Wicomm Pty Ltd ("Wicomm") sues CJ-Milne Solutions Pty Ltd ("CJ-Milne") in this Court for unpaid invoices issued pursuant to work done under an oral contract. CJ-Milne has made application to have the proceeding stayed under s 20 of the Service and Execution of Process Act 1992 (Cth).
[2]
ISSUES AND LEGAL PROVISIONS
The issues are whether the County Court of Victoria is the appropriate court to determine the dispute and whether, if it is, the proceedings should be stayed.
Sections 20(3) and(4) of the Service and Execution of Process Act 1992 (Cth) provide:
"20 Stay of proceedings
…
(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."
There is no issue that the County Court has jurisdiction to determine the matters in issue. Nor was there any challenge made to the jurisdiction of this Court, and, indeed, the application relies on this Court's jurisdiction. Thus, the initial question is whether the County Court is the appropriate court to determine the dispute.
The specific list of relevant factors stated in s 20(4) must be taken into account in determining whether the County Court is the appropriate court. As the list is inclusive, other relevant matters not expressly excluded may also be considered (cf Queensland Rail v Irving (2004) 1 DDCR 578 at [4]). Section 20(4) excludes, for the purpose of determining the appropriate court, consideration being given to the circumstance that the proceedings were commenced in this Court.
It is clear that the Court's discretion to stay the proceeding in s 20(3) is conditioned upon but not determined by a finding that the County Court of Victoria is the appropriate court to determine the dispute (see Queensland Rail at [4]).
[3]
BACKGROUND
The oral contract between Wicomm and CJ-Milne resulted from a telephone conversation between Stephen Page of Wicomm, located in Sydney, and Mathew O'Sullivan, representing CJ-Milne in Melbourne.
The terms of that contract are the central matter in the dispute.
The contract arose out of Wicomm's relationship with Huawei Technologies (Australia) Pty Ltd ("Huawei") based in Sydney. Huawei wished to retain the services of Wicomm, but were precluded from doing so (apparently by some internal rule) due to the size of Wicomm. Wicomm is a two-employee company. CJ-Milne is a larger company having 12 employees and was known by Huawei to have worked with Wicomm.
Ultimately, CJ-Milne was retained by Huawei to do the works who then in turn retained Wicomm. Whether Wicomm was retained by CJ-Milne to do all the works (including by subcontracting some of them to CJ-Milne) and on what terms, or whether Wicomm was retained only to do those works which CJ-Milne did not do itself directly, remains the primary issue.
CJ-Milne received the sum of $487,867.44 from Huawei for the works and remitted part of those funds to Wicomm. This amount was apparently based on Wicomm's quotes. Wicomm says it has been deprived of $104,657.94 owing under its contract with CJ-Milne.
There are potentially other issues such as who did what work, although it is not at all clear that the parties are in dispute on those matters (cf Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 139 FLR 54 at 59.9 to 60.1).
The parties agree that paragraphs (d) to (f) of s 20(4) are not significant in determining whether the County Court is the appropriate court. There was no agreement between the parties about where any proceedings should be instituted; neither Victoria nor New South Wales law is the more appropriate, nor is the relevant law between the two States perceived to be different, and there is no related proceeding commenced in either court.
As to s 20(4)(a), Wicomm is a company located in Sydney and CJ-Milne is in Melbourne. Of the primary witnesses, Mr Page resides in Sydney and Mr Sullivan apparently resides in Melbourne. There is a possibility of other witnesses, one from Huawei in Sydney and perhaps several from CJ-Milne in Melbourne, although I am not persuaded on the balance of probabilities that any other witnesses besides Mr Page and Mr Sullivan will give evidence.
As to s 20(4)(b), the contract between Wicomm and CJ-Milne involved work being done directly or indirectly by both companies for Huawei. The registered office of Huawei is located in Sydney. Work involved the "design, supply, installation, commission of indoor mobile coverage for Optus." It appears, according to an undisputed submission of Wicomm, that the design occurred in Sydney and the supply was from Sydney. Supply was to five locations in Melbourne, and thus the installation and "commission" was in Melbourne. Since the central contest in the proceedings involves the terms of an oral contract, the subject of the proceeding is not clearly to be placed either in Sydney or Melbourne. The Wicomm invoices were issued in Sydney and received in Melbourne. Work was done in one or other city. In those circumstances, the place of the works is not determinative. The subject matter of the proceedings is properly the disputed terms of an oral contract made by telephone (cf Rick Cobby at 58.1).
As to s 20(4)(c), as stated above, Wicomm is a two‑person, husband and wife, company, Mr and Mrs Page. CJ-Milne is a company having 12 employees and that greater size of CJ-Milne was relevant in CJ-Milne becoming involved in the work. However, the size of the two companies may be an unreliable guide as to their "financial circumstances". A trial interstate is likely, relatively, to be more disruptive to Wicomm then CJ-Milne. This is because Mr Page, a primary witness, would be absent from the commercial activities of Wicomm for a part, potentially a large part, of the trial. Mr Page appears to be the primary employee of Wicomm, and thus his absence is likely to affect significantly the earnings of Wicomm.
Mr Sullivan no longer works for CJ-Milne and, thus, his presence would have no direct impact on the financial circumstances of CJ-Milne. With 12 employees, CJ-Milne would have a greater capacity to cover the absence of any representative attending the trial. If a number of CJ-Milne employees were required to be witnesses which, as I indicated, is unclear at this stage, their evidence would ordinarily be by affidavit and any cross‑examination, if it be necessary, could be done by video link.
Further, it may be relevant that the bulk of the approximately $487,000 paid by Huawei for the works has been retained by CJ-Milne and Wicomm claims that a significant proportion of the money retained, some $104,000 approximately, should be paid to it. That circumstance is a matter which is more likely to impact upon the financial circumstances of Wicomm - which is potentially out of pocket - than CJ-Milne which might be favoured with having funds that are owed to another.
In these circumstances, the statutory factor of the financial circumstances of the parties is a matter that operates to some uncertain extent in favour of Wicomm.
Wicomm also raised other factors: the cost of the proceedings to date, the size of the claim, and the limited range of issues. Other matters than those listed in s 20(4) can be considered because of the inclusive definition in that provision. However, it is difficult to attribute much significance to the costs of the proceedings in determining the question of what is the appropriate court. Costs will always result from commencement of proceedings and the place of commencement is expressly not a consideration. Where costs largely result from the commencement of proceedings and the application under s 20 of the Service and Execution of Process Act 1992 (Cth), as appears to be the case here, I do not think it is appropriate that I give the consideration of the costs of the proceedings any weight in determining what is the appropriate court.
The size of the claim is also not a compelling factor one way or the other, at least as to the question of the appropriate court. There may be just as much reason for a small matter to be determined to have been commenced in an inappropriate court, as for, a large matter to be so determined. The same might be said about the limited range of issues. In any event, it is not altogether clear that the issues will be as confined as Wicomm asserts.
In my view, these additional factors relied on by Wicomm are not at all persuasive in determining the appropriate court under s 20(4).
In the result, the factors in favour of the District Court of New South Wales or the County Court of Victoria being the appropriate court to determine the dispute are fairly evenly balanced. Perhaps the balance is slightly in favour of this Court because of the greater financial impact upon Wicomm in having the proceedings heard interstate because it is a smaller company and one of its employees is a crucial witness.
The meaning of the term "the appropriate court" is not obvious. The use of the definite article may suggest that the applicant is required to prove that no other court is appropriate, which will enliven the "clearly inappropriate forum" principles applicable at common law: see Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 557. That is not a burden CJ-Milne undertook or discharged on this application.
Another meaning is that the phrase assumes that the more appropriate court is "the appropriate court". The weight of authority seems to favour this view, see In the matter of Featherston Resources Limited; Tetley & Ors v Weston & Ors [2014] NSWSC 1139 at [53], St George Bank Ltd v McTaggart [2003] 2 Qd R 568; [2003] QCA 59 at [10], but cf [9], and it is the approach I propose to adopt.
Thus, although what is the most convenient forum is not determinative of what is the most appropriate forum based on the factors in s 20(4) and other relevant and not expressly excluded factors, the most appropriate forum has been expressed to be the forum with the "most real and substantial connection" and the "natural forum" (see McTaggart at [10]).
For the reasons I have indicated, I am not persuaded that the County Court of Victoria is the appropriate court. Further, in Rick Cobby at 58, it was suggested that a clear and compelling case was required and the evidence on the application did not reach that level.
[4]
THE DISCRETION
If I am wrong as to whether the County Court of Victoria is the appropriate court, I would need to consider whether I would grant a stay. As stated by the NSW Court of Appeal in Queensland Rail at [4]:
"The factors enumerated in s 20(4) first have to be taken into account when deciding whether a Court of another State is the appropriate Court for the proceedings. Once that decision has been made, the discretion under s 20(3) is activated and all relevant matters can then be considered in the balancing exercise."
A question arises as to whether the fact that the proceedings were commenced in the District Court is relevant to the discretion under s 20(3), though not relevant in determining the appropriate court under s 20(4). A literal reading of subss (3) and (4) and the quoted paragraph from Queensland Rail would suggest that if relevant, it can be considered under the s 20(3) discretion. Both the textual and contextual considerations favour the view that while the place of the existing proceedings should not impact on what is the appropriate court, nevertheless that is a fact that may be among "all relevant matters" that can be "considered in the balancing exercise" (see Queensland Rail at [4]).
All these matters suggest that slight factors in favour of one forum might not render it in the interests of justice to stay proceedings and compel a plaintiff, if it wanted relief, to start again in a jurisdiction less convenient to it.
The interests of justice favour a quick and cheap disposal of the proceedings, justly (see s 56 of the Civil Procedure Act 2005). Although s 56 of the Civil Procedure Act 2005 cannot override or amend the meaning of s 20 of the Service and Execution of Process Act 1992 (Cth) (by reason of s 109 of the Constitution), nevertheless the interests of justice are relevant to the exercise of the discretion under s 20(3) of the Service and Execution of Process Act 1992 (Cth), and are informed by matters such as those referred to in s 56 of the Civil Procedure Act 1995. These matters are magnified when the costs of a stay and recommencement of proceedings are significant in comparison to the amount in issue. It is not in the interests of justice to "multiply the proceedings" by creating the need for a further action at a cost significant to the size of the claim. The present case involves a claim - in the context of the District Court and County Court jurisdictions ‑ of a relatively modest amount.
I also regard it as relevant that there are measures in this Court that can limit the inconvenience CJ-Milne will suffer if the proceedings continue in New South Wales. Evidence‑in‑chief in a commercial matter such as this will be by affidavit, which may relieve a witness of giving oral evidence. If oral evidence is required, an option for the Court is to allow evidence via video link, which is both available and might be seen as especially appropriate for witnesses when only limited cross‑examination is sought. That same procedure could be utilised for any necessary directions hearings. Whether, in the particular case, the Court could or should receive evidence in Victoria was not raised.
For all these reasons, including those matters discussed in relation to the s 20(4) factors, I would not stay the present proceedings even were I wrong in failing to find that the County Court of Victoria was the more appropriate court.
It follows that the application must be dismissed.
[5]
COSTS
Although the plaintiff sought an order for costs, the matter was finely balanced. I think that if CJ-Milne was ultimately successful in resisting the plaintiff's claim then the plaintiff should not have its costs of this application, and that its advantage in succeeding on the application should be limited to the convenience it obtains in having the proceedings heard in Sydney. Of course, the position is different if Wicomm were to succeed in the proceedings. Bearing in mind also the provisions of the Uniform Civil Procedure Rules 2005, rr 42.1 and 42.7, in my view the appropriate order is that the plaintiff's costs of the application be the plaintiff's costs in the proceedings.
[6]
ORDERS
Accordingly, the orders of the Court are:
1. Defendant's notice of motion dismissed.
2. Plaintiff's costs of the notice of motion be the plaintiff's costs in the proceedings.
3. Direct that the plaintiff serve upon the defendant by 4 May 2015 a draft of any amended statement of claim it proposes to file.
4. Direct that the parties communicate by 4 May 2015 with a view to agreeing on consent directions to enable the matter to be ready for hearing.
5. Stand over for directions on Thursday, 28 May 2015 before the Judicial Registrar.
[7]
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Decision last updated: 21 September 2016