Programmed Maintenance Services Limited v The Shell Company of Australia Ltd
[2000] QDC 249
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Programmed Maintenance Services Limited v The Shell Company of Australia Ltd[2000] QDC 249
- Add to List
Programmed Maintenance Services Limited v The Shell Company of Australia Ltd[2000] QDC 249
Programmed Maintenance Services Limited v The Shell Company of Australia Ltd[2000] QDC 249
DISTRICT COURT OF QUEENSLAND
CITATION: | Programmed Maintenance Services Limited v. The Shell Company of Australia Ltd [2000] QDC 249 |
PARTIES: | PROGRAMMED MAINTENANCE SERVICES LIMITED (Plaintiff) v. THE SHELL COMPANY OF AUSTRALIA LTD (Defendant) |
FILE NO/S: | D1972 of 2000 |
DIVISION: |
|
PROCEEDING: | Application in a proceeding |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 4 August 2000 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 28 July 2000 |
JUDGE: | McGill DCJ |
ORDER: | Application dismissed with costs. Conditional Notice of Intention to Defend struck out; extend time for filing of Notice of Intention to Defend |
CATCHWORDS: | PRACTICE – stay of proceedings – whether court in Victoria the appropriate court to determine the matters in issue – Service and Execution of Process Act 1992 (Cwth) s. 20. Rick Cobby Pty Ltd v. Padesta Transport Pty Ltd (1997) 139 FLR 54 – followed Re: Currie (1899) 25 VLR 224 - cited Traders Finance Corporation Ltd v. Bradshaw (1963) QWN 48 - followed Valkama v. Jamieson (1994) 11 SR(WA) 246 – followed Huddart Parker Ltd v. The Ship “Mill Hill” (1950) 81 CLR 502 – cited Oceanic Sun Line Special Shipping Co Inc v. Fay (1998) 165 CLR 197 – cited |
COUNSEL: | P.R. Franco for defendant applicant A.M. Daubney for plaintiff/respondent |
SOLICITORS: | Minter Ellison for defendant Macrossans Lawyers for plaintiff |
- [1]By a claim filed on 17 May 2000 the plaintiff claimed $87,181.77 for breach of contract from the defendant. The attached Statement of Claim alleged that under a contract evidenced by an exchange of facsimiles the plaintiff agreed to supply and install for the defendant a sign at Packinham for a particular price, and that the contract was subsequently varied in a way which increased the price. It is alleged that the sign was installed, that a credit from the contract price was allowed, and the balance of the contract price, being the amount of the claim, is due and payable to the plaintiff in Queensland, but has not been paid.
- [2]On 16 June 2000 the defendant filed a conditional Notice of Intention to Defend which disputed the jurisdiction of this court to entertain the plaintiff’s claim on the basis that the contract was made in Victoria, the subject matter of the contract is situated in Victoria, and the contract between the plaintiff and the defendant contains a jurisdiction clause which provides that the competent jurisdiction for any dispute under the contract is Victoria. As required by r. 144, the defendant on 30 June filed an application seeking an order that the proceedings be stayed pursuant to s. 20 of the Service and Execution of Process Act 1992. This would be an order within para. (g) of r. 16.
- [3]Section 20 provides relevantly as follows:
“(2)The person served may apply to the court of issue for an order staying the proceeding.
- (3)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.
- (4)The matters that the court is to take into account in determining whether that court of another State is another appropriate court for the proceeding include:
- (a)the places of resident of the parties and of the witnesses likely to be called in the proceedings; and
- (b)the place where the subject matter of the proceeding is situated; and
- (c)the financial circumstances of the parties, so far as the court is aware of them; and
- (d)any agreement between the parties about the court or place in which the proceeding should be instituted; and
- (e)the law that would be most appropriate to apply in the proceedings; and
- (f)whether a related or similar proceeding has been commenced against the person served or another person;
but do not include the fact that the proceeding was commenced in the place of issue.”
- [4]It follows that I may make an order under this provision to stay the proceeding only if I am satisfied that the court of another State has jurisdiction to determine all the matters in issue between the parties and that that court is the appropriate court to determine those matters. An applicant seeking such an order bears the onus of demonstrating a clear and compelling basis for relief: Rick Cobby Pty Ltd v. Padesta Transport Pty Ltd (1997) 139 FLR 54 at 58. That decision also indicates that when an application is made under s. 20 it is appropriate to focus attention on the specific criteria identified in subsection (4): p. 59. The expression “the appropriate court” means that the issue is whether a particular court can be regarded as the natural forum for the dispute: Valkama v. Jamieson (1994) 11 SR(WA) 246.
- [5]With regard to (a), the parties are both corporations and both have their registered offices in Victoria. The defendant has identified seven potential witnesses who are resident in Victoria, and who are or may be relevant to the matter in dispute, but does not anticipate calling any witnesses who are resident in Queensland: A/Toomey, para. 25, 26. There is some indication given of the subject matter of possible evidence from them. From this it might be inferred that the defendant is proposing to allege that the sign erected by the plaintiff deviated from the specification required by the defendant. There is reference to communications with the plaintiff regarding these deviations, although the persons with whom that communication took place are not identified. The complaints are said in para. 19 to have been the subject of various conversations with the plaintiff over the period 17 February 1999 to 18 April 2000.
- [6]Deviations from the specifications are said to have been set out in an email on the latter date, a copy of which his exhibited. Hopefully the contents of this email were more meaningful to the plaintiff than they are to me, but my superficial impression is that none of the deficiencies look very serious. It would seem, however, that if the real issue is that the work which was done was defective, then it would be necessary to pay some attention to proving the terms of the contract and the specifications, but essentially the case would turn upon evidence of the actual state of the sign, and the significance of such deficiencies as may exist. It is, however, not clear that that is the only matter in dispute.
- [7]The plaintiff’s general manager of that part of its business which is concerned with the production of signs of this nature has in an affidavit identified eight potential Queensland residents who may be required to give evidence on behalf of the plaintiff. It was submitted on behalf of the defendant that no weight should be attributed to this because the affidavit did not identify the sort of evidence they might be able to give. It seems to me, however, that where there is no clear identification of the matters in issue, it becomes more difficult for the plaintiff to be precise about what witnesses it may or may not wish to call, and the plaintiff should not be disadvantaged in this way. There is no clear preponderance either way in respect of the matters referred to in (4)(a).
- [8]As to (b), at the moment the subject matter of the proceeding is a debt allegedly owed by the defendant to the plaintiff, and that is situated in Victoria: Re: Currie (1899) 25 VLR 224. There is also the consideration that the sign is in Victoria. It follows that (b) favours the defendant. I doubt however whether this is a factor deserving great weight; I think it unlikely that a view would be appropriate, although it is possible that some independent expert’s assessment of the sign may be appropriate, and the fact that the sign is in Victoria may make the use of Victorian experts more convenient.
- [9]With regard to (c), there was no evidence before me as to the financial circumstances of the parties, although, as I said during the hearing, I have heard of the defendant before. I proceed on the basis that either could afford to litigate in either jurisdiction, although I suspect that the defendant’s pocket is somewhat deeper than the plaintiff’s.
- [10]As to (d), this was the principal matter in issue because the defendant alleged that it was a term of a contract between the parties that the courts in Victoria have exclusive jurisdiction to resolve any dispute. Such a clause would not deprive this court of jurisdiction, although it would be an important factor in determining whether the requirements of s. 20(3) are satisfied and the proceeding in this court ought to be stayed: Traders Finance Corporation Ltd v. Bradshaw [1963] QWN 48; Huddart Parker Ltd v. The Ship “Mill Hill” (1950) 81 CLR 502 at 509; Oceanic Sun Line Special Shipping Co Inc v. Fay (1998) 165 CLR 197 at 231. It is therefore necessary for me to examine the basis for this submission more carefully.
- [11]Although the claim refers to a contract to supply and install a particular sign for a particular price, the contractual relationship began with the acceptance of a tender from the plaintiff to the defendant for the supply, delivery, installation and commissioning of RVI Signage at Shell retail outlets for a period of 3 years. The plaintiff submitted such a tender, a copy of parts of which is Exhibit MJT-1 to the affidavit of Ms. Toomey. It appears from that document that the contract contemplated was for the supply of all the company’s RVI Signage requirements, with the defendant committing to the purchase of signage for particular sites from time to time during the period: s. 4, p. 2. The contract was to be awarded on the basis of an offtake order with prices submitted in accordance with the one off price as listed in the tender documents, or as a commitment/blanket order with prices submitted in accordance with the prices for multiple units as listed in the tender documents: s. 1, p. 2.
- [12]It appears from p. 2 of the contents section that the conditions of contract in s. 3 included “general conditions of purchase revision C November 1994”, although these are not reproduced in the Exhibit. However, by a letter dated 11 October 1995, the defendant substituted “general conditions of purchase – revision D September 1995” and this substitution was accepted by a facsimile dated October 1995: Exhibit MJT-3. There were further negotiations between the parties and the defendant accepted the plaintiff’s tender on or about 13 December 1995 when they entered into a form of contract which appears at p. 2 of section 8 of Exhibit MJT-1. That sheet also bears the date 5 September 1995, but neither party suggested that this was of any significance; apparently it was the date on which the tender was submitted: A/Toomey, para. 3.
- [13]I think that there is no doubt that there was a contract formed, through the acceptance of this tender, although it is not necessarily the only contract between the parties. It is possible to have a contract which governs the relationship between the parties, under which particular supplies of goods or services take place in accordance with separate contracts formed between the parties in accordance with the framework laid down by the overall contract. See for example the Bill Facility Letter of Offer considered by the Court of Appeal in Queensland Cement Limited v. Commissioner of Stamp Duties (Appeal 24/95, 1.8.95, unreported). The fact that there is this contract is therefore not inconsistent with the existence of a separate contract between the parties for the supply and erection at a particular price of a particular sign.
- [14]Subsequently the defendant forwarded to the plaintiff a document headed “Supply Agreement”, a copy of which is Exhibit MJT-4; it does not seem to be controversial that this document reflects the contract, but the situation appears to be that this was a document issued by the defendant in response to the parties having entered into the contract referred to earlier. It was dated 1 January 1996. Consistently with the matters referred to earlier, it lists as among other documents forming part of the contract “General Conditions of Purchase Revision D September 1995”. A copy of this document was Exhibit MJT-2 and provides in clause 24:
“Jurisdiction. The purchase contract is deemed to have been made in the capital city of the state or territory in which the seller’s office concerned most closely with the purchase contract is situated and is governed by and shall be construed in accordance with the law in force for the time being in that state or territory. The parties submit to the exclusive jurisdiction of the courts of that state or territory and courts competent to hear appeals therefrom”.
The term “seller” is defined in clause 28 in terms which indicate that in the present context the reference is to the plaintiff. The “purchase contract” is denied in terms which in my opinion make it applicable to the contract formed by the acceptance of the tender. Accordingly, clause 24 operates by reference to that contract rather than to any separate individual contract for the supply of a particular sign, which is the subject of the action. Clause 24 therefore operates by reference to the situation of the plaintiff’s office concerned most closely with the contract formed by acceptance of the tender.
- [15]Before dealing more closely with the application of that clause 24, I should deal with an alternative argument on behalf of the defendant, which was that the relevant provision was contained in a revised set of general conditions of purchase. According to Ms. Toomey, she was told by the defendant’s former senior buyer that in about February 1997 the defendant sent to the plaintiff an “outline agreement” which was intended to amend the earlier contract, which among other things replaced the general conditions of purchase revision D with general conditions of purchase revision E. A copy of the outline agreement is Exhibit MJT-5; it is plainly an offer to amend the existing contract, and the plaintiff was invited to sign and return a formal agreement. The document exhibited has not been signed on behalf of the plaintiff, although that person believes that a signed version would have been returned as “it was the defendant’s normal practice to put such contracts on hold until the defendant received that signed acknowledgment from its suppliers”. However, there were a number of other orders supplied between February 1997 and October 1998.
- [16]Mr. Millar, on the other hand, says that a search of all of the files of the relevant division of the plaintiff relating to commercial arrangements with the defendant, do not reveal the outline agreement or any reference to it. His affidavit also exhibits a copy of a letter from the defendant dated 20 August 1997 to the plaintiff which commences:
“I refer to the meeting which took place on Tuesday 1 July 1997 between representatives of SCOA and Prosign Advertising ( a division of PMS), in relation to supply agreement CMRP034/95 (“the contract”) … “
That designation of the contract is the one appearing on Exhibit MJT-4, the supply agreement dated 1 January 1996. It appears from MJT-5 that one of the purposes of the outline agreement was to substitute a revised agreement number 460000434 in lieu of agreement number CMRP034/95. Continuing use of the old designation on 20 August 1997 suggests that the outline agreement did not come into operation. This letter was executed on behalf of both parties, and would appear to be a variation of the contract, or perhaps a further contract binding on the parties, but does not contain anything relevant to the present application. I am not persuaded that the outline agreement was accepted by the plaintiff in the manner indicated in the offer.
- [17]It was also submitted that the fact that the plaintiff had filled a number of orders from the defendant subsequently indicates acceptance by conduct of the outline agreement. Given that there was already a contract in place for such a thing to be done, this argument is entirely without force. There is no reason why those orders should not be taken to have been supplied in accordance with the earlier contract, perhaps as amended by the agreement of 20 August 1997.
- [18]The attitude that the defendant would not have proceeded with the previous contract unless the plaintiff agreed to a variation of it suggests a degree of commercial arrogance on the part of the defendant. Its attitude appears to be that it has a right to change the terms of the contract entered into when that suits the defendant, although it is happy enough to insist upon the provisions of a particular clause such as clause 24 of the general conditions of purchase in circumstances where to do so might give it a tactical advantage in litigation.
- [19]In my opinion therefore, the relevant provisions is clause 24 of the general conditions of purchase revision D. During the course of argument, it seemed to me that there was some ambiguity in the clause, in that the reference to the seller’s office most closely concerned with the contract might be a reference to the office most closely concerned with the formation of the contract or the office most closely concerned with the performance of the contract, and that the former construction was to be preferred because the meaning of the term had to be capable of being resolved with certainty as soon as the contract was made. I think it is clear that the way in which the contract is in fact performed, and the office of the plaintiff with which the defendant has in fact dealt in connection with the performance of the contract, must therefore be irrelevant because the meaning of the term could not change after the contract had been made. This follows from the fact that among other things this formula is one which deems the contract to have been made at a particular place, and once a particular seller’s office is identified for that purpose, that would be the relevant seller’s office for the purpose of the rest of the clause.
- [20]After further consideration, however, I think that the dichotomy I posed during the course of argument was superficial. Reading the words “the formation of” into clause 24 does involve a modification of its meaning and one which is not justified by any provision of the contract, or the surrounding circumstances. The question of which office is most closely concerned with the contract has to be decided at the time the contract is made, but I think it is relevant to take into account all of the aspects by which an office could be concerned with the contract in determining which office is most closely concerned.
- [21]The plaintiff company is incorporated in Victoria but the division of the plaintiff company concerned with this contract operates principally in Queensland, although it has a branch office in Victoria close to and separate from the head office of the company: A/Millar, para. 9, 10. Ms. Toomey’s affidavit indicates that negotiations for the contract took place between Mr. Wright on behalf of the plaintiff, and Mr. Squires on behalf of the defendant. Mr. Squires was then based in Melbourne, and Mr. Wright is described as being of the plaintiff’s Mt. Waverley office: para. 7. The contract was actually entered into in Victoria. According to Mr. Millar however, Mr. Wright was the former general manager of the division of the plaintiff company of which he, Millar, is now the general manager, that division is based in Brisbane and at the relevant time Mr. Wright was in an unusual situation in that he was based in the Brisbane office for a period of time but normally resided in Melbourne: para 10.(d).
- [22]The principal office of the division of the plaintiff company concerned with the contract was in Brisbane, but the general manager was in fact in Melbourne during the negotiations. The rest of the senior divisional management was based in Brisbane. According to Mr. Millar, the Brisbane office employed about 100 staff, had the factory premises at which the work was to be done under the contract, and had various departments, including engineering, estimating, manufacturing, graphics, technical and sales. The Melbourne office of the division of the plaintiff concerned with the contract comprised fewer than five staff made up of marketing and administrative personnel.
- [23]I think it is a fair inference that the process of negotiating the contract and putting the plaintiff in the position to enter such a contract with the defendant involved more than just Mr. Wright personally. It does seem that so far as the defendant was concerned the negotiations took place with the Victorian office, at least in the sense that letters were sent to that office and received from that office, but given the scale of this contract, I think it very likely that various people in the principal office of the division would have been involved in order to formulate the tender, and their input would also have been required for any further negotiations carried on by Mr. Wright. The fact that the work under the contract was done at the factory in Brisbane is not relevant, but the fact that at the time the contract was entered into it must have been contemplated that the work required to be done under the contract would be done at the factory in Brisbane provides another basis for a connection between that office of the plaintiff and the purchase contract.
- [24]I think that in circumstances where it was a particular division of the plaintiff company which was involved in entering into the supply agreement and that division as appears generally from Mr. Millar’s affidavit was concerned with doing the sort of work required to be done under the supply agreement, for the purpose of applying clause 24 it is relevant to look at the offices of that division rather than the location of the head office of the plaintiff company, which does not appear to have had anything much to do with this contract. Plainly there was some aspect of connection between the contract and each of the offices, but on balance I think the fact that the person who negotiated the contract was normally based in Brisbane along with the rest of the senior management of the division, that aspects of estimating, engineering, graphics and technical work required in order to formulate the tender and negotiate the subsequent contract would have involved the head office of the division in Brisbane, and the fact that it would have been contemplated at the time that the contract was entered into that the work required to be done under the contract be done at the factory in Brisbane, all indicate a greater degree of connection between the Brisbane office than the Melbourne office. The indications are not all one way, but on balance I think they favour the Brisbane office. I therefore find that the plaintiff’s Brisbane office was the one most closely concerned with the purchase contract, and that accordingly the contract is governed by and to be construed in accordance with the law in force for the time being in Queensland, and the parties have submitted to the exclusive jurisdiction of the courts of Queensland.
- [25]If Mr. Wright had been a Queenslander based in Queensland, and had simply flown to Victoria and stayed in a hotel while he negotiated the contract and made use of the head office of the plaintiff company as a post box for the purpose of sending and receiving correspondence, all but one of the factors relied on by the defendant in para. 26 of the submissions in writing would still have been applicable, but it would I think, in those circumstances, have been quite clear that the office of the plaintiff concerned most closely with the contract would have been the Brisbane office. I do not regard the clause as one which focuses on formal matters such as the location of the parties at particular times or the location of registered offices, or the location of Mr. Wright at any particular time; the clause speaks of “office”, not “officer”. I think it is preferable to take a broader view of the commercial reality of the situation.
- [26]It follows that in my opinion factor (d) in s. 20 favours the courts of Queensland as being the appropriate court for the proceeding rather than the courts of Victoria. It also follows from the fact that apparently the proper law of the contract was the law of Queensland that factor (e) also favours the courts of Queensland. The remaining factor (f), was not sought to be invoked by either party.
- [27]It was submitted in the alternative that if the effect of the clause in revision D amounted to a submission to the courts of Queensland, the conflict of evidence as to which was the relevant general conditions of purchase in force precluded the finding as to the appropriate jurisdiction clause with the result that no weight should be given to this issue either way. I do not think that that is the correct approach, but if it were and no weight be given to factor (d), or for that matter (e), the situation would still be one where the defendant had failed to demonstrate a clear and compelling basis for granting relief under s. 20.
- [28]It follows from this analysis that some of the features referred to in subsection (4) favour a court of Victoria as the appropriate court, and some favour a court of Queensland. The feature in para. (d) is a feature which would ordinarily be deserving of particular weight, although I think in this particular case its significance is diminished by the circumstance that the clause operates by reference to the degree of connection between different offices of the plaintiff company and the contract, and there was some connection with the contract by officers of the plaintiff company in each of the states. Indeed, had I concluded that the balance was in favour of a greater connection with the Victorian office, so that this factor had favoured Victoria, the existence of some significant connection with the Queensland office in any event would, I think, have weakened this factor so that it might have been a difficult question to determine whether there was nevertheless a clear and compelling basis for concluding that the relevant court in Victoria was the appropriate court to determine the matter. However, on the view that I take of the various factors, the defendants have certainly not shown that that is the case.
- [29]It is not appropriate to stay the plaintiff’s action under s. 20 and the application is dismissed. In these circumstances, it is appropriate to order that the conditional Notice of Intention to Defend be struck out, and to extend the time for filing a Notice of Intention to Defend for a suitable period. I will hear argument about the length of that period. The defendant should pay the costs of and incidental to the application.