| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : ENVIRO CONSTRUCTIONS AUSTRALIA PTY LTD -v- MANDURAH HOMES PTY LTD [2013] WADC 163 CORAM : REGISTRAR KINGSLEY HEARD : 17 OCTOBER 2013 DELIVERED : 30 OCTOBER 2013 FILE NO/S : CIVO 184 of 2012 BETWEEN : ENVIRO CONSTRUCTIONS AUSTRALIA PTY LTD Plaintiff
AND
MANDURAH HOMES PTY LTD
Defendant
Catchwords: Practice - Application to transfer proceedings from Magistrates Court - Claim in Magistrates Court means claim as presently lodged in that court - Counterclaim not outside Magistrates Court jurisdiction Legislation: Nil Result: Application dismissed
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Representation: Counsel:
Plaintiff : Mr T Denniss
Defendant : Mr R Cullen
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Cullen Babington Macleod
Case(s) referred to in judgment(s):
Sims Sales and Marketing Pty Ltd v West State Piping Services Pty Ltd [2007] WADC 182
Waco Quickform Ltd v Q-Con Pty Ltd [2009] WADC 45
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Enviro Constructions Australia & Mandurah Homes 1 The defendant, Mandurah Homes Pty Ltd (Mandurah Homes), has brought an originating summons seeking an order that pursuant to s 39 of the Magistrates Court Act2004 general procedure claim PER/GCLM/4143/2012 between Enviro Constructions Australia Pty Ltd (Enviro Constructions) and Mandurah Homes be transferred to the District Court of Western Australia. The relevant Act is of course the Magistrates Court (Civil Proceeding) Act 2004 (MCCPA). 2 Counsel for Enviro Constructions opposes the transfer submitting that, on the claim as presently pleaded, Enviro Constructions consents to the hearing of a counterclaim in excess of the Magistrates Courts jurisdiction and that in any event the dispute is not a complex dispute.
The Magistrates Court proceedings 3 A copy of Enviro Constructions statement of general procedure claim is annexed to the affidavit, sworn 16 October 2012, of Scott William Green (Green), a director for Mandurah Homes. Enviro Constructions pleads a prior contract between Enviro Systems Pty Ltd (Enviro Systems) where Enviro Systems, a supplier of wall panels, agreed to sell to Mandurah Homes a number of wall panels which Mandurah Homes intended to use in constructing residential dwellings. 4 In and around July 2011 Enviro Systems supplied the panels to Mandurah Homes. After construction of one dwelling, Mandurah Homes contacted Enviro System contending that the outer skin of the panels were detaching from the foam. Enviro Constructions pleads that Mandurah Homes and Enviro Systems agreed that remedial works would be performed, Mandurah Homes would perform the work on the panels on one dwelling and Enviro Systems would obtain replacement panels for a second dwelling. 5 In and around July 2011 Enviro Systems ceased operating and, it is pleaded, Mandurah Homes was advised that Enviro Constructions would operate as the supplier of wall panels. 6 Enviro Constructions pleads that in or around August 2011, Enviro Constructions and Mandurah Homes agreed that Enviro Constructions would sell to Mandurah Homes 406 wall panels. In November 2011 there was a variation to the contract whereby the date for delivery was extended and the payment structure varied. (Page 4)
7 Enviro Constructions pleads that Mandurah Homes has failed to pay the balance of the price. Enviro Constructions makes an alternative claim in quantum meruit. Enviro Constructions claim is $51,060.05. 8 In its defence dated 12 November 2012, Mandurah Homes admits the contract between it and Enviro Systems but denies the specific terms of the agreement. Mandurah Homes specifically denies that it and Enviro Constructions entered into an agreement in August 2011. In essence Mandurah Homes pleads there was no contract between it and Enviro Constructions. In any event if there was a contract between the parties the panels supplied were not of merchantable quality or reasonably fit for purpose. 9 That contention forms the basis of a counterclaim on the part of Mandurah Constructions. The description of the counterclaim was that if there was a contract between Enviro Constructions and Mandurah Homes then the contract contained implied terms as to merchantable quality, and fitness for purpose. As a result of the breach of those terms, Mandurah Homes contends it has suffered loss and damage and quantifies the damage at $96,580.
The basis of the application to transfer 10 By a supplementary affidavit sworn by Green on 24 September 2013, Green deposes that it is his intention to amend the counterclaim to increase the counterclaim of Mandurah Homes by a further $151,684.93. The basis of this increase is a debt owed by Enviro Constructions to Mandurah Homes. 11 The purported debt arises from a poorly worded deed of acknowledgement of debt and charge made 16 November 2010. In that deed, Enviro Constructions acknowledges that it is indebted to Mandurah Homes in the sum of $222,169. Enviro Constructions agrees to pay the debt on the earlier of settlement of the sale of land owned by Enviro Constructions in Boddington and 31 January 2011. 12 Also attached to Green's supplementary affidavit is an irrevocable authority to pay, again poorly expressed., The background to the irrevocable authority is that Mandurah Homes has lent the sum of $300,000 to Enviro Constructions and has agree to erect a kit home on the Boddington land at a cost of $229,169. The irrevocable authority authorises whoever buys the Boddington land to pay the balance of the purchase price to Mandurah Homes. There is also an assignment of future property the consideration being Mandurah Homes forgoing making (Page 5)
demand for payment of the loan amount until the earlier of the settlement of the sale of the Boddington property and 31 January 2010 – which must be an error considering the document was executed on 16 November 2010. 13 Thus the counterclaim of Mandurah Homes is a debt owing on a deed and, there being no information otherwise, the cause of action on the deed should have crystallised on 31 January 2011.
The MCCPA 14 Section 39(2) MCCPA provides that a party to a case in the Magistrates Court may apply to a superior court for an order that all or part of the case be transferred to the superior court. Section 39(4) provides that a superior court may make an order for transfer of an action if the superior court is satisfied that all or a part of the case is within its jurisdiction and: 15 Thus s 39(4) MCCPA contemplates a two stage process: Firstly, that the superior court be satisfied that all or part of a case is within its jurisdiction; secondly, upon being satisfied, then being satisfied that the case ought be transferred having regard to the two limbs of s 39(4). Matters to do with convenience of the party’s efficiency and fairness do not arise (Waco Quickform Ltd v Q-Con Pty Ltd [2009] WADC 45, Sims Sales and Marketing Pty Ltd v West State Piping Services Pty Ltd [2007] WADC 182). 16 Section 9 MCCPA provides that that section applies if a party's counterclaim involves a claim or an issue that is outside the Magistrates Court civil jurisdiction. Section 9(4) MCCPA provides that if the counterclaim is for an amount of money, the Magistrates Court has jurisdiction to deal with the counterclaim, unless the party against which the counterclaim is made objects before a date is set for the trial of the counterclaim. 17 Section 3 defines claim as a claim made to the court by a party (whether a claimant, a defendant or other party). (Page 6)
Discussion 18 Mandurah Homes' counterclaim is for the sum of $96,580. That sum, on its face, is outside the jurisdiction of the Magistrates Court as the current limit in that jurisdiction is $75,000. I am satisfied that part of the case, being Mandurah Homes' counterclaim, is within the jurisdiction of the District Court. That means the alternative limbs of s 39(4) are enlivened. 19 Counsel for Enviro Constructions states that, as the party against which the counterclaim is made, it has no objection to the Magistrates Court hearing the counterclaim. Counsel for Enviro Constructions did not qualify that statement. Thus having regard to s 9(4), for the purposes of s 39(4)(a) MCCPA, as the counterclaim is for an amount of money, the Magistrates Court has jurisdiction to deal with the counterclaim. 20 That being the case, I am satisfied that the counterclaim by Mandurah Homes is not outside the Magistrates Court jurisdiction for the purposes of s 39(4)(a) MCCPA. 21 Is there a matter of complexity or a question of law involved. There was no argument and it would appear no issue that a question of law is involved. Counsel for Mandurah Homes argued that the matter was complex because during the term of the contract to the company from whom Mandurah Homes received invoices changed or attempted to change its identity four times without any explanation or noticeable change (the defendant's outline of submissions par 7). The evidence suggests that in fact that there was only one change to the identity of the contracting parties. 22 The claim involves the supply of goods and a defence that the goods supplied were defective. The counterclaim is for the rectification of the defects. This type of claim and counterclaim is well known within the Magistrates Court and in itself has no apparent complexity. Whilst some experts may well need to be called, this would be expected in a claim and counterclaim of this nature and, I am sure, are regularly encountered in the Magistrates Court. 23 Accordingly, I am not satisfied that this is a matter, because of its complexity, that should be dealt with by this court. 24 Counsel for Mandurah Homes in his submissions (par 10) relies on s 9(6) MCCPA which provides that, whether or not the Magistrates Court (Page 7)
deals with the counterclaim under s 39(4) or s 39(5), the Magistrates Court may adjourn the case to enable a party to apply to a superior court under s 39. 25 Section 9(6) MCCPA is invoked by the Magistrates Court. Counsel for Mandurah Homes suggests that s 9(6) MCCPA allows Mandurah Homes to make an election to transfer the matter to the District Court. 26 I am not persuaded by that submission. Section 9(6) MCCPA refers to the Magistrates Court, during the course of a hearing, or on the enforcement of any judgment, adjourning the case to allow a party to apply to a superior court under s 39. Section 9(6) MCCPA also enables a case to be adjourned to enable a party concerned to take action in a court of competent jurisdiction to establish its counterclaim. 27 The proposed counterclaim by Mandurah Homes is on a deed, and on the face of that counterclaim, is not complex. The counterclaim, whilst involving the same parties, is of a discrete and narrow compass. There is no reason why Mandurah Homes could not issue proceedings in the District Court and have that action disposed of in a cost effective manner. 28 Further s 3 MCCPA defines a claim, which would include a counterclaim (s 9(1) MCCPA), as a claim made to the Magistrates Court. 'Made' is the simple past tense and past participle of 'make'. In my opinion no concept of a future contemplated claim can be imported into s 3 MCCPA. That being the case I can only consider the claim that is presently lodged in the Magistrates Court because the claim referred to in s 39(4) MCCPA is the claim made, that is, the claim already lodged in the Magistrates Court.
Conclusion 29 For these reasons I am not persuaded that the Magistrates Court action should be transferred to this court. Accordingly, the application by Mandurah Homes is dismissed. The application having failed the usual costs order flows, Mandurah Homes is to pay the costs of Enviro Constructions on the application, to be taxed.
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