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Hickey v Bender[2015] QDC 8



Hickey & Anor v Bender [2015] QDC 8
















Magistrates Court at Brisbane


6 February 2015 ex tempore




6 February 2015


Samios DCJ


  1. Appeal dismissed.
  2. The appellants to pay the respondent’s costs to be assessed on the standard basis.


PRIVATE INTERNATIONAL LAW – CONTRACT – CHOICE OF LAW – JURISDICTION – where the respondent was the director of a company carrying on business in Papua New Guinea – where respondent alleged the appellants entered into an agreement with the respondent whereby the appellants would pay the respondent an amount of money if the respondent would leave the business – where the respondent alleges the appellants did not pay the respondent the balance of the amount agreed to – where the respondent initiated proceedings in the Magistrates Court of Queensland by way of claim and statement of claim against the appellants for recovery of the balance due – where the appellants applied to the Magistrates Court to have the claim set aside on the basis of jurisdiction – whether the Magistrates Court of Queensland has jurisdiction to hear the present litigation – whether section 41A of the Investment Promotion Act 1992 (Papua New Guinea) applies to the parties – whether the circumstances of the present litigation come under the Investment Promotion Act 1992 (Papua New Guinea) – whether the present litigation would be void or illegal if it came under the Investment Promotion Act 1992 (Papua New Guinea)


Investment Promotion Act 1992 (Papua New Guinea) s 41A


CDJ v VAJ (1998) 197 CLR 172

House v The King (1936) 55 CLR 499

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538


Mr T Lambert of counsel for the appellants

Mr S Russell, solicitor, for the respondent


Broadley Rees Hogan Lawyers for the appellants

Russells Law for the respondent

  1. [1]
    HIS HONOUR: This is an appeal against the decision of the Chief Magistrate, Judge Carmody QC, who on 14 March 2014 dismissed an application brought by the appellants to have a claim filed in the Magistrates Court by the respondent set aside. The application by the appellants also sought service of the claim of the respondent upon the appellants be set aside. As to that, the Chief Magistrate ordered that service of the claim was to be taken to have been effected on the appellants on the day it came into their respective possession. The respondent’s claim against the appellants, filed in the Magistrates Court on 6 December 2013, is for the sum of $119,651.57, pursuant to an agreement, or alternatively is for damages for breach of contract. The appellants filed a conditional notice of intention to defend to the respondent’s claim.
  1. [2]
    The appellants disputed the jurisdiction of the Magistrates Court because:  (a) the first defendant did not live or carry on business in Queensland, (b) the second defendant did not live or carry on business in Queensland, and (c) the cause of action did not arise in Queensland in part or at all. The basic facts and in general terms to be found in the statement of claim are that the respondent and the first defendant to the proceedings were directors of a company, Pacific Cargo Services Limited (PCS). This was alleged to be a company incorporated in Papua New Guinea and carried on business in Papua New Guinea of customs clearance, logistics, equipment hire, freight and shipping agents. The respondent alleged the business and all of the assets used in the business was held on trust by PCS for the appellants and respondent in equal shares.
  1. [3]
    Further it was alleged that the second defendant was the sole registered shareholder of PCS; further that the second defendant held his shares in PCS on trust for himself, the respondent and the first defendant in equal shares. What the respondent alleged was that on about 2nd May 2013 the parties entered into an agreement – a sale agreement – pursuant to which the respondent agreed to leave the business. He alleged that he would cease to be a director as one of the terms of the sale agreement, his guarantees would be released in the manner alleged and he would cease to hold any interest. Further that he would be paid by the defendants – that is, the appellants – the sum of 500,000 kina by direct debit deposit into his bank account, held at the Commonwealth Bank Limited at Runaway Bay, by instalments.
  1. [4]
    They were 250,000 kina during the month of May 2013 and the balance of 250,000 kina on 31 May 2013. The effect of the allegations is that he resigned, his guarantees were released, he ceased to hold any interest in the assets or the business and he was paid 250,000 kina by direct deposit into his nominated account. He alleges that the balance has not been paid. Converted to Australian, the balance comes to $119,651.57. The effect of the learned Magistrate’s decision, having heard the application, was that there was no ground to refuse the respondent the jurisdiction of the Magistrates Court in Queensland. He was addressed about the appropriate tests; that is, the arguments of the appellants, broadly speaking, was that if the respondent was to commence proceedings against the appellants those proceedings should have been commenced in Papua New Guinea.
  1. [5]
    In arriving at his decision, the learned Magistrate noted that the court will only refuse to determine proceedings under the so-called “clearly inappropriate forum test” formulated by the High Court in Voth. At page 559 of Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, the majority said:

As Deane J. pointed out in Oceanic Sun, principle and authority (in the form of the decision of Maritime Insurance) favour the test adopted by his Honour. The selected forum’s conclusion that it is a clearly inappropriate forum is a persuasive justification for the court refraining from exercising its jurisdiction. Granted that there is an obligation on the domestic courts of this country to exercise jurisdiction which is conferred upon them – a matter on which the majority in Oceanic Sun was united – it does not extend to cases where it is established that the forum is clearly inappropriate.

  1. [6]
    Many arguments were advanced by the appellants that the Queensland Magistrates Court was clearly an inappropriate forum; nevertheless these were not accepted by the learned Magistrate. The learned Magistrate was clearly exercising a discretion. In that regard it is well settled that discretionary judgments and decisions based on value judgments can be set aside only on strictly limited grounds. In House v The King (1936) 55 CLR 499 at 504-505, the majority said:

It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court must exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law opposes in the court of first instance.

  1. [7]
    At page 202, in CDJ v VAJ (1998) 197 CLR 172, a majority said:

Appellate jurisdiction in the strict sense is jurisdiction to determine whether the order of the court below was correct on the evidence and in accordance with the law then applicable.

  1. [8]
    There is no dispute on the hearing of this appeal that the issue of service is no longer a matter that concerns the court. The submissions of the appellants for the most part go to convenience. In this respect, no error has been demonstrated to have been made by the learned Magistrate. In the grounds of appeal the first ground is that there was no evidence or insufficient evidence to found or support an inference of finding made by the learned Magistrate at paragraph 31 of his decision. That is his Honour found that the availability and appropriateness of the foreign tribunal is relevant, but not decisive. Further, a legal expert in PNG commercial law, Mr Molloy, is of the opinion that the applicable law is the same, substantially, in both countries.
  1. [9]
    Having considered all the evidence before me and the submissions I am satisfied that when Mr Molloy gave his opinion his concentration was directed to the issue of contract law between Papua New Guinea and Queensland;  that is, that contract law was the same in both jurisdictions. The remaining grounds of appeal in this appeal, in my opinion, all come down, in the end, to the failure of the learned Magistrate to consider and take into account section 41A of the Investment Promotion Act 1992 (Papua New Guinea) (the Act). I have examined the learned Magistrate’s reasons given on the 14th of March 2014. It is correct to say that the learned Magistrate did not expressly deal with section 41A of the Act. When the application to set aside the claim came before the learned Magistrate, on the 18th of February 2014, there was before him an affidavit of Mr Broadley which had been sworn that very day, the 18th of February 2014.
  1. [10]
    Mr Broadley’s affidavit, in effect, said that he had been told by Mr Frizelle, a lawyer in Papua New Guinea – practising in Papua New Guinea – that because the second defendant was a Papua New Guinea citizen, the fact that he owned all the issued shares in PCS meant that no certification was required under the Act for PCS to commence trading;  however Mr Broadley went on to say that Mr Frizelle told him that the arrangement pleaded by the respondent in paragraph 1.3 of the statement of claim was liable to be declared unlawful and void by a court in PNG because it contravenes section 41A of the Act. Section 41A of the Act is as follows:


Where a contract, agreement or understanding is entered into between a foreign enterprise and another enterprise and-

  1. (a)
    that foreign enterprise has not been issued a certificate at the time at which the contract, agreement or understanding was entered into; or
  2. (b)
    the subject matter of the contract relates to business activities outside of the nature of the activities for which the foreign enterprise is certified to carry on business,

the court may, on the application of that other enterprise or of the Authority, declare the contract unlawful and void.

  1. [11]
    That was the state of the evidence before the learned Magistrate on this section 41A of the Act. To my mind, even if the learned Magistrate had turned his mind to that section it was insufficient evidence to persuade him to set aside the claim or make another order that had the effect of stopping the respondent’s proceedings in the Magistrates Court in Queensland. That is because it was not demonstrated why the court in Papua New Guinea would exercise that jurisdiction in the circumstances of this case.
  1. [12]
    However matters have proceeded further in terms of the appeal. Judge Martin, on the 15th of August 2014, gave leave to the appellants to read on this appeal the affidavit of Gregory Mark Egan, filed 15 July 2014. The effect of that is to – by Mr Egan – is to express an opinion about the applicability of section 41A. He also, of course, points out that the Magistrates Court in Queensland cannot make an order under section 41A. Even if that is accepted, it does not follow that it would be an incorrect exercise of discretion for the learned Magistrate to refuse the application to set aside the claim; that is again because there is no indication of why, necessarily, a court in Papua New Guinea would make the declaration pursuant to section 41A of the Act.
  1. [13]
    Mr Molloy has also, though, sworn an affidavit which was provided for by Judge Martin’s order. The effect of his affidavit is to opine that the parties were not within the Act, and in particular that the appellants have no standing to seek a declaration against the respondent under section 41 of the Act. However matters have moved on again in this appeal. Today I gave leave to the appellants to read on this appeal a further affidavit by Mr Egan. Notice of its contents was given in September last year; nevertheless it was received by me today. My opinion of the affidavit is that it goes on to opine that for various reasons the parties do come within the Act. Mr Egan considers that should either the second defendant or the investment promotion authority make application in PNG for a relevant declaration of invalidity, pursuant to the provisions of section 41A of the Act, that such application would have very good prospects of success, particularly in the light of the expressed disdain of Kandakasi J to business activity being carried out by foreigners in PNG without the relevant IPA certification or exemption.
  1. [14]
    Notwithstanding Mr Egan’s opinion, I did find the quoting of Justice Kandakasi’s judgment in one of the decisions to be relevant on the hearing of this appeal today, and that is:

In a few words, the requirements were enacted to control the entry of foreigners into the country to conduct business.

  1. [15]
    I have great difficulty being persuaded that what is alleged by the respondent and in part accepted by the appellants in their affidavits filed in the Magistrates Court, in support of the application to set aside the claim, amounts to the type of conduct that Justice Kandakasi was referring to. That is on the hearing of this application appeal I have come to the view that the appellants have failed to persuade me that the circumstances of this litigation comes within the Act, and even if it did come within the Act, I am not persuaded that the court would move to declare it void or illegal. On the contrary, the respondent has persuaded me that section 41A is not a ground here to allow this appeal in all the circumstances.
  1. [16]
    Mr Broadley has also been given leave by me today for his affidavit to be read and filed. It is sworn 4 February 2015. In effect it shows that the second defendant has commenced proceedings in Papua New Guinea against the respondent. In effect he is seeking, pursuant to section 41A of the Act, a declaration that the sale agreement is unlawful and void. In my opinion there are grounds here to consider there is conflict between these proceedings by Mr Collins and what he has sworn to in the lower court affidavit, and what the first defendant has also sworn to, which was before the learned Magistrate, that creates doubt in my mind that these proceedings have been commenced with sincerity.
  1. [17]
    Clearly it has been nearly a year since Mr Broadly referred, in an affidavit, to what he had been told by Mr Frizelle and no proceedings have been commenced until very recently. In addition it seems to me that the proceedings commenced in Papua New Guinea cannot be controlled by this court appropriately, nor should the respondent be the subject of conditions placed on the proceedings here in the Queensland Magistrates Court. It seems to me that the appellants have disqualified themselves by the delay in commencing proceedings in Papua New Guinea if it is their belief that whatever may have been the “arrangement” was void or illegal.
  1. [18]
    Therefore when considering this appeal, even though I accept the learned Magistrate did not appear to expressly deal with that point – it seems to me it may have either escaped his attention because it was brought up in the way it was in Mr Broadley’s affidavit or there’s some other reason that it has not been dealt with – even – notwithstanding that, when I look at this matter on appeal I see no error by the learned Magistrate in the decision he made;  or if it is an error not to have turned to section 41A and dealt with it with reasons, then I, on this appeal, having before me the proceedings in the Magistrates Court and the further affidavits that have been allowed to be read on this appeal, I come to the same conclusion that this section 41A is of no validity regarding the respondents’ proceedings here in Queensland.
  1. [19]
    It is for those reasons that I come to the view and conclude that this appeal should be dismissed. Whatever the path to his conclusion, I agree with the learned Magistrate’s decision that there is no principled reason for the court to decline to exercise its power and authority to hear and determine the proceedings; therefore the appeal is dismissed.
  1. [20]
    HIS HONOUR: Yes, I’ll repeat the first order. Appeal dismissed. The second order is I order the appellants to pay the respondent’s costs, to be assessed on the standard basis. Yes, thank you.

Editorial Notes

  • Published Case Name:

    Hickey & Anor v Bender

  • Shortened Case Name:

    Hickey v Bender

  • MNC:

    [2015] QDC 8

  • Court:


  • Judge(s):

    Samios DCJ

  • Date:

    06 Feb 2015

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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