Trilogy Corporate Solutions v Fitzroy Shopfitting & Building Pty Ltd

[2006] NSWSC 1026

CITATION:	Trilogy Corporate Solutions & Anor v Fitzroy Shopfitting & Building Pty Ltd [2006] NSWSC 1026
HEARING DATE(S):	20 and 27 September 2006
JUDGMENT DATE :	27 September 2006
DECISION:	1. The summons is dismissed; 2. The plaintiffs are to pay the defendant's costs in these proceedings.
CATCHWORDS:	Contract - plaintiffs seek consolidation of proceedings in Supreme Court - whether proceedings in NSW District Court ought be removed into Supreme Court under s 140 Civil Procedure Act 2005 - whether proceedings in Magistrates' Court in Victoria ought be removed into Supreme Court under Jurisdiction of Courts (Cross Vesting) Acts - discretionary factors and interests of justice.
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW) District Court Act 1973 Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic) Jurisdiction of Courts (Cross Vesting) Act 1987 (NSW) Service and Execution of Process Act 1992 (Cth)
CASES CITED:	KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516 Parry v WGE Engineering [2003] NSWSC 337 Sonia Lee White v Viewden Pty Ltd [2005] NSWSC 196 Thermasorb Pty Ltd v Rockdale Beef pty Ltd & Ors. [2005] NSWSC 361 Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 BHP Billiton Ltd v Schultz [2004] HCA 61 Bankinvest AG v Seabrook (1988) 14 NSWLR 711 Rippon v Chilcotin Pty Limited & Ors. (2001) 53 NSWLR 198
PARTIES:	Plaintiff 1 - Trilogy Corporate Solutions Pty Ltd Plaintiff 2 - CPE Pty Ltd Defendant - Fitzroy Shopfitting & Building Pty Ltd
FILE NUMBER(S):	SC 14179/06
COUNSEL:	Plaintiffs 1 and 2 - Mr DA Smallbone Defendant - M Simon
SOLICITORS:	Plaintiffs 1 and 2 - Holman Webb Lawyers Defendant - Jonathan Kemp & Associates

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

LATHAM J

27 SEPTEMBER 2006

14179/06 TRILOGY CORPORATE SOLUTIONS PTY LTD & CPE PTY LTD v FITZROY SHOPFITTING & BUILDING PTY LTD

JUDGMENT

1 By Summons filed on 24 August 2006, the first and second plaintiffs seek orders pursuant to the provisions of the Civil Procedure Act 2005 (NSW) and the Jurisdiction of Courts (Cross Vesting) Acts of NSW and Victoria removing proceedings from the Magistrate’s Court in Victoria and from the District Court in NSW to this Court.

2 The principal basis for the application is the risk of inconsistent judgments should the proceedings continue in each jurisdiction. The orders are opposed by the defendant. In order to understand the plaintiffs’ arguments, it is necessary to briefly summarise the history of the matter to date.

The History of the Proceedings

3 CPE Pty Ltd is a subsidiary of Trilogy Solutions Pty Ltd. Both companies are represented by the same firm of solicitors for the purposes of both sets of proceedings. The plaintiffs and the defendant are in dispute over a fit-out of retail premises in Macarthur and Penrith NSW by the defendant. The principal issue in the proceedings commenced by the defendant in Victoria on 15 May 2006 against Trilogy Solutions is whether the defendant was aware that Trilogy Solutions acted as an agent of CPE Pty Ltd. Trilogy Solutions denies that it owes the amount claimed, namely $30,270 to Fitzroy Shopfitting, on the basis that the contract was between Fitzroy Shopfitting and CPE Pty Ltd. The latter company is not a party to the proceedings in the Magistrates’ Court in Victoria.

4 The proceedings in the District Court in NSW were commenced by CPE Pty Ltd against the defendant on 15 June 2006. It has not been disputed that substantially the same issue arises in these proceedings, namely the identity of the parties to the contract. CPE Pty Ltd is claiming the sum of $67,208 from Fitzroy Shopfitting for the negligent performance of work under the same contract. It would appear therefore that CPE Pty Ltd has chosen to commence proceedings in the District Court in New South Wales, in preference to becoming a party to, and filing a cross claim in the proceedings in Victoria.

5 One month after the commencement of proceedings in the Magistrates’ Court, Trilogy Solutions filed a defence and sought further and better particulars from Fitzroy Shopfitting. On 12 July 2006 Trilogy Solutions filed a notice for discovery in the Magistrates’ Court proceedings. On 14 July 2006 a notice of hearing was sent to Trilogy Solutions fixing the matter for hearing on 8 September 2006.

6 On 18 August 2006 the District Court proceedings were adjourned to allow an application to be made to transfer those proceedings to this Court. On 22 August Fitzroy Shopfitting filed a defence in the District Court proceedings.

7 On 24 August 2006, the plaintiffs in these proceedings filed the summons which is presently before me for determination. The summons had a return date of 11 September 2006.

8 On 5 September 2006 Trilogy Solutions made an application to adjourn the proceedings in the Frankston Magistrates’ Court. The application was made primarily on the basis that should the hearing on 8 September continue, the plaintiffs may well be denied the benefit of the determination of the issues raised by the summons in this Court. I am informed from the bar table that the Magistrate was referred to the spectre of inconsistent judgments and issue estoppel. The application was dismissed by the Magistrate who determined in effect that if the proceedings were decided against Fitzroy Shopfitting, it would inevitably follow that a contract had existed between Fitzroy and CPE Pty Ltd. In that event, it is conceded by the defendant's representative before me that Fitzroy Shopfitting would be precluded from traversing that finding in the District Court in New South Wales. In the event that the proceedings before the Magistrate were determined in favour of Fitzroy Shopfitting, the Magistrate was of the view that CPE Pty Limited would be precluded from disputing the fact that Fitzroy Shopfitting was ignorant of the relationship between Trilogy Solutions and CPE Pty Limited for the purposes of the proceedings in the District Court in New South Wales.

9 On 7 September 2006 Trilogy Solutions and CPE Pty Limited made an application to this Court to bring the hearing of the summons forward, given that the hearing in the Magistrates’ Court was set down for 8 September and the application for vacation of that date had been refused on 5 September 2006. Justice Whealy declined the application on the basis that the "long history and chronology of the matter clearly favours the matter proceeding in the Magistrates’ Court [and that] it was extremely ill-advised of the plaintiffs to select a return date, or at least to allow the selection of a return date, which was after the anticipated hearing in the Local Court in Victoria." In addition, and relevantly for present purposes, Justice Whealy was not persuaded that there was necessarily a high likelihood of inconsistent results. However, Justice Whealy was careful to refrain from expressing a view as to the outcome of the summons before me.

10 On the afternoon of 5 September 2006, a critical witness according to the plaintiffs in the proceedings in Victoria became unavailable due to a pressing business trip overseas. Nonetheless, on 8 September the proceedings before the Magistrate commenced and were adjourned part heard to 8 December 2006.

The Legislative Scheme

11 Section 140 of the Civil Procedure Act 2005 (NSW) relevantly provides that the Supreme Court may, on the application of a party to proceedings before the District Court, order that the proceedings be transferred to this Court. This provision is the successor to s 145 of the District Court Act 1973. The discretionary power conferred on the Supreme Court by s 145 of the latter Act has been held to be remedial in nature ; KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516. The onus rests on the party seeking the order ; Parry v WGE Engineering [2003] NSWSC 337. The discretionary power is exercised having regard to the relevant circumstances of the particular case before the Court so that justice is best served between the parties ; Parry. (See generally Sonia Lee White v Viewden Pty Ltd [2005] NSWSC 196 and Thermasorb Pty Ltd v Rockdale Beef pty Ltd & Ors. [2005] NSWSC 361)

12 CPE Pty Limited therefore bears the onus of persuading this Court that in the particular circumstances of this case, the interests of justice will be best served by the removal of the proceedings in the District Court to this Court. Until and unless such an order is made, there are no proceedings pending in this Court.

13 Section 8 of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic) provides that where a relevant proceeding is pending in a court other than the Supreme Court (in this case, the Magistrates’ Court) and it appears to the Supreme Court that the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State and, if an order is made under this section in relation to the relevant proceeding, there would be grounds on which that other proceeding could be transferred to the Supreme Court, the Supreme Court may, on the application of a party to the relevant proceeding, make an order removing the relevant proceeding to the Supreme Court.

14 By the combined operation of s 8 and s 4(3) of that Act and s 9(a) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (NSW), the plaintiffs seek the removal of the proceedings in the Magistrates’ Court in Victoria into the Supreme Court of Victoria. Section 4(3) of the Victorian Act provides that the Supreme Court of another State may exercise original jurisdiction with respect to State matters. State matters are defined as matters removed to the Supreme Court under s 8. Section 9(a) of the New South Wales Act provides that this Court may exercise original jurisdiction conferred by a provision relating to cross vesting in an Act of another State.

15 Further, by the operation of s 4(3), s 5(2) or s 5(6) of the Victorian Act and s 9(a) of the New South Wales Act, the plaintiffs seek an order removing the proceedings from the Supreme Court of Victoria into this Court. I am of the view that s 5(2) is the appropriate vehicle by which the plaintiffs seek the removal of the proceedings into this Court, given the construction of s 5(6).

16 Section 5(2) of the Victorian Act relevantly provides that where a relevant proceeding is pending in the Supreme Court of Victoria (in this case, the former Magistrates’ Court proceedings, assuming that the order under s 8 of the Victorian Act is made) and it appears that the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State (in this case, the former District Court proceedings, assuming that the order under s 140 of the Civil Procedure Act is made) and it is more appropriate that the relevant proceeding be determined by that other Supreme Court, or it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State, the Court shall transfer the relevant proceeding to that other Supreme Court.

17 By way of contrast, section 5(6) of the Victorian Act relevantly provides that where a court (the “first court”, that is, this Court) transfers a proceeding to another court (the former Magistrates’ Court proceeding into the Victorian Supreme Court, assuming that the order under s 8 of the Victorian Act is made) under a law relating to cross vesting of jurisdiction and it appears to the first court that there is another proceeding pending in the first court (the former District Court proceedings, assuming the relevant order is made) that arises out of, or is related to, the first mentioned proceeding and it is in the interests of justice that the other proceeding be determined by the other court, the first court shall transfer the other proceeding to the other court. The application of this provision would thereby result in the proceedings being transferred to the Victorian Supreme Court.

The Application under s 140 of the Civil Procedure Act

18 In Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924, Bryson J (as he then was) said :-

When asked to exercise this power the Court should, in my opinion, appraise the facts and circumstances of the case before it and consider whether the applicant has shown something which, within the framework of the purposes for which the power exists, is a sound ground or a good reason why an order ought now to be made. The subject does not admit of more particular exposition.

19 Given the very broad nature of the discretion and the wide-ranging factors that may be taken into account in the exercise of this power, it is appropriate to have regard to the whole of the circumstances surrounding the institution of the proceedings in the Magistrates’ Court in Victoria and in the District Court in New South Wales. The requirement that the power to remove proceedings from the District Court into this Court serve justice as between the parties brings with it, in my view, considerations not unlike those which are properly taken into account under the cross vesting legislation (although the interests of the parties are not always commensurate with the interests of justice, as to which, see below), including those relevant to the prospect of inconsistent judgments or issue estoppel.

20 The factors which I regard as appropriate to the exercise of my discretion are :-

* The complaint filed by Fitzroy Shopfitting in the Frankston Magistrates’ Court on 15 May 2006 alleged that the defendant entered into a contract with Trilogy Solutions at Moorabbin in Victoria in about August 2005. The forum chosen by the defendant was an appropriate one in these circumstances.

* The amount claimed by the defendant in the proceedings in the Magistrates’ Court is a modest amount which is unlikely to be exceeded by the costs incurred by the parties in that jurisdiction, but will almost certainly be exceeded by the cost of proceedings in this Court.

* Over the following two months, Trilogy Solutions was active in that litigation, in that it sought further and better particulars and discovery of documents from the defendant. Those particulars and documents were provided on 31 August.

* Trilogy Solutions did not foreshadow removal of the proceedings until 18 August 2006, one month after it had been notified of a hearing date at Frankston listed for 8 September and two months after its subsidiary commenced proceedings in the District Court NSW. It filed a defence in the Victorian proceedings on 22 August 2006.

* Following the filing of a Statement of Claim in the District Court on 15 June 2006 by CPE Pty Limited, the solicitors acting on behalf of CPE Pty Limited and Trilogy Solutions wrote to the solicitors for the defendants on 6 July 2006, referring to both proceedings in the Magistrates’ Court of Victoria and the District Court of New South Wales. An admission was sought from the defendant that the Penrith and Macarthur shop contracts were entered into by CPE Pty Limited, not by Trilogy Solutions, and that, in the event such an admission was made, the Magistrates’ Court proceedings should be dismissed. The plaintiffs therefore acknowledged that the substantive issue in both proceedings was the same.

* The amount claimed by CPE Pty Ltd in the District Court is also a modest amount which is more likely to be exceeded by the cost of proceedings in this Court than by the cost of the proceedings in the District Court.

* The plaintiffs at no stage made an application under s 20 of the Service and Execution of Process Act 1992 (Cth) seeking a stay of the proceedings in the Magistrates’ Court on the grounds that a court of another State had jurisdiction to determine all the matters in dispute between the parties and was the appropriate court to determine those matters.

* CPE Pty Ltd did not seek to be joined as a party to the proceedings in the Magistrates’ Court, despite the fact that its legal representative was identical to that of Trilogy Solutions and a cross-claim by CPE Pty Ltd against the defendant was capable of “setting off” the defendant’s claim against Trilogy Solutions. On 31 August, the defendant foreshadowed consent to an adjournment of the hearing on 8 September to allow the plaintiffs to adopt that course.

* In the applications to the Magistrates’ Court and this Court on 5 and 7 September respectively, the plaintiffs’ attempts to persuade both courts that the interests of justice favoured the consolidation of the proceedings into this Court failed.

* The unavailability of a critical witness on behalf of the plaintiffs was notified to the defendant after the failure of the application on 5 September, in circumstances which rendered the continuation of the Magistrates’ Court proceedings beyond 8 September and, more relevantly, beyond 11 September inevitable.

* The transfer of the District Court proceedings into this Court and the transfer of the Magistrates’ Court proceedings into the Supreme Court of Victoria and then into this Court would involve considerable further delays in the resolution of the litigation, given the unlikelihood that a hearing date could be allocated before mid 2007.

* The additional cost of the litigation to the defendant would be considerable. In addition to the need for three witnesses and legal representatives to travel from Victoria to NSW for court attendances, the defendant would be obliged to file and serve fresh pleadings and defences and prepare further affidavits.

* The proceedings in the Magistrates’ Court are listed for one day’s hearing on 8 December 2006.

21 These factors may be said to be more closely associated with doing justice as between the parties than with the interests of justice generally (although they may substantially overlap). Consideration of the interests of justice, including whether inconsistent judgments may arise out of the two sets of proceedings and questions of issue estoppel, call for further analysis to which I will now turn.

The Interests of Justice

22 In the course of the joint judgments of Gleeson CJ, McHugh and Heydon JJ in BHP Billiton Ltd v Schultz [2004] HCA 61, the High Court referred with approval to Street CJ’s description of the cross-vesting legislation in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713-714 which was:-

In relation to transfer, the common policy reflected in each of the individual enactments is that there must be a judicial determination by the court …… either to transfer or not to transfer the proceedings to one of the other [courts], broadly speaking, upon consideration of the interests of justice … It calls for what I might describe as a “nuts and bolts” management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.

23 Further, at par 15-16 of the joint judgment, the High Court stated :-

The reason why a plaintiff has commenced proceedings in a particular court might, or might not, concern a matter related to the interests of justice. It might simply be that the plaintiff’s lawyers have their offices in a particular locality. It is almost invariably the case that a decision as to the court in which an action is commenced is made by the plaintiff’s lawyers, and their reasons for making that choice may be various. …. The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in section 5 is not disembodied, or divorced from practical reality. ……. the capacity of [a court or tribunal] to deal expeditiously with cases has always, and rightly, been regarded as relevant to the interests of justice …

On the other hand, there may be conflicting interests of such a kind that justice would not attribute greater weight to one rather than the other. The advantage which a plaintiff might obtain from proceeding in one court might be matched by a corresponding and commensurate disadvantage to a defendant. The reason why a plaintiff commenced proceedings in one court might be the same as the reason why the defendant seeks to have them transferred to another court. In such a case, justice may not dictate a preference for the interests of either party.

24 Whilst I acknowledge that these comments were made in the context of an action for personal injury brought in the Dust Diseases Tribunal of New South Wales (a tribunal established to deal expeditiously with such cases, often involving the imminent death of the plaintiff), which was sought to be removed into this Court and then to the Supreme Court of South Australia, they are nonetheless generally applicable to the circumstances of the instant case.

25 The Magistrates’ Court in Victoria has the capacity to deal with the substance of the dispute between the plaintiffs and the defendant as early as 8 December 2006, at considerably less cost to all parties than removal of those proceedings will entail. Both the narrow focus of the dispute and the amount claimed by Fitzroy Shopfitting against Trilogy Solutions amply fall within the jurisdiction of that court. The plaintiffs have not identified any relevant prejudice or disadvantage occasioned to them (leaving to one side for present purposes the issue of inconsistent judgments) by the continuation of the proceedings in the Magistrates Court. There is no impediment, as far as I am aware, to the participation of both plaintiffs in the proceedings commenced by the defendant, and none was identified by the plaintiffs when the defendant offered to consent to a brief adjournment of the hearing on 8 September 2006 to allow that to occur. Moreover, that offer is still open.

26 Nor am I persuaded that the prospect of inconsistent judgments as between the Magistrates’ Court in Victoria and the District Court in New South Wales will be realised. The fact that CPE Pty Limited is not a party to the proceedings in Victoria does not prevent reliance by it upon the case advanced by Fitzroy Shopfitting in those proceedings, for the purposes of CPE's claims in the District Court : see Rippon v Chilcotin Pty Limited & Ors. (2001) 53 NSWLR 198 at 201-202 ; [2001] NSWCA 142. It would be an abuse of process should the plaintiffs or the defendant seek to re-litigate an issue central to the proceedings in Victoria, in the proceedings in New South Wales or in any other court.

27 Substantially for the reasons set out at par 20 above, the plaintiffs have not discharged the onus upon them to persuade me to exercise my broad discretion under s 140 of the Civil Procedure Act to remove the proceedings in the District Court into this Court. It follows that there are no proceedings pending in this Court which would enliven the provisions under the cross vesting legislation. If I am wrong in this regard, I am nonetheless unpersuaded that there are grounds upon which the proceedings in the Victorian Magistrates’ Court ought be removed to the Victorian Supreme Court pursuant to s 8 of the Jurisdiction of Courts (Cross Vesting) Act 1987 Vic. That power is also discretionary and the same considerations to which I have referred in par 20 justify a refusal to exercise that discretion.

28 For completeness, I am also of the view that this Court is not the more appropriate forum, nor do the interests of justice warrant the removal of the proceedings from the Supreme Court in Victoria to this Court, pursuant to s 5 of the cross vesting legislation. Accordingly, I would refuse the orders sought in the summons.

29 The formal orders I make are :-

1. The summons is dismissed.

2. The plaintiffs are to pay the defendant's costs in these proceedings.

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