Acn 080 988 807 P/L v Kneipp & Anor No. DCCIV-02-150

ACN 080 988 807 PTY LTD v KNEIPP
[2002] SADC 165
Judge Muecke
Civil

This is an appeal from an order of a Master of this court made on 12 July 2002. On the defendants’ application of 16 May 2002 the Master granted a stay of these proceedings pursuant to section 20 of the Service and Execution of Process Act, 1992 (Cwth). The Master published reasons for his decision on 12 July 2002.
The Master’s reasons set out in some detail the issues raised on the pleadings, the defendants’ application, and the affidavit material relied upon by both parties on the application. By their application the defendants sought orders:
“2.     The Court grant a stay of enforcement of proceedings on the basis that:
(a)    The Court does not have jurisdiction to hear and determine this action; or
(b)    In the alternative pursuant to s20 of the Service & Execution of Process Act. (Cth)”
The Master’s order staying the proceedings was made pursuant to sub-section (3) section 20 of the Service & Execution of Process Act.
By Notice of Appeal filed on 26 July 2002 the plaintiff sought an order setting aside the Master’s orders made on 12 July 2002 and an order dismissing the defendants’ application of 16 May 2002. A number of grounds of appeal are set out in the notice. It was submitted that the grounds allege that the Master made a number of errors of law in deciding the application before him. As this appeal is an appeal by way of re-hearing enabling me to exercise my own discretion without having regard to the manner in which the discretion was exercised by the Master, it is not necessary for me to examine in detail the arguments that were advanced as to errors of law allegedly made by the Master in his reasons for decision. It is also not necessary for me to set out in detail in these reasons the factual matters that were before the Master when he considered the defendant’s application and that are now before me. The Master set out those matters in some detail in his reasons.
Section 20 of the Service & Execution of Process Act relevantly provides:
(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 was 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.
….
(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.
A consideration of these provisions indicates that this court has a discretionary power to order that the within proceedings 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. The section sets out matters which this court must take into account in determining whether that court of another State is the appropriate court for the proceedings. The matters which this court must take into account is an inclusive provision and, with one exception, does not prevent the court from taking into account other matters. The exception is that this court is not to take into account the fact that the proceedings were commenced in the District Court of South Australia.
It is also to be noted that the Act provides that section 20 does not affect this court’s power to stay a proceeding on a ground other than the ground mentioned in sub-section (3) (sub-section (9)).
It was submitted on the appeal that the Master has erred in directing himself as to the proper test to be applied when considering whether to make an order pursuant to section 20(3) of the Service & Execution of Process Act. It was submitted that the proper test for an order under section 20(3) was that the defendant bore the onus to demonstrate a clear and compelling basis for an order under that sub-section. It was submitted that such a test was bound to be applied by both the Master and me on the authority of Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 191 LSJS 469. It was submitted that the Master had not applied that test.
I agree that both the Master and I are bound to adopt this as the proper test and apply it to this case. I am not convinced that the Master misdirected himself as to that test, particularly as he concluded his detailed reasons by expressing his view that the defendants had established a clear and compelling case for a stay order. Be that as it may, I am satisfied that the proper test to be applied by me is as I have indicated.
In his detailed reasons the Master purported to “balance” the “scales” which he ultimately found to tip overwhelmingly in favour of the defendants’ application. In a number of places in his reasons he spoke of a Queensland court as being the “more appropriate court” to determine the issues between the parties. That expression was criticised on the appeal. It is correct that sub-section (3) of section 20 of the Service & Execution of Process Act does not provide the court with power to order proceedings be stayed if it is satisfied that a court of another State is the “more appropriate court” to determine the matters in issue than the court in which the proceedings have been issued. I do not consider that the Master’s use of the phrase “more appropriate court” did other than reflect the manner in which the application was argued before him and how the parties couched the affidavit material they put before him on the application. The submissions that were made before me were developed in a similar way. That is, the various inclusive matters set out in sub-section (4) of section 20 were each addressed to convince me that each of them or all of them collectively “favoured” a South Australian court (or this court) as being the appropriate court as opposed to a Queensland court. That approach is inevitable when an application is made pursuant to sub-sections (3) and (4) of section 20. In most cases the issue will be whether a court of another State is the “more” appropriate court to determine the issues than the court in which proceedings have been issued. This will all the more be the case where it cannot be said that the court of issue is an inappropriate court to determine the matters in issue. The very matters set out in sub-section (4) lead to such an approach. This court must exercise its discretion to make an order pursuant to section 20(3) of the Service & Execution of Process Act by a consideration of and a balancing of the matters set out in sub-section (4), particularly where there are competing considerations in respect to some of those matters as to courts in two different States.
It is, as was submitted before me, correct that section 20(3) of the Service & Execution of Process Act does not provide that an order staying these proceedings may be made if this court is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the more appropriate court to determine those issues than the court where the proceedings were commenced. In my view, however, what has to be determined on the defendants’ application is whether this court is satisfied that a court of another State has jurisdiction to determine all the matters in issue between the parties, and that that court “is the appropriate court” to determine all those matters taking into account the matters referred to in sub-section (4) and other relevant matters, but not including the fact that the proceeding was commenced in South Australia. This court must also consider whether, in all the circumstances, there is a clear and compelling case made out by the defendants for an order to be made pursuant to section 20(3) of the Act and that, in the exercise of the court’s discretion, it is proper to make an order.
Another issue that was argued before me as to the proper construction of section 20 of the Service & Execution of Process Act, and in particular the making of an order pursuant to sub-section (3) of that section, was that no order can or should be made under sub-section (3) unless this court is satisfied that a court of another State has jurisdiction to determine all the matters in issue between the parties. It was submitted before me (but not so clearly before the Master) that the plaintiff’s cause of action based on representations read by the plaintiff in South Australia from the Internet cannot be actionable within Queensland but are actionable in South Australia. Representations as to the number of sheep on the property in Queensland purchased by the plaintiff were read from the Internet by one of the plaintiff’s officers on his computer terminal at Victor Harbor. It is alleged in the pleadings that the defendants, through their agent Wesfarmers Landmark, advertised the station for sale over the Internet and made certain representations as to the approximate number of sheep. It is further alleged that the plaintiff, by the same officer, viewed the station in Queensland and orally agreed with the defendants that the purchaser would receive approximately 10,000 sheep on the station. It is also alleged that the agreement ultimately signed by the parties included the same representation. Finally, it is alleged that similar representations were made to a valuer.
It is alleged that the representations that the station contained 10,000 sheep and that the purchaser would receive 10,000 sheep were misleading and deceptive and constituted misrepresentations. It is not entirely clear from a reading of the Further Amended Statement of Claim as to whether any distinction is drawn by the pleader between what was read on the Internet by an officer of the plaintiff at his computer terminal at Victor Harbor, what he was told orally in Queensland, what ultimately appeared in the written agreement, and what was told to the valuer.
It was submitted before me that a Queensland court does not have jurisdiction to deal with the Internet representation because the affidavit evidence established that the Internet base was set up in Western Australia with a back-up in Melbourne. It was submitted that because of these factors a court in Queensland could not have jurisdiction to deal with the Internet representation.
I am convinced that this submission is not correct. The Amended Statement of Claim alleges that the defendants appointed Wesfarmers Landmark as their agent to advertise the station for sale and to market the station. It is alleged that the defendants, through that agent, advertised the station for sale over the Internet. It is not alleged where the appointment of this agent was made, nor where the officer of Wesfarmers was when he or she caused the advertisement to be placed on the Internet. It was said that Wesfarmers’ head office is in Perth but it has branch offices elsewhere. There is no doubt that the station advertised for sale is in Queensland and the defendants were residents of Queensland at the time they were selling the station. They still are. It was submitted that the evidence that the Internet information was transmitted from Perth with a back-up system in Victoria established that a Queensland court had no jurisdiction to deal with the Internet representation. In my view how and where the Internet representation came to be placed upon the Internet is not in any way relevant to this case. These matters are certainly not pleaded. The plaintiff’s case is that the defendants in Queensland, by their agents, caused the representation concerning the sale of their station in Queensland to be placed upon the Internet. I have no doubt that the Queensland court would have jurisdiction to hear and determine issues as to whether such representation constituted a misrepresentation or misleading and deceptive conduct by the defendants pursuant to the Fair Trading Acts of Queensland or South Australia. I am satisfied therefore that a court of Queensland has jurisdiction to determine all the matters in issue between the parties.
There is an issue similar to that to which I have just referred that arises in this case. In the Further Amended Statement of Claim the plaintiff seeks alternative relief to that in damages. It claims tracing rights in respect to a certain sum of money, which was part of the purchase price paid by it to the defendants, by which the defendants purchased another property in Queensland. The plaintiff claims that it is entitled “to tracing, transfer and registration of an equitable interest, a caveat and an order for partition and sale” in respect of that property. It was submitted on behalf of the defendants that this court has no jurisdiction to grant that relief.
A caveat has been lodged in Queensland over that property. It is signed by the plaintiff’s solicitor, giving an address in Kellyville, New South Wales. The grounds of the plaintiff’s claim of an equitable interest in that property include the tracing of funds in this action. The caveat is subject to the Lands Titles Act 1994 of Queensland. The defendants’ solicitor has given notice to the plaintiff’s solicitor at its New South Wales address warning the caveat. The notice is given pursuant to the Lands Titles Act 1994 of Queensland which obliges the plaintiff to commence proceedings in a court of competent jurisdiction to establish the interest claimed under the caveat. A section of that Queensland Act requires an order from the Supreme Court of Queensland.
In my view the relief sought by the plaintiff in paragraph 35A of the Further Amended Statement of Claim seeks relief which this Court has no jurisdiction to grant. It appears that the only Court having jurisdiction to grant some of the relief claimed by the plaintiff in that paragraph is the Supreme Court of Queensland. If it could be any court in South Australia it would be the Supreme Court here, not the District Court.
Whilst section 20(3) of the Service & Execution of Process Act only provides that, before I can make an order pursuant to that sub-section, I must be satisfied that a court of another State has jurisdiction to determine all the matters in issue, the fact is that some relief sought by the plaintiff in this court is relief which this court has no jurisdiction to grant. I consider that that fact is a matter that I may take into account in determining this appeal and the defendants’ application. Section 20(4)(f) indicates that a matter that I must take into account is whether a related or similar proceeding has been commenced against the person served or another person. I consider it relevant as to whether a related proceeding is likely to be commenced against the person served in a court of another State. It is also a relevant discretionary matter. It is relevant because of the desirability of avoiding a multiplicity of actions where possible.
As to the matters specifically set out in sub-section (4) of section 20 the Master considered each of them in turn. He was of the view that the “scales” tipped overwhelmingly in favour of the defendants’ application and that the defendant had established a clear and compelling case for a stay under section 20(3) of the Service & Execution of Process Act.
I have considered the detailed submissions that were put by senior counsel for the plaintiff on the appeal and the affidavits relied on. I am satisfied that a court of another State has jurisdiction to determine all the matters in issue between the parties and, on a consideration of the matters relevant to it, a court of another State is the appropriate court to determine those matters. I consider that this case is a proper one for an order to be made pursuant to section 20(3) of the Service & Execution of Process Act. I agree with the observations of the Master when he dealt separately with each of the matters in sub-section (4) of section 20. This agreement is qualified by my earlier discussion about the Master’s phrase “more appropriate court”. I am not persuaded by any of the submissions made on the appellant’s behalf except that I have no regard to whether the defendants’ state of mind as to the causes of action pleaded under the Fair Trading Act, although I have no doubt that the defendants’ state of mind is likely to be explored at trial. It was suggested that it is possible that there might ultimately be allegations of fraud raised on the pleadings. Like the Master, I consider that this is a clear and overwhelming case for a stay.
I mention specifically the final ground of appeal because by that ground the appellant complains that the Master failed to have regard to the undue delay caused by a stay of the proceedings and the additional costs incurred. In particular, the appellant complains that the Master failed to take into account section 20(5) of the Service & Execution of Process Act which provides that 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 matters in issue without delay or undue expense. The appellant also complains that the Master failed to take into account the substantial losses the plaintiff is suffering by the substantial delays and undue expense in re-issuing proceedings, serving the proceedings, receiving the defence, and re-settling the claim before discovery is given. I raised some of these points during argument on the appeal before me. I am not convinced that there were or are appropriate conditions to which the court’s order should be made subject. Nor am I convinced that an order staying these proceedings necessarily leads to undue expense. The pleadings are in an advanced form and no discovery has been given. I do not consider it would have been appropriate for the Master to order mutual discovery before deciding the defendants’ application to stay these proceedings. The defendants’ application for a stay was made in a timely way. Furthermore, in considering this issue, I have some regard to the fact that the Act provides that a matter to be taken into account in determining whether a court of another State is an appropriate court does not include the fact that the proceeding was commenced in South Australia. Finally, I do not think that the plaintiff can properly complain of the Master’s observation that “neither party has suggested that proceedings conducted in another State will cause financial ruin. The plaintiffs do not address the topic at all”.
The conclusion I have reached is that I would have made the same order made by the Master.

Accordingly, I would dismiss this appeal.

[2002] SADC 165

13 December 2002