintiff at $10,000.
The defendant deposed that she also wished to adduce evidence from the persons of whom the plaintiff made his inquiries on her behalf during 2015 and 2016. The defendant asserts that those persons would be able to attest to the limited authority which she conferred upon the plaintiff to investigate the circumstances of the relevant company. The defendant further deposed that those persons reside and carry on business in Western Australia. From correspondence annexed to the plaintiff's affidavits that appears to be so.
The defendant also deposed that her solicitors in Busselton, Western Australia, which is approximately 70 kilometres south of her property at Burekup, had advised her she would need to engage a second firm of solicitors in Sydney to conduct the defence of the Local Court proceedings on her behalf and possibly that she would also need to engage counsel at the Sydney Bar to appear for her in the Local Court. The defendant deposed she had been advised that the Bunbury Magistrates Court would have jurisdiction to determine the plaintiff's claim.
The pleaded defence together with an appearance, the s 20 application and the defendant's affidavit in support of that application were sent by express post to the Local Court registry in Sydney under cover of a letter from the defendant's solicitors dated 17 August 2016. These documents were recorded in the Local Court registry as having been filed on 31 August 2016. Copies of all of the documents were sent by post to the plaintiff under cover of a letter from the defendant's solicitors dated 17 August 2016.
On 1 September 2016 the Local Court issued a notice of listing to the plaintiff advising that the matter would be listed for call-over on 5 October 2016 for the making of orders to achieve efficient management and disposal of the claim.
The plaintiff swore and filed in the Local Court an affidavit of 6 September 2016 in which he responded to the defence, deposing to matters in support of his substantive claim. He swore and filed in the Local Court a second affidavit on 19 September 2016 in which he responded to the defendant's application for a stay under s 20.
So far as relevant for present purposes, in these affidavits the plaintiff particularised the alleged oral agreement upon which he sues as having been made in telephone conversations which took place whilst he was in Sydney and whilst the defendant was in Burekup. He deposed that the conversations occurred during the course of the investigations he was undertaking on the defendant's behalf. He carried out those investigations from Sydney. This appears to have been done by email, by telephone and by internet search. The persons with whom the plaintiff corresponded for the purpose of making the investigations were located in Western Australia.
The plaintiff disputes that he engaged in any discussion with the defendant in June 2016 regarding settlement of his claim and denies that he made a compromise agreement at $10,000. He deposed in his Local Court affidavits that he and the defendant had had a close personal relationship in the late 1960s and early 1970s, that it was the defendant who first contacted him in February 2015, rather than the other way around, and that in 2016 she demonstrated to him a romantic interest, through conversation and correspondence. He has deposed that these are matters upon which his two sisters who live in Sydney would corroborate him. However, these are in my view irrelevant matters and the need for the two sisters to make affidavits or to attend a hearing of the action, either in person or by video link if required for cross-examination, is not demonstrated.
The plaintiff's evidence about having been contacted on his birthday in February 2015 by the defendant, following her husband's death, does not appear to me to be relevant to resolution of any issue concerning the contract upon which the plaintiff sues or the settlement agreement upon which the defendant defends.
The two affidavits of the plaintiff filed in the Local Court did not contain any statement that the plaintiff took objection to that Court determining the defendant's application for a stay under s 20 without a hearing. The plaintiff has sworn an affidavit on 21 November 2016 filed in this Court in support of the summons. He has not deposed in that affidavit that he notified either the defendant or the Local Court of any such objection to resolution of the s 20 stay application without a hearing. None of the documents annexed to this affidavit constitute or refer to any such objection.

The Local Court decision granting a stay of the plaintiff's claim

In conformity with subs (6) of s 20, the usual practice of the Local Court is to determine a stay application under s 20 in chambers on the papers, absent objection to this course either from the applicant (in this case the defendant) or from any other party to the proceedings (in this case only the plaintiff).
Magistrate Keogh proceeded in this way without an oral hearing on 21 September 2016. She considered in chambers the s 20 application and the competing affidavits which had been filed in the Local Court. Her Honour ordered a permanent stay on 21 September 2016, finding that the appropriate Court to determine the plaintiff's claim was "Western Australia". By implication this meant such court of the State of Western Australia as would have jurisdiction in respect of a claim of this nature and magnitude. Her Honour had considered both parties' affidavits in arriving at her decision.

Interlocutory nature of the s 20 stay order

The decision of Magistrate Keogh was interlocutory within the meaning of s 40 (2) Local Court Act 2007 (NSW). That subsection is in the following terms: "40 Appeals requiring leave (cf LCA 1982, section 74) (2) A party to proceedings before the Court sitting in its General Division who is dissatisfied with any of the following judgments or orders of the Court may appeal to the Supreme Court, but only by leave of the Supreme Court: (a) an interlocutory judgment or order, (b) a judgment or order made with the consent of the parties, (c) an order as to costs."
The learned magistrate's decision under s 20 was interlocutory because it did not finally determine the rights of the parties in a principal cause pending between them (Re Luck [2003] HCA 70; 78 ALJR 177; 203 ALR 1 at [4]; Dodoro v Knighting [2004] VSCA 217; 10 VR 277 at [17]). An order striking out proceedings as frivolous, vexatious or an abuse of process is interlocutory according to this test (Re Luck at [6]-[9]) except where abuse of process has been alleged on the basis of res judicata (Port of Melbourne Authority v Anshun Pty Ltd (No 1) (1980) 147 CLR 35; [1980] HCA 41 at [3]; Dodoro v Knighting at [20]). A stay granted under s 20 permits the plaintiff to proceed with his action in the court of another state, such court having been found to be the appropriate one to determine the matter. According to the test stated in Re Luck and Dodoro v Knighting, a stay order under s 20 bears the hallmark of being interlocutory even more strongly than a stay granted on grounds of frivolousness etc (in respect of which there is no inherent opening to pursue the claim in another court).
In Bienstein v Bienstein [2003] HCA 7 the High Court found that an order of the Family Court to remove causes of action pending in that court into the High Court was interlocutory. The order of Magistrate Keogh, which does not remove the plaintiff's proceedings to the Western Australian Magistrates Court but which would not impede the plaintiff from recommencing there, is in material respects of a similar character to the order which was held to be interlocutory in Bienstein v Bienstein.
That brings the Court to a consideration of whether leave should be granted under s 40 (2) of the Local Court Act. It was said in Michail v Mt Druitt and Area Community Legal Centre Inc [2015] NSWCA 396 at [49] that: "What is generally required to obtain a grant of leave from an interlocutory judgment is a demonstration by the applicant for leave that there is a question of principle, or a matter of public importance involved, or where there is an injustice which goes beyond that which is merely arguable."
This formulation of the test was reiterated in Gibson v Drumm [2016] NSWCA 206 at [19]. In Re Decor Corporation Pty Ltd and Rian Tooling Industries Pty Ltd [1991] FCA 655; 33 FCR 397, the Full Court of the Federal Court, at [2] formulated the criteria for a grant of leave to appeal from an interlocutory decision as follows: 1. "whether in all the circumstances the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court." 2. "whether substantial injustice would result if leave were refused, supposing the decision to be wrong."
The Full Court accepted that these two criteria should not be treated in isolation but as bearing upon each other.

The plaintiff's proposed appeal grounds

The plaintiff's proposed grounds of appeal may be summarised as follows: Grounds 1-5, 15 and 19: failure to give reasons including failure to specify a court in Western Australia which would be appropriate to determine the plaintiff's claim. Grounds 6-9 and 12-14: failure to accord the plaintiff a hearing. Grounds 10, 11 and 15: alleged technical deficiencies in the Local Court's orders, such as the absence of a signature or court seal on the orders as made. Grounds 16-18 and 23: untruthfulness of the plaintiff in her affidavit filed in the Local Court. Grounds 20-22: lack of legal merit in the decision of Magistrate Keogh applying the test in s 20 to the facts.
With respect to grounds 1-5 and 19, the learned Magistrate's reasons for making the stay order are limited to her conclusion that the appropriate court was the Western Australian court of sufficient jurisdiction. Her Honour did not refer to any of the considerations listed in subs (4) of s 20 or indicate which of them, if any, was engaged by the evidence, nor what, if any, weight was to be attached to any one of them.
Several aspects of the case lead me to the conclusion that there was no legal error arising from her Honour's failure to give reasons. First, the decision is one from which no appeal lay as of right. That is, there is no right of appeal which would be potentially frustrated by the absence of reasons.
Secondly, the factual considerations bearing upon the decision were reasonably clear. Primarily those considerations were the relative degree of connection of the proceedings with Western Australia and with New South Wales respectively; the place or places of residence of parties' and witnesses who might be required to attend the hearing to give oral evidence in person and the relative cost and inconvenience to each party of conducting a proceeding at the opposite end of the continent from his or her residence. The narrow and clear scope of the relevant factors means that the manner in which the learned Magistrate evaluated them is substantially self-evident.
Thirdly, the learned Magistrate's decision that a court of Western Australia was appropriate was open to her because the Magistrates Court of that state does have jurisdiction in relation to the dispute. That is apparent from ss 4 and 6 of the Magistrates Court (Civil Proceedings) Act 2004 (WA). Those sections show that the Magistrates Court has jurisdiction up to $75,000 in respect of various causes of action including claims for debt or damages whether liquidated or unliquidated.
In circumstances where the defendant resides in Western Australia and where a breach of the alleged contract constituted by a failure to pay is said to have occurred in Western Australia there is no doubt that the Magistrates Court would have jurisdiction over this dispute. Magistrate Keogh's decision to grant a stay was not one which would in practical effect alter substantive rights.
The decision of the Court of Appeal in Apps v Pilet (1987) 11 NSWLR 350 supports the view that in relation to an interlocutory decision, considerations such as those identified at [33]-[36] tend against a requirement to give reasons.
I have concluded that there was no legal error in the Magistrate's failure to give reasons upon the basis of the particular circumstances of this case. It may be that on different facts a decision to grant a stay under s 20 might require reasons in order that justice be seen to be done (see Soulumezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). Situations which might call for reasons for a decision under s 20 are contemplated by McPherson JA in St George Bank Ltd v McTaggart [2003] QCA 59 at [17]-[18].
Not only was there no error in the failure of the Magistrate to give detailed reasons but further there is no reasonably clear appearance of injustice in the outcome of the Magistrate's decision, even if, contrary to my view, detailed reasons should have been provided. That is, in part, because the plaintiff's case has significant connection with Western Australia. For example, the contract he alleges is said to have been made in Western Australia. That follows from his evidence (affidavit of 21 November 2016 at par 4) that the alleged contract was formed when the defendant in Western Australia telephoned him in Sydney and offered to pay him a commission and he accepted the offer over the telephone. In these circumstances, where parties are at locations remote from one another and communicate their offer and acceptance by means which are instantaneous in their effect, it is established law that the place of formation of the contract is the place where the acceptance was received (see Entores Ltd v Miles Far East Corporation [1955] 2 QB 327; Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) [2009] FCA 522; 255 ALR 632; Reese Brothers Plastics Ltd v Hamon-Sobelco Australia Pty Ltd (1988) 5 BPR 97 325; Aviet v Smith & Searls Pty Ltd (1956) 73 WN (NSW) 274.
Not only is the contract alleged to have been made in Western Australia, according to the evidence before me, but the system of law with which the alleged contract would have the strongest connection would be that of Western Australia. Further, the contract is said to have required a payment to be made in Western Australia and when the payment was not made, as alleged by the plaintiff, default is alleged to have occurred in Western Australia.
Another consideration which negates any injustice to the plaintiff is that the significant inconvenience to the defendant if she had to litigate in Sydney would be, on the face of the affidavits filed in the Local Court and in this Court, greater than the inconvenience to the plaintiff of having to litigate in Western Australia. I refer to convenience in terms of disruption and expense arising from having to travel interstate and from having to procure the attendance of witnesses.
I take into account that the defendant on her evidence is actively engaged in a cattle grazing enterprise at a rural location in Western Australia. The plaintiff is a retired solicitor, having practiced in New South Wales from about 1960 to about 1980. It is not demonstrated that there is any pressing engagement to which he is committed in Sydney which would be significantly disrupted if he should have to travel to Western Australia to prosecute the case.
It is material that the defendant pleads a compromise of the plaintiff's claim which is said to have been agreed orally while both parties were in Western Australia. That alleged compromise is thus said to have been made in Western Australia and would, if it is proved to have been made, be governed by the law of that State. The existence and effect of this compromise are matters in issue in the proceedings. Those matters have their predominant connection with Western Australia. On the plaintiff's case they involve a witness in addition to either of the plaintiff and the defendant, namely the defendant's son, who is said to have taken part in the negotiations.
Having regard to all of these considerations it cannot be said that the decision made by the learned Magistrate was one that no reasonable judicial officer could make in the exercise of discretion upon the material before her. It cannot be said that the discretion may be inferred to have miscarried on that basis (see House v The King (1936) 55 CLR 499; [1936] HCA 40). And it cannot be said that the plaintiff will have suffered any demonstrable injustice even if there was some error in the learned Magistrate's decision, such that the stay application really should have been refused.
As to grounds 6-9 and 12-14 there is no substance in the complaint that the plaintiff was not afforded a hearing. By statute he was not entitled to a hearing in the absence of objection from him to the matter being decided on the papers. Natural justice was accorded through the plaintiff's opportunity to file affidavits, as he did. These proposed grounds raise neither an issue of principle or of public importance nor any reasonably clear case of injustice to the plaintiff.
The plaintiff says that he did not think he needed to take objection to the s 20 application being decided in his absence because he thought that as a hearing call-over had been appointed for 5 October 2016 the stay application would be dealt with on that date. This was his mistake. The communication from the Local Court did not justify this inference on his part. Evidence in the affidavits includes correspondence between the plaintiff and the defendant's solicitors in Western Australia. In that correspondence he demonstrated that he has examined s 20 of the Service and Execution of Process Act. As a retired solicitor he was in a position to understand that it required active objection on his part if the matter of a stay was not to be decided, as the defendant asked, without a hearing.
Grounds 10, 11 and 15 are similarly without merit and do not attract a grant of leave upon the principles which I have quoted from Michail v Mt Druitt and Area Community Legal Centre Inc. There is before this Court sufficient evidence of the terms in which the Local Court's order was made on 21 September 2016. The making of the orders has been authenticated and the meaning of the orders is clear.
Grounds 16-18 and 23 concerning alleged untruthfulness of the defendant in her affidavit filed in the Local Court and grounds 20 to 23 concerning the merits of the stay application again involve no matter of principle or public importance. Nor is there a clear demonstration of injustice to the plaintiff arising from the matters which these grounds raise. On the contrary, the defendant's account of events as she presented it in her Local Court affidavit was open to be accepted by the learned Magistrate. If accepted (as apparently it was) that account would, arguably at the least, justify the conclusion which the Magistrate drew that a Court in Western Australia should determine the case. This Court, on an application for leave under s 40(2) Local Court Act, cannot determine the truthfulness of a deponent who was not cross examined in the Local Court. The plaintiff could only show injustice to himself in relation to grounds such as 16-18 and 23 if the impugned evidence was so obviously false that it was not open to the Magistrate to accept it.

Orders

For these reasons the application for leave to appeal will be refused. The requirement for leave under the Local Court Act serves the policy purpose of preventing very small claims in the Local Court from spawning appeals, the cost of which could readily become disproportionate to the amount in issue in the lower court. The present is a case where the bar created by the leave requirement has not been cleared. There is no injustice to the plaintiff in this. He is not precluded from pursuing his claim on its merits but he must do so in Western Australia. Necessarily there will be inconvenience to one of the parties in such a case. A decision has been made that it should be the plaintiff rather than the defendant who will bear that inconvenience. A case for opening up that decision on appeal has not been made out.
The orders of the Court are: 1. The summons is dismissed. 2. The plaintiff is to pay the defendant's costs of the summons.

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: 02 February 2017

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