Stiftung Ausbildingsfond Jung'sche Psychologie v Penhall-Jones

[2003] NSWLC 6

Local Court of New South Wales

CITATION:	Stiftung Ausbildingsfond Jung'sche Psychologie v Penhall-Jones [2003] NSWLC 6
JURISDICTION:	Civil
PARTIES:	Stiftung Ausbildingsfonds Jung'sche Psychologie Margaret Penhall-Jones
FILE NUMBER:	10373/99
PLACE OF HEARING:	Downing Centre Local Court Sydney
DATE OF DECISION:	10/04/2001
MAGISTRATE:	Magsitrate B A Lulham
CATCHWORDS:	Civil - Forum non conveniens
LEGISLATION CITED:	Local Court (Civil Claims) Act 1970 Local Court (Civil Claims) Rules 1988
CASES CITED:	Rajski v Computer Manufacture & Design Pty Ltd (1983) 2 NSWLR 122 Voth v Manildra Flour Mills Pty Ltd & Anor (1990) 171 CLR 538 Oceanic Sunline Special Shipping Co In v Faye (1988) 165 CLR 197 Laurie v Connell (1958) 98 CLR 310 National Bank v Winborne (1979) 11 NSWLR 156 Vertzjas v Singapore Airlines Ltd (2000) 50 NSWLR 1
REPRESENTATION:	Mr Burke Counsel for Plaintiff Mr Rueben for Defendant
ORDERS:	1. Notice of Motion filed by the defendant dismissed except as to the order for the security of costs.; 2. I propose to make the orders sought by the Plaintiff and the Third Party Notice provisionally filed in these proceedings will be struck out.; 3. The defendant should pay the plaintiff's costs in relation to the defendant's motion but such costs should take into account the order for the security of costs. If the parties are unable to agree on the amount of the orders for costs, then the matter can be relisted before me.

Reasons for Decision

1 This matter was argued on the final occasion before me on 16 March 2001 when Mr Burke of Counsel appeared for the plaintiff and Mr Reuben of Counsel appeared for the defendant.

2 In this Judgment I shall refer to the plaintiff as 'The Lending Institute'. I shall refer to the proposed third party as 'The Teaching Institute'.

3 There are three Notices of Motion before the Court.

4 The Lending Institute issued a statement of claim on 17 September 1999 seeking the sum of $14,284.24. The amount claimed was the sum alleged to be outstanding under two loans. The first made 17 May 1993 required repayment by the 31 August 1998 and the second made 11 November 1993 required repayments by 31 December 1998.

5 It appears the defendant undertook a course in Carl Jung's Analytical Method of Psychology at The Teaching Institute. It is alleged that she obtained the loans from the plaintiff to assist in paying the fees of The Teaching Institute.

6 The plaintiff and The Teaching Institute are situated in Switzerland. The contracts of loan were made in Switzerland when the defendant was then in Switzerland. The agreements for loan included the following provision;

"11. The candidate is expressly and emphatically advised of the following agreed place of jurisdiction:

7 For the settlement of any disputes from this legal contract, the debtor shall recognise the courts of justice of the place of the Foundation's domicile (Zurich) to be internationally responsible and Swiss law to be applicable. However, the Foundation has the right to also take legal action against the debtor at her ordinary place of jurisdiction, upon application of Swiss substantive law. The candidate thus also expressly chooses the operational domicile at the business location of the Foundation (Zurich) for fulfilment of her repayment obligations.

8 The defendant now resides in New South Wales. The defendant was served in New South Wales.

9 A Notice of Grounds of Defence was filed on 15 November 1999. Whilst the Statement of Claim does not set out the purpose of the loan, the defence alleges the defendant had been the subject of sexual or other harassment by an officer of The Teaching Institute, and had been unable to complete her studies and had therefore suffered personal and financial loss. The defendant alleges a total failure of consideration as between the defendant and the plaintiff.

10 A Certificate of Readiness was filed on 30 August 2000 and the matter was listed for callover on 23 October 2000. On that date it appears an order was made granting the defendant leave to serve a Third Party Notice. The Third Party Notice was provisionally filed on 17 November 2000 on the basis the defendant would apply to the Supreme Court for leave to serve the Third Party Notice outside the jurisdiction.

11 On 22 November 2000 the defendant filed a Notice of Motion seeking the following orders;

1. That the Statement of Liquidated Claim filed in these proceedings be dismissed.
2. Costs.

12 The Notice of Motion was supported by an Affidavit of Patrick John Snowden the solicitor for the defendant sworn 21 November 2000.

13 The Notice of Motion was listed for hearing on 14 December 2000. The hearing was adjourned to 2 February 2001 when the matter first became before me and interestingly and extraordinarily optimistically, was said to take about half a hour.

14 On that day leave was granted to the defendant to file a further Notice of Motion seeking the following orders;

1. That the Statement of Liquidated Claim filed in these proceedings be stayed or dismissed on the following grounds:
(a) The plaintiff has no legal status within NSW:
(b) The Local Court of NSW is clearly an inappropriate forum for the hearing of these proceedings.
In the alternative:
2. Pursuant to part 31 of the Local Court Rules security for costs of the defendant in the sum of $2,500.00.
3. Any other order the Court deems fit.
4. Costs.

15 The Notice of Motion was supported by an Affidavit of the solicitor for the defendant, Patrick John Snowden, sworn 12 December 2000. The Notice of Motion and Affidavit were filed in Court. Mr Burke, Counsel for the plaintiff, wished to cross examine Mr Snowden but he was unable to attend. My recollection is that the Affidavit was read subject to Mr Burke making objections and also having the right to cross examine Mr Snowden. Subsequently this did not occur. I do not believe the plaintiff will be prejudiced by such course of action.

I heard submissions for more than two hours and I then adjourned the matter to 9 February 2001 with the expectation of giving a judgment. However on that day I decided the matter should be further adjourned to 16 March 2001 and I granted leave to the plaintiff to file a Notice of Motion seeking to strike out the Third Party Notice. My view was the determination of the Motion may depend on whether the Third Party Notice could be relied on in these proceedings by the defendant.

16 I made an order that the plaintiff make the necessary arrangement for the lodgement of the sum of $5,000 in cash as security for costs in the matter.

17 The Third Party Notice seeks to join The Teaching Institute. The Third Party Notice alleges the third party was guilty of a breach of the contract between it and the defendant in that it failed to ensure the defendant was not sexually or otherwise harassed by Dr Robert Strubel an officer of the third party. It includes further allegations of failing to ensure the defendant was given the opportunity to complete her studies and failure to provide the level and scope of training. The Third Party Notice contains an alternate allegation of negligence based on the similar failures alleged in the breach of contract. The defendant seeks from the third party contribution towards or indemnity for any judgment recovered against her by the plaintiff.

18 On 16 March 2001 the plaintiff filed in Court a Notice of Motion seeking to have the Third Party Notice struck out and seeking an order for costs upon the grounds set out in the Affidavit of Fiona Henderson sworn 15 March 2001. Further submissions were made in the matter for a period in excess of two hours.

19 The first Notice of Motion filed by the defendant was based on the submission that the Local Court does not have jurisdiction to hear the matter (see Annexure 'D' to Affidavit of P.J. Snowden, Solicitor for defendant sworn 21 November 2000).

Such submission is clearly wrong.
S.17(1)(b) of the Local Courts (Civil Claims) Act provides as follows;

'17(1) A Court has jurisdiction in accordance with this Act and the Registrar may exercise the powers conferred on a Registrar by or under this Act;
(b) Even if the whole of the cause of action arose outside New South Wales so long as the defendant was resident within New South Wales at the time of service of the document which commenced the action.'

This is clearly the position in this matter.

20 The loan contracts were made in Switzerland. The relevant law to apply is Swiss law. The Local Court pursuant to s.17(i)(b) of the Act has jurisdiction. The Magistrate hearing the matter will have to apply Swiss law.

21 The second Motion seeks to have the proceedings stayed on the basis of the power of the Court under s.32 of the Local Courts (Civil Claims) Act.

22 Section 32 of the Act provides;

'32(1) A Court may order on such terms as it thinks fit that any proceedings in any action or matter before that Court be stayed at any stage of the proceedings.'
The power to stay proceedings confirmed by the section is wide and unfettered.

"The general or overriding power of the Court to order a stay or proceedings is a power, the boundaries of which have not been precisely defined, except that in the many different situations in which it has been exercised it can be seen as directed to preventing a person pursuing litigation or doing so in a way which is oppressive so as to be unjust to the other party": Rajski v Computer Manufacture and Design Pty Ltd [1983] 2 NSWLR 122 per Moffitt P at 128.

23 Mr Reuben based his argument for a stay of proceedings under s.32 on the doctrine forum non conveniens. Such doctrine allows a Court which has jurisdiction over an action to dismiss, stay or strike out that action if the following principles apply;

'A defendant will ordinarily be entitled to an order for a stay or the dismissal of an action if he persuades the Local Court that having regard to the circumstances of the particular case and the availability of a foreign tribunal to which jurisdiction the defendant is amenable and which would entertain the matter, it is clearly an inappropriate forum for the determination of the dispute. The question whether the Local Court is a clearly inappropriate forum requires attention to be directed to the inappropriateness of the Local Court and not the appropriateness or comparative appropriateness of the suggested foreign forum.' (Mason CJ Deane, Dawson, Toohey and Gaudron Voth V Manildra Flour Mills Pty Ltd & Anor. 171 CLR p.538).

24 I am satisfied the principles enunciated in Voth and also Oceanic Sunline Special Shipping Co. Inc v Faye (1988) 165 CLR 197, do not apply per se in this matter. Those principles relate to a matter where there is a competing claim between an Australian Court and a foreign Court and the defendant is amenable to having the matter heard in the foreign Court. That is not the position here. The defendant does not apply for the stay on the basis the plaintiff should commence the action in Switzerland. She does not claim to be amenable to jurisdiction in Switzerland. The defendant applies for the stay on the basis the proceedings in the Local Court should be stayed and if the plaintiff wishes to proceed, then the plaintiff should be forced to proceed in the Supreme Court in New South Wales and commence this action again.

Clearly, the amount claimed, $14,284.24 is well within the jurisdictional limit of the Local Court which is presently $40,000.

25 There is no power under the Local Courts (Civil Claims) Act to transfer a matter to the Supreme Court.

26 I have already set out the provisions of s.17(i)(b) of the Local Courts Act which clearly gives the Local Court jurisdiction.

27 I cannot see how it can be said that these proceedings which are properly and regularly commenced in the Local Court are oppressive so as to be unjust to the defendant. The defendant is unable to point to any action of the plaintiff in bringing the proceedings which is improper or contrary to the Act.

28 If there be any doubt on the jurisdictional question I would hold in any event that the defendant has waived any objection to Local Court jurisdiction by her actions in these proceedings inconsistent with the objection to jurisdiction.

29 The defendant has filed a defence and attended at callover. Those actions amount to a submission to jurisdiction:

see: Laurie v Connell (1958) 98 CLR 310.
National Bank v Winborne (1979) 11 NSWLR 156.
Vertzjas v Singapore Airlines Ltd 2000 50 NSWLR page 1.

30 The defendant puts forward the following additional reasons as to why the proceedings in the Local Court should be stayed and if the plaintiff wishes to proceed, the plaintiff should be forced to recommence the action in the Supreme Court;

1. The defendant cannot subpoena witnesses or require the presence of witnesses critical to her case if the matter proceeds in the Local Court.
The Local Court under the Evidence Act 1995 has the same power as the Supreme Court to deal with witnesses failing to attend proceedings. The evidence discloses that Dr Gerald Breuleux is the in-house legal counsel of the plaintiff. It is obvious the plaintiff will have to rely on his evidence in its claim. If the defendant wishes to dispute the evidence of Dr Gerald Breuleux or put to him matters relating to a defence based on the Swiss equivalent of the Contracts Review Act, then in the ordinary course the defendant would have to give the plaintiff's solicitor notice of their requirement for him to attend for cross examination and he will be required to attend.
2. The matter proceeding in the Local Court rather than the Supreme Court submits the defendant, enables the plaintiff to be selective about the witnesses which it calls and does not enable the defendant to call and compel any witnesses in her case to attend other than herself. This submissions appears to repeat submission 1. For the reasons I have already given, I do not accept such submission. I do not accept the plaintiff will in practice, rather than theory, be able to compel attendances of witnesses from Switzerland better in the Supreme Court than she could in the Local Court.
3. The defendant submits proceeding in the Local Court does not enable the defendant to obtain discovery essential to her case related to the alleged agreement for loan and the linking between that and the alleged Third Party. In relation to the alleged agreement for loan, I am of the view a Notice to Produce directed to the solicitors in New South Wales acting for the plaintiff would be effective to recover all of the admissible documents within the plaintiff's control. I reject this submission in so far as it relates to the plaintiff's claim.
4. The main submission of the defendant is that the continuance of the matter in the Local Court will not enable to defendant to proceed with her Third Party Notice as the Local Court has no jurisdiction to enable service of that document abroad.

31 This submission relates to the granting of the stay in the Local Court, but in considering it I propose now to deal with the plaintiff's Motion for the Third Party Notice provisionally filed in these proceedings on 17 November 2000, to be struck out.

32 I have previously set out the details of the allegations by the defendant against The Teaching Institute in the Third Party Notice.

33 It is of course extraordinarily important for the defendant for her to be allowed to bring the Third Party proceedings in these proceedings as if she is unable to do so, she can only bring those proceedings in Switzerland. The defendant relies on Part 10 of the Supreme Court Rules as the only basis upon which the Supreme Court of this State will exercise extra territorial jurisdiction. The only way which the defendant is able to proceed with her action against the third party in New South Wales is if she can bring it under Part 10 Rule 1A to claim contribution or indemnity from the third party in the action commenced by the plaintiff.

34 Mr Burke for the plaintiff submitted the Third Party Notice is itself an abuse of process. The defendant has provided particulars of the loss she alleges as against the Third Party in the sum of $192,000. That sum does not include general damages. In her Third Party Notice in these proceedings she is not able to claim that loss. She can only seek indemnity or contribution. Mr Burke submitted that if the claim against the Third Party was genuine, surely the defendant would have proceeded with her claim for the amount well in excess of $200,000 well before now. He submitted that the Third Party Notice was a device entered in an attempt to defeat or delay the plaintiff's claim. Whilst those submissions have considerable appeal, I do not rely on them when coming to my decision in this matter.

35 I have come to the view on all the evidence that the Third Party Notice provisionally filed in this matter should be struck out.

36 I am satisfied on the evidence contained in the Affidavit of Fiona Henderson that the plaintiff and the Third Party are separate legal entities. I do not propose to go through the evidence in detail but the searches attached to the Affidavit of Fiona Henderson give an entirely different legal position to that alleged by the defendant through the Affidavits of Patrick Snowden. I accept the evidence of Fiona Henderson. I am satisfied the plaintiff and the Third Party are separate legal entities and not so closely related as to enable the Third Party Notice to be relied upon in these proceedings.

37 Not only is the Third Party Notice against a separate legal entity, it raises entirely different issues. The plaintiff's claim is for the recovery of an amount of money said to be due under two loans. The Third Party Notice raises allegations of sexual harassment, breach of contract and negligence. In my view there is a very strong argument that the Court would not hear both matters together even if the companies were related. The plaintiff's claim would occupy a relatively short period of the Court's time, whereas the claim by the defendant against the Third Party would involve a very lengthy hearing indeed. The issues are not so closely related that the hearings should be heard together in any event.

38 Other matters which I take into account when I exercise my discretion not to stay the proceedings under s.32 are as follows;

1. The plaintiff has already incurred considerable expense. These costs will be lost if the plaintiff is forced by a stay to commence fresh proceedings in the Supreme Court.
2. The question of the proposed Third Party Notice was only raised by the defendant at the callover to fix a date for hearing. The Defence was filed on 15 November 1999. It was not until the date of the callover on 23 October 2000 that the question of the Third Party Notice was raised. The delay does not assist the defendant.

39 For the above reasons I have come to the view that the Notice of Motion filed by the defendant should be dismissed, except as to the order for the security of costs which I previously made and which I believe is now in effect. I propose to make the orders sought by the plaintiff and the Third Party Notice provisionally filed in these proceedings will be struck out.

40 The plaintiff was successful in its motion and is entitled to costs on that motion.

41 The defendant was unsuccessful on her motion, except in relation to the order for security of costs which was not opposed except as to amount. The defendant should pay the plaintiff's costs in relation to the defendant's motion but such costs should take into account the order for the security of costs. If the parties are unable to agree on the amount of the orders for costs, then the matter can be re-listed before me.