Talk to Us Communications v Kazamias
[2012] VCC 1870
•4 December 2012
| IN THE COUNTY COURT OF VICTORIA | Revised |
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-12-00474
| TALK TO US COMMUNICATIONS AUSTRALIA PTY LTD (ACN 076 141 707) | Plaintiff |
| v | |
| CHRISTIAN KAZAMIAS | Defendant |
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JUDGE: | HER HONOUR JUDGE KENNEDY | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 November 2012 | |
DATE OF RULING: | 4 December 2012 | |
CASE MAY BE CITED AS: | Talk to Us Communications v Kazamias | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1870 | |
REASONS FOR JUDGMENT
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Catchwords: Practice and Procedure - application under s20 Service and Execution of Process Act 1992 (Cth) - application refused
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. R Kumar (Counsel) | Eales & Mackenzie |
| For the Defendant | Mr. S Blanks | Frenkel Partners acting as agents for SBA Lawyers |
HER HONOUR:
1 This is a return of a summons issued on 11 October 2012 seeking an order that the proceeding be stayed pursuant to s20 of the Service and Execution of Process Act 1992 (Cth) (“SEPA”).
2 The application was supported by an affidavit of Christian Kazamias, affirmed on 9 October 2012. The plaintiff also filed an affidavit of Mr Vasilios “Bill” Votsaris of 20 November 2012.
3 The proceeding concerns an alleged breach of an employment services agreement constituted by a breach of a restraint of trade clause. The plaintiff alleges that the defendant procured a company, Teledesign Australia Pty Limited, to divert a supplier of “2N” products away from the plaintiff and/or to divert customers away from the plaintiff.
4 The plaintiff also alleges that the defendant breached a confidentiality term by disclosing a customer list and a supply agreement to Teledesign.
5 The loss is currently unspecified.
6 The defendant has denied the breaches and, in particular, denies that information given to him concerning customers was confidential information. The defendant further says that the restraint of trade clause is void or unenforceable, and that the plaintiff had not been authorised to sell the 2N products it sold.
7 The primary issues are, therefore, whether there has been a breach of the employment services agreement; whether the restraint of trade clause is void; and the quantum of any loss.
Principles
8 Section 20(2) of SEPA makes provision for a person served in another State to apply to this court for an order staying the proceeding. Subsection 20(3) then provides that 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.
9 Section 20(4) then sets out the matters that the Court is to take into account in determining whether that Court of another State is the appropriate court for this proceeding (which matters will be referred to below), which are not to include the fact that the proceeding was commenced in the place of issue.
10 The principles that have been applied in determining this application are set out in a decision of St George Bank Ltd v McTaggart[1], a decision of the Court of Appeal of the Supreme Court of Queensland. McPherson JA, in delivering the leading judgment of the Court, agreed with an earlier judicial pronouncement that :-
The expression ‘appropriate court’ in s20 of the Act [was] the one with which the action has the most real and substantial connection, and which can therefore be regarded as the natural forum.[2]
[1][2003] QCA 59
[2][2003] QCA 59 at [10] applying Valkama v Jamieson (1994) 11 SR (WA) 246, 250
11 His Honour also notes that the factors listed in subsection 20(4) are not exhaustive.[3]
[3]Ibid at [11]
12 It remains, therefore, to consider the matters prescribed in subsection 20(4), while also considering any other matters that shed light on the question for the Court, bearing in mind that the defendant has the onus on this application.[4]
[4]Ibid at [17]
Section 20 factors
The places of residence of the parties and of the witnesses likely to be called in the proceeding (subsection 20(4)(a))
13 The defendant resides in Sydney and has resided in Sydney continuously for all of his life (he is 48 years old). His legal representative is also located in Sydney (though he has retained Victorian agents, Frenkel Partners).
14 The plaintiff corporation is incorporated in Victoria, while the Director of the plaintiff is also a resident of Victoria. The plaintiff primarily trades in Victoria and its office is in Melbourne, Victoria. The plaintiff’s solicitors are also located in Victoria.
15 The defendant indicates that, apart from himself, he intends to call witnesses who reside in Sydney. At this stage of the proceeding, he cannot say who those witnesses will be. However, if it appears necessary, he would call a witness who is an executive from Teledesign (whose offices are located in Sydney).
16 Mr Votsaris says that the plaintiff intends calling some 6 witnesses who reside in Victoria, as well as 8 (named) customers who trade in Victoria, and who will give evidence as to the contact by the defendant and Teledesign concerning the breach of contract.
17 The defendant suggested that this estimate should be treated with caution. However, the current pleading alleges that there was contact with persons identified in the Customer list (which is a contested matter).[5] In such circumstances, there appears to be a significant number of Victorian witnesses likely to be called, at least at this stage of the proceeding (no trial date has been allocated yet). This is particularly so given there generally appears to be “more for the plaintiff to prove”.[6]
[5]Amended statement of Claim dated 12 April 2012 at para 16
[6]St George Bank at [14]
18 Accordingly, this factor does not favour the defendant.
The place where the subject matter of the proceeding is situated (subsection 20(4)(b))
19 The contract was formed and signed in Victoria.
20 This factor therefore favours the plaintiff.
The financial circumstances of the parties, so far as the Court is aware of them (subsection 20(4)(c))
21 Mr Votsaris says that the plaintiff is a small company with the equivalent of approximately four employees at any one time. Further, that if this proceeding was stayed, and the plaintiff was required to issue a proceeding in another location, the additional cost to the plaintiff would be “very significant” (para 5).
22 As highlighted by the defence, the plaintiff could have, but did not, adduce any evidence of balance sheets or other appropriate financial material. The evidence, therefore, says very little about the precise financial standing of the plaintiff, and/or the amount of any alleged additional costs were the proceeding to be stayed.
23 The defendant states that his financial circumstances are set out in an annexure to his affidavit, Annexure F (para 15). However, this document also lacks definition.
24 In terms of assets/liabilities, the defendant includes assets as his motor vehicle (net value of $10,000) and liabilities of $15,000 (for credit cards). However, although he also includes his “joint interest in consulting business providing services to CC2GO”, as an asset, no figure is allocated to this asset. His profile (annexure A) also suggests that this figure may be significant, given that he states that he was instrumental in selling the intellectual property of the CC2GO business, for which he was a founding partner for a considerable return to investors.
25 In terms of income/expenses he itemises a salary of $1000 per month, and expenses of $700 per month, without any supporting material. The $1000 salary appears to be relatively small, given he describes himself as a “proven entrepreneurial executive having achieved the establishment of highly profitable IT distribution and software development companies and noted successes in starting up and selling these start-up businesses” (Annexure A). His expenses also include unparticularised personal expenses of $600 per month (although he lives with his parents with no suggestion that any mortgage or rent is payable).
26 The defendant also does not specify how he would be affected if the case was to remain in Victoria. This, despite the fact that he was able perform the national sales role for the plaintiff as a “teleworker” even though he resided in NSW.
27 The material is, therefore, unsatisfactory in relation to both parties.
28 In those circumstances, I am unable to find that the Court is in a position to properly assess the financial circumstances of either party, with the result that the factor does not assist the defendant (who has the onus).
Any agreement between the parties about the court or place in which the proceedings should be instituted (s20(4)(d))
29 Both parties accepted that there was no such agreement.
The law that would be most appropriate to apply in the proceeding (s20(4)(e))
30 Mr Votsaris suggests that Victorian law applies to the contract. However, as correctly highlighted by the defendant, this is subjective opinion evidence on a question of law which is not admissible.
31 The defendant submitted that New South Wales law would be the appropriate law to apply, because the essential nature of the contract was its performance, which performance occurred in New South Wales. The defendant also cited a decision of Akai v The People’s Insurance Co[7] in support of this proposition.
[7](1996) 188 CLR 418
32 The employment agreement did appear to contemplate performance in New South Wales. Thus, the position title is described as “Channel Manager- NSW/QLD.” However, the defendant also says that, although initially he was responsible for sales in New South Wales and Queensland, in about September/October 2010 he became the national sales manager (although, as indicated already, he continued to perform this national role from an office in Sydney).
33 In terms of Akai, that decision was concerned with the question of what was the “proper law” applicable to an insurance contract, for the purposes of section 8 of the Insurance Contracts Act 1984 (Cth).
34 The High Court by majority (Toohey J, Gaudron J and Gummow JJ) suggested that in an analysis of that question, it was proper to have regard to a number of matters which included the place of performance, but also the places of residences of the parties or business of the parties, the place of contracting and the nature and subject matter of the contract.[8]
[8]Ibid at 437
35 The question was said to be one of whether, upon the construction of the contract, and by the permissible means of construction, the court may infer that the parties intended their contract to be governed by reference to a particular system of law. If the answer was in the negative, then the law itself would select a proper law.[9]
[9]Ibid at 441-2
36 The employment agreement between the plaintiff and the defendant gives a NSW address for the defendant. However, it also gives a Victorian address for the plaintiff. Further, although the position description is defined as relating to NSW and Queensland, this appears to have been amended to include a national role in circumstances which are not known. As indicated already, the contract was also formed in Victoria though the circumstances surrounding the formation are also unknown.
37 The evidence before the Court does not enable any appropriate assessment as to what law was to apply, at least, at this stage of the proceeding.
38 In any event, the issue appears to be unnecessary to resolve. Thus, although s4 of the Restraint of Trade Act 1976 applies if NSW law was to be applicable, the defendant fairly conceded that, in practice, there would appear to be no difference in substance if this provision was to apply. Certainly no difference was identified which could affect the current dispute.
39 In those circumstances, this factor again does not assist the defendant.
Whether a related or similar proceeding has been commenced against the person served or another person (s 20(4)(f))
40 No such proceeding was identified.
Other matters
41 Insofar as the factors specified in s20(4) are concerned, one factor clearly favoured the plaintiff, namely the place where the subject matter of the proceeding was located. None of the others clearly favoured the defendant (who has the onus).
42 However, as indicated already, the above factors are not exhaustive. Thus, the defendant relied on the low prospects of success, as well as the fact that the work under the contract had been performed in Sydney.
43 In terms of the prospects of success, the defendant suggested that it was a speculative case because of the absence of particulars and, at one point, suggested it was close to “vexatious”.
44 I am unable to find that the case is vexatious on the material in front of me. The case appears to plead a proper cause of action and I am unable to find that it is vexatious simply by reason of the absence of particulars. The defendant might make other applications if it wishes to pursue such an approach, but the submission does not shed any light on the appropriate resolution of this application.
45 It is true, however, that the performance of the work appeared to occur in New South Wales. Nevertheless, an examination of the pleading suggests that there is no issue in terms of the performance of the work. Rather, the issue between the parties turns on matters subsequent to that performance after the contract was terminated.
46 In this context, it may well be that the breach in terms of restraint of trade by diversion of supplier occurred in Sydney. However, insofar as there are breaches by contact with Customers, such breach appears to have occurred, at least in part, in Victoria. I say this given the identify of the proposed witnesses to be called by the plaintiff, and the fact that the plaintiff primarily trades in Victoria.
47 The loss to the plaintiff also appears to have occurred in Victoria, given the plaintiff was trading in Victoria.[10]
[10]See St George Bank v McTaggart [2003] QCA 59 at [20]
Conclusion
48 Factors in favour of the defendant were that at least part of the breaches alleged appear to have occurred in New South Wales. There was also some financial concern raised by the defendant, but the evidence in support was unparticularised and left questions unanswered.
49 Against this, the contract was formed in Victoria and the loss suffered in Victoria. Part of the breach alleged also appears to have occurred in Victoria, which appears likely to involve a substantial amount of court time.
50 In such circumstances, there appears to be a real and substantial connection with this State, and I am not satisfied that the defendant has discharged its onus of satisfying the court, on the balance of probabilities, that the proceeding ought to be stayed.
51 It follows that the defendant’s summons dated 11 October 2012 will be dismissed.
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