Benue Minerals Ltd v Banc Qld Pty Ltd

[2014] VCC 1588

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-14-03580

BENUE MINERALS LTD	Plaintiff
v.
BANC QLD PTY LTD & ORS	Defendants

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	19 September 2014
DATE OF JUDGMENT:	19 September 2014 (revised 22 September 2014)
CASE MAY BE CITED AS:	Benue Minerals Ltd v. Banc Qld Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2014] VCC 1588

REASONS FOR JUDGMENT

---

Catchwords:              County Court – Jurisdiction – Whether a material part of the cause of action occurred in Victoria – Sale of mining equipment – Whether contract made in Victoria – Series of emails between the representatives of the plaintiff’s agent in Victoria and the defendants in Queensland –Whether contract breached in Victoria – Whether the defendants’ breach made it impossible for the plaintiff to perform part of the contract which ought to have been performed in Victoria – Sections 36 and 39 County Court Act 1958 (Vic)

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms A. Kouloubaritsis	Holding Redlich
For the Defendant	Mr D. Carlile	CBL Business Lawyers

HIS HONOUR:

1The plaintiff initiated the proceeding by writ on 25 July 2014. The defendants by summons dated 1 September 2014, seek to have the proceeding set aside on the basis that the Court does not have jurisdiction or alternatively, the proceeding should be stayed pursuant to s. 20 of the Service and Execution and Process Act 1992 (Cth).

2The plaintiff delivered an amended statement of claim on 12 September 2014, purportedly pursuant to rule 36.03(a). Defendants’ counsel, Mr Carlile, has raised the objection that the amendments included the adding of a second plaintiff which he submitted was not permitted by the rule relied upon. Notwithstanding, I consider it appropriate to deal with the matter on the basis of the amended pleading.

3The claim relates to the sale of equipment by the first defendant to the first plaintiff and the assertion that after the equipment was transferred to Nigeria, the second and third defendants took possession of the equipment and that this constituted a breach of the Sale Agreement and also gives rise to causes of action in detinue and/or conversion.

4The objection to jurisdiction is based on the fact that the plaintiffs’ causes of action do not have a relevant connection with the State of Victoria. The plaintiffs, however, rely upon the assertion that:

a.the agreement for the sale of the equipment was made in Victoria;

b.a variation of the Sale Agreement was made in Victoria; or

c.the Sale Agreement was breached in Victoria.

5There are differences in the pleadings between the initial statement of claim included with the writ and the proposed amended statement of claim. Many of those amendments go to refining the issues and particularising matters in such a way as to accord with the submissions now made by the plaintiffs that the agreement, the variation to the agreement or the breach of agreement occurred in Victoria.

6The agreement and variation of the agreement were relatively informal. There is evidence of the email exchanges between the parties. Plaintiffs’ counsel, Ms Kouloubaritsis  in her submissions, examined the emails to support her submission as to what constituted the final offer and final acceptance, which gave rise to a binding contract. The rule is as stated by Charles JA in Schib Packaging sri v Emrich Industries Pty Ltd (2005) 12 VR 268, 271 that, “when a contractual offer has been accepted by instantaneous means of communications…the contract is made when the acceptance is received by the offeror”.

7Notwithstanding plaintiffs’ counsel’s submissions based upon her examination of the relevant email correspondence between representatives of the plaintiffs’ agents in Melbourne and the second and third defendants in Queensland, I am not satisfied that the assertions made in the amended statement of claim as to what constituted the final offer and final acceptance giving rise to the Sale Agreement, correctly identified the final acceptance, or that the final acceptance was a communication made by the defendants to the plaintiffs’ agents.

8It is equally possible, in my view, that alternative emails from the plaintiffs’ representatives to the defendants or telephone communications or other correspondence between the parties may have constituted the final acceptance of the offer to enter into the Sale Agreement. It is very difficult on the present material to say categorically at what point in time, and by reason of what act, contractual relations between the parties was concluded.

9A similar problem arises in relation to the Variation Agreement. The variation was raised for the first time in the amended statement of claim. I reach a similar conclusion in relation to that. The plaintiffs rely upon an email dated 12 November 2013 from the third defendant to a representative of the plaintiffs’ agent in Melbourne. However, that email itself refers to a previous conversation between the third defendant and a representative of the plaintiffs’ agent. It is more likely, in my view, that any variation to the agreement was reached prior to that email. I note that there is a gap of about three weeks since the previous email which email suggested that the plaintiffs at least, wished to “revisit our deal”. It is likely, in my view, that any variation was concluded before the email dated 12 November 2013.

10In relation to the breach of agreement relied upon, the plaintiffs allege that the defendants repudiated the Sale Agreement or Varied Sale Agreement by indicating that payment of the balance of the monies owing as a result of the Varied Agreement would not be accepted by the defendants.

11The plaintiffs appear to rely upon the indication that payment would be refused as a breach of the agreement. They also rely upon the later actions of the defendants in taking possession of the equipment in Nigeria as a breach of the Sale Agreement. These facts are also the basis for the claims in detinue and conversion.

12It is clear that the taking of possession of the equipment in Nigeria cannot found jurisdiction in this Court. What is also pleaded is that the notification from Queensland to Melbourne that the defendants would not accept the balance of purchase money for the equipment was a breach which either occurred in Melbourne or which prevented the plaintiffs from performing their obligations under the varied contract which would have been performed in Victoria.

13Plaintiffs’ counsel referred to Rule 7.01(g) in support of the submission. This is part of the Rules which provide for the circumstances in which service of originating process out of Australia is allowed. The rule extends (or clarifies) the circumstances in which a breach committed within Victoria can be relied upon. The Rule provides that service may occur where “the proceeding is brought in respect of a breach committed within Victoria of a contract wherever made, even though that breach was preceded or accompanied by a breach out of Victoria that rendered impossible the breach at that part of the contract which ought to have been performed within Victoria”.

14Plaintiffs’ counsel submitted that the plaintiffs were prevented from performing their obligation to pay the defendants because the performance of that obligation had been rendered impossible by the indication by the third defendant that payment would not be accepted by the defendants.

15In the amended statement of claim, it is alleged that the second plaintiff “tendered the amount of $158,600” to the first defendant but that tender was refused. The refusal was said to arise in a conversation where the plaintiffs’ representative asked the third defendant, “the details of the account to which payment should be made. Mr Wiperi said words to the effect that Ms Loon should not arrange for any payment to be made to BANC QLD”, the first defendant.

16In circumstances where the pleading relies upon a tender, it is difficult to accept that the performance by the second plaintiff of its obligations have been prevented by a breach by the defendants. Further, it is likely a tender could have been made, or payment effected in the same way as the deposit of $100,000 had previously been paid by the plaintiff to the first defendant on about 13 August 2013.

17I do not consider in this case that it has been established that a relevant breach of the Sale Agreement, or even of the Variation Agreement, occurred within the State of Victoria or that the extension of the concept of a breach committed within Victoria, which is included in the Rules relating to service of process outside Australia, has any application in the present case.

18I am not satisfied that this Court has jurisdiction to hear the claim presently brought by the plaintiff or as proposed by the amended statement of claim and the addition of a second plaintiff. I suggested to plaintiffs’ counsel that these jurisdictional difficulties might be overcome by the proceeding being transferred to the Supreme Court of Victoria. If that course were followed, the defendants might pursue their application pursuant to s.20 of the Service and Execution of Process Act 1992 (Cth) in that Court.

19Defendants’ counsel indicated that s. 39 of the County Court Act gives me power to stay the proceeding “pending the making of an application under Part 3 of the Courts (Case Transfer) Act 1991”. Any such application could only result in transfer, in this case, to the Supreme Court of Victoria. That Court would, however, have power to transfer the proceeding to the Supreme Court of Queensland, if it considered that Queensland was the more appropriate jurisdiction for the determination of the dispute between the parties.

20Unless plaintiffs’ counsel indicates to me that it would be more appropriate simply to strike out the proceeding, I would be disposed to stay the proceeding pending an application for case transfer and would give directions requiring that to be done within a certain period, in default of which the proceeding would be struck out.

- - -

Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 19 September 2014 and revised on 22 September 2014.

Dated: 22 September 2014

Catherine Kusiak

Associate to His Honour Judge Anderson