White Enhancements Pty Limited v Quick Fit Tyre Service Pty Limited as trustee for the Quick Fit Unit Trust [2008] ACTSC 122

(A) whether, in the opinion of the first court, apart from this Act and a law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory; and

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of that other State or Territory and not within the jurisdiction of the first court apart from this Act and a law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and

it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory;

the first court shall transfer the relevant proceeding to that other Supreme Court.

3. The jurisdiction of this Court to exercise cross-vested jurisdiction of the Supreme Court of a State or the Northern Territory is conferred by section 9 of the Act.

4. Section 4 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 of the State of Queensland provides that the Supreme Court of another State or of a Territory has and may exercise jurisdiction with respect to Queensland State matters, other than criminal matters.

5. The effect of these two sections is to confer on this Court jurisdiction to hear and determine an action which would otherwise be within the exclusive jurisdiction of the Supreme Court of Queensland and not within the jurisdiction of this Court.

6. The present application was commenced on 3 July 2008. The plaintiff is a company having its registered office at Jerrabomberra, a suburb of Queanbeyan. Although Jerrabomberra is in New South Wales, it is close to the border with the ACT and indeed closer to Canberra than some of Canberra's own suburbs.

7. The defendant is a company with its registered office at Windsor, a suburb of Brisbane in Queensland.

8. The plaintiff's claim is for damages for breach of contract, the contract being described as a master franchise sale agreement for the sale of a franchise to operate a business known as Quick Fit Tyres in the Australian Capital Territory. The plaintiff asserts that the defendant, some three years after the agreement was entered, repudiated it; the plaintiff accepted the repudiation and terminated the agreement. The plaintiff claims that in the circumstances it is entitled to damages.

9. Following service of the originating claim on the defendant company in Queensland, accompanied by the prescribed notice under the Service and Execution of Process Act 1992 (Cth), the defendant entered a conditional notice of intention to respond, giving notice of its intention to challenge the jurisdiction of this Court.

10. The defendant then made the present application. The defendant has not delivered a defence. The plaintiff entered default judgment for damages to be assessed, which I subsequently set aside on the defendant's application. I formed the view that the default judgement had been entered irregularly, within the time available to the defendant for the delivery of a defence.

11. The master franchise agreement included a clause stating that the agreement was to be governed by the laws of Queensland and that the parties submitted to the non-exclusive jurisdiction of the Courts of Queensland.

12. The Brisbane solicitor for the defendant asserts in an affidavit that there was a subsequent agreement entered between the plaintiff, the defendant and other parties, which will be relevant to the dispute, and which contained a clause in similar terms.

13. Counsel for the defendant no longer asserts that this Court does not have jurisdiction to hear and determine the action. In these circumstances, the solicitors for the defendant should now file an unconditional notice of intention to respond. However, counsel for the defendant submits that the Court has jurisdiction to hear and determine the action only because of the Queensland jurisdiction vested in it by the cross-vesting legislation. This is potentially important for the present application, because if the submission is correct the Court may be obliged to transfer the action to the Supreme Court of Queensland by section 5(2)(b)(ii). If the submission is incorrect, the power to order a transfer would arise only via section 5(2)(b)(iii).

14. For section 5(2)(b)(ii) to mandate a transfer, a further factor for consideration by the Court would be the extent to which matters to be determined arise under or involve questions as to the application, interpretation or validity of a law of Queensland.

15. I shall deal with that latter point first. I have arrived at the view that the words "the application, interpretation or validity of a law of that other State or Territory" in section 5(2)(b)(ii)(B) must be a reference to a Queensland legislative provision, and cannot apply to the common law of Queensland. I arrive at this conclusion for two reasons: firstly, it is now accepted that the common law of Australia is uniform throughout Australia and does not vary from one State or Territory to another: see for example Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520 at 563. Secondly, the words "interpretation" and "validity" make sense only when applied to a legislative provision. Further, the expression, "a law" is used appropriately of a legislative provision and would not be an appropriate term to use in respect of a common law principle or of the ratio of a decided case.

16. Counsel for the defendant was unable to refer me to any Queensland statutory provision the application, interpretation or validity of which might arise in the hearing and determination of the present action.

17. The question of whether or not this Court would have jurisdiction to hear and determine the present action in the absence of the cross-vesting legislation is a little more complex. The Court is a statutory one, originally established by Commonwealth legislation, the Supreme Court Act 1933, an exercise of the territories power conferred on the Commonwealth Parliament by section 122 of the Constitution. Since 1988, by reason of the Australian Capital Territory (Self-Government) Act 1988 (Cth), the Australian Capital Territory is now a self-governing Territory. By combination of section 34 and schedule 2 of that Act, the Australian Capital Territory Supreme Court Act 1933 became an enactment of the Territory. By section 48A of the Self-Government Act, the jurisdiction of this Court was entrenched, in almost identical wording to section 20 of the Supreme Court Act.

18. Subject to those general provisions about jurisdiction, the principles governing the jurisdiction of the Court in a particular case were explained by Higgins J in Dawson v Baker (1994) 123 FLR 194 a decision in which Gallop J concurred. Miles CJ dissented as to the outcome but did not express a different view on this question. The Court was there dealing with an application for transfer under the cross-vesting legislation to New South Wales of three actions for damages for personal injury arising out of motor vehicle accidents. Higgins J explained that the jurisdiction of the Court depended on the efficacy of its process to secure obedience to its command. This depended primarily on the presence of the defendant within the jurisdiction: Laurie v Carroll [1958] HCA 4; (1957) 98 CLR 310. This Court had in earlier times a rule permitting interstate service of its process, but this rule was held in Cotter v Workman (1972) 20 FLR 318 to be invalid because it permitted interstate service without reference to any nexus with a party or the subject matter of the litigation. The Service and Execution of Process Act 1901 (Cth) had permitted interstate service provided that leave of the Court was obtained after service. Leave was to be granted only where there was a relevant nexus with the Territory. However, that Act has since been replaced with the Service and Execution of Process Act 1992 (Cth), section 12 of which provides that service of process pursuant to the Act is as effective as if it had been served in the place of issue. Sections 5 and 15 of that Act, in combination, provide expressly that any initiating process issued in a State or Territory may be served in any other State or Territory. The sanction available to a defendant sued in an inappropriate forum is, in the case of a lower court, to apply for stay of the proceedings, and, in a superior court, to apply under the cross-vesting legislation for a transfer to the appropriate court.

19. Counsel for the defendant submitted that the provisions of the Service and Execution of Process Act 1992 permitting interstate service should be characterised as provisions facilitating service and not as provisions conferring jurisdiction which would not otherwise exist. Counsel cited no authority for this proposition, and I am persuaded that it is incorrect. In repealing the old Service and Execution of Process Act and replacing it with the present Act, the Commonwealth Parliament clearly intended to do away with the previous requirement for a plaintiff to establish a nexus with the State or Territory in which proceedings were commenced. I am satisfied that the effect of the new Act, at least in relation to this Court, is to confer upon it jurisdiction to hear and determine any cause, wherever arising, where the defendant is served, in compliance with the formalities of the Act, anywhere in Australia.

20. It follows that in hearing and determining the present action, this Court will be exercising jurisdiction conferred on it regardless of the cross-vesting legislation.

21. It follows that for the purposes of section 5(2) of the Jurisdiction of Court (Cross-Vesting) Act 1993, the action is not one which would have been incapable of being instituted in this Court and capable of being instituted only in the Supreme Court of Queensland. I have already explained my reasons for coming to the view that the matters for determination in the action are not matters arising under or involving questions as to the application, interpretation or validity of a law of Queensland. Section 5(2)(b)(ii) accordingly cannot govern the present application.

22. That is not the end of the matter. If the Court is satisfied that "it is otherwise in the interests of justice" that the action be determined by the Supreme Court of Queensland, the Court is required to transfer the action to that Court by virtue of section 5(2)(b)(iii).

23. The principles to be applied in determining an application for transfer under that provision were explained in some detail by the High Court in BHP Billiton Limited v Schultz [2004] HCA 61; (2004) 221 CLR 400, and have since been applied in this Court by Connolly J in Woodham v Medina Group Pty Limited [2005] ACTSC 92 and MC v The State of South Australia [2006] ACTSC 9; (2006) 196 FLR 470; and more recently by me in Frost v Bankstown Wiley Park Motor Cycle Club Inc & Ors [2008] ACTSC 104 and Henderson v Murray [2008] ACTSC 120.

24. The statute does not confer a discretion on the Court. If the Court is satisfied that it is in the interests of justice that the action be determined by another Supreme Court, the Court must order that the proceedings be transferred to that court. The interests of justice are not limited to the interests of any of the parties, although the interests of the parties must be considered. The fact that the plaintiff has chosen to bring the proceedings in a particular court is not a factor to be given any particular weight. The choice of a plaintiff to bring proceedings in a court where it may gain an advantage at the expense of the defendant, whereas on transfer it would lose that benefit to the defendant's advantage, is generally a neutral factor.

25. Each case depends on its own facts. In Schultz, the High Court by majority (Gummow, Kirby, Hayne and Callinan JJ; Gleeson CJ, McHugh and Heydon JJ dissenting) reversed the decision of a judge of the Supreme Court of New South Wales at first instance and ordered the transfer of the proceedings to the Supreme Court of South Australia. Factors included that the cause of action had arisen in South Australia; the courts of that State provided the forum which best gave effect to the reasonable expectations of the parties and to the policy in the cross-vesting legislation; the transfer would remove the need for a decision as to whether a relevant legislative provision was substantive or procedural; most of the witnesses at the trial would come from South Australia; and the appellate procedures available in South Australia had a more generous scope for an appellant than those in New South Wales.

26. In MC v The State of South Australia, the plaintiff's claim had arisen out of medical treatment she had been given in that State thirty-five years earlier when she gave birth to a child which was subsequently adopted pursuant to the then State legislative regime. The claim was in negligence, breach of statutory duty and breach of fiduciary duty. The claim included an allegation that the plaintiff had been pressured or coerced into agreeing to the adoption of the baby. Connolly J accepted that the vast majority of witnesses were likely to be based in South Australia. His Honour also noted that the action was not a routine claim in negligence for personal injury. It raised a challenge to past State government policy, was a novel claim breaking new ground in the development of the law, and was likely to be a complex and lengthy proceeding. Taking evidence from Canberra by telephone or video link would be likely to be unsatisfactory. Where a court was asked to break new ground in reviewing past conduct of a State government and determining whether that conduct, forming part of a long term pattern of conduct, was unlawful, there were compelling reasons why the court making the determination should be the court of the polity concerned. The balance favoured a transfer to the Supreme Court of South Australia.

27. In the present case, the pleadings are not yet closed and I am unable to work out with any certainty precisely what the issues for determination at the trial will be. It seems likely that some witnesses will come from the Canberra region while others will come from Brisbane. Hearing the action in Canberra will be inconvenient to the defendant's witnesses, but hearing it in Brisbane will be, perhaps equally, inconvenient to the plaintiff's witnesses. On the present evidence, no question of interpretation of a Queensland statute arises. It seems likely that the case will turn on the construction of contracts and on questions of fact to be determined on oral evidence.

28. At the present state of the proceedings, and on the evidence before me on the application, I am not satisfied that it is in the interests of justice that the action be determined by the Supreme Court of Queensland rather than by this Court. I make the point that there is no bar to a further application being made before the hearing. It may be that different factors will be found to have come into play after the pleadings are closed and perhaps after discovery and interrogatories.

29. I should say that it will be a rare occasion when a court will be persuaded to transfer an action in circumstances where the only pleading before the Court is the statement of claim. It is apparent from the affidavits that those advising the defendant took the view that it was inappropriate for a defence to be delivered until the present application had been determined. The plaintiff's solicitors took a contrary view. In the hope that it may be of assistance in future applications of this kind, I express the view that the Court would generally find it of assistance to have the pleadings closed before an application for transfer is made, so that the issues to be determined on the hearing of the action are identified.

30. The application will be dismissed. I shall hear the parties as to costs.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Solicitors for the defendant: Pappas, j. - attorney