Paul Jones & Associates Pty Ltd v Howard Chic Corporation Pty Ltd

[1990] FCA 459

JUDGMENT NO. .%.?./..-?L

C A T C H W O R D S

PRACTICE AND PROCEDURE - cross-vesting - building dispute - marginal s.52 claim - substantially contractual dispute - parties in Perth and Sydney - relevant premises in Sydney - work done in Sydney - action transferred to Supreme Court of New South Wales.

Jurisdiction of Courts (Cross Vestina) Act 1987 s.5(4)
Trade Practices Act 1974 s.86A(l)

Federal Court of Australia Act s.48

PAUL JONES & ASSOCIATES PTY LTD v HOWARD CHIA CORPORATION PTY
LTD. HOWARD CHIA IMeORTS PTY LTD. HOWARD CHIA and STELLA CHIA
HOWARD CHIA CORPORATION PTY LTD v PAUL JONES & ASSOCIATES PTY

LTD

REOISTRV

RECEIVED

FEDERAL COURT OF

AUSTRAL*
PRINCIPAL

IN THE FEDERAL COURT	)
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION	1 No. WAG 62 of 1990
B E T W E E N :	PAUL JONES & ASSOCIATES PTY LTD

Applicant

and
HOWARD CHIA CORPORATION PTY

LTD

First Respondent

and

HOWARD CHIA IMPORTS PTY LTD

Second Respondent

and

HOWARD CHIA and STELLA CHIA

Third Respondent

and
HOWARD CHIA CORPORATION PTY

LTD

Cross Claimant

PAUL JONES & ASSOCIATES PTY

and

LTD

Cross Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	24 AUGUST 1990
WHERE MADE:	PERTH
THE COURT ORDERS THAT:

1.         Pursuant to s.5(4) of the Jurisdiction of Courts JCross Vestina) Act 1987 the proceeding be transferred to the Supreme Court of New South Wales.

The costs of the motion be in the cause.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal

Court Rules.

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IN THE FEDERAL COURT	)
OF AUSTRALIA	)
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	1
GENERAL DIVISION	) No. WAG 62 of 1990
B E T W E E N :	PAUL JONES & ASSOCIATES PTY LTD

Applicant

and
HOWARD CHIA CORPORATION PTY

LTD

First Respondent

and

HOWARD CHIA IMPORTS PTY LTD

Second Respondent

and

HOWARD CHIA and STELLA CHIA

Third Respondent

and
HOWARD CHIA CORPORATION PTY

LTD

Cross Claimant

and

PAUL JONES & ASSOCIATES PTY
LTD

Cross Respondent

CORAM:	FRENCH J.
24 August 1990

REASONS FOR JUDGMENT ON MOTION TO TRANSFER PROCEEDINGS

This action arises out of a dispute between an
architect and his clients over interior design work to a

residence at Castle Cove in Sydney. The architect, Paul Jones, who resides in Western Australia, says that on 16 February 1989, through his company, Paul Jones & Associates Pty Ltd he agreed to perform work for Howard and Stella Chia. His contract was with their companies, Howard Chia Corporation Pty Ltd and Howard Chia Imports Pty Ltd. The price for the work is said to have been $350,000 payable in monthly instalments of $38,800 from February to August 1989 with a lump sum of $156,000 payable on completion.

Annexed to the statement of claim is an extensive schedule setting out the works carried out under the contract which was said to have been completed by 14 November 1989. Those works, it was alleged, represented at least 85% of what was required under the agreement. On 14 November however it is claimed the respondents repudiated the agreement, refused to be bound by it and terminated the applicant's appointment. The repudiation was accepted but the balance of the contract sum, $156,000, is allegedly outstanding. At paras. 11 and 12

of the statement of claim the following appears:

"11. Alternatively, at the time of agreement made between the Applicant and the Respondents and notwithstanding the express and implied terms of that agreement referred to in paragraph 4 and 5 hereof (and without notifying the Applicant of the fact) the Respondents had no intention or were recklessly indifferent to such intention, of giving timely instructions to the Applicant in relation to approvals for the work; or in relation to instructions for variations or alternations to the scope of the work as may be required, nor at the time of contracting did the Respondents have any intention of allowing the Applicant to complete its work so as to become entitled to the balance of its fee pursuant to the agreement.

12. The conduct on the part of the Respondents referred to in paragraph 11 hereof was such as to mislead the Applicant (who relied on the express and implied terms of the contract as pleaded in paragraphs 4 and 5 hereof) into carrying out work for the Respondents when at all materlal tlmes the Respondents had no intention (Or were recklessly indifferent as to such intention ) of allowing the Applicant to complete its work and be paid. Such conduct by the Respondents was misleading and/or likely to mislead in trade or commerce and in breach of Section 52 of the Trade Practices Act as a result of which the Applicant has suffered loss and damage.

PARTICULARS OF LOSS AS A RESULT OF BREACH
OF SECTION 52

The balance of commission due on completion of the contract work, namely $156,000.00, or otherwise as damages assessed by the Court."

The statement of claim pleads that Mr and Mrs Chia

were involved in the s.52 contravention as accessories. The

There is also a claim for fees of $12,673 in relation to	substance of the claim however is contractual in character.
additional works said to have been done by the applicant.
The respondents have filed a defence and cross- claim. The cross-claim alleges various breaches of the contract by the applicant including carrying out extra works without approval and failing to exercise due care and skill. A reply and defence to cross-claim have also been filed.
The respondents now move under s.5(4) of the Jurisdiction of Courts f Cross Vestina) Act 1987 and alternatively s.86A(l) of the Trade Practices Act 1974 for an order transferring the proceedings to the Supreme Court of New South Wales. In the alternative, they seek an order pursuant to s.48 of the Federal Court of Australia Act that the proceeding be conducted or continued at Sydney in New South Wales.
In support of the motion M r G. McKenzie of the solicitors for the respondents has sworn an affidavit making the following points:

The applicant has a Sydney office.

The respondents' likely witnesses live in
Sydney.
A view of the site will probably be necessary
wherever the proceedings are conducted.
The respondents' records and their legal
advisers are located in Sydney. The contract was made and performed in Sydney. New South Wales has a specialised construction list for the efficient resolution of disputes of this kind.

The first and second respondents are place of business elsewhere in Australia.
incorporated in New South Wales.

They conduct their businesses from offices in

Mr and Mrs Chia both live in Sydney.

Paul Jones in an affidavit in reply points out that his company is incorporated in Western Australia and that he is a resident of this State. While he has a branch office in New South Wales it is a branch office only. It was opened in January or February 1990 to enable him to have a base when present in Sydney and for staff to work from in relation to projects in Sydney. His likely witnesses all reside in Perth.

There is obviously considerable inconvenience for both parties in proceedings in either Perth or Sydney.

Section 5(4) of the Jurisdiction of Courts (Cross Vestina) Act 1987 provides as follows:

"5(4) Where -

(a) a proceeding (in this sub-section referred to

as the "relevant proceeding") is pending in the

Federal Court or the Family Court (in this sub-

section referred to as the "first court");
and

(b)

it appears to the first court that-

(i)	the relevant proceeding arises out of, or is related to, another proceeding pending the in Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;
(ii)	having regard to -

(A) whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross- vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of a State or Territory;

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, ~nterpretation or validity of a law of the State or Territory referred to in sub-sub- paragraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating t o cross-vesting of jurisdiction; and

(C) the interests of justice,

it is more appropriate that the relevant proceeding be determined by that Supreme Court; or

(iii) it is otherwise in the interests of

justice that the relevant proceeding be determined by the Supreme Court of a State or Territory,

the first court shall transfer the relevant

proceeding to that Supreme Court."

This is not a case to which sub-para.5(4)(b)(ii)(A)

applies. Accepting that the s.52 claim which brings the matter within the primary jurisdiction of this Court may be marginal, the respondents did not contend that no cause of action was disclosed in federal jurisdiction. And accepting that to be so, the contractual questions form part of the same controversy and fall into the accrued jurisdiction of the Court. This is not therefore a case where it can be said of the contract claim that but for the existence of State cross-

vesting legislation it would be incapable of being instituted in the Federal Court. Nor is it a case of the kind contemplated under 5(4)(b)(ii)(B) involving matters arising under or questions as to the application, interpretation or validity of a law of a State or Territory outside the jurisdiction of the Federal Court apart from cross-vesting legislation.

In my opinion however it is a case in which the interests of justice would be better served by transfer of the matter to the Supreme Court of New South Wales than its continuance in this Court. The action is in all relevant respects an action arising in that State and is in essence a building dispute, the federal element of which is marginal. Accepting that there will be inconvenience to the applicant it does have a commercial presence in New South Wales and in all probability the capacity to instruct solicitors and engage an independent expert in that State. The Supreme Court has a specialised construction list. In the circumstances I propose

to make orders as follows: 

1.   Pursuant to s.5(4) of the Jurisdiction of Courts (Cross Vestina) Act 1987 the proceeding be transferred to the Supreme Court of New South Wales.

2.    That the costs of the motion be in the cause.

I certify that the preceding seven (7) pages are a true copy of the Reasons for Judgment of his Honour Justice French.

Associate:

Date:

Counsel for the Applicant: Mr M. McPhee

Solicitors for the Applicant: Michell Sillar McPhee Meyer

Counsel for the Respondent: Mr Gzell QC and Mr P. Blachnan

Solicitors for the Respondent: Robinson Cox

Date of Hearing:	21 August 1990
Date of Judgment:	24 August 1990