Omiros Pty Ltd v PM Developments Pty Ltd and Ors (No.3)
[2006] FMCA 58
•31 January 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OMIROS PTY LTD v PM DEVELOPMENTS PTY LTD & ORS (No.3) | [2006] FMCA 58 |
| PRACTICE AND PROCEDURE – Transfer of proceedings to Federal Court – cross-claim seeking damages exceeding Court’s jurisdiction – mere filing of cross-claim not sufficient – other evidence required. |
| Federal Magistrates Act 1999, s.39 Federal Magistrates Court Rules 2001, r.8.02 Trade Practices Act1974, ss.82, 86AA |
| Omiros Pty Ltd v PM Developments Pty Ltd & Ors (No 2) [2005] FMCA 234 Omiros Pty Ltd v PM Developments Pty Ltd & Ors [2004] FMCA 661 |
| Applicant: | OMIROS PTY LTD |
| First Respondent: | PM DEVELOPMENTS PTY LTD |
| Second Respondent: | MIMI MACPHERSON |
| Third Respondent: | ANDREW PAPADOPOULOS |
| File Number: | MLG 1331 of 2003 |
| Judgment of: | McInnis FM |
| Hearing date: | 28 November 2005 |
| Date of Last Submissions: | 13 December 2005 |
| Delivered at: | Melbourne |
| Delivered on: | 31 January 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr. E. Vadarlis |
| Solicitors for the Applicant: | Vadarlis & Associates |
| Counsel for the Respondents: | Mr. R. Clark |
| Solicitors for the Respondents: | Provestlaw |
ORDERS
Pursuant to r.1.06 of the Federal Magistrates Court Rules 2001, compliance with r.8.02(2) of the Rules be dispensed with.
Pursuant to s.39 of the Federal Magistrates Court Act 1999, the proceedings be transferred forthwith to the Federal Court of Australia.
The trial date of 3 April 2006 be vacated.
Costs be in the cause.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1331 of 2003
| OMIROS PTY LTD |
Applicant
And
| PM DEVELOPMENTS PTY LTD |
First Respondent
| MIMI MACPHERSON |
Second Respondent
| ANDREW PAPADOPOLOUS |
Third Respondent
REASONS FOR JUDGMENT
This is an application by the Respondents pursuant to s.39 of the Federal Magistrates Act 1999 (“the Act”) and r.8.02 of the Federal Magistrates Court Rules 2001 (“the Rules”) to transfer these proceedings to the Federal Court of Australia.
Section 39 of the Act provides:
“Section 39 – Discretionary transfer of proceedings to the Federal Court or the Family Court
(1)If a proceeding is pending in the Federal Magistrates Court, the Federal Magistrates Court may, by order, transfer the proceeding from the Federal Magistrates Court to the Federal Court or the Family Court.
(2)The Federal Magistrates Court may transfer a proceeding under this section:
(a) on the application of a party to the proceeding; or
(b) on its own initiative.
(3)In deciding whether to transfer a proceeding to the Federal Court under subsection (1), the Federal Magistrates Court must have regard to:
(a) any Rules of Court made for the purposes of subsection 40(2);
and
(b) whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c) whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.”
Rule 8.02 of the Rules provides:
“8.02 Transfer to Federal Court or Family Court
(1)The Court may, at the request of a party or its own motion, transfer a proceeding to the Federal Court or the Family Court.
(2)Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding.
(3)Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit.
(4)In addition to the factors required to be considered by the Court under subsections 39 (3) and (4) of the Act for transfer of proceedings to the Federal Court or the Family Court, the following factors are relevant:
(a) whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;
(b) whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c) whether the proceeding will be heard earlier in the Federal Magistrates Court;
(d) the availability of particular procedures appropriate for the class of proceeding;
(e) the wishes of the parties;
(f) …’
These proceedings have had a chequered history, with various orders being made by the Court including an order for mediation, which regrettably has been unsuccessful. When the application was first filed on 27 November 2003 a statement of claim alleged that there had been a breach of copyright and/or a breach of provisions of the Trade Practices Act1974 (“the TPA”) arising from the preparation of drawings which were part of architectural work of the Applicant for the First Respondent. The Second and Third Respondents at all material times were alleged to be Directors of the First Respondent. It is sufficient to note that the claim for damages then amounted to $79,700.00.
An application for change of venue was foreshadowed at an early stage in the proceedings and ultimately led to a decision by this Court refusing the application for change of venue (see Omiros Pty Ltd v PM Developments Pty Ltd & Ors (No 2) [2005] FMCA 234). It should be noted that prior to the hearing of the application for a change of venue, other orders had been made permitting amended pleadings to be filed and served by either party.
After the filing of an amended statement of claim on 26 March 2004, a defence was provided by each of the Respondents. The Respondents by order dated 29 April 2004 were permitted to file and serve any cross‑claim together with affidavits in support and were required to do so on or before 16 July 2004. Mediation was then ordered on the same date. The dates were subsequently altered by order of the Court on
17 September 2004.
The notice of motion which had been filed requesting the change of venue, referred to earlier in this judgment, was then adjourned for further hearing. In passing, it should be noted that a brief ex tempore judgment was delivered on 17 September 2004 dealing with the issue of extension of time to comply with the orders and other matters (see Omiros Pty Ltd v PM Developments Pty Ltd & Ors [2004] FMCA 661).
Ultimately, an amended defence to an amended statement of claim and cross-claim was filed by the Respondents on 5 October 2004. That document, by the cross-claim, then sought damages allegedly for contravention of the TPA amongst other claims. Orders were sought for the return of a sum of $128,000.00 and the damages then claimed pursuant to s.82 of the TPA were $2,084,993.02.
Precise particulars and supporting affidavit material in relation to the amount of the cross‑claim were not then available save for some vague assertion in unsatisfactory affidavit material by the Third Respondent in an affidavit sworn 30 September 2004. An architect, namely Mr. Morris Daniel Liussi, in an affidavit sworn 30 September 2004, likewise simply made an estimate of the damages without particulars.
The Applicant then filed a reply to amended defence and defence to cross-claim on 15 October 2004 denying liability arising out of the cross-claim.
When the matter came before the Court on 23 May 2005, the Court made a number of orders which included orders that the application be listed for further directions and consideration of a foreshadowed application for transfer to the Federal Court. It was clear up to that stage that although a cross-claim had been filed which, on the face of it, provided a claim which exceeds the Court's jurisdiction in relation to damages, the Court was not satisfied that the mere filing of that document together with the vague and unsatisfactory affidavit material should automatically entitle the Respondents to succeed in the application for transfer to the Federal Court.
In fact on that occasion the transcript reveals that the Court was concerned to refer the parties to mediation, and in the event that mediation failed, the Court would further consider the issue of a transfer on a later date. As it happened, unfortunately, the matter failed to mediate, despite the availability of the cross-claim and the material in support of that cross-claim.
It is not necessary to deal further with the mediation process save and except that it was not successful, and some doubt was raised as to whether the cross-claim issue was considered as part of the mediation. In any event, ultimately the Court was required to determine whether to transfer the matter to the Federal Court.
Further affidavit material was filed for and on behalf of the Respondents including further detailed affidavit material from Mr Liussi, the architect, providing further details, amongst other things, of damages. Another architect, John Robertson, by an affidavit sworn
27 August 2005, provided a valuation report of potential losses claimed to have been sustained by the First Respondent as a result of alleged loss in development capability of the relevant property.
Orders were made by the Court on 14 September 2005 that the parties should file and serve written submissions in relation to the issue of transfer of the application to the Federal Court and that thereafter, subject to any further order of the Court, the issue of the transfer to the Federal Court would be considered on those written submissions.
Both parties filed written submissions and it is noted that the Respondents further relied upon additional affidavits referring to the quantum of the cross-claim. Those affidavits include an affidavit from Mr Becirevic sworn 4 December 2005 setting out accounting detail, a further affidavit from Mr Liussi sworn 2 December 2005 and an affidavit of a quantity surveyor, Mr Duckworth sworn 1 December 2005. All of those recent affidavits refer to the issue of damages claimed by the Respondents in their cross-claim.
In the written submissions the Respondents now claim a total loss of $3,446,235.00. It was submitted that the Court should have regard to administration in the interests of justice when exercising a discretion to transfer the proceedings to the Federal Court and noted that this Court, pursuant to s.86AA of the TPA, has no jurisdiction to award damages exceeding $200,000.00. It was argued in the circumstances that the parties should be free to claim full damages and accordingly, in the exercise of the discretion, the cross-claim and claim should be transferred to avoid duplicity of costs at trial given that the matters are closely related and that they ought to be heard together.
The Applicant in written submissions dated 13 December 2005 submitted that the application to transfer the proceedings to the Federal Court should be dismissed with costs. The submissions made in support, though detailed, in my view tend to challenge the factual basis of the cross-claim. Attached to the submissions were a number of documents purporting to be correspondence alleged to be relevant to the issue of liability by the Applicant arising out of the alleged cross‑claim and otherwise challenging the state of evidence of the Respondents in support of the damages claim.
The Applicant also relied upon an affidavit of Mr Bryan Gordon Eakins Miller sworn 8 September 2005 which again seeks to take issue with the matters raised by the Respondents in the defence and cross-claim.
In my view, the mere filing of a cross-claim seeking damages in an amount which exceeds the Court's jurisdiction does not automatically provide a basis upon which the application should be transferred pursuant to s.39 of the Act. In this instance, however, further affidavit material has been provided which at least demonstrates an arguable or prima facie case in support of the belated cross-claim for damages exceeding this Court's jurisdiction. I am satisfied the cross‑claim at least appears to raise issues common to both the cross-claim and claim and as a matter of convenience it would be in the interests of the administration of justice for the claim and cross‑claim to be heard together.
Whilst I have grave reservations about the extent and nature of damages now sought to be the subject of the cross-claim by the Respondents, this Court cannot simply be dismissive of that issue on the affidavit material before it. There is indeed sufficient prima facie material to satisfy the Court that the Respondents have raised a cross‑claim which exceeds this Court's jurisdiction and which I am satisfied would be more appropriately dealt with by the Federal Court.
Of course in the event that the Federal Court were to decide there is no merit in the cross-claim, then the issue of costs may become significant. Nevertheless, in my view, in the exercise of the discretion the Court undoubtedly has pursuant to s.39 of the Act, I am satisfied that it would be in the interests of the administration of justice for the proceedings to be transferred to the Federal Court. It is clear in this instance that the application could not have been made prior to the first Court hearing date, as the formulation of the damages and indeed the cross-claim itself had not yet then occurred.
It is regrettable the parties have not managed to reach a sensible resolution of what now will become extremely expensive proceedings, and it is evident there has been considerable delay already experienced by the parties in proceeding to trial. However, I am now satisfied there is sufficient material before the Court to provide a proper basis for the transfer of the proceedings to the Federal Court.
To the extent that I am required to do so, I shall order that so much of the rules be dispensed with that would prevent the Court from making an order transferring the application to the Federal Court. That would effectively deal with r.8.02 of the Rules which may otherwise have prevented the request for transfer being dealt with at this late stage.
Consequential orders will be made in relation to the vacation of any hearing date, and in my view the appropriate order in relation to costs is that the costs be in the cause. Ultimately, the issue may be determined by the Federal Court pending further deliberation in that Court.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 31 January 2006
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