Strata Voting Pty Ltd v Axios It Pty Ltd - [2022] QSC 32

SUPREME COURT OF QUEENSLAND

CITATION:

Strata Voting Pty Ltd v Axios IT Pty Ltd & Anor [2022] QSC 32

PARTIES:

STRATA VOTING PTY LTD ACN 161 143 853 (IN LIQUIDATION)

(respondent/plaintiff)

v
AXIOS IT PTY LTD ACN 114 708 753

(applicant/first defendant)

STRATASAURUS PTY LTD ACN 626 393 379

(applicant/second defendant)

FILE NO/S:

14162 of 2021

DIVISION:

Trial Division

PROCEEDING:

Cross-vesting application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

14 March 2022

DELIVERED AT:

Brisbane

HEARING DATE:

15 February 2022

JUDGE:

Applegarth J

ORDER:

1. The proceeding be transferred to the Supreme Court of South Australia pursuant to s 5(2)(b) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld).

2. The costs of the proceeding, including the costs of the application filed 4 January 2022, be costs in the proceeding in the Supreme Court of South Australia.

CATCHWORDS:

COURTS AND JUDGES – COURTS – JURISDICTION AND POWERS – CONCURRENT JURISDICTION OF DIFFERENT COURTS – TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION – WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE – GENERALLY – where the plaintiff issued proceedings in the Supreme Court of Queensland – where a key witness for the plaintiff requires medical treatment in Queensland – whether South Australia is the appropriate forum in all the circumstances – whether the balance of convenience to parties and witnesses makes it in the interests of justice to transfer the proceeding to South Australia

Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld), s 5
Uniform Civil Procedure Rules 1999 (Qld), rule 57

Bankinvest AG v Seabrook (1988) 14 NSWLR 711, cited
Bourke v State Bank of New South Wales (1988) 22 FCR 378, cited
R v Sutton (2015) 253 A Crim R 457; [2015] QSC 110, cited
River Gum Homes Pty Ltd v Meridian Pty Ltd [2010] QCA 293, cited
Valceski v Valceski (2007) 70 NSWLR 36, cited
World Firefighters Games Brisbane v World Firefighters Games Western Australia Inc (2001) 161 FLR 355; [2001] QSC 164, cited

COUNSEL:

M K Callanan, counsel for the plaintiff

R Ross-Smith, counsel for the defendants

SOLICITORS:

Piper Alderman for the plaintiff

Kenseo for the first and second defendants

The plaintiff sues for money owing under a contract and also seeks a raft of equitable relief, alleging equitable fraud in respect of a contract between the first defendant and the second defendant. The essence of its case is that by mid-2018, the software that was the subject of an agreement between the plaintiff and the first defendant had been commercialised and had a value of between $1.2 million and $1.5 million. The plaintiff alleges that two directors of the first defendant arranged for the second defendant to be incorporated and had the software sold by the first defendant to the second defendant at an undervalue. This is alleged to have involved a breach of an express term of good faith and to have been an equitable fraud to the knowledge of each of the first defendant and the second defendant who…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] QSC 32
Decision Date: 14 March 2022

CaseChat Overview and Summary

The case of Strata Voting Pty Ltd v Axios IT Pty Ltd involves a dispute between the plaintiff, Strata Voting, and the defendants, Axios IT and another entity, concerning alleged breaches of contract and equitable fraud. The plaintiff, which developed online voting software, initiated proceedings in the Supreme Court of Queensland, where it claims to have a significant connection through its sole director and shareholder who planned to develop the prototype for the Queensland strata industry. However, the defendants argue that the proceedings should be transferred to the Supreme Court of South Australia, where they were located and trading, and where the alleged breaches of contract and equitable fraud are said to have occurred. The defendants also point to a jurisdictional clause in a Deed of Charge that they claim is a primary instrument in dispute.

The primary legal issue before the court was whether the Supreme Court of South Australia is the more appropriate court to hear the case and whether it is in the interests of justice to transfer the proceedings to that court. The court considered various factors, including the location of the parties, the place where the alleged breaches of contract and equitable fraud occurred, the connection of the proceeding with each jurisdiction, and the convenience of witnesses. Notably, a key witness for the plaintiff requires medical treatment in Queensland, which the court took into account in its reasoning.

The court found that South Australia was the more appropriate forum to hear the case in the interests of justice. It reasoned that the proceeding had minimal connection with Queensland, but had stronger connections with South Australia, including the location of the defendants and the alleged breaches of contract and equitable fraud. The court also considered the convenience of witnesses and the fact that the plaintiff's key witness requires medical treatment in Queensland. Based on these factors, the court ordered that the proceeding be transferred to the Supreme Court of South Australia.

The court further ordered that the costs of the proceeding, including the costs of the application filed on 4 January 2022, be costs in the proceeding in the Supreme Court of South Australia. This decision underscores the importance of considering jurisdictional factors and the interests of justice when determining the appropriate forum for a legal proceeding.

Orders

Orders of the court

1. The proceeding be transferred to the Supreme Court of South Australia pursuant to s 5(2)(b) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld).

2. The costs of the proceeding, including the costs of the application filed 4 January 2022, be costs in the proceeding in the Supreme Court of South Australia.

Background

Background to the litigation

The essential issue is whether the Supreme Court of South Australia is the “more appropriate” court to hear the case. This aligns with the issue whether it is in “the interests of justice” to transfer the proceeding to that court. Background The plaintiff’s sole director and shareholder came up with an idea to develop online voting software for the Australian strata title industry. She planned to develop the prototype for the Queensland strata industry with which she had decades of experience. She knew of the first defendant and had meetings with one of its representatives. Most of these meetings occurred in Queensland. Over the following years she worked collaboratively with employees of the first defendant. The plaintiff undertook its activities from the Sunshine Coast in Queensland and the first defendant undertook its activities from Adelaide. Contracts were entered into from time to time between the plaintiff and the first defendant. The so-called “Second Contract” was entered into on or about 19 November 2014. Some issues may arise about its proper interpretation including minimum instalment payments and the operation of provisions that allowed for a reversion of rights. A significant issue at any trial will be the genesis and purpose of what is described as the “Third Contract”, that was entered into between the first defendant and the second defendant. The plaintiff pleads that, in May 2018, a body corporate services provider that was listed on the Australian Stock Exchange announced that it had entered into an exclusive technology partnership agreement with the second defendant. This is said to show that the first defendant had commercialised the software within the meaning of various clauses of the Second Contract. Two directors of the first defendant, Mr Ayton and Mr Goodridge, arranged for the second defendant to be incorporated at around the same time and became its two directors. The first defendant sold the software and associated business to the second defendant in May 2018 for $122,500, purportedly pursuant to clause 9.8 of the Second Contract and applied the proceeds to pay the first defendant the amount that was allegedly due to it by the plaintiff. Issues at the trial are likely to include the purpose of Mr Ayton and Mr Goodridge in acting as they did and the value of the property at the time it was sold by the first defendant to the second defendant. The defendants intend to call as witnesses a company accountant and an expert who has prepared a valuation report that supports the defendants’ case that the sale was not at an undervalue.The applicants’ submissions on the cross-vesting application The applicants/defendants point to a number of factors that are submitted to make it in the interests of justice to transfer the proceeding to the Supreme Court of South Australia. The proceeding is said to have minimal connection with Queensland but has connections with South Australia that make it the prima facie natural forum for the resolution of the proceeding. Reliance is placed upon the fact that the alleged breaches of contract and equitable fraud are said to have occurred in South Australia where the defendants were, and still are, located and trading. Reliance is placed upon a jurisdictional clause in a Deed of Charge that is said to be a primary instrument in dispute.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Strata Voting Pty Ltd v Axios IT Pty Ltd & Anor [2022] QSC 32
PARTIES:	STRATA VOTING PTY LTD ACN 161 143 853 (IN LIQUIDATION) (respondent/plaintiff) v AXIOS IT PTY LTD ACN 114 708 753 (applicant/first defendant) STRATASAURUS PTY LTD ACN 626 393 379 (applicant/second defendant)
FILE NO/S:	14162 of 2021
DIVISION:	Trial Division
PROCEEDING:	Cross-vesting application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	14 March 2022
DELIVERED AT:	Brisbane
HEARING DATE:	15 February 2022
JUDGE:	Applegarth J
ORDER:	1. The proceeding be transferred to the Supreme Court of South Australia pursuant to s 5(2)(b) of the *Jurisdiction of Courts (Cross-vesting) Act 1987* (Qld). 2. The costs of the proceeding, including the costs of the application filed 4 January 2022, be costs in the proceeding in the Supreme Court of South Australia.
CATCHWORDS:	COURTS AND JUDGES – COURTS – JURISDICTION AND POWERS – CONCURRENT JURISDICTION OF DIFFERENT COURTS – TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION – WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE – GENERALLY – where the plaintiff issued proceedings in the Supreme Court of Queensland – where a key witness for the plaintiff requires medical treatment in Queensland – whether South Australia is the appropriate forum in all the circumstances – whether the balance of convenience to parties and witnesses makes it in the interests of justice to transfer the proceeding to South Australia Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld), s 5 Uniform Civil Procedure Rules 1999 (Qld), rule 57 Bankinvest AG v Seabrook (1988) 14 NSWLR 711, cited Bourke v State Bank of New South Wales (1988) 22 FCR 378, cited R v Sutton (2015) 253 A Crim R 457; [2015] QSC 110, cited River Gum Homes Pty Ltd v Meridian Pty Ltd [2010] QCA 293, cited Valceski v Valceski (2007) 70 NSWLR 36, cited World Firefighters Games Brisbane v World Firefighters Games Western Australia Inc (2001) 161 FLR 355; [2001] QSC 164, cited
COUNSEL:	M K Callanan, counsel for the plaintiff R Ross-Smith, counsel for the defendants
SOLICITORS:	Piper Alderman for the plaintiff Kenseo for the first and second defendants