Dueeasy Pty Limited v Devlin

[2014] NSWDC 318

District Court

New South Wales

Medium Neutral Citation:	Dueeasy Pty Limited v Devlin [2014] NSWDC 318
Hearing dates:	27 June 2014
Date of orders:	30 June 2014
Decision date:	30 June 2014
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)Summons filed 19 June 2014 by Bulldog Civil Engineering Pty Ltd and Brian Devlin dismissed. (2)Bulldog Civil Engineering Pty Ltd and Brian Devlin to pay the costs of the defendants to that summons.
Catchwords:	PROCEDURE – Local Court proceedings – application for transfer to District Court by cross-claimant – cross-claim stayed by consent order resulting from failure to provide security for costs – claim exceeds jurisdictional limit of Local Court – purported abandonment of excess in correspondence – need for abandonment in pleadings – potential for amendment – matter set down for hearing – potential for delay and inconvenience – appropriateness of an order for transfer in respect of proceedings subject to a stay
Legislation Cited:	Civil Procedure Act 2005, s 23, s 140 Local Court Act 2007, s 30, s 31
Cases Cited:	Heath v Goodwin (1986) 8 NSWLR 478 Segur v Franklin (1934) 34 SR (NSW) 67; (1934) 51 WN (NSW) 31 Waxman v M'Auliffe (1879) 5 VLR (L) 48
Texts Cited:	Ritchie's Uniform Civil Procedure NSW
Category:	Procedural and other rulings
Parties:	Bulldog Civil Engineering Pty Ltd and Brian James Devlin (plaintiffs on the summons) Dueeasy Pty Limited and Daniel King (defendants on the summons)
Representation:	Counsel: Mr D Smallbone with Mr W Soon (plaintiffs on the summons) Mr S Titus (defendants on the summons) Solicitors: Slater & Gordan Ltd (plaintiffs on the summons) Carneys Lawyers (defendants on the summons)
File Number(s):	2013/322283
Publication restriction:	None

Judgment

1. Bulldog Civil Engineering Pty Ltd and Brian Devlin seek transfer of Local Court proceedings to the District Court on the basis that the amount of the claim and the amount of the cross‑claim exceed the jurisdiction of the Local Court.

2. Dueeasy Pty Limited sued Bulldog Civil in the Local Court for damages for conversion and detention of two earthmoving machines and seeks the return of those machines.  Bulldog Civil denied the claim on the basis that it owned the machines pursuant to an oral agreement and cross‑claims for profits alleged to be payable under a separate oral agreement.

3. Issues arose between the parties in respect of security for costs.  Dueeasy lodged $50,000 with its solicitor as security pursuant to an agreement between the parties in respect of security by Bulldog Civil. Consent orders in respect of security by Bulldog Civil were made on 13 May 2014 in the following terms.

"By consent, in relation to the Notice of Motion dated 23 April 2014

1. Cross Claimant [Bulldog Civil] to give security for costs of the Cross Defendants in the sum of $50,000, such payment to be made by the following instalments:

(i) $12,500 on or before 13 June 2014

(ii) $12,500 on or before 13 July 2014

(iii) $12,500 on or before 13 August 2014

(iv) $12,500 on or before 13 September 2014

2. The sum of $50,000 as security for costs to be held in a controlled monies account by the solicitors for the Cross Claimant

3. Cross Claim be stayed until the amount of $50,000 is held by the solicitors for the Cross Claimant

4. Within 7 days of the solicitors for the Cross Defendants being advised that the sum of $50,000 is held by the solicitors for the Cross Claimant, the Plaintiff/First Cross Defendant and Second Cross Defendant shall produce documents pursuant to Notices to Produce issued by the First and Second Defendant dated 7 February 2014.

5. Costs of the Cross Defendant's Motion dated 23 April 2014 be paid by the Cross Claimant as agreed or assessed."

4. On 27 May 2014 the Local Court made orders in the proceedings listing the claim by Dueeasy for hearing on 28 and 29 August 2014 in the Coffs Harbour Local Court and declined to list the cross‑claim for hearing concurrently with the claim.  The cross‑claim by Bulldog Civil is presently stayed pursuant to the orders made on 13 May 2014.  Subject to this stay, the evidence is on and the matter is ready for hearing.

5. On 19 June 2014 Bulldog Civil filed a summons in this Court seeking the following orders.

"1  Order that the claim in Local Court of New South Wales proceedings number 2013/322283 titled Dueeasy Pty Ltd v Brian Devlin and Bulldog Civil Engineering Pty Ltd, be transferred to this Honourable Court.

2  Order that the cross claim in Local Court of New South Wales proceedings number 2013/322283 titled Bulldog Civil Engineering Pty Ltd v Dueeasy Pty Ltd and Daniel King, be transferred to this Honourable Court

3 Costs."

6. Section 140(2) of the Civil Procedure Act 2005 provides:

“(2) The District Court may, of its own motion or on application by a party to proceedings before the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the District Court.”

7. It is common ground that the amount of damages claimed by Dueeasy would exceed the jurisdiction of the Local Court because of the lapse of time since the cause of action arose. As a result of that delay the daily losses have accumulated. Bulldog Civil says this is a reason why the proceedings should be transferred.

8. On 19 June 2014 the solicitors for Dueeasy wrote to the solicitors for Bulldog Civil in the following terms: “2. We advise that pursuant to Section 23 Civil Procedure Act 2005 (NSW), the Plaintiff abandons any claim over the jurisdictional limit of the Local Court of New South Wales.”

9. Bulldog Civil says this letter is insufficient to enliven s 23.

10. Section 23 of the Civil Procedure Act 2005 provides:

“23 Effect of abandoning excess claim

(cf Act No 9 1973, section 50; Act No 11 1970, section 14)

(1) If, in any proceedings on a claim, the cause of action giving rise to the claim is for more than the court’s jurisdictional limit:

(a) the person may abandon the excess by a statement to that effect in the originating process, and

(b) in that event, the person’s claim is taken to be reduced by the amount of the excess.

(2) If a person’s claim is successful in respect of a cause of action:

(a) the amount recoverable by the person (exclusive of costs and interest) is not to exceed the court’s jurisdictional limit, and

(b) the judgment in the proceedings is in full discharge of all of the person’s demands in respect of that cause of action, and

(c) entry of the judgment in the records of the court is to be made accordingly.

(3) This section is subject to section 51 of the District Court Act 1973 and section 31 of the Local Court Act 2007.

…”

11. Bulldog Civil submits that the abandonment of the excess is only effective if there is a "statement to that effect in the originating process" as stated in s 23(1)(a) of the Civil Procedure Act 2005.

12. Dueeasy submits that the Local Court under s 23(2) of the Civil Procedure Act 2005 can award the Court's jurisdictional limit and thus effectuate the abandonment under s 23(2) even if the provisions of s 23(1) are not satisfied.

13. Bulldog Civil says that s 30 of the Local Court Act 2007 does not grant this jurisdiction in the Local Court. Section 30(1)(b) provides:

“30 Conferral of jurisdiction

(cf LCA 1982, section 65)

(1) Subject to this Part, the Court sitting in its General Division has jurisdiction to hear and determine:

…

(b) proceedings to recover detained goods, or to recover the assessed value of detained goods, so long as the value of the goods, together with the amount of any consequential damages claimed for their detention, does not exceed the jurisdictional limit of the Court when sitting in that Division…”

14. The commentary in Ritchie's Uniform Civil Procedure NSW at [s 23.15] in respect of s 23 says:

“[s 23.15] Mode of abandonment

The abandonment must be stated ‘by a statement to that effect in the originating process’: CPA s 23(1)(a). Merely filing a statement of claim for part of the claim does not constitute an abandonment of the excess: Vines v Arnold (1849) 8 CB 632; 137 ER 655. Neither can the court amend a claim without a party’s consent in order to bring it within the court’s jurisdiction: Re Hill (1855) 10 Exch 726; 156 ER 632. However, no particular formality is required: Waxman v M'Auliffe (1879) 5 VLR (L) 48 (sufficient to include a general statement of abandonment ‘of all excess of any claims over and above the sum of ($x)’). And it would seem that any failure to comply with formalities of the section is still capable of being cured by amendment, in the same way as a failure to claim pre-judgment interest in the originating process as required by UCPR r 6.12(6) is also capable of being cured by amendment: see Heath v Goodwin (1986) 8 NSWLR 478. Thus, in Segur v Franklin (1934) 34 SR (NSW) 67; 51 WN (NSW) 31, the trial judge was held to be wrong to refuse a request made at the trial for leave to amend the claim by abandoning the excess.”

15. In my view, it is necessary that the provisions of s 23(1) be satisfied in order for the Local Court to have jurisdiction. Section 23(2) complements s 23(1) but does not operate as a further source of jurisdiction. Thus, if the subject matter of the dispute is beyond the jurisdiction conferred by s 30 of the Local Court Act 2007, s 23(1) provides a means of bringing the matter within the Court's jurisdiction. Another means is consenting to jurisdiction under s 31 of the Local Court Act 2007. But s 23(2) does not, without an abandonment under s 23(1), enable a party to sue for an amount beyond the jurisdiction on the basis that the Court will award only the jurisdictional limit.

16. The consequence is that for the Local Court to determine the matter (assuming there is no consent to jurisdiction) Dueeasy will need to amend its originating process in the manner contemplated by s 23(1) of the Civil Procedure Act 2005.  That amendment may require leave of the Local Court.  If leave is not granted or not sought, in my view, the Local Court will be unable to determine the matter.

17. There is no suggestion that Dueeasy is unwilling to amend the Local Court originating process in the manner required.  The authorities of Waxman v M'Auliffe (1879) 5 VLR (L) 48, Heath v Goodwin (1986) 8 NSWLR 478 and Segur v Franklin (1934) 34 SR (NSW) 67; (1934) 51 WN (NSW) 31 noted above support in general terms the prospects of an amendment being successfully made. However, whether an amendment is ultimately permitted may depend on the attitude and submissions of Bulldog Civil or the decision of the Local Court.

18. That fact is not sufficient, in my view, to require that the claim by Dueeasy be transferred to this Court.  It may be different if Dueeasy had not indicated a willingness to abandon the excess but that is not the case here.

19. The matter has been set down for hearing in less than two months in a place determined by the Local Court to be convenient for the hearing, including the interests of witnesses. A hearing in this Court at that venue is unlikely to occur this year. The claim for relief includes the return of heavy machinery used to generate revenue. These circumstances are relevant and support an entitlement of the plaintiffs to pursue the claim in the Local Court.

20. In the event that no amendment is successfully obtained so that the Local Court does not have jurisdiction to determine the matter, then it remains open for Bulldog Civil to make a further application.  Whether it would then wish to do so remains a matter of uncertainty.

21. Bulldog Civil also seeks to transfer its cross‑claim to the Local Court.  Although the cross‑claim is denied, the relief sought is for an amount beyond the jurisdiction of the Local Court.  Ordinarily (leaving aside the significance of the hearing date) that may justify the transfer of both the cross‑claim and the claim.

22. However, in the present case the cross‑claim has been stayed by consent pending the provision of security.  In that event, I do not think it is appropriate that I make an order in respect to the cross‑claim.  It may arguably be within the Court's jurisdiction to transfer the cross‑claim to this Court even though it is stayed, and yet leave the stay in place, but it might not be.  Bulldog Civil does not seek to set aside the stay. I think I should give the stay its usual meaning and not take any steps, including a transfer order, while a stay remains in place.

23. Further, it is at least possible that the stay will never be lifted because the circumstance causing the stay, the non‑payment of the security funds, might not change.  In that event, any transfer would have been pointless. In my view, any application for the transfer of the cross‑claim proceedings is premature whilst a stay remains in place. 

24. I appreciate the force of the argument that both the claim by Dueeasy and the cross‑claim by Bulldog Civil have common witnesses.  The modern laws of procedure discourage multiplicity of proceedings. A determination in one part of the claim on the credibility of witnesses might be undesirable whilst the other part, the cross‑claim, remains to be heard.  But these are reasons why a security for costs order might not have been appropriate or should not have been consented to, and if consented to, not on terms that operated to stay the cross‑claim.

25. Where the parties have agreed and consented to an order having the effect that the Dueeasy claim can proceed whilst the cross‑claim is stayed, they have agreed to the potential for multiple hearings and for the determination on the credibility of witnesses on one component only of the dispute. No attempt is made to set aside the consent order and so I cannot ignore the stay that is in force. I make no comment as to whether any attempt to set aside the consent order would be successful.

26. Accordingly, for all these reasons, an order for the proceedings to be transferred at this stage is inappropriate.

27. As Bulldog Civil has been unsuccessful in its application it must pay the costs.

28. The orders of the Court are:

1. Summons filed 19 June 2014 by Bulldog Civil Engineering Pty Ltd and Brian Devlin dismissed.

2. Bulldog Civil Engineering Pty Ltd and Brian Devlin to pay the costs of the defendants to that summons.

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Decision last updated: 06 May 2015