Debco Pty Ltd v Abacad Automation Pty Ltd

[1998] FCA 1508

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 111 of 1998

BETWEEN:

DEBCO PTY LTD (ACN 004 710 534)
APPLICANT

AND:

ABACAD AUTOMATION PTY LTD (ACN 009 172 650)
FIRST RESPONDENT

JOHN JOHANSON
SECOND RESPONDENT

JUDGE:	HEEREY J
DATE:	19 NOVEMBER 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

When the matter came before me at the first directions hearing, I raised the question of a possible cross-vesting order.  It seemed to me then, and still does, that this matter being essentially a contractual dispute concerning an allegedly defective machine, is more appropriate to be dealt with in a State court rather than this Court.  I gave certain directions.

However, in the meantime, the parties negotiated what appeared to be a settlement of the whole proceeding.  They entered into a written agreement dated 19 August 1998.  Under that agreement the first respondent was to collect the machine from the applicant's premises in New South Wales, take it to Perth, and do such work on it as was necessary to render it capable of performing the functions described in the specifications.  It was provided by cl 6.1 that the machine was to be redelivered by 23 October 1998 and commissioned by the first respondent at the applicant’s plant by 30 October.  By cl 6.2 time was to be of the essence of the agreement.  By cl 10.1, if the first respondent was to make default in substantial performance of any obligation of the agreement, then if that default were not remedied within three days after the applicant had served a notice specifying the default, the agreement was treated then to have been rescinded.

The machine has not in fact been returned.  The applicant gave the requisite notice more than three days ago.  The applicant has, on 13 November, filed a notice of motion seeking, pursuant to O 20 of the Federal Court Rules, judgment for the applicant against the first respondent “for damages for breach of contract in the sum of $285,166.16 and interest”.

It did not seem to me to be appropriate to deal with the substance of that matter now.  The respondents have, by agreement of the parties, never been required to file a defence because of the pendency of the cross-vesting application to which I referred, and the subsequent settlement agreement.  The position is, it seems to me, that if the settlement agreement has been rescinded the parties are back to the position they were when the proceeding started. 

The question then arises as to which is the appropriate court to which the matter should be cross-vested.  I am inclined to the view that the appropriate court is the Supreme Court of Western Australia.  I say that because the machine is now in Western Australia, and notwithstanding what was said by counsel for the applicant, I am not persuaded that a court dealing with this dispute would not need to have some inspection of the machine, or at least hear evidence from experts who have themselves inspected the machine.

Moreover, the original agreement provided by cl 21 that the contract was “deemed to have been made in the State of Western Australia and the construction, validity and performance of the Contract shall be governed in all respects by the laws of the State of Western Australia”.  Also there is an arbitration clause, cl 18, providing for arbitration by an arbitrator nominated by the chief executive officer from time to time of the Australian Institute of Engineers, WA division.

Since the parties, when they initially made this agreement, obviously contemplated that disputes would be dealt with in Western Australia (notwithstanding that the machine was to be delivered to premises in New South Wales), I think the fairest solution is to cross-vest the matter to the Supreme Court of that state.  So I will make an order cross-vesting the matter to the Supreme Court of Western Australia and reserving today’s costs.

I can understand the applicant’s wish to have this matter resolved promptly, as unfortunately time has passed due to the attempts to resolve the matter by settlement.  However, obviously enough, I cannot make any directions as to the subsequent management of the matter in the Supreme Court of Western Australia, but no doubt the parties will approach that Court and seek appropriate directions in the near future.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate:

Dated:            19 November 1998

Counsel for the Applicant:	Mr V Ruta
Solicitor for the Applicant:	J N Martin & Partners
Counsel for the Respondent:	Mr B Scheid
Solicitor for the Respondent:	Higgins Teale
Date of Hearing:	19 November 1998
Date of Judgment:	19 November 1998