KBR Commercial (WA) Pty Ltd v RHG construction Fitout and Maintenance Pty Ltd and Joshua Hill
[2020] VCC 319
•3 April 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-20-00114
| KBR COMMERCIAL (WA) PTY LTD | Plaintiff |
| v | |
| RHG CONSTRUCTION FITOUT AND MAINTENANCE PTY LTD and JOSHUA DENNY HILL | Defendant |
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JUDGE: | LEWITAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 18 March 2020 | |
DATE OF JUDGMENT: | 3 April 2020 | |
CASE MAY BE CITED AS: | KBR Commercial (WA) Pty Ltd v RHG construction Fitout and Maintenance Pty Ltd and Joshua Hill | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 319 | |
REASONS FOR JUDGMENT
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Subject:Application for stay pursuant to Service and Execution of Process Act 1992 (Cth)
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Best | Mornington Legal |
| For the Defendant | Ms K Dovey | Stork Davies |
HER HONOUR:
1 KBR Commercial (WA) Pty Ltd (KBR) claims that RHG Construction Fitout and Maintenance Pty Ltd (RHG) is indebted to KBR in the sum of $153,167.41 for services performed by KBR (the services). RHG was engaged by Louis T Collection (LTC Group) to extend and refurbish the Esplanade Hotel at 18 the Esplanade Perth in the State of Western Australia (the Esplanade Hotel).
2 By letter of demand dated 25 July 2019 KBR’s solicitors advised RHG that RHG is indebted to KBR in the sum of $153,167.41 for services performed by KBR at the Esplanade Hotel and demanded that RHG pay the debt.
3 On 14 January 2020 KBR issued a writ against RHG claiming payment of $153,167 for breach of contract by failing and refusing to pay KBR’s progress payment claims in full and, in the alternative, the sum of $153,167.41 upon a quantum meruit. KBR further claims that RHG and its director Joshua Hill (Hill) engaged in unconscionable conduct in breach of s18 of the Australian Consumer Law.
4 KBR issued a summons dated 11 February seeking an order that the proceeding be stayed pursuant to s20 of the Service and Execution of Process Act 1992 (Cth) (the Act).
5 Section 20(3) of the Act provides that “[t]he court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters.”
6 In this case it is not disputed that the District Court of Western Australia has jurisdiction to determine all the matters in issue between the parties.
7 Section 20 (4) of the Act relevantly provides:
…
(2) The person served may apply to the court of issue for an order staying the proceeding.
(3) The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters.
(4) The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include:
(a)the places of residence of the parties and of the witnesses likely to be called in the proceeding; and
(b)the place where the subject matter of the proceeding is situated; and
(c)the financial circumstances of the parties, so far as the court is aware of them; and
(d)any agreement between the parties about the court or place in which the proceeding should be instated; and
(e)the law that would be most appropriate to apply in the proceeding; and
(f)whether a related or similar proceeding has been commenced against the person served or another person;
but do not include the fact that the proceeding was commenced in the place of issue.
8 RHG submits that the appropriate court to determine the matters in issue between the parties is the Western Australian District Court. RHG relies on subsections 4(a), (b) and (e) of s20(4). Dealing with these matters in turn:
(a) the places of residence of the parties and witnesses likely to be called
9 RHG’s registered office and principal place of business is in Western Australia. Hill lives in Western Australia.
10 KBR’s registered office is in Victoria and its directors have offices in Victoria. KBR maintains branch offices in Western Australia. KBR’s branch offices in Western Australia are located at 6b Bowen Street, O’Connor, Western Australia and 2/22 Burler Drive, Vasse, Western Australia.[1] The branch offices in Western Australia are staffed by four staff employed by KBR. Fabian Pergoloni (Pergoloni) works in these branch offices and his role is principally to manage the day-to-day affairs of KBR’s projects in Western Australia. Pergoloni referred important matters in relation to major projects by email and telephone to KBR’s directors, Andrew Robertson (Robertson) and Bruce Jenkins (Jenkins). Robertson and Jenkins both reside in Victoria. The documents relied upon by KBR in this proceeding were reviewed and approved by Robertson and Jenkins at KBR’s head office in Victoria. I accept the plaintiff’s submission that KBR resides in Victoria. A corporation is resident in the country where its central management and control is exercised.[2]
[1] Paragraph 8, affidavit made by Andrew Mark Robertson on 13 March 2020.
[2]De Beers Consolidated Mines Limited v Howe [1906] AC 455 458 (Lord Loreburn L.C.).
11 There are four named witnesses in Western Australia and two in Victoria. The witnesses identified by the defendants are Hill, Scott Jager (an employee of RHG) and Andrew Phillips. Andrew Phillips is a former employee of RHG who resides in Western Australia. KBR intends to rely on the evidence of Bruce Jenkins and Pergoloni. Pergoloni resides in Perth. Bruce Jenkins and Robertson, the other director of KBR, reside in Victoria.
(b) the place where the subject matter of the proceeding is situated
12 RHG forwarded a letter of intent dated 22 October 2018 to Pergoloni at KBR Commercial WA Pty Ltd (Letter of Intent). The Letter of Intent states:
New Esplanade Hotel Refurbishment – Letter of Intent - Kitchen Equipment & Coolrooms Supply and Install Contract
We are happy to advise that we are offering to form a contract with you to carry out the supply and installation of kitchen equipment and coolrooms at the New Esplanade Hotel, following your recent discussions with Robert Batrick of LTC Group (project superintendent), as set out below:
Scope of Work
1 Refridgeration [sic] Works (L10 Coolrooms etc, including sub-floor heating, as per terms agreed with R. Batrick, attached for reference)
$64,613.00 + GST
2 Level 10, as per schedule attached. Except:
· E 30 – 2 Group Expresso Machine - $5034
· E 31 – Coffee Grinder - $1,153
$108,914.00 + GST
3. Ground Floor, as per schedule attached. Except:
· E32 – Convection Microwave Oven - $6809
· E 37- 3 Group Espresso Machine - $6387
· E 38 – Coffee Grinder - $1,153
$105,765.00 + GST
- All site loading, parking and other site constraints to be factored into the above price.
- RHG will provide 1.4mx3.0m hoist to Level10, until 20/Dec/2018.
- Includes for site working hours being 7am – 5pm Mon-Fri and 7am -3pm Sat.
-Includes working all working days between 20 Dec, 2018 and 11 January, 2019 as necessary.
- Temporary Protection of equipment until handover to client.
- Multiple delivery dates and site visits as necessary.
Commercial terms will be based on a standard AS 4906-2002 Minor Works Contract, with the following particulars:
- Progress Claims to be submitted via the RHG Portal by the 20th of each month, for works to be done to the end of the month.
- Materials can be claimed as long as they are on side or [by agreement] held off-site and registered on the PPSR in the name of H& M capital (the client).
- Claims will be paid on EOM + 30 day terms.
- Liquidated Damages for late completion will be N/A, but please be advised that we are on a very tight timeline for completion of the hotel by the 25th January. Your works are on the critical path for our Practical Completion, and will be carried out leading up to and over the Christmas period. RHG is exposed to $16,500/day + prelim costs, for late completion of the hotel.
Start on site date: Week commencing Mon 10th December.
Completion dates for installing to each area:
L10 Coolrooms: 22 Dec, 2018
L10 Kitchen: 22 Dec, 2018
Ground Floor: 11 January, 2019.
Sequencing of deliveries and works, in coordination with other trades is to be agreed with RHG Site Management.
KBR Commercial will be expected to attend site as per agreed programme, or within 5 days notice upon request from RHG.
Please respond ASAP to confirm acceptance of the above, and we will have a contract drafted and sent to you ASAP.
We would welcome a meeting on site ASAP to discuss detailed planning of the works.
We look forward to working together toward successful completion of the New Esplanade Hotel Project.
13 On 23 October 2018 Pergoloni of KBR advised Scott Jager of RHG that he had received the Letter of Intent and was “looking forward to working with you on this project”.
14 By email dated 23 October 2018 from Andrew Phillips of RHG to Pergoloni of KBR, RHG advised KBR to use the information contained in the Letter of Intent “as certainty to commence procurement”. By email dated 25 October 2018 from Pergoloni to Andrew Phillips, KBR advised RHG that all kitchen procurement orders in relation to the Letter of Intent and the parties’ agreed scope of works had been placed and further that “shop drawings for coolroom and custom stainless’ benches had commenced.”
15 During the period 21 November 2018 to 6 March 2019, Pergoloni forwarded numerous emails to RHG requesting that a formal contract be drawn up and executed by the parties as contemplated by the Letter of Intent.
16 On 6 March 2019 Scott Jager of RHG responded to the requests advising Pergoloni of KBR that “I have approved in writing, so you are covered.”
17 The parties did not enter into any further written contract as contemplated by the Letter of Intent.
18 The LTC group imposed liquidated damages upon RHG for failure to reach practical completion of the renovation works on time (the liquidated damages). RHG asserts that some of the liquidated damages were caused by KBR’s failure to complete the services on time. RHG claims that it is entitled to pass any “delay damages” payable by RHG to the LTC group. RHG asserts that when the amount payable to KBR in respect of its work on the Esplanade is deducted from the liquidated damages caused by KBR, KBR owes RHG an amount which has not yet been finally determined but which may be up to $315,060.
19 During the period from 19 December 2018 to 8 April 2019, KBR issued progress payment claims to RHG for services performed by KBR at the Esplanade Hotel. In response to KBR’s progress payment claims, RHG paid KBR a total sum of $180,989.49. The payments were paid to the KBR Bank Account with the National Australia Bank Limited’s branch in Moorabbin, Victoria.
20 The plaintiff submits that the plaintiff’s principal claim in debt is due in Victoria. The demand for the debt was issued out of Victoria by KBR’s solicitors Mornington Legal. The plaintiff submits that the matter should be heard before the County Court in Victoria because the plaintiff’s right to sue is founded in Victoria.
21 I do not accept the plaintiff’s submission. The subject matter of the proceeding primarily constitutes the works undertaken in Western Australia.
22 I accept the defendant’s submission that to the extent that KBR alleges that RHG and Hill engaged in unconscionable conduct, the conduct primarily occurred in Western Australia.[3]
[3] See paragraphs 32 - 34 of the Statement of Claim dated 14 January 2020.
(e) The law that would be most appropriate to apply in the proceeding
23 The plaintiff submitted that the most appropriate law to apply in the proceeding is Victorian law because Victoria is the place of payment. I do not accept the plaintiff’s submission. In Bonython v Commonwealth of Australia[4] the court rejected the contention that the place of payment governs the contract. The law that would be most appropriate to apply in the proceeding is the law with which the transaction has its closest and most real connexion.
[4] (1950) CLR 486, 498,
24 In this case the subject matter of the contract between KBR and RHG was construction works in Western Australia. The contract between KBR and RHG is a “construction contract” within the meaning of the Construction Contracts Act 2004 (WA) and, as such, that law applies to it. In my view the transaction has the closest and most real connection with the law of Western Australia and the law of Western Australia is the most appropriate law to apply to this dispute.
25 Accordingly it is not necessary for me to consider whether RHG would be entitled to a set off in respect of the “delay damages” payable by KBR to the LTC Group.
The fact that the proceeding was commenced in Victoria
26 The plaintiff submitted that the Court should exercise its jurisdiction to refuse a stay because RHG had not commenced proceedings against KBR since the demand was made in June 2019. The plaintiff submitted that the defendant had failed to respond to the plaintiff’s demand and had failed to articulate the nature of its defence. The plaintiff further submitted that the defendant had chosen not to agitate the issue until after the plaintiff filed its claim in this Court.
27 The plaintiff relied upon Oceanic Sunline Special Shipping Co Incorporated v Fay[5] (Oceanic). In that case the majority of the High Court held that where jurisdiction exists, it should not be withdrawn unless the chosen forum is “clearly inappropriate.” The plaintiff also referred to Holt v Forehan[6] (Holt v Forehan). In that case Justice Harper stated that a “party who seeks to interfere with a plaintiff’s access, regularly invoked, to its chosen forum, has the burden of convincing that forum that it should nevertheless refuse to do what would ordinarily be its duty.”
[5] (1988) 165 CLR 197.
[6] (2006) VSC 148, [10].
28 I do not accept the plaintiff’s submissions. The passages referred to by the plaintiff in Oceanic and Holt v Forehan have no practical relevance to an application for a stay under the Act. Oceanic was concerned with an application to transfer a proceeding on the ground commonly known as the “forum non conveniens” for declining to exercise jurisdiction otherwise regularly involed. In Holt v Forehan the application was made pursuant to s5 of the Jurisdiction of Court (Cross-vesting) Act (Cth) where the issue was whether there must be a transfer because the interests of justice so require. In this case what must be demonstrated before a stay can be ordered under s20(3) is that another State court with jurisdiction to determine all the matters in issue is “the appropriate court to determine those matters”.
29 In St George Bank Ltd v McTaggart[7] McPherson J stated:
..the question whether another State court is the appropriate court to determine all the matters in issue between the parties fell to be decided in the context of s20(4). It lists a series of factors to be taken account, which are not expressed to be exhaustive but to “include” what follows in paras (a) to (f) of s20(4), but specifically not to include “the fact that the proceeding was commenced in the place of issue.” In view of the presence of the word “include”, I do not consider it would be correct to regard the provisions of s20(4) as a complete code of the factors to be considered in deciding an application under 2 20(3) to stay proceedings. What is clear from s20(4) is, however, that the fact that proceeding D2673 of 2002 has been instituted in the District Court of Queensland at Brisbane is to be disregarded.
[7] [2003] 2 Qd R 568, 572 [11].
30 Having considered the whole of the evidence and the submissions made by counsel, I propose to order that the proceeding be stayed. The District Court of Western Australia has jurisdiction to determine all the matters in issue between the parties and is the appropriate court to determine those matters.
31 If either party wishes to apply for costs, such application should be made filed and served in writing within 7 days.
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