DKSH Australia Pty Ltd v Colmax Glass Pty Ltd

[2013] VCC 313

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-11-02798

DKSH AUSTRALIA PTY LTD	Plaintiff
v.
COLMAX GLASS PTY LTD	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	25 March 2013
DATE OF JUDGMENT:	25 March 2013 (revised 26 March 2013)
CASE MAY BE CITED AS:	DKSH Australia Pty Ltd v. Colmax Glass Pty Ltd
MEDIUM NEUTRAL CITATION:	[2013] VCC 313

REASONS FOR JUDGMENT

---

Catchwords:             Practice and procedure – Jurisdiction – Third party served by defendant in Germany – Whether a “material part of the cause of action arose in Victoria” – section 36 of the County Court Act 1958.    

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N. Kitingan	M & K Solicitors
For the Defendant	Ms L. Kinda	Brygel Lawyers
For the Third Party	Mr C.E Shaw	Clayton Utz

HIS HONOUR:

1The present application before the Court challenges the Court’s jurisdiction to deal with a claim between the present defendant and third party. The third party submits that no “material part of the [defendant’s] cause of action arose within Victoria”, as required by section 36 of the County Court Act 1958. The third party is a German company and was served with the third party proceeding in Germany. The third party indicated that it wished to challenge the Court’s jurisdiction to determine the third party proceeding. The third party issued a summons dated 22 November 2012 asserting that, ”the County Court does not have jurisdiction to hear and determine the proceeding under section 36 of the County Court Act 1958” and as a consequence sought an order that, “the third party proceeding be struck out, alternatively dismissed, alternatively stayed”.

2The defendant filed a proposed amended defence and counterclaim which was considered by the Court at a directions hearing on 15 February 2013. In the draft pleading, the third party was named as a second defendant by counterclaim. There were, however, certain inconsistencies between the pleading in the statement of claim in the third party proceeding and the proposed amended defence and counterclaim.

3The matter was adjourned until 20 March 2013 to give the defendant the opportunity to prepare and serve a further proposed amended defence and counterclaim. This is a document dated 13 March 2013. The defendant (and proposed plaintiff by counterclaim) asserts that the Court has jurisdiction because the contract upon which it sues was made in Victoria. Alternatively, it pleads that certain representations made all related to the contract which was made in Victoria and therefore jurisdiction to bring claims based upon conduct in breach of in the Trade Practices Act are within the Court’s jurisdiction.

4At the hearing on 20 March 2013, Mr Shaw of counsel who appeared for the third party, examined the proposed defence and counterclaim in detail. It was clear from his examination that the agreement alleged in the proposed counterclaim was not pleaded as a contract made in Victoria and the representations upon which the Trade Practices Act  claim were based, were not pleaded as representations provided to the defendant in Victoria and that the defendant’s loss and damage had no connection to Victoria. The only references to Victoria in the counterclaim were passing references which would not found a basis for the Court’s jurisdiction.

5In relation to the alleged agreement, the defendant in the proposed counterclaim refers to a “GRP agreement”, and to a “Compressor Agreement” and to a “Collateral Agreement”. In each case, so far as can be ascertained from the draft pleading, the agreement was formed by notification by Mr Erik Paulsen, the business manager of Environmental technologies of the plaintiff to Mr Peter Harkins, a director of the defendant, either by telephone or by email. The evidence establishes that the defendant’s base was in South Australia, its operations were in New South Wales and the specific project to which the agreements related was to be carried out in Western Australia. In relation to each agreement, the defendant asserts in the proposed counterclaim that the plaintiff was acting for and on behalf of the third party (second defendant by counterclaim) in the negotiations for the agreements.

6The plaintiff originally brought the action against the defendant suing upon a commercial credit application made by the defendant and accepted by the plaintiff in March 2010, pursuant to which the plaintiff was to supply and deliver goods and services to the defendant in return for payment in accordance with the trading terms. The plaintiff’s claim for $119,677.84 relates to the supply of compressors to the defendant for the project in Perth. The substantial part of the equipment supplied for the project (for a glass recycling plant or GRP) in Western Australia was to be supplied by the third party. The defendant in the proposed counterclaim asserts that the equipment supplied for the glass recycling plant, including the compressors supplied by the plaintiff, did not function together to operate at the level which had been represented by the plaintiff and the third party to the defendant.

7The representations as pleaded in the proposed defence and counterclaim are all alleged to be constituted by telephone or email communications from Mr Paulsen to Mr Harkins and there is nothing in the draft pleading to suggest that Mr Harkins was at the time he received those communications anywhere other that New South Wales where his office was located. When these matters were discussed with Ms Kinda of counsel who appeared for the defendant, during her submissions on 20 March 2013, she sought an adjournment of the third party’s summons until today to consider whether there was any other material which might support a pleading that the agreements were made in Victoria or the representations sued upon were made to a party in Victoria.

8Alternatively, it was suggested that Ms Kinda might consider whether there was some basis for the proceeding to be transferred to the Supreme Court and for the jurisdictional issue to be resolved in that way. The third party proceedings had been served upon the third party in Germany and it would probably be necessary for any proposed counterclaim to similarly be served unless the third party (as the second defendant to the counterclaim) were prepared to accept service of that process.

9This morning, the matter has proceeded on the basis that I earlier referred to, Ms Kinda submitting that the relevant contract was made in Victoria and that the representations related to a contract made in Victoria. I consider therefore, that the debate has not advanced the argument from the position reached in discussion on 20 March 2013. As I indicated on that day, if no further material was filed indicating that the facts were other than as pleaded in the proposed defence and counterclaim, the third party proceeding would be struck out.

10This morning, Ms Kinda has also relied upon section 51 of the of the County Court Act 1958 which extends the jurisdiction of the Court to allow the determination of a counterclaim, although the resolution of the counterclaim would ordinarily have been beyond the jurisdiction of the court. The decision of Davis v Flagstaff Silver Mining Company of Utah (1878) 3 CACPD 228 at page 237 makes it clear that this provision relates to “the jurisdiction of the inferior court in respect of both amount and locality”. However, I accept Mr Shaw’s submission that the matters beyond jurisdiction can only be raised in defence to a claim, such as in the present case between the plaintiff and defendant, but would not justify the bringing of a counterclaim against a third party (as the second defendant to counterclaim) where no claim had been made by the third party against the defendant.

11Ms Kinda also referred to Rule 7.01 which provides the circumstances in which the, “originating process may be served out of Australia without order of the Court”. These include where a contract, “was made by or through an agent carrying on business or residing within Victoria on behalf of a principal carrying on business or residing out of Victoria” (Rule 7.01(f)(ii)) and where, “another person out of Australia is a necessary or proper party to the proceeding” (Rule 7.01(l)).

12In the present case, there is no challenge to the service of the third party proceeding, but rather the challenge is to the jurisdiction of the Court to determine the matters raised in the third party proceeding or alternatively the proposed defence and counterclaim. In the circumstances, I consider that the defendant’s submissions are not assisted by Rule 7.01.

13Accordingly, I propose to make the following orders:

a.The trial date of 8 April 2013 of the proceeding between the plaintiff and the defendant is confirmed.

b.The third party proceeding is struck out.

c.The defendant must pay the third party’s costs of the third party proceeding including the costs of the third party’s summons dated 22 November 2012 including the hearings on 15 February 2013, 20 March 2013 and today and the costs reserved on 6 December 2012, to be taxed in default of agreement.

d.The plaintiff’s costs of the third party’s summons filed 22 November 2012 including the hearings on 15 February 2013, 20 March 2013 and today and the costs reserved on 6 December 2012, shall be the plaintiff’s costs in the proceeding.

e.Reserve liberty to apply.

- - -

Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 25 March 2013 and revised on 26 March 2013.

Dated:            26 March 2013

Philippa Gilkes    

Associate to His Honour Judge Anderson