Anders v NACS Nominees Pty Ltd (ACN 008 118 732)
[2013] SASC 152
•10 October 2013
SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
ANDERS AND ANOR v NACS NOMINEES PTY LTD (ACN 008 118 732)
[2013] SASC 152
Judgment of The Honourable Justice Peek
10 October 2013
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
LANDLORD AND TENANT - RETAIL AND COMMERCIAL TENANCIES LEGISLATION - JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS - JURISDICTION GENERALLY
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS
MAGISTRATES - GENERALLY - STAY OF PROCEEDINGS AND ABUSE OF PROCESS
The appellants and the respondent are the lessors and the lessee of the Snowtown Hotel, respectively. A dispute arose between the parties during 2012 over the application of an amount of $32,087 towards maintenance works. The lessee did not exercise its right of renewal under the lease during the renewal period. Two months after the expiration of that period the lessee sought renewal of the lease. The lessors refused that request and indicated that the lessee would be placed in holding over as a monthly tenant. The lessors subsequently sought payment by the lessee of a further sum of $65,477.50 in connection with maintenance works. When the lessee refused to pay that sum, the lessors commenced recovery proceedings in the District Court and later issued a Notice to Vacate to the lessee. The lessee subsequently filed an application pursuant to the Retail and Commercial Leases Act 1995 in the Magistrates Court seeking an interlocutory injunction restraining the lessors from enforcing the Notice to Vacate, as well as other final relief. The next day the lessee filed a Defence and Counterclaim in the District Court proceedings seeking identical final relief. The lessee's application was subsequently heard by a Magistrate who granted the application for an interlocutory injunction and ordered that the proceedings be transferred to the District Court for consolidation. The lessors appealed and asserted that the Magistrate erred in finding that the Magistrates Court was an appropriate forum for the grant of interlocutory relief pending trial in the District Court.
Held (Peek J, allowing the appeal):
The Magistrates Court was an inappropriate forum for the consideration of the application for the interlocutory injunction.
(1) The proceedings in the Magistrates Court were prima facie an abuse of process, being proceedings between the same parties, arising from the same substratum of fact, raising the same factual issues and questions of law, and seeking relief identical to that claimed in the proceedings pending in the District Court. [57]
(2) The Magistrates Court proceedings were not reasonably justified. [29]-[34], [38]-[72]
(i) Instituting, or proceeding with, the Magistrates Court application was enirely unnecessary. Pursuant to s 22, Magistrates Act 1983 and s 5(1), Judicial Administration (Auxillary Appointments and Powers) Act 1988, the District Court has jurisdiction to make all of the orders sought by the lessee. [29]-[34], [58]
(ii) The jurisdiction vested in the Magistrates Court pursuant to s 68(2), Retail and Commercial Leases Act 1995 is not a specialist jurisdiction vested exclusively in that Court or which is unknown to the District Court. The District Court exercises a review jurisdiction over orders made by Magistrates under s 68(2) pursuant to s 38(6), Magistrates Court Act 1991. The Retail and Commercial Leases Act 1995 also provides for the transfer of proceedings to the District Court under s 69(1). The District Court also regularly deals with matters arising at common law and equity which overlap with s 68(2). [59]-[60]
(iii) The Magistrates Court is an inappropriate forum for the determination of the complex factual matters which are raised for determination in these proceedings. The lessors' action exceeds the jurisdictional limit of the Magistrates Court of $40,000 and consequently the matter was always one that was required to be determined by the District Court. The District Court is the correct forum for the determination of the parties' respective rights, the Court being familiar with these matters in its general experience and having the appropriate jurisdictional limit. [61]-[63]
(iv) The Magistrates Court proceedings constituted an unnecessary duplication of work and waste of scarce judicial resources given that it is only in the District Court proceedings that orders can be made which will dispose of all matters in dispute between the parties. Determination of the interlocutory application by the Magistrates Court potentially embarrasses the District Court, producing a judicial determination as to the prospects of success of the lessee in a District Court trial. This situation would be greatly exacerbated were the Supreme Court to deliver a judgment on appeal from the Magistrate's decision, making, as would be required, fairly definite findings about those prospects of success and thus producing the inappropriate outcome of there being two (partial) judicial determinations prior to the District Court having an opportunity to consider the matter. [64]-[71]
Magistrates Court Act 1991 ss 8(1)(a), 10, 19(2), 38(6); Magistrates Act 1983 s 22; Retail and Commercial Leases Act 1995 ss 68, 68(2), 69(1); Judicial Administration (Auxillary Appointments and Powers) Act 1988 s 5(1); Supreme Court Civil Rules 2006 r 117; District Court Act 1991 s 8(1); District Court Civil Rules 2006 r 263(2)(h), 286(1); District Court Civil Rules (Amendment No 23) cl 5; Statutes Amendment (Courts Efficiency Reforms) Act 2012 s 24(1); Statutes Amendment (Courts Efficiency Reforms) Act (Commencement) Proclamation 2013 s 2, referred to.
Tarasenko v Boylan (1992) 58 SASR 587; Walton v Gardiner (1993) 177 CLR 378; Henry v Henry (1996) 185 CLR 571; Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, applied.
Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346; Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277, distinguished.
Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; Michael Wilson & Partners Limited v Nicolls (2011) 244 CLR 427; State Bank Case Ruling [1997] SASC 6111; Moore v Inglis (1976) 50 ALJR 589; Lidden v Composite Buyers Ltd (1996) 139 ALR 549; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; Puttick v Tenon Ltd (2008) 238 CLR 265, discussed.
Jago v District Court (NSW) 168 CLR 23; Williams v Spautz (1992) 174 CLR 509; Rogers v The Queen (1994) 181 CLR 251; Ridgeway v The Queen (1995) 184 CLR 19; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75; Moti v The Queen (2012) 245 CLR 456; Moore v Inglis (1976) 51 ALJR 207; Phillip Morris Ltd v Attorney-General (Vic) (2006) 14 VR 538; R v Dalton (2011) 111 SASR 170; Zollo v National Australia Bank Ltd (2009) 261 LSJS 93; Turelin Nominees Pty Ltd v Dainford Ltd (1983) 67 FLR 440; Jillawarra Grazing Co v John Shearer Ltd (1983) 60 FLR 339; Xclusive Pty Ltd v Christian Brothers Inc [2001] SASC 380; CP (Adelaide) Pty Ltd v Hartford Holdings Pty Ltd (No 7) [2002] SADC 81; Elaura Enterprises v Harnas & Harnas [2002] SADC 178; Jenkinson & Anor v Young [2004] SADC 30; Fresace P/L v Brian & Vivien Enterprises P/L; Brian & Vivien Enterprises P/L v Fresace P/L [2005] SADC 120; Paralawie Investments P/L v Maurice Srour P/L [2006] SADC 16; Williams v Victoria [2012] VSC 585; Commonwealth v Cockatoo Dockyard Pty Ltd (2003) 1 DDCR 1; Adelaide Bank Ltd v Lucke [2010] SASC 59; Macerlean v Notfair Pty Ltd [2013] SADC 80; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Attorney-General (Vic) v Weston [2004] VSC 314; Attorney-General v Jones [1990] 1 WLR 859; Hamilton v Oades (1989) 166 CLR 486, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"abuse of process", "forum non conveniences", "clearly inappropriate forum"
ANDERS AND ANOR v NACS NOMINEES PTY LTD (ACN 008 118 732)
[2013] SASC 152Magistrates Appeal
PEEK J. Appeal against the granting of an interlocutory injunction.
Introduction
A dispute arose between the appellants, the owners/lessors of the Snowtown Hotel (the Hotel), and the respondent company, the lessee, concerning the payment of money for the repair and repainting of the Hotel.[1]
[1] The appellants and the respondent are to be referred to as the lessors and the lessee, respectively.
On 9 April 2013, the lessors commenced recovery proceedings in the District Court. On 17 April 2013, the lessors served the lessee with a Notice to Vacate the Hotel on the basis that the lessee had not exercised a right of renewal of the lease according to the terms of the lease which had since expired.
On 13 May 2013, the lessee filed an application for an interlocutory injunction in the Magistrates Court pursuant to s 68(2), Retail and Commercial Leases Act 1995 (the Act) restraining the appellant from enforcing the Notice to Vacate pending the resolution of the District Court action. The Magistrate subsequently on 10 July 2013 made the order sought. His Honour then transferred the proceedings to the District Court. The lessors now appeal against the order for an injunction.
Background
The Hotel was previously leased from 3 October 2007 to the entity Niley Pty Ltd (Niley). The lease to Niley (the lease) was to expire on 2 October 2012, subject to a right of renewal for five successive terms of five years. On 10 August 2009, the lessors entered into an agreement to take an assignment of the lease from Niley in consideration for a sum of $360,000. By a Memorandum of Transfer dated 23 October 2009 the lessors were assigned the lease with final settlement occurring on 20 November 2009.
The first inspection of the Hotel
The lease places certain obligations on the lessee to paint the Hotel and maintain the premises in a state of good repair.[2] On 12 October 2009 (two years into the lease period and while Niley was still in occupation of the Hotel), Mr Peter Hutchings prepared a report upon inspection of the Hotel (the First Inspection Report). That report indicated that repair and repainting works at an estimated cost of $32,087 (including GST and the inspection fee of Mr Hutchings) needed to be carried out. Niley paid that amount of $32,087 (the Niley Funds) to the lessors’ solicitors around the time of settlement between the lessee and Niley in October 2009. This payment had been expressly agreed upon between Niley and the lessee as a condition of the assignment transaction.
[2] See clauses 2.12-2.14.
The right of renewal
The exercise of rights of renewal was conditional upon compliance with certain terms, including subclause 4.10.1(a) which provides:
[t]he Lessee has made a written request to the Lessor not less than three (3) nor more than six (6) months (both inclusive and time being of the essence) before the expiration of the current term of this Lease …
Accordingly, the right was exercisable by the lessee providing, during the period between 2 April 2012 and 2 July 2012, a written request to the lessor for the extension of the lease. However, the lessee did not exercise the right to renew within that renewal period and it was not until 4 September 2012 that the lessee, by letter of that date, requested renewal of the lease for five years. The lessors’ solicitors responded by letter of 6 September 2012 denying the request; they indicated that at the expiration of the lease on 2 October 2012 the lessee would be placed in holding over as a monthly tenant pursuant to clause 4.9.
The second inspection of the Hotel
In the intervening period, the Hotel was again inspected by Mr Hutchings and a report was issued on 8 October 2012 (the Second Inspection Report). Mr Hutchings found that repairs and repainting needed to be undertaken, this time at an estimated cost of $65,477.50 (including GST and the inspection fee of Mr Hutchings). The lessee did not pay this amount.
The lessors’ District Court action and the lessee’s Magistrates Court application
On 9 April 2013, the lessors commenced proceedings in the District Court (action number: DCCIV-13-1938) by filing a Statement of Claim seeking recovery of certain amounts from the lessee, including the unpaid amount of $65,477.50 relating to the Second Inspection Report.
By a Notice to Vacate dated 17 April 2013, the lessors advised the lessee that the holding over was at an end and directed the lessee to vacate the Hotel.
On 13 May 2013, the lessee filed an application in the Magistrates Court (action number: AMCCI-13-1505) seeking an interlocutory injunction restraining the lessors from enforcing the Notice to Vacate, pursuant to s 68(2) of the Act.
The Jurisdiction of the Magistrates Court
Sections 68 and 69 of the Act relevantly provide:
68—Jurisdiction of the Magistrates Court
(1) An application for an order under this section may be commenced by application to the Magistrates Court by a party (or former party) to a retail shop lease or a collateral agreement.
(2) The Magistrates Court may on application under this section, by order—
(a)restrain an action in breach of this Act, a retail shop lease or a collateral agreement; or
(b)require a person to comply with an obligation under this Act, a retail shop lease or a collateral agreement; or
(c)order a person to make a payment (including a payment of compensation) that is payable under this Act, a retail shop lease or a collateral agreement; or
(d)order the payment of compensation for loss or damage resulting from a breach of this Act, a retail shop lease or a collateral agreement; or
(e)relieve a party to a retail shop lease or a collateral agreement from the obligation to comply with a provision of the lease or agreement; or
(f)reinstate rights under a retail shop lease that have been forfeited or have otherwise terminated; or
(g)require the payment of rent under a retail shop lease into the Magistrates Court until the lease has been performed or an application for compensation has been determined; or
(h)require that rent paid into the Magistrates Court be paid out and applied as directed by the Magistrates Court; or
(i) require a tenant to surrender possession of premises to the lessor; or
(j)do anything else necessary or desirable to resolve a dispute between the parties to the retail shop lease.
69—Substantial monetary claims
(1) If a proceeding before the Magistrates Court involves a monetary claim for an amount exceeding $40 000, the Magistrates Court must on the application of a party to the proceeding refer the proceeding into the District Court.
(2) If a proceeding is referred to the District Court, the Court has, in addition to the powers that it has apart from this section, the powers that the Magistrates Court has under this Division.
The interim and final orders sought by the lessee in the Magistrates Court
The lessee sought to invoke various of the placita in s 68(2) of the Act as a basis for the grant of an interlocutory injunction restraining the enforcement of the Notice to Vacate. The lessee in the same application to the Magistrates Court also sought final orders as follows:[3]
[3] Accordingly, it cannot be said that the lessee’s application in the Magistrates Court did not constitute the institution of proceedings: Attorney-General (Vic) v Weston [2004] VSC 314 [13] (Whelan J); Attorney-General v Jones [1990] 1 WLR 859, 861 (Lord Donaldson).
1.1.An Order requiring the Defendants to pay and arrange for the completion of all paint and repair works (defined as the Works) pursuant to the Collateral Agreement within six (6) months (or alternatively to pay the Plaintiff an amount for the cost to carry out the Works).
1.2.A declaration that the Defendants are not entitled to reimbursement From the Plaintiff for the cost of carrying out the Works.
1.3.A declaration that the rent shall not be increased as a result of any of the works undertaken pursuant to the above Orders.
1.4.An Order confirming that the annual rental as at the commencement of the holding over period shall be determined in accordance with Clause 4.9 of the Lease (subject to the order below).
1.5.A declaration that the Lease has been validly renewed and an order granting a second term of the Lease commencing on 3rd October 2012 and expiring on 2nd October 2017 and reinstating the Lease on the same terms and conditions as the Lease for the balance of the term therein including remaining rights of renewal therein stipulated and that the Annual Rental for the commencement of the Lease be determined in accordance with clause 4.11.1(a) – (f).
1.6.An Order requiring the Defendants to arrange for the preparation of a new Lease upon those terms to be registered on the Certificate of Title for the Premises at the cost in all things of the Defendants.
1.7.An order requiring the Defendants to consent to any mortgage of the Lease and registration of the Mortgage of the Lease on the same terms and conditions as the previous Mortgage of Lease No. 11295450.
1.8.An Order that all costs paid in relation to the Defendants’ solicitor’s legal fees be returned to the Plaintiff.
1.9.An Order that the Defendants arrange for the Premises to be separately rated by the Council, and any overpayment of rates paid by the Plaintiff be refunded by the Defendants.
1.10.An order that the Defendants pay to the Plaintiff any amount of overpayment of rent as a consequence of the above orders pursuant to Clause 4.9 and 4.12 of the Lease.
1.11. An order for costs.
1.12. Any other orders this Court deems fit to make
The final orders sought by the lessee by counterclaim in the District Court
On the very next day, 14 May 2013, the lessee filed a Defence and Counterclaim in the District Court proceedings.[4] The lessee here asserted that, despite the lessee’s failure to exercise the option to renew, the lessee was entitled to renewal of the lease. By way of counterclaim, the lessee sought final orders in identical terms to those sought in its Magistrates Court application filed the previous day, as reproduced immediately above.
[4] This constituted the institution of a proceeding: Attorney-General (Vic) v Weston [2004] VSC 314 [13] (Whelan J); Attorney-General v Jones [1990] 1 WLR 859, 861 (Lord Donaldson).
The proceedings before the Magistrate
On 24 May 2013, the application for the interlocutory injunction was called on before the Magistrate but was adjourned to 30 May 2013. On that date full argument was heard and judgment was reserved.
During the hearing, it was acknowledged by both parties that the lessee’s renewal request was sent well out of time and was legally inefficacious. The question raised by the application was whether there were other facts giving rise to a cause of action and which would justify an order requiring the lessors to grant an ongoing leasehold interest in favour of the lessee. This was of course the same question raised squarely for determination by the lessee’s Defence and Counterclaim in the District Court proceedings.
Put briefly, the lessee alleged that during the renewal period there existed a dispute between the parties as to the use of the Niley Funds. In an affidavit of 13 May 2013, Mr Philip Hyde (a director of the lessee) deposed that when the lessee had taken the assignment of the lease from Niley (having secured Niley’s promise to pay the sum due in connection with the First Inspection Report), the lessors had represented and agreed that they would use the Niley Funds to carry out the first set of works. Mr Hyde deposed that in November 2011 he had advised the lessors of his intention to commence painting the interior of the Hotel and requested the release of some of the Niley funds to this end but the lessors never specifically replied to that request.
Mr Hyde further deposed that the Second Inspection Report refers to substantially the same works as the First Inspection Report, the lessors having failed to employ the Niley Funds towards carrying out the works required by that first report, and that it was for this reason that payment of the sum claimed in the Second Inspection Report was withheld.
The lessee submitted that the lessors had reneged on their promise and representation to use the Niley Funds to carry out the agreed works and claimed that it was for this reason, and the associated concern about the lessee’s ongoing liabilities under the lease, that the lessee did not exercise its right of renewal during the renewal period. The lessee contended that, as a result of what was alleged to be the misleading and deceptive conduct of the lessors, it is unconscionable for the lessors not to renew the lease.
The lessors denied each of these assertions in an affidavit of Mr Mark Anders dated 22 May 2013.
On 5 July 2013, the Magistrate delivered a ruling granting the application for the interim injunction. That order was then formally made on 10 July 2013. The Magistrate also ordered on that date that the proceedings before the Magistrates Court be transferred to the District Court.
The District Court orders an early trial
On 29 July 2013, the lessors filed an interlocutory application in the District Court seeking an urgent determination of the matter. On 1 August 2013, that application was granted and a priority trial date fixed for 14 April 2014.
The grounds of appeal and the Notice of Contention
On 24 July 2013, the lessors filed the present appeal (action number: SCCIV-13-975). The Notice of Appeal contains the following grounds:
1.(No serious question to be tried) The learned magistrate erred in concluding that there was a serious question to be tried as to whether the plaintiff would ultimately secure relevant final relief (in effect, an order that the defendants treat the plaintiff as having validly exercised an option to renew the memorandum of lease in respect of the Snowtown Hotel dated 3 October 2007 (Lease) for a period of five years from 3 October 2012) (Reasons [17]):
1.1. the plaintiff did not exercise the option to renew the Lease between 2 April 2012 and 2 July 2012 (the renewal period)) (Reasons [1]), and thus the plaintiff’s claim depended upon either a contention that equitable or statutory relief was available;
1.2. the learned Magistrate erred in considering equity might well grant relief against forfeiture (Reasons [18]):
(a) the plaintiff had not forfeited any proprietary right;
(b) the non-exercise of the option meant that no right came into existence;
(c) the notice to vacate was not founded on any breach;
(d) the Lease was not terminated as such, it expired;
1.3. the plaintiff’s evidence, taken at its highest, did not support any claim for equitable or statutory relief;
1.4. the plaintiff’s contention was that a dispute regarding funds provided by the previous lessee to the lessor for the carrying out of works on the premises was in some way the reason why the plaintiff did not exercise its right of renewal during the renewal period, however:
(a)the plaintiff’s evidence did not establish the existence of any such dispute;
(b)further and in any event, if there was a dispute, and if the defendants had failed to release funds for works as agreed, neither the dispute nor the conduct of the defendants could be characterised as unconscionable conduct;
(c)further and in any event, there was no nexus between any dispute or conduct (unconscionable or otherwise), and the plaintiff’s failure to exercise the option, as evidenced by the fact that, there having been no resolution of any such dispute or change in any such conduct, the plaintiff did in fact seek to exercise the option on 4 September 2012;
(d)equally, if there was any misleading and deceptive conduct in respect of the funds or the works in question there was no sufficient nexus between any such conduct and the plaintiff’s failure to exercise the option;
1.5. further and in any event, the evidence did not reveal any relevant dispute, and the plaintiff’s counsel offered only speculation from the bar table as to why there was no evidence of any communications concerning such a dispute, suggesting the plaintiff may have been a busy publican, or might not have wanted to “ruffle feathers”;
1.6. further and in any event, the plaintiff did not answer the defendants’ sworn evidence that the last conversation he had had with a representative of the plaintiff was to the effect that the defendants would release funds for painting upon presentation of an invoice from a licensed tradesman;
1.7. there was no evidence of conduct on the part of the defendants which would justify the intervention of equity;
1.8. the learned magistrate appears to have considered the defendants engaged in unconscionable conduct by reference to evidence that, after the plaintiff had failed to exercise the option, the defendants had indicated the lease could be renewed if a financial payment was made (Reasons [12]-[14], [16]), whereas:
(a)conduct subsequent to the expiry of the renewal period could not give rise to a claim for relief of the kind sought;
(b)the conduct could not be characterised as unreasonable, let alone unconscionable (ACCC v Samton Holdings Pty Ltd (2002) 117 FCR 310). There was no element of victimisation (Kakavas v Crown Melbourne Ltd [2013] HCA 25 at [18]);
(c)the letter relied upon was inadmissible because it was a without prejudice settlement communication;
1.9. the learned magistrate erred in considering there was any basis for the operation of principles of estoppel (Reasons [12], [14]):
(a) estoppel was not pleaded or relied upon by the plaintiff;
(b)there was no allegation that the defendants made any representation concerning the requirement to renew the Lease within the renewal period;
(c)the learned Magistrate’s finding that in some way the defendants’ preparedness to reinstate the Lease might found an estoppel (Reasons [12]) was misconceived and based on inadmissible evidence.
2.(Balance of convenience) The learned magistrate erred in considering it was obvious that the plaintiff would succeed on the question of the balance of convenience, and erred in his consideration of the balance of convenience generally (Reasons [4], [16]), in that:
2.1. this was not a case where it was accurate to say that the granting of the injunction simply maintained the status quo:
(a)it was agreed the Lease had come to an end, and the period of holding over had been regularly terminated;
(b)the effect of the injunction was akin to a mandatory injunction requiring the defendants to permit the plaintiff to occupy the premises notwithstanding the admitted absence of any (presently existing) proprietary right;
2.2. it was not accurate to suggest the landlord “loses nothing” (Reasons [16]), or that the injunction “rewards the defendants as landlord, obtaining rent on a monthly basis” (Reasons [4]), because:
(a)the effect of the injunction was to entitle the plaintiff to remain in occupation pending a trial, paying a rental which applied prior to the expiry of the Lease in October 2012, whereas if the Lease had been renewed, a market rent review would have been required, and if the premises were free to be offered to another tenant, market rent could be obtained;
(b)the defendants’ evidence was that they were concerned about the plaintiff’s ability to continue to pay rent and outgoings and the plaintiff proffered no evidence of its means;
(c)the operation of the injunction pending a trial effectively prohibited and prohibits the defendants from exploring alternative tenants and the defendants may lose the opportunity to secure appropriate tenants;
(d)the effect of the injunction was to force the defendants to grant a proprietary right to an adversary in litigation pending a trial which, on all available indications, would not be able to be heard (let alone determined) before late 2014 (cf. Lead Plus Pty Ltd v Kowho Intercontinental Pty Ltd [2000] NSWSC 459 per Young J);
2.3. to the extent the learned magistrate considered that the granting of the injunction would not cause any or any serious inconvenience to the defendants because the defendants were “now happy with the tenant resuming the lease, so long as the plaintiff fulfils the landlord’s financial promises of the past” (Reasons [16]), the learned magistrate proceeded upon a mischaracterisation of (inadmissible) evidence.
2.4. the learned magistrate erred in failing to have regard to the risk that the undertaking as to damages (belatedly offered by the plaintiff) would prove insufficient because, despite request, there was no evidence of the plaintiff’s means.
3.(Balancing strength of case and impact of relief) The learned magistrate erred in failing to find that in circumstances where:
3.1. the plaintiff’s prospects of securing relevant final relief depended upon a tenuous link between asserted misconduct in relation to the release of a portion of funds for further works (on the evidence, a dispute about, at the most, approximately $16,000) and the plaintiff’s non-renewal of the Lease; and
3.2. the effect of the injunction would be to foist upon the defendants, for a period of potentially in excess of twelve months, a tenant whose Lease had admittedly expired, at non-market rent
there was no sufficient basis for the grant of interlocutory relief.
4.(Consideration of forum) The learned magistrate erred in considering that it was appropriate for the Magistrates Court to grant interlocutory relief pending trial to a plaintiff who had foreshadowed, and has subsequently obtained, a transfer of the proceedings to the District Court.
(Emphasis in original)
The lessee also filed a Notice of Contention on 28 August 2013 which submits that the Magistrate’s decision should be upheld on the following additional grounds:
1.The Appellants (as lessors) failed to provide the Respondent (as lessee) with a copy of the prospective lease or a disclosure statement
2.The failure to do so in all of the circumstances was a breach of sections 11 and 12 of the Retail and Commercial Leases Act 1995 (the Act) and/or provides further grounds for an order under section 68(2)(e), (f) or (j) of the Act.
(Emphasis in original)
Grounds of appeal 1 to 3 and the Notice of Contention raise questions which would, in the ordinary course, require a detailed analysis of the factual dispute between the parties and the formation of fairly definite predictions as to the lessee’s prospects of success in the District Court action.
Ground 4 of appeal stands in a different category. If the appeal is allowed on ground 4, the review of the Magistrate’s reasons and conclusions required by grounds 1 to 3 (and the Notice of Contention) would be entirely unnecessary and indeed inappropriate, for reasons which will be outlined in detail below.
I consider that ground 4 of appeal has been made out. My reasons follow.
Proceeding with the Magistrates Court action was entirely unnecessary
Counsel for the lessee submitted on appeal that the lessee was forced to file its application in the Magistrates Court because of its wish to rely on the power bestowed by s 68(2) of the Act; it was submitted that only the Magistrate Court has this power.
If the lessee’s basic submission were really correct, I consider that it would not avail the lessee in any event. If there really was such a lacuna in the jurisdiction of the District Court, then the lessee could have instituted the action in the Magistrates Court and then immediately transferred the proceedings to the District Court under s 19(2), Magistrates Court Act 1991 whereby the District Court would be clothed with the Magistrate’s jurisdiction. Thus, the application for the interim injunction could have been heard as an interlocutory application in the District Court with the substantive application under s 68 of the Act being later heard during the course of the District Court trial.
However, in my view the basic submission of the lessee is not correct. Counsel did not refer the Court to s 22, Magistrates Act 1983 which provides as follows:
22—Certain members of the judiciary may assume magisterial powers
Any of the following persons, namely—
(a) a Judge of the Supreme Court; or
(b) a Master of the Supreme Court; or
(c) a District Court Judge,
may exercise the jurisdiction, powers or functions of a magistrate.
Nor did counsel refer the Court to s 5(1), Judicial Administration (Auxiliary Appointments and Powers) Act 1988 which provides as follows:
... a judicial officer holding or acting in a particular judicial office may exercise, in addition to the jurisdiction and powers attaching to that office, the jurisdiction and powers attaching to any other judicial office of a co-ordinate or lesser level of seniority.
In Tarasenko v Boylan, King CJ (with whom Mullighan J concurred) considered these provisions and stated: [5]
[5] (1992) 58 SASR 587, 590-591; see also Olsson J at 596-600.
… I think that the jurisdiction powers and functions of a magistrate, which a judge is authorised to exercise by s 22 of the Magistrates Act, include the totality of a magistrate’s jurisdiction powers or functions, from whatever source derived, and include his jurisdiction powers and functions when sitting as the Magistrates Court. The distinction sought to be made between the jurisdiction power or functions of a magistrate as such and his jurisdiction powers or functions when sitting as the Magistrates Court, is unduly subtle and, in my opinion, not warranted by the section.
The section seems to me moreover to have a wider operation. It enables the judge to exercise the jurisdiction powers or functions of a magistrate by sitting in the Magistrates Court, but it goes further than that. It does not limit the means by which a judge may exercise the jurisdiction powers and functions of a magistrate, to sitting as the Magistrates Court. The language of the section is apt to confer on the District Court judge, while sitting as the District Court, the jurisdiction powers and functions of a magistrate. As the jurisdiction powers or functions of a magistrate include the jurisdiction powers or functions which he enjoys in sitting as the Magistrates Court, it follows that the District Court judge sitting as the District Court may exercise the jurisdiction powers or functions of the Magistrates Court.
The operation of s 22 of the Magistrates Act is, for relevant purposes, twofold. It empowers the judge to sit in the Magistrates Court as though he were a magistrate and to exercise the jurisdiction powers and functions of a magistrate therein. It also enables him, while sitting in his own court and exercising the jurisdiction of that court, to exercise the jurisdiction powers or functions of a magistrate including those which the magistrate could exercise when sitting as the Magistrates Court.
The legal position as outlined above is confirmed by s 5 of the Judicial Administration (Auxiliary Appointments and Powers) Act 1988. Subsection (1) of that section provides that:
... a judicial officer holding or acting in a particular judicial office may exercise, in addition to the jurisdiction and powers attaching to that office, the jurisdiction and powers attaching to any other judicial office of a co-ordinate or lesser level of seniority.
Subsection (4) provides that:
A judicial officer who has been appointed to hold or act in a judicial office in a particular court must obtain the consent of the judicial head of that court before undertaking judicial work in another court (but such a consent is not required where the occasion to exercise the jurisdiction and powers of some other court arises incidentally in some matter before the court to which the judicial officer was appointed).
I think that subs (4) clearly contemplates that a judge may sit in a lower court and exercise its jurisdiction, but that he may also exercise the jurisdiction and powers of a lower court while sitting as the court to which he has been appointed.
(Emphasis added)
Particularly in a situation where, as here, there are extant proceedings in the District Court, a District Court Judge can simply apply the “jurisdiction powers or functions of a Magistrate” (including the powers referred to in s 68 of the Act) in dealing with both the trial and interlocutory applications in the action. I consider that it was not at all necessary to institute the action in the Magistrates Court since the District Court has jurisdiction to make all of the orders sought by the lessee. Indeed, the orders sought by the lessee in the counterclaim in the District Court filed on 14 May 2013 are phrased identically to those sought by way of the application filed in the Magistrates Court the previous day (with the exception of the interlocutory injunction).
Proceeding with the Magistrates Court action was also highly inappropriate
By ground 4 of appeal, the lessors essentially assert that proceeding with the Magistrates Court action was not only unnecessary, it was also highly inappropriate. They essentially contend that the Magistrates Court was an inappropriate forum (or forum non conveniens) because District Court proceedings concerning the same parties, involving substantially the same facts and seeking substantially the same relief were already on foot at the time of the hearing and the Magistrate should therefore have declined to exercise jurisdiction and immediately transferred the proceedings into the District Court for consolidation.
This submission essentially raises the question: are the Magistrates Court proceedings an abuse of process in that the Magistrates Court was an inappropriate forum for those proceedings?
The Supreme Court’s powers
The power of this Court to control the course and conduct of litigation is provided by r 117, Supreme Court Civil Rules 2006:
117—Power to make orders controlling conduct of litigation
(1) The Court may make any order it considers necessary for the proper conduct of a proceeding or otherwise in the interests of justice.
Note—
In addition to the powers specifically mentioned in this rule, the Court's powers to enforce compliance with the rules (rule 12) and the Court's powers to penalise procedural irregularities in costs (rule 13) should be noted.
(2) The Court may (for example)—
(a) dispense with compliance with a rule;
(b) extend or reduce the time for taking any step in a proceeding;
(c)fix the time for taking a step in a proceeding if the time is not otherwise fixed;
(d) permit a party to withdraw a pleading or other document;
(e)strike out a document or proceeding if the Court considers it frivolous, vexatious or an abuse of the process of the Court;
(f) require the parties to state issues in a particular way;
Example—
In cases where there may be numerous issues for determination by the Court, the Court may require preparation of a schedule, in tabular form, listing each item for determination by the Court and the contentions of the plaintiff and the defendant in relation to each item (for example, the so-called Scott schedule used in cases of building disputes).
(g) make orders giving effect to, or modifying, litigation plans;
(h)require the parties to prepare a joint or separate statement of the issues in contention between them for the Court's use;
(i)require each party to file in the Court affidavits sworn by the witnesses the party proposes to call at the trial setting out the substance of the evidence the party proposes to adduce from each witness;
(j)require the parties to file in the Court statements of the documents they propose to tender at the trial;
(k) deal with the form in which evidence is to be taken at the trial;
(l)dispense with compliance with the rules of evidence in relation to a particular issue or range of issues;
(m) fix the time and place of trial.
(3) The Court may exercise its power to extend a time limit even though the relevant time limit has already expired.
(4) An order under this rule may vary or revoke an earlier order.
(5) An order under this rule prevails, to the extent of any inconsistency, over any rule relevant to the subject matter of the order.
It is well established that r 117 is the source of the Court’s power to make orders in relation to litigation which is deemed to constitute an abuse of process, including the making of orders that one proceeding be struck out or consolidated with another proceeding.
Abuse of process
The meaning of the phrase “abuse of process” has been subject to a good deal of consideration[6] and the categories are not closed.[7] In Walton v Gardiner,[8] the High Court identified key categories of proceedings which may constitute an abuse of process. Mason CJ, Deane and Dawson JJ observed:[9]
The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail.[10] Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them.[11] Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.[12] The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police as “the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people”. (Emphasis added)
[6] See Hamilton v Oades (1989) 166 CLR 486, 502 (Deane and Gaudron JJ); Jago v District Court (NSW) 168 CLR 23, 25-26 (Mason CJ); Williams v Spautz (1992) 174 CLR 509, 518 (Mason CJ, Dawson, Toohey and McHugh JJ), 531 (Brennan J), 554-555 (Gaudron J); Walton v Gardiner (1993) 177 CLR 378, 392-393 (Mason CJ, Deane and Dawson JJ); Rogers v The Queen (1994) 181 CLR 251, 255-256 (Mason CJ), 286-287 (McHugh J) ; Ridgeway v The Queen (1995) 184 CLR 19, 74-75 (Gaudron J); D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, 28 [74]-[75] (Gleeson CJ, Gummow, Hayne and Heydon JJ); Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256, 265-267 [9]-[14] (Gleeson CJ, Gummow, Hayne and Crennan JJ); Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75, 92-94 [25]-[28] (French CJ, Gummow, Hayne and Crennan JJ); Michael Wilson & Partners Limited v Nicolls (2011) 244 CLR 427, 452 [88]-[90] (Gummow A-CJ, Hayne, Crennan and Bell JJ); Moti v The Queen (2012) 245 CLR 456, 463-464 [10]-[11] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[7] Sea Culture International v Scoles (1991) 32 FCR 275, 279 (French CJ); Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256, 265 [9] (Gleeson CJ, Gummow, Hayne and Crennan JJ).
[8] (1993) 177 CLR 378.
[9] Walton v Gardiner (1993) 177 CLR 378, 392-393 (Cited with approval in Phillip Morris Ltd v Attorney-General (Vic) (2006) 14 VR 538, 542 [20] (Maxwell P); R v Dalton (2011) 111 SASR 170, 179 [30] (Gray J); Zollo v National Australia Bank Ltd (2009) 261 LSJS 93, 99 [24] (Gray J).
[10] See, eg, Metropolitan Bank v Pooley (1885), 10 App Cas 210, at pp 220-221; General Steel Industries Inc v Commissioner for Railways (NSW) (1964), 112 CLR 125, at pp 128-130.
[11] See, generally, Voth v Manildra Flour Mills Pty Ltd (1990), 171 CLR 538.
[12] See, eg, Reichel v Magrath (1889), 14 App Cas 665, at p 668; Connelly v Director of Public Prosecutions, [1964] AC 1254, at pp 1361-1362.
In the State Bank Case Ruling, Olsson J gave the following guidance as to the types of proceedings which may constitute an abuse of process:[13]
… I accept that, for present purposes, the article written by the former Master Jacob “The Inherent Jurisdiction of the Court” (1970) 23 CLP 23 contains an accurate summation of the circumstances in which an abuse of process may be dealt with, by stay, dismissal or striking out (as appropriate), as I have always understood them to be.
Without attempting to be fully exhaustive, he postulates the categories of proceedings susceptible of categorisation as an abuse as including any one or more of the following -
(a) proceedings which involve a deception on the court, or are fictitious or constitute a mere sham;
(b) proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way;
(c) proceedings which are manifestly groundless or without foundation or which serve no useful purpose;
(d) multiple or successive proceedings which cause or are likely to cause improper vexation or oppression. (Emphasis added)
[13] [1997] SASC 6111.
As is apparent from the above statements, one of the central categories of proceedings which may be classified as an abuse of process are proceedings initiated concurrently with other extant proceedings, in either the same or a different court, and which arise from the same substratum of fact and seek similar relief. This principle has a long history with many decisions elucidating its content.
For example, in Moore v Inglis,[14] Mrs Inglis had commenced proceedings in the High Court after first commencing an action in the Supreme Court of the Australian Capital Territory. Both actions concerned her complaint that she had been transferred from one post to an allegedly inferior one although the actions differed in some respects.[15] The defendants to the High Court action sought an order that Mrs Inglis’ statement of claim be struck out in whole or that the High Court proceedings be stayed pending the determination of the Supreme Court action. Mason J granted the defendants’ application for a perpetual stay, relying on the principle that it is prima facie vexatious for a party to commence proceedings in two courts concurrently relating to the same substratum of fact and seeking similar relief. In arriving at his decision, Mason J observed:[16]
… There is no relevant limitation on the jurisdiction of the Supreme Court to grant relief by way of declaration and injunction which does not apply to this court. Consequently, the circumstance that the relief claimed in the two courts is different is not in itself a reason for allowing the two actions to continue. Putting aside the inherent deficiencies in her claim to relief, deficiencies which would work against her case as much in this court as in the Supreme Court, there is no reason why the plaintiff could not, or cannot, seek relief by way of declaration and injunction in addition to, or in substitution of, damages in the action in the Supreme Court. Any difficulty which the plaintiff may encounter in securing appropriate amendments to the proceedings in the Supreme Court will stem, not from jurisdictional limitations, but from the manner in which the plaintiff has presented her case to date and from the insufficiency of the matters upon which she relies to ground the relief which she claims. However, these difficulties do not provide a reason for allowing the plaintiff to maintain a second proceeding in this court relating to the subject matter already in course of litigation in the Supreme Court.
Finally there is the question of parties. Again, if there is a sufficient basis for so doing — and I express no opinion upon the point — the proceedings in the Supreme Court could be amended as to parties. …
[14] (1976) 50 ALJR 589. This decision was upheld on appeal: Moore v Inglis (1976) 51 ALJR 207.
[15] In the Supreme Court action there was one allegation of conspiracy against five defendants, whereas in the High Court five separate allegations of conspiracies were pleaded. In the Supreme Court action Mrs Inglis sought only damages, whereas in the High Court she sought relief in the nature of declarations and injunctions. The parties differed somewhat between the two actions.
[16] Moore v Inglis (1976) 50 ALJR 589, 592.
Accordingly, Mason J held that the High Court proceedings were an abuse of process as Mrs Inglis had no reasonable justification for bringing those proceedings.
In Henry v Henry, Dawson, Gaudron, McHugh and Gummow JJ stated: [17]
It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the court’s of this country if an action is already pending with respect to the matter in issue.
[17] (1996) 185 CLR 571, 591 (Dawson, Gaudron, McHugh and Gummow JJ). See also Williams v Victoria [2012] VSC 585 [14]-[20], [56] (Zammit AsJ); Branir Pty Ltd v Wallco Pastoral Company Pty Ltd (2006) 18 NTLR 127, 133-134 [19]-[20] (Mildren J); CFMEU v Commonwealth [1999] FCA 1571 [31] (North J); Caloundra Boatyard Pty Ltd v The Ship “Almonta” [1968] SASR 325, 327-328 (Bray CJ).
Again in Lidden v Composite Buyers Ltd, Finn J held:[18]
It is the case that, where proceedings have been started in one court, it is an abuse of process to duplicate proceedings in another court when a complete remedy is available in the first court. It likewise seems the case that where proceedings are pending in a court, a separate action in the same court should, at lease by (sic) stayed where both actions involve the same parties and the same subject matter and where the hearing of the first will effectively dispose of the need for the hearing of the second.
[18] (1996) 139 ALR 549, 559.
In Batistatos v Roads and Traffic Authority (NSW), Gleeson CJ, Gummow, Hayne and Crennan JJ observed:[19]
[19] (2006) 226 CLR 256, 265-267.
[9]What amounts to abuse of court process is insusceptible of a formulation comprising closed categories. Development continues. One example is the line of authority dealing with the stay of proceedings instituted in a second forum where there are pending proceedings in another forum and the continuance of the second proceedings would be an abuse of the process of the first forum.
…
[15] Earlier, in Rogers v The Queen, McHugh J observed:
Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute.
His Honour added:
Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court’s process.
To that it should be added that the power to deal with procedural abuse extends to the exclusion of particular issues which are frivolous and vexatious. Further, the failure to take, as well as the taking of, procedural steps and other delay in the conduct of proceedings are capable of constituting an abuse of the process of the court.
More recently, in Michael Wilson & Partners Limited v Nicolls, Gummow A-CJ, Hayne, Crennan and Bell JJ (with whom Heydon J agreed) noted:[20]
[90]One recognised class of abuse of process is where proceedings are instituted against a party in a second forum when there are proceedings against that party pending in another and the continuance of the second would be an abuse of the process of the first.[21]
[20] (2011) 244 CLR 427, 452.
[21] See, eg, Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538.
Abuse of process need not involve misconduct or moral delinquency
It should be noted that while some decisions refer to an abuse of process requiring proceedings which are “vexatious”, “unjustifiably oppressive” or “invoked for an illegitimate purpose”, not every case of abuse of process need involve misconduct by a party or some kind of moral delinquency. In Oceanic Sun Line Special Shipping Co Inc v Fay, Deane J indicated in relation to such formulations of the rule:[22]
… I do not think that one should read into the words a requirement that the continuance of the action would involve moral delinquency on the part of the plaintiff … Rather, it seems to me that those words should be read, in the St Pierre formulation, as describing and characterizing the objective effect, on balance, of a continuation of the particular forum as the venue of the proceedings rather than as describing the conduct of the plaintiff in selecting or persisting with that forum …
[22] (1988) 165 CLR 197, 247.
This statement was recently affirmed by Gleeson CJ, Gummow, Hayne and Crennan JJ in Batistatos v Roads and Traffic Authority (NSW).[23]Kirby J made some additional comments on this issue:[24]
[142]In some cases an order made under this power, or under analogous powers, will indeed be made to protect the parties proceeded against from the serious injustice involved in subjecting them to litigation in circumstances that render the proceedings grossly unfair. However, part at least of the reasons for the termination of such proceedings, or the provision of a permanent stay, on the ground of an abuse of process, is the self-regard of the court itself. At the one time, the court is protecting parties and defending the “temples of justice”. This is inherent in the performance by the court of its jurisdiction and the exercise of its powers.[25] Thus, preclusion by misconduct is a consideration. But it is not the only consideration. Nor is it essential. Of its nature, the power exists for application in a wider range of circumstances.
[23] (2006) 226 CLR 256, 281 [70] (Gleeson CJ, Gummow, Hayne and Crennan JJ). See Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 555 (Mason CJ, Deane, Dawson and Gaudron JJ).
[24] (2006) 226 CLR 256, 300.
[25] See Nudd v The Queen (2006) 80 ALJR 614, 632-633 [84]; 225 ALR 161, 184; Levinge v Director of Custodial Services, Department of Corrective Services (1987) 9 NSWLR 546, 557; Jack Brabham Holdings Pty Ltd v Button (1988) 94 FLR 278, 289-290.
Forum non conveniens
Classically, the principle of forum non conveniens (or the “clearly inappropriate forum” principle) has been applied in the context of private international law; it is generally called in aid to prevent a multiplicity of proceedings where actions between the same parties, with the same substratum of fact, seeking similar relief, are before both a domestic and a foreign court. The classic statement of the principle emanates from the judgment of Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay:[26]
… it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties. The reason why that is so is that, once it is accepted that the adjectives “oppressive” and “vexatious” are not to be narrowly or rigidly construed and are to be applied in relation to the effect of the continuation of the proceedings rather than the conduct of the plaintiff in continuing them, the continuation of proceedings in a tribunal which is a clearly inappropriate forum would, in the absence of exceptional circumstances being established by the plaintiff (cf Spiliada Maritime Corp v Cansulex Ltd),[27] be oppressive or vexatious to such a defendant if there is some available and appropriate tribunal in another country. Admittedly, that approach to the “vexatious” and “oppressive” test is less stringent and less rigid than would have been accepted in the nineteenth century. Under it, the applicable test pursuant to traditional principles can, in the ordinary case, properly be seen as an “inappropriate forum” test. It cannot, however, properly be seen as a “more appropriate forum” test since the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is a clearly inappropriate one.
[26] (1988) 165 CLR 197, 247-248.
[27] [1987] 1 AC 460, at p 478.
That statement of principle has been successively affirmed by the High Court, most notably in Voth v Manildra Flour Mills Pty Ltd,[28] Henry v Henry,[29] Regie Nationale des Usines Renault SA v Zhang[30] and Puttick v Tenon Ltd.[31]
[28] (1990) 171 CLR 538, 564-566 (Mason CJ, Deane, Dawson and Gaudron JJ).
[29] (1996) 185 CLR 571, 586-589 (Dawson, Gaudron, McHugh and Gummow JJ).
[30] (2002) 210 CLR 491, 503-504 [24]-[25] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).
[31] (2008) 238 CLR 265, 277 (French CJ, Gummow, Hayne and Kiefel JJ).
In Voth v Manildra Flour Mills Pty Ltd, Mason CJ, Deane, Dawson and Gaudron JJ added the following explanation to the principle:[32]
It follows that, subject to the question of onus discussed in the preceding paragraph, the principles to be applied in applications to set aside service and in applications for a stay on inappropriate forum grounds are those stated by Deane J in Oceanic Sun.[33] In the application of those principles the discussion by Lord Goff in Spiliada[34] of relevant “connecting factors” and “a legitimate personal or juridical advantage” provides valuable assistance.
The fact that the onus of proof will differ according to whether the application is an application to set aside service effected outside the jurisdiction pursuant to leave or an application to stay the proceedings is inevitable: this flows from the issue to which the test is relevant. In one case, should the court assume jurisdiction? In the other, should the court decline jurisdiction? As Spiliada recognizes, there will be a difference in onus regardless of the precise content of what is seen as the appropriate test. The question whether the local court is a clearly inappropriate forum focuses, on both kinds of application, upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum. In practice, the differing onus should raise no real difficulty. (Emphasis added)
[32] (1990) 171 CLR 538, 564-565.
[33] (1988) 165 CLR, at pp 247-248.
[34] [1984] 2 Lloyd’s Rep 91.
As is evident from the above, there is a significant overlap between abuse of process principles and clearly inappropriate forum principles.
In Walton v Gardiner,[35] the High Court identified the forum non conveniens principle as a species of abuse of process. Mason CJ, Deane and Dawson JJ made the observation in seeking to delineate a number of categories of proceedings which will be an abuse of process:[36]
… Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them.[37] …
[35] (1993) 177 CLR 378.
[36] Walton v Gardiner (1993) 177 CLR 378, 392-393 (Cited with approval in Phillip Morris Ltd v Attorney-General (Vic) (2006) 14 VR 538, 542 [20] (Maxwell P); R v Dalton (2011) 111 SASR 170, 179 [30] (Gray J); Zollo v National Australia Bank Ltd (2009) 261 LSJS 93, 99 [24] (Gray J).
[37] See, generally, Voth v Manildra Flour Mills Pty Ltd (1990), 171 CLR 538.
The role of the forum non conveniens principle where there is an allegation of an abuse of process constituted by two similar actions having been commenced, either in two Australian courts or the same court, was also specifically acknowledged by Bowen CJ in Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd:[38]
In my opinion there are many matters to be considered in exercising this Court’s discretion besides weighing the advantage to the plaintiff against the disadvantage to the defendant. Some might be comprised in the principle of forum non conveniens if that were adopted. This would involve consideration of circumstances relating to the witnesses. In cases where, as in the present case, many of the issues of fact and the relief claimed were the same, it would involve consideration of the fact that the work done on pleadings, particulars, discovery, interrogatories and preparation generally might be found, when the hearing of the second case came on, to have been wholly or partly thrown away. … In addition, the court might have to consider other matters. Thus in some sense the public interest may be involved in deciding whether two cases claiming the same damages and involving substantial issues of fact, which are the same in each case, should be allowed to proceed simultaneously in the State and federal systems of justice. This would certainly open the way to tactical manoeuvres in which the appearance might well be presented to the public of two court systems competing to see who determined the common facts first. It would be unfortunate if we adopted practices and procedures which facilitated this. In MacShannon v Rockware Glass Limited[39] Lord Diplock thought it relevant to consider the substantial waste of time and effort if it became a common practice to bring in England actions arising out of industrial injuries in Scotland when the matters were referred by trade unions to English solicitors for them.
It appears to me to be proper to take into account all the matters which I have mentioned. … (Emphasis added)
[38] (1978) 35 FLR 346, 353. See also Turelin Nominees Pty Ltd v Dainford Ltd (1983) 67 FLR 440, 447 (Smithers J); Jillawarra Grazing Co v John Shearer Ltd (1983) 60 FLR 339, 341 (Toohey J).
[39] [1978] 2 WLR 362.
This was also alluded to in the extract above from the judgment of Gummow A-CJ, Hayne, Crennan and Bell JJ in Michael Wilson & Partners Limited v Nicolls,[40] the plurality there citing Voth v Manildra Flour Mills Pty Ltd.[41]
[40] (2011) 244 CLR 427, 452. See also the remarks of Gleeson CJ , Gummow, Hayne and Crennan JJ in Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256, 265 [9] extracted above, citing Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 and Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538.
[41] (1990) 171 CLR 538.
Consideration of the present case
The District Court and Magistrates Court proceedings in this case arise from the same substratum of fact; involve the same parties; raise the same factual issues and questions of law; and similar relief is sought in each of the proceedings.[42] The Magistrates Court proceedings were therefore prima facie an abuse of process. I therefore proceed to consider whether there was any reasonable justification for the commencement and continuation of the Magistrates Court proceedings.
[42] The only difference being that the interlocutory injunction was not sought in the District Court. Otherwise, the relief sought is identical.
Was it necessary for the lessee to bring the proceedings in the Magistrates Court?
I have concluded above that it was quite unnecessary to bring these proceedings in the Magistrates Court.
Is the jurisdiction of the Magistrates Court a specialist jurisdiction?
The jurisdiction vested in the Magistrates Court pursuant to s 68(2), Retail and Commercial Leases Act 1995 and s 10(1a)(ab), Magistrates Court Act 1991 is not a specialist jurisdiction vested exclusively in that Court like the admiralty jurisdiction of the High Court[43] or what was formerly the exclusive jurisdiction of the Federal Court to determine claims under the Trade Practices Act 1974.[44]
[43] See Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277, 281 (Dixon J).
[44] See Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346, 354-355 (Bowen CJ).
It is not unique or unknown to the District Court; indeed, the District Court in the ordinary course exercises a review jurisdiction over orders made by Magistrates under s 68(2) where those orders relate to a minor civil action.[45] Further, pursuant to s 69(1) of the Act, which provides for the transfer of Magistrates Court proceedings under s 68 to the District Court, the District Court itself commonly determines proceedings calling into question matters arising within the province of s 68(2) at the first instance level;[46] the lessee’s pending counterclaim in the District Court is testament to that fact. As well as this, the District Court regularly deals with various matters which arise at common law and equity and overlap with s 68(2).
Is the jurisdiction of the Magistrates Court suitable for the final resolution of the present matters?
[45] Magistrates Court Act 1991 s 38(6).
[46] See for example: Xclusive Pty Ltd v Christian Brothers Inc [2001] SASC 380; CP (Adelaide) Pty Ltd v Hartford Holdings Pty Ltd (No 7) [2002] SADC 81; Elaura Enterprises v Harnas & Harnas [2002] SADC 178; Jenkinson & Anor v Young [2004] SADC 30; Fresace P/L vBrian & Vivien Enterprises P/L; Brian & Vivien Enterprises P/L v Fresace P/L [2005] SADC 120; Paralawie Investments P/L v Maurice Srour P/L [2006] SADC 16.
The jurisdiction of the Magistrates Court is not suitable for the determination of the complex factual matters which are raised for determination in these proceedings; indeed, it is clearly inappropriate for that purpose.
Perhaps most importantly, the lessors’ action well exceeds the relevant jurisdictional limit of the Magistrates Court of $40,000[47] and consequently the matter was always one that was required to be determined by the District Court.
[47] Magistrates Court Act 1991 s 8(1)(a)(ii). Note: that as from 1 July 2013, the jurisdictional limit has been increased from $40,000 to $100,000: Statutes Amendment (Courts Efficiency Reforms) Act 2012 s 24(1); Statutes Amendment (Courts Efficiency Reforms) Act (Commencement) Proclamation 2013 s 2.
The District Court is the ideal forum for the determination of the parties’ respective rights, the Court being familiar with these matters in its general experience and having the appropriate jurisdictional limit.[48] Proceedings were originally filed by the lessors in the District Court, the lessee has filed a Defence and Counterclaim in the District Court, and the Magistrate transferred the Magistrates Court proceedings to the District Court for consolidation.
[48] See District Court Act 1991 s 8(1); District Court Civil Rules 2006 r 263(2)(h). Note that as from 4 July 2013, the jurisdictional limit imposed by r 263(2)(h) has been increased from $15,000 to $40,000: See District Court Civil Rules 2006 (Amendment No 23) cl 5. Cf Magistrates Court Act 1991 s 8(1)(a)(ii).
Is there duplication of work and waste of time?
There was no purpose to the action in the Magistrates Court. There was nothing which could be achieved in the Magistrates Court and which could not be achieved in the District Court. Indeed, the contrary is the case. It is only in the proceedings in the District Court that orders can be made which will dispose of all matters in dispute between the parties.
The District Court is now seized of the whole of the action and has been (in terms of the lessee’s Defence and Counterclaim) since the day after the present application was filed in the Magistrates Court which was, of course, before the hearing of the application for the injunction and the making thereof.
The Magistrates Court always lacked jurisdiction to finally determine the respective rights of the parties under the lease given the extant District Court proceedings which exceed the Magistrates Court’s monetary jurisdiction.[49] The filing of the application in the Magistrates Court Registry has merely resulted in a duplication of actions and the waste of scarce and continually dwindling judicial resources.[50] By dealing with the application of the lessee, the Magistrate purported to assume a jurisdiction to deal with the same matters of which the District Court was already seized. The District Court will, in due course, be required to undertake an examination of those matters at much greater depth than was possible in the Magistrates Court.
[49] Magistrates Court Act 1991 s 8(1)(a)(ii). Note: that as from 1 July 2013, the jurisdictional limit has been increased from $40,000 to $100,000: Statutes Amendment (Courts Efficiency Reforms) Act 2012 s 24(1); Statutes Amendment (Courts Efficiency Reforms) Act (Commencement) Proclamation 2013 s 2.
[50] Williams v Victoria [2012] VSC 585 [64] (Zammit AsJ); Commonwealth v Cockatoo Dockyard Pty Ltd (2003) 1 DDCR 1, 24 [91] (McColl JA); Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346, 354-355 (Bowen CJ).
Further, for this Court to give a substantive judgment on the matters presently before the District Court would be a manifest misapplication of judicial resources.[51] Were this Court to consider the substantive grounds raised in grounds of appeal 1 to 3 and the Notice of Contention, it would have to spend a good deal of time in undertaking a detailed analysis of the parties’ contentions and determining the proper (although not definitive) factual conclusions which are required by the principles set down by the High Court in Australian Broadcasting Corporation v O’Neill.[52]
[51] An appeal from the decision of a Magistrate to this Court proceeds by way of rehearing (Supreme Court Civil Rules 2006 r 286(1)). As Gray J indicated in Adelaide Bank Ltd v Lucke [2010] SASC 59 [17] in an appeal against a decision relating to an injunction: “The initial inquiry is to ascertain whether all relevant facts have been considered and whether any immaterial matters have been had regard to. The appellate court is to consider whether any error of law or principle has been identified on the part of the judicial officer under appeal. Further, the appellate court is to assess whether the decision under appeal is so extreme that although error cannot be identified, the court is satisfied that error must have occurred”.
[52] (2006) 227 CLR 57. Gummow and Hayne JJ (with whom Gleeson CJ and Crennan J agreed) there stated at 81-82:
[65]The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued: “The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted”.
[66]By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstance the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal: “How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks”.
In particular, the inquiries into whether there is a serious issue to be tried, and whether the injury the lessee would be likely to suffer if the injunction is refused outweighs the injury the lessors would suffer if the injunction is granted, would, in this highly complex situation, require a detailed examination of the evidence proffered in the Magistrates Court and the submissions made on appeal. This would all occur against the backdrop of extant and progressing District Court proceedings which will require yet a third determination of these very same factual and legal matters in any event.
This diabolical situation is directly antithetical to the purpose of s 68(2) of the Act. As Judge Tilmouth observed recently in Macerlean v Notfair Pty Ltd:[53]
[21]An initial purpose of s 68(2)(j) appears to ensure that all disputes under the Retail and Commercial Leases Act are dealt with and finalised at the one time and in the one hearing. These are the objectives of economy and expedition. …
[53] [2013] SADC 80.
The above conclusions are reinforced by s 69 of the Act which provides for the transfer of proceedings on the application of a party to the District Court where the monetary jurisdiction of $40,000 of the Magistrates Court is exceeded.[54]
[54] That jurisdictional limit has since been increased to $100,000 with effect from 1 July 2013: Statutes Amendment (Courts Efficiency Reforms) Act 2012 s 33; Statutes Amendment (Courts Efficiency Reforms) Act (Commencement) Proclamation 2013 s 2.
Is there embarrassment caused to the District Court?
A further issue raised by the peculiar circumstances of this case is that of embarrassment of the District Court. One effect of the interlocutory application being determined in the Magistrates Court is to produce a judicial determination as to the prospects of success of the lessee in a District Court trial, a matter of some potential embarrassment to the District Court Judge. Such embarrassment would be greatly exacerbated were this Court to deliver a judgment on appeal from the Magistrate’s decision, making, as would be required, fairly definite findings about those prospects of success. In such circumstances, there would exist on record two (partial) judicial determinations of the matter prior to the District Court having an opportunity to consider the matter. In my view, this is quite inappropriate.
Conclusion
For all of the above reasons, I consider that the Magistrates Court was an inappropriate forum for the determination of the lessee’s claim for an injunction. Both final remedies and interlocutory remedies (including orders for injunctions) are available to the lessee in the District Court and there are good reasons why the District Court should be the sole forum for the determination of all matters in dispute between the present parties. I find that the application for the injunction in the Magistrates Court action, in the face of extant District Court proceedings which raised for determination the same issues between the parties, was an abuse of process and should have been transferred to the District Court for consolidation. If there is to be an application for an interim injunction pending the District Court trial, that application should be heard and determined by a District Court Judge.
I find that the appellant has made out ground 4 of appeal. I allow the appeal. I will hear the parties as to the precise form of the orders to be made.
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