Short 'N' Sharp Pty Ltd t/as Stone Coomera v Kabir - [2024] NSWSC 1492 - NSWSC 2024 case summary — Zoe

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Short 'N' Sharp Pty Ltd t/as Stone Coomera v Kabir

[2024] NSWSC 1492

Supreme Court of NSW|2024-09-02|Before: Ierace J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2024-09-02

Before

Ierace J

Catchwords

[1971] AC 458 Thomas v Penna & Ors (1985) 2 NSWLR 171 Thompson v Distillers Co (Bio-Chemicals) Ltd (1968) 70 SR (NSW) 274

Source

Original judgment source is linked above.

Catchwords

[1971] AC 458 Thomas v Penna & Ors (1985) 2 NSWLR 171 Thompson v Distillers Co (Bio-Chemicals) Ltd (1968) 70 SR (NSW) 274

Judgment (16 paragraphs)

[1]

Solicitors: CE Corporate Lawyers (Plaintiffs/Defendants) EK Legal (Defendant/Plaintiff) File Number(s): 2024/00135119

[2]

JUDGMENT

By summons filed on 11 April 2024, Short 'N' Sharp Pty Ltd t/as Stone Coomera and Shane Evans, the first and second plaintiffs in these proceedings, who were respectively the first and second defendants in the proceedings below (the defendants), seek leave to appeal pursuant to ss 39 and 40 of the Local Court Act 2007 (NSW) from a decision of the Local Court of New South Wales (the Local Court) dismissing their notice of motion in respect of proceedings commenced against them by way of a statement of claim by the defendant in these proceedings and plaintiff in the proceedings below, Mohammad Kabir (the plaintiff).
The summons further seeks that the appeal be allowed; the decision be set aside; and that a declaration, or alternatively, an order be made pursuant to rr 12.11(1)(g), (i) of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR) that the Court below does not have jurisdiction to hear the plaintiff's claim. Further or alternatively, the defendants seek an extension of the time requirement under r 12.11(2) of the UCPR for the filing of the defendants' notice of motion, pursuant to r 1.12(1) of the UCPR, or an order dispensing with that requirement altogether, pursuant to s 14 of the Civil Procedure Act 2005 (NSW). Finally, the summons seeks that the proceedings be stayed pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth), or that the plaintiff's statement of claim be dismissed. For convenience, I will refer to the parties before this Court by their status in the proceedings below.

[3]

Background

The plaintiff, who resides in New South Wales, was the owner of real property in Upper Coomera, Queensland (the property). He decided to sell the property and engaged the first defendant as the sales agent. The first defendant trades from premises located in Upper Coomera, Queensland; is registered to a Queensland address; and has a Queensland address as its principal place of business. The second defendant, who is the sole director and secretary of the first defendant, and an estate agent who is employed by it, resides in Queensland.
On or about 20 February 2021, a contract of sale for the property was executed between the plaintiff and the purchasers. On or about 11 May 2021, a deposit of $57,000 was paid into a trust account of the first defendant by the incoming purchasers. Ashleigh McKinnon, a real estate agent and business manager of the first defendant, stated in an affidavit dated 23 January 2024: "8 On 6 May 2022, I sent an email ('Email dated 6 May 2022') to the email address nominated by the plaintiff in the Agency Agreement. A true copy of the email and the associated email chain is annexed and marked AM-1, starting on page 4 of the annexures. 9 In the email, I requested the bank details from the plaintiff for the payment of the Deposit held by the first defendant in its trust account, as deposit holder. 10 On 11 May 2021, I received a response from a person that appeared to be the plaintiff. That response was sent from the same email address nominated in the Agency Agreement and contained account details for payment of the Deposit. 11 I then caused the Deposit to be paid into the bank account provided in that email."
The amount transferred, being the balance of the deposit after the payment of the sale agent's fees, was $45,600. As I understand it, the defendants do not now contest that the email that purported to be from the plaintiff was not in fact from the same email address as the one that was nominated in the Agency Agreement, which was the one to which Ms McKinnon sent the email dated 6 May 2022; but rather from a deceptively similar email address.
On 17 November 2023, the plaintiff filed its statement of claim in the Local Court seeking that the defendants pay the amount of the deposit pursuant to the contract between the parties together with interest and costs, or alternatively, damages in negligence. Service by email of a copy of the statement of claim was accepted by the solicitors acting for the defendants (CE Corporate Lawyers) on 6 December 2023. By return email, CE Corporate Lawyers wrote, "We note that the defence is due 3 January 2024 and we intend to file by then".
On 4 January 2024, the defendants attempted to file a notice of motion in the Local Court (the 4 January notice of motion). Orders were sought pursuant to rr 12.11(1)(g), (h) and (i) of the UCPR that the Local Court did not have jurisdiction over the defendant in respect of the subject matter of the proceedings; that the proceedings be dismissed, or alternatively, stayed pursuant to s 20 of the Service and Execution of Process Act; and for costs to be awarded in favour of the defendants.
The filing was rejected by the Registrar, who gave reasons in a "Notice of Orders Made" on that date: "Notice of motion is refused. A sworn affidavit in support is required when filing a notice of motion. The affidavit in support must contain the grounds on which the applicant relies to justify the making of the orders."
By a letter sent by email on 4 January 2024, [1] CE Corporate Lawyers foreshadowed to the plaintiff's lawyers that a notice of motion and supporting affidavit would be filed, that would plead an absence of jurisdiction pursuant to r 12.11.(1)(g) or, alternatively, seek a stay pursuant to s 20 of the Service and Execution of Process Act. The letter sought the plaintiff's undertaking that he would not take steps adverse to the defendants' interests, to be confirmed by 10 January 2024.
On 23 January 2024, the defendants filed a notice of motion (the 23 January notice of motion), in substantially the same form as the 4 January notice of motion, except for two differences. First, an additional order was sought, pursuant to r 1.12(1) of the UCPR, extending the time for the filing of the notice of motion in r 12.11(2) of the UCPR to 23 January 2024. Second, the order in relation to the jurisdiction issue was sought pursuant to rr 12.11(1)(g) and (i) of the UCPR; omitting r 12.11(h) as an additional basis for the order, which was formerly pleaded in the 4 January notice of motion. The basis for the application was, essentially, that the Local Court of New South Wales did not have jurisdiction, so that the Magistrates Court of Queensland was the appropriate forum to determine the matters in issue in the proceeding.
The filing included three affidavits in support, all dated 23 January 2024. One was by Adrian Edwards, who is a solicitor of CE Corporate Lawyers, who gave the following explanation for the failure by CE Corporate Lawyers to file an affidavit in support of the notice of motion that they attempted to file on 4 January 2024: "CE Corporate Lawyers were unable to file a Notice of Motion with corresponding affidavit within the period required by r 12.11(2) of the Uniform Civil Procedure Rules 2005 (NSW) for the following reasons: (a) The CE Corporate Lawyers offices were closed over the Christmas and New Year period from 15 December 2023 to 8 January 2024 (Christmas Closure). The closure meant that CE Corporate Lawyers were unable to attend to preparing affidavit material in support of this application until after its office reopened; (b) Notwithstanding the Christmas Closure, CE Corporate Lawyers attempted to create an account with the Court's Online Registry Platform. CE Corporate Lawyers did not previously have an Online Registry account given that it does not frequently practice in New South Wales; (c) CE Corporate Lawyers had difficulties registering an account for the Court's Online Registry platform. Those difficulties were resolved on 4 January 2024; (d) In order to preserve the defendants' position, the defendants filed a Notice of Motion seeking that the proceeding be dismissed or stayed on 4 January 2024. For the reasons outlined above, the affidavit material in support of that Notice of Motion had not been prepared and accordingly could not be filed at that time. The defendants Notice of Motion filed on 4 January 2024 was refused by the Court ..."
The second affidavit in support was that of Ashleigh McKinnon, referred to at [4] above. The third affidavit in support was of the second defendant, who stated that the contract for sale settled "on or around 11 May 2021" and that Ms McKinnon informed him on 14 May 2021 that she had transferred the balance of the deposit. On 18 May 2021, the plaintiff called the second defendant and advised that he had not received the amount.
By way of response, the plaintiff filed affidavits by himself, dated 26 February 2024 and his solicitor, Erika Kerr, of the same date. The plaintiff acknowledged that "on or about 6 May 2021", he received Ms McKinnon's email dated 6 May 2021, requesting his bank account details, and stated, "I did not respond to that email". I note that he did not explain why he did not give his bank account details, as requested. He stated that, "on or about 20 May 2021", he phoned the second defendant to follow up on the deposit and was subsequently informed of the transfer to a bank account which was not one of his, in the name of Jemima Kelly Margai, whom he did not know.
The plaintiff said that he had examined a copy of the email received by Ms McKinnon on 11 May 2021 which was purportedly from him and noted that the email address from which it was sent was not his email address. I note that it had a one-letter misspelling of his name, which was a lower case "j" instead of a lower case "i".
Ms Kerr, in her affidavit, stated that on or about 24 November 2023, she caused the statement of claim to be served by post on the first defendant's registered office in Toowoomba, so that, pursuant to r 10.10(3)(c) of the UCPR, it was served on the first defendant at the end of seven days after the day on which it was sent, meaning 1 December 2023. She stated her belief that it was served on the second defendant on 6 December 2023, as an attachment to the email referred to in Mr Edwards' affidavit. Accordingly, she stated, she believed that the first defendant was obliged to file its response by 29 December 2023 and the second defendant by 3 January 2024.

[4]

Legislative framework

The UCPR empowers a court to set aside a statement of claim on certain grounds, including that it does not have jurisdiction in respect of the proceedings: "12.11 Setting aside originating process etc (1) In any proceedings, the court may make any of the following orders on the application of a defendant - … (g) an order declaring that the court has no jurisdiction over the defendant in respect of the subject-matter of the proceedings, (h) an order declining to exercise jurisdiction in the proceedings, (i) an order granting such other relief as the court thinks appropriate. (2) Such an order may not be made unless notice of motion to apply for the order is filed by the defendant within the time limited for the defendant to enter an appearance in the proceedings. (3) Notice of motion under subrule (2) - (a) may be filed without entering an appearance, and (b) must bear a note stating the applicant's address for service. (4) The making of an application for an order under subrule (1) does not constitute submission to the jurisdiction of the court."
The jurisdiction of the Local Court in respect of a cause of action or defendant outside the State of New South Wales is established by s 34 of the Local Court Act, which is as follows: "34 Jurisdiction when cause of action or defendant outside the State (1) The Court has jurisdiction to hear and determine proceedings with respect to a cause of action - (a) even if part of the cause of action arose outside New South Wales, so long as a material part of the cause of action arose within New South Wales, and (b) even if the whole cause of action arose outside New South Wales, so long as the defendant was resident in New South Wales at the time of service of the document that commenced the proceedings, and (c) even if the defendant is not within New South Wales, so long as - (i) the whole or a material part of the cause of action arose within New South Wales, and (ii) the defendant was within a State or a part of the Commonwealth (within the meaning of the Service and Execution of Process Act 1992 of the Commonwealth) at the time of service of the document that commenced the proceedings. (2) Subsection (1) (c) applies whether or not the defendant has ever been resident or carried on business in New South Wales. (3) In this section, defendant includes, if there are 2 or more defendants, any one of those defendants."
Rule 51.61(1)(a) of the UCPR provides: "51.61 Affidavits in support of orders sought by notice of motion (1) Unless the Court orders otherwise - (a) a party that files a notice of motion must also file an affidavit setting out the evidence that the party relies on in support of the orders sought by the notice…"
The time in which a defendant is to enter an appearance in the proceedings for the purposes of r 12.11(2), is established by r 6.10(1)(a)(i) to be 28 days: "6.10 Time for appearance (1) For the purposes of these rules, the time limited for a defendant to enter an appearance (whether by filing a notice of appearance in accordance with this Division or by filing a defence in accordance with Division 4) is - (a) in the case of proceedings commenced by statement of claim - (i) 28 days after service on the defendant of the statement of claim or such other time as the court directs for the filing of a defence, or (ii) if the defendant makes an unsuccessful application to have the statement of claim set aside, 7 days after the refusal of the application, whichever is the later …"
Rule 1.12(1) provides for a broad power to extend or abridge any time fixed by the UCPR: "1.12 Extension and abridgment of time (1) Subject to these rules, the court may, by order, extend or abridge any time fixed by these rules or by any judgment or order of the court. (2) The court may extend time under this rule, either before or after the time expires, and may do so after the time expires even if an application for extension is made after the time expires."
Furthermore, s 14 of the Civil Procedure Act empowers the Court to dispense with the UCPR in particular cases: "14 Court may dispense with rules in particular cases In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case."
Section 20 of the Service and Execution of Process Act relevantly provides: "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. …"
As noted, the appeal is brought pursuant to ss 39(1),and 40(2)(a) of the Local Court Act, which are as follows. "39 Appeals as of right (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law. … 40 Appeals requiring leave (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court. (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 …"
The alternative orders available to this Court by way of resolution of the appeal are set out in s 41(1) of the Local Court Act: "41 Determination of appeals (1) The Supreme Court may determine an appeal made under section 39 (1) or 40 - (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal."

[7]

A preliminary issue: the admissibility of further affidavit evidence

The defendants submitted that if Greenwood LCM's order is set aside, this Court should proceed to determine the issue of jurisdiction. The defendants sought to read an affidavit that was relevant to that issue, by an expert witness as to banking practices, Andrew Yiangou, dated and filed on 30 July 2024. His evidence was said to be relevant to whether the transfer of funds to the account not associated with the plaintiff occurred in New South Wales or elsewhere.
The defendants relied upon rr 50.16(1) and (3) of the UCPR to admit the further evidence, which provides as follows. "50.16 Conduct of appeal (1) If the decision under appeal has been given after a hearing, the appeal is to be by way of rehearing. (2) … (3) The higher court may receive further evidence."
As to the availability of r 50.16, the defendants referred to Fillipou v Coates Hire Operations Pty Limited [2011] NSWSC 986 per Johnson J at [47] and Onik New Energy Australia Pty Limited v Henderson [2016] NSWSC 186 per Harrison AsJ at [57]. The latter is, with respect, of little assistance because it seems to me that in that paragraph her Honour was recounting the submissions of a party, rather than making a determination.
The plaintiff submitted that, if Greenwood LCM's order is set aside, the matter should be remitted to the Local Court for determination of the jurisdictional issue. He opposed the reading of the affidavit for that reason and, as well, he challenged Mr Yiangou's expertise. In written submissions, the defendants sought to answer the concerns as to Mr Yiangou's expertise. The plaintiff relied upon Rose v Tunstall [2018] NSWCA 241, which was to the effect that if the appeal is upheld on a question of law alone (s 39 of the Local Court Act), there is no legislative scope for this Court to make further findings of fact; thus, the only available options are the orders listed at s 41 of the Local Court Act. The defendants countered that Rose v Tunstall was irrelevant, since the appeal was brought pursuant to s 40 of the Local Court Act, not s 39. The defendants also relied upon Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [27].
I ruled that the affidavit was inadmissible because it was irrelevant to the narrow issue before the Court, namely, the construction of rr 1.12 and 12.11(2) of the UCPR.

[8]

The defendants' submissions

As to the extension of time issue, the defendants submitted that the statement of claim was served on 6 December 2023 and that, pursuant to r 14.3(1) of the UCPR, the time for them to file their motion was 28 days, meaning by 3 January 2024, that is, the day before they attempted to file the first notice of motion. As to the circumstances in which the discretion in r 1.12 should be exercised in favour of the party seeking its application, they relied upon Smith v Shilkin (No 2) [2019] NSWSC 969 per Hallen J at [207]-[208], where his Honour held that it is a broad discretion that should be exercised "flexibly, with regard to the facts of the particular case".
The defendants relied upon s 36(3) of the Interpretation Act 1987 (NSW): "36 Reckoning of time … (3) If in any Act or instrument a period of time is prescribed or allowed for the doing of any thing and a power is conferred on any person or body to extend the period of time - (a) that power may be exercised, and (b) if the exercise of that power depends on the making of an application for an extension of the period of time - such an application may be made, after the period of time has expired."
In addition, the defendants relied upon s 14 of the Civil Procedure Act: "14 Court may dispense with rules in particular cases In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case."
The defendants submitted that, as well as determining the appeal from Greenwood LCM's decision to refuse the extension of time to file the 23 January notice of motion, this Court should determine whether the Local Court had jurisdiction to entertain the plaintiff's claim (the jurisdictional issue). It was submitted that her Honour erred in law by failing to consider and determine the defendants' alternative relief pursuant to s 20 of the Service and Execution of Process Act. They submitted that the jurisdictional issue was raised, in any event, by virtue of her Honour's order that the defendants file and serve a defence, which was an implicit determination of jurisdiction.
As to the avenue of appeal, the defendants submitted that, although a question of jurisdiction is technically a question of fact, it should not require leave, relying upon El-Hadi v Australian Timbers (NSW) Pty Ltd [2021] NSWSC 501 per Rothman J, at [15]: "While a question of jurisdiction may, technically, be a question of fact, it is, in my view, one for which leave to appeal is unnecessary. Alternatively, if there be a question of jurisdiction raised leave to appeal should be granted in relation to that ground, except in a clear case where the jurisdictional question is unarguable."
The defendants submitted that, if their appeal is successful on any ground, since the factual background was not in dispute, it would be appropriate for the Court, exercising its power pursuant to s 41(1)(a) of the Local Court Act and s 75A(10) of the Supreme Court Act 1970 (NSW) to finally determine the jurisdictional issue: Nohra v Nando's Quality Meats Pty Ltd [2021] NSWSC 1209 per Gleeson J at [61].
The defendants submitted that it could not be concluded that "a material part of the cause of action arose within New South Wales" as required by s 34(1)(a) of the Local Court Act, since none of the essential elements of the plaintiff's cause of action arose within the State. The defendants submitted: "If [the plaintiff] suffered loss as alleged, it was suffered the moment funds were paid out to an incorrect account by Short N Sharp, amounting simultaneously to both a breach of duty, and damage. That payment occurred in Queensland. Each essential element of [the plaintiff's] cause of action therefore arose - came into existence - in Queensland."
The defendants relied upon the reasoning of Nash DCJ in Thomas v Penna & Ors (1985) 2 NSWLR 171 at 176 which, in turn, relied upon a passage from the judgment of Asprey JA in Thompson v Distillers Co (Bio-Chemicals) Ltd (1968) 70 SR (NSW) 274 at 287; (1968) 88 WN (Pt 2) (NSW) 219 at 230-231 (The Distillers case): "Where, as in an action of negligence, the act which constitutes the want of due care occurs in one State and the resultant damage is sustained in another State, it cannot be said, in my opinion, that the tort of negligence is committed in the last-mentioned State, for the reason that only a part of the essential ingredients of the cause of action has taken place in that State. When speaking of an action brought in respect of a tort, to say that the tort has been committed in any one State is to assert that all its essential ingredients have taken place in that State. In my view, the concept of a cause of action, founded on the tort of negligence, arising within the jurisdiction of a State is quite different from the notion of the commission of that tort within the same jurisdiction. 'To arise' in this context is, to my way of thinking, 'to come into existence'. A cause of action in the field of negligence is only inchoate at the stage when the breach of duty takes place. It comes into existence when, as a consequence of the breach, actual loss or damage results. In some classes of tort (eg motor accident cases) the want of due care and the occurrence of injury are coincidental in time and place."

[9]

The plaintiff's submissions

The plaintiff agreed with the defendants that the time for filing the notice of motion expired on 3 January 2024, because, since the defendants were in Queensland, the period of 28 days was fixed by ss 14(b)(iii) and 17(1)(a)(ii) of the Service and Execution of Process Act, which, by reference to r 6.10(1)(a) of the UCPR, was 28 days after service of the statement of claim.
The plaintiff submitted that since the ambit of r 1.12 is limited to time limits fixed by the UCPR and in this case the calculation of the time limit relied in part on provisions of the Service and Execution of Process Act, r 1.12 had no application to the case. In any event, the affidavit evidence failed to explain in detail why the notice of motion was not filed on or before 3 January 2024.
The plaintiff submitted that Greenwood LCM's order to the defendants to file and serve a defence did not constitute a judgment or order in respect of jurisdiction; alternatively, leave would be required for it to be a subject of appeal. The plaintiff submitted that, in any event, the material elements of his claim were a duty of care, a breach of that duty and damage. The plaintiff suffered damage in New South Wales by virtue of his residence in this State, the presence of his bank account here, his provision of those account details to the defendants on or about 21 May 2021, the payment by the defendants of the balance of the deposit to a different account in this State and an obligation on the defendants to pay the money to the plaintiff in the State in which he was residing: Shallay Holdings Pty Ltd v Griffith Co-operative Society Ltd [1983] 1 VR 760 at 766.
The plaintiff submitted that even if the appeal against Greenwood LCM's determination on the extension of time issue is found to be on a question of law, leave is nevertheless required since it was an interlocutory judgement, for reasons explained by Schmidt J in Ciszek v Enterprise Financial Solutions Pty Ltd [2010] NSWSC 1265 at [10]. The plaintiff submitted that leave should be refused, since there was no error apparent in her Honour's determination or, if there was, it did not involve a matter of importance warranting an appeal. The amount involved is $45,000 and the defendants have poor prospects of success on the substantive issue of jurisdiction, so a grant of leave to appeal is not warranted.
The plaintiff submitted that s 36(3) of the Interpretation Act did not advance the defendants' case any further than r 1.12 of the UCPR, because it was qualified by s 5(2) of the same Act, which provides that "This Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned". The plaintiff further submitted that s 14 of the Civil Procedure Act empowered the Court to dispense with "requirements" of rules, however r 12.11(2) was not a requirement, but a prohibition, and therefore s 14 of the Civil Procedure Act did not apply.
The plaintiff submitted that if this Court set aside her Honour's orders, the matter should be remitted to the Local Court for a determination of the jurisdiction issue.

[12]

Whether her Honour had the power to extend the time for the filing of the notice of motion in the Local Court

As noted, the summons was expressed to have been "brought under sections 39 and 40" of the Local Court Act, which was confirmed in the defendants' written submissions, although in oral submissions the defendants' counsel said that it was not brought under s 39, but rather only s 40. The defendants did not seek leave to amend the summons and I proceed on the basis that the appeal relies upon both sections, depending upon whether the Court determines the issue to be "only a question of law" (s 39), or "a question of mixed law and fact" (s 40).
The term "a question of law" is wider in meaning than "an error of law": Attorney-General (NSW) v X (2000) 49 NSWLR 653 per Spigelman CJ at [124]. The summons challenges Greenwood LCM's determination that the terms of r 12.11 do not allow any latitude if the notice of motion is not filed within time and that r 1.12(1) cannot qualify that obligation. An appeal of that determination, in my view, exclusively raises a question of law and thus comes within s 39(1) of the Local Court Act. Since Greenwood LCM's determination was an interlocutory judgment, leave is required pursuant to s 40(2)(a) of the Local Court Act, and is granted.
The 23 January notice of motion, which was filed out of the time frames set by r 12.11(2), sought an order that would extend the time for filing pursuant to r 1.12(1). Her Honour's determination of that issue was made ex tempore and, necessarily, without time to research the issue, consequent to the busy workload of the Local Court. Her Honour's reasoning for her determination that there was no discretion to extend the time to file the notice of motion was that the qualification in r 1.12(1) that its operation was "subject to these rules", meant that the words in r 12.11(2) that an order sought "may not be made" if the notice of motion was not filed in time (within the time for the defendant to enter an appearance) could not be overridden, so that there was no discretion to extend the time. Her Honour said: "… but the issue here, in my view, are the words 'may not be made' and when I look at those words, it seems to me that I do not have any discretion at all to extend the time. And in my view … r 1.12 does not come into play because 12.11 makes clear that I may not grant an extension and I must find today that the extension cannot, I have no power to make that extension and the application must fail."
There is some authority as to the degree of compliance that was required by the predecessor to r 12.11(2). The UCPR were introduced by Sch 7 of the Civil Procedure Act 2005 (NSW) and commenced on 15 August 2005. Rule 12.11 effectively replaced Pt 11, r 8 of the SCR. Rule 12.11(1) is to a similar effect as SCR r 8(1). SCR Pt 11, r 8(2) was as follows: "8 Setting aside originating process etc (1) … (2) Notice of motion under subrule (1): (a) may be filed without entering an appearance, (b) shall bear a note 'The defendant's address for service is' and state the address, (c) shall be filed within the time limited for entering an appearance."
Although it may be thought that the use of "shall" in SCR Pt 11, r 8(2) is more proscriptive of an out of time filing than "may not" in r 12.11(2), I note that in Maronis Holdings Ltd & Anor v Nippon Credit Australia Ltd & Ors [2000] NSWSC 507, Bryson J said at [8] with respect to SCR Pt 11, r 8, "it is plain that the prescription of time for application is directory, and that an application under Pt 11, r 8 will not necessarily fail if it is made out of time". [2] A construction of the rules so that the time limit in r 12.11(2) could not be extended in any circumstances at all, regardless of fault, is unnecessarily harsh and would serve no apparent purpose. It is noteworthy that r 36.16(3C) is a sub-rule that expressly excludes the operation of r 1.12 in respect of a provision as to the time within which a notice of motion in certain circumstances must be filed, which is consistent with the proposition that r 12.11(2) would by its terms expressly exclude the operation of r 1.12 if that was the drafter's intention. Thus, there is no impediment to the application of r 1.12 to r 12.11(2).
In my view, there is no reason why r 1.12(1) could not apply to r 12.11(2), so that her Honour was able to exercise the discretion so afforded to permit the 23 January notice of motion to be filed out of time. Factors that favoured a determination for the defendants included the intervening office holidays, her Honour's observation that the registry had erred in rejecting the defendants' attempted filing of the 4 January notice of motion and the similarities between the two notices of motion.

[13]

Whether the Local Court had jurisdiction to hear the matter

As to the defendants' reliance on Nash DCJ's application in Thomas v Penna of the Distillers case, I note that the plaintiff in the Distillers case claimed that she suffered injury from a medication she purchased and consumed in this State, but which was manufactured in the United Kingdom. Asprey JA was concerned with the construction of s 18(4)(a) of the Common Law Procedure Act 1899 (NSW), that is, whether the plaintiff's claim was in respect of "a cause of action which arose within the jurisdiction". His Honour first considered the meaning of "a cause of action" in the context of the tort of negligence, which devolved to a consideration of whether all of the essential ingredients of the tort "arose" in this State. His Honour noted that loss or damage was an essential ingredient and thus the tort was incomplete until it was suffered, which was in this State, and therefore the tort "arose" in New South Wales. Implicit in that reasoning, and his Honour's approval of Jackson v Spittall (1870) LR 5 CP 542, is the proposition that the tort "arose" in the jurisdiction in which the elements of it became complete, that is, "the act on the part of the defendant which gives the plaintiff his cause of complaint"; as much was made clear in the judgment of the Privy Council on appeal: Distillers Co (Biochemicals) Ltd v Thomson (1971) 1 NSWLR 83; [1971] AC 458 at 467.
In Thomas v Penna, Nash DCJ was concerned with a personal injuries claim brought in New South Wales involving a motor vehicle accident in Queensland. The plaintiff resided in this State and the defendant in Queensland. The relevant statutory provision was s 47(1)(c) of the District Court Act 1973 (NSW), which was summarised by Nash DCJ thus, at 174: "So far as is relevant, this section provides that the court shall have jurisdiction to hear and dispose of an action, notwithstanding that the defendant is not within New South Wales, provided the whole cause of action or a material part of the cause of action arose within New South Wales and provided the defendant was within a State or part of the Commonwealth at the time of service of the statement of claim in the action."
As noted by R A Hulme J in Marketland Pty Ltd v Yura Yungi Aboriginal Medical Service [2018] NSWSC 1406 at [18], that test was essentially the same as s 34(1)(c) of the Local Court Act. As to the applicability of the Distillers case, Nash DCJ opined, at 176, that damage was a material part of the cause of action, so that if in the Distillers case the relevant statutory test had been whether the whole or a material part of the cause of action arose within this State, rather than a question of whether the cause of action "arose" in this State, the result would have been the same, since such damage is a material part of the cause in action. Accordingly, his Honour concluded: "I consider that 'material part of the cause of action' means any one or more of the essential elements of the claim, in this case those elements which give the plaintiff his cause for complaint."
His Honour added: "I feel it is straining the meaning of the section to interpret the words 'material part of the cause of action' as a material part of one of the elements of the cause of action, particularly where that element is damage in personal injury litigation."
Applying that test to the facts in Thomas v Penna, his Honour found, at 177, that the damage incurred by the plaintiff was incurred in Queensland, although the plaintiff continued to suffer from the injuries when he returned to New South Wales: "The plaintiff suffered injury, and therefore some damage, at the time of the subject collision. His cause of action was then complete. His later damage did not 'arise' in New South Wales. It merely happened in New South Wales, having arisen or, in the words of Asprey JA, having come into existence, in Queensland. It follows, therefore, that no material part of the plaintiff's cause of action arose in New South Wales and the first defendant's objection to jurisdiction is sustained."
In Marketland P/L v Yura Yungi, R A Hulme J observed, at [24], that it was essential to distinguish between the material elements of the cause of action and other matters that the plaintiff may have to prove; it is "those elements which give the plaintiff his cause of complaint" that determine the issue of jurisdiction.
The jurisdictional question is the application of those principles to the issue as stated in s 34(1)(c)(1) of the Local Court Act, namely, whether a material part of the cause of action arose within New South Wales. That exercise, which involves findings of fact, is beyond the remit of this Court in the determination of this appeal, for reasons stated in Rose v Tunstall at [31] and [32].

Short 'N' Sharp Pty Ltd t/as Stone Coomera v Kabir

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