Meridian Pty Ltd v Rivergum Homes Pty Ltd
[2010] QSC 123
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- Unreported Judgment
- Meridian Pty Ltd v Rivergum Homes Pty Ltd[2010] QSC 123
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Meridian Pty Ltd v Rivergum Homes Pty Ltd[2010] QSC 123
Meridian Pty Ltd v Rivergum Homes Pty Ltd[2010] QSC 123
SUPREME COURT OF QUEENSLAND
CITATION: | Meridian Pty Ltd v Rivergum Homes Pty Ltd [2010] QSC 123 |
PARTIES: | MERIDIAN PTY LTD V RIVER GUM HOMES PTY LTD |
FILE NO/S: | BS 8998 of 2009 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court of Queensland |
DELIVERED ON: | 28 April 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 October 2009 |
JUDGE: | Daubney J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – TRANSFERS AND CONSOLIDATIONS – where the defendant applied to transfer Queensland proceedings to Supreme Court of South Australia pursuant to the cross-vesting legislation – where the proceedings are for breach of contract - where the relevant agreement contained an exclusive jurisdiction clause – where the defendant company was started and has its residential address in South Australia – where the defendant company has a branch office in Queensland – where the majority of witnesses that would be required to give evidence reside in Queensland – whether it is more appropriate or in the interests of justice that the proceeding be transferred to South Australia Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth), s 5 Uniform Civil Procedure Rules, r 16 Backyard Concepts Corporation Pty Ltd v Jims Group Pty Ltd [2007] QSC 295, applied Bankinvest AG v Seabrook (1988) 14 NSWLR 711, cited World Firefighters Games Brisbane v World Firefighters Games Western Australia Incorporated & Ors [2001] QSC 164, cited |
COUNSEL: | M R Bland for the plaintiff S Sheaffe for the defendant |
SOLICITORS: | QBM Lawyers for the plaintiff McLaughlins Solicitors for the defendant |
- The plaintiff has commenced proceedings in this Court against the defendant seeking the sum of $231,168 said to be payable pursuant to a contract and further damages of $22,210 for breach of contract. The statement of claim alleges:
- By a written agreement dated 5 November 2007 (“the Agreement”), the defendant agreed to engage the plaintiff as its general manager – Queensland;
- Material terms of the Agreement included that the defendant would pay the plaintiff the sum of $250,000 plus GST per annum, and would pay for all fuel in the plaintiff’s business use of its motor vehicle and reasonable travel costs;
- On 22 June 2009, the defendant purported to terminate the Agreement;
- The plaintiff had not engaged in any misconduct to justify the termination, and the purported termination by the defendant was a repudiation of the Agreement;
- On 22 June 2009, the plaintiff accepted the defendant’s repudiation and terminated the Agreement;
- The defendant owes the plaintiff $231,168 (for sums due under the Agreement, including travel costs) and has suffered loss of $22,210, representing the defendant’s failure to give four weeks notice of termination.
- The defendant filed a conditional notice of intention to defend averring, in effect, that by reason of an exclusive jurisdiction clause in the Agreement, the plaintiff submitted to the exclusive jurisdiction of the courts of South Australia and that the Supreme Court of Queensland is not the most convenient jurisdiction for determination of this proceeding.
- The defendant has now applied for the following orders:
“1.That the within proceeding be stayed permanently as being forum non conveniens pursuant to rule 16 of the Uniform Civil Procedure Rules.
- That the within proceeding be transferred to the Supreme Court of South Australia pursuant to the cross-vesting legislation.”
- In an affidavit by Mr Victor Said, the sole director of the defendant, he says that the defendant is a builder and property developer which started in South Australia in August 1994 and which has its head office and principal place of business in Mile End in South Australia. The defendant’s registered office is at another address in South Australia. Mr Said says that in about March 2006, the defendant started providing building and construction services to Queensland customers after having opened its first display home at Mariners Cove in Southport. As at November 2007, about 89 per cent of the defendant’s business was in South Australia and about 11 per cent was in Queensland. He says that in November 2007, the defendant established a branch office in the Seabank building at Southport. The defendant employed five staff to work in that office within a few months after its opening, but all of the accounting, bookkeeping and marketing in respect of the Queensland business was, and still is, undertaken by the defendant’s head office in South Australia. Mr Said deposes to the process undertaken to recruit a general manager to manage the Queensland operations. A recruitment agency referred the defendant to Mr Louis Donald. After a period of negotiations, an “independent contractor agreement” dated 5 November 2007 was entered into between the defendant as “principal”, the plaintiff as “contractor” and Mr Donald as “director”, by which the plaintiff was engaged “in the capacity of general manager – Queensland of the defendant”. Mr Donald was, and is, a director of the plaintiff, and it was clearly contemplated that he would be the person effectively performing the duties required of the plaintiff under this agreement. The Agreement also provided:
“14Governing law
This Agreement shall be governed by and construed in accordance with the laws enforced for the time being in the State of South Australia and the parties hereto submit to the exclusive jurisdiction of the Courts of South Australia.”
- In his affidavit, Mr Said describes an alleged deterioration of the Queensland part of the defendant’s operations. He says that on 1 July 2009, a letter was sent from the defendant’s head office to the plaintiff terminating the Agreement. Mr Said says in his affidavit:
“21.One of the issues relevant to the termination of the Agreement was undertaking of personal contracting works by the plaintiff, which came to our attention in part from invoices sent to our head office in South Australia.
- This proceeding relates to termination of the Agreement by the defendant. The defendant denies the plaintiffs claim.
- The plaintiff and defendant expressly agreed in the Agreement that the Agreement shall be governed by and construed in accordance with the laws enforced for the time being in the State of South Australia and the parties submitted to the exclusive jurisdiction of the Courts of South Australia.
- On the basis of all the matters I refer to in this affidavit I believe this proceeding therefore ought to have been commenced in the Supreme Court of South Australia.”
- The defendant’s finance and administration manager, Mr Nicholas Lee, has also sworn several affidavits in support of the application, in which he says:
(a)That the defendant’s head office and principal place of business is situated in Mile End in South Australia. There are 55 staff employed at that head office;
(b)The defendant’s lawyers in respect of all legal matters are its solicitors in Adelaide;
(c)The defendant’s branch office at Seabank building, Marine Parade in Southport has nine staff. The defendant’s business includes carrying on business as a residential home builder, undertaking property development, and supplying timber and other building products, and it services customers in South Australia and Queensland;
(d)All bookkeeping and accounting services in relation to business undertaken on behalf of the Queensland branch office, and therefore by the plaintiff, was undertaken in the defendant’s head office in South Australia;
(e)In May 2009, Mr Lee became aware of certain invoices from Queensland being sent to the head office for payment in respect of which no purchase orders or other documentation had previously been provided to the accounts department. These appeared to be invoices in respect of a personal development being undertaken by the plaintiff.
- The letter terminating the plaintiff’s engagement under the agreement is exhibited to an affidavit of the plaintiff’s solicitor. Without reciting the terms of this letter in detail, it was written by the defendant to the plaintiff and referred to a meeting between Mr Donald, Mr Said, Mr Lee and the defendant’s human resources manager, Mr David Kerr, on 22 June 2009. The letter stated:
“The primary item discussed was the property being constructed at Calypso Bay by your company [the plaintiff], which had recently raised significant concerns needing urgent resolution, and had been brought to the attention of the Managing Director, Victor Said, in the prior four weeks by employees of the Group.
You confirmed that none of this was intentionally caused by yourself, however you did accept that in hindsight you should have acted differently. This assertion of lack of intention was rejected by [the defendant] and this remains the case.
These matters were of significant concern, especially in light of the unacceptable financial performance of the QLD division, the delays in construction resulting in liquidated damages claims on RPC investment homes, the Construction Mgr being too busy to perform his duties adequately, poor operational performance, delays in the estimators completing budget models and the repeated requests from management for you to be more focused on the business.”
The letter then went on to make a number of assertions concerning diversion of resources, improper use of contractors on the Calypso Bay project, improper use of suppliers, improper use of staff members to obtain beneficial prices for the Calypso Bay project, and a failure to make full and frank disclosure of the extent of use of the defendant’s resources.
- In his affidavit in opposition to the present applications, Mr Donald notes that this letter asserted that:
(a)he had asked certain of the defendant’s employees to undertake a significant amount of work on the Calypso Bay project;
(b)copies of purchase orders and documentation relating to the Calypso Bay project were not provided to the defendant’s accounts department;
(c)the plaintiff used certain contractors and suppliers on the Calypso Bay project that were ordinarily used by the defendant, thereby adversely affecting the defendant’s business by reducing the contractors’ and suppliers’ ability to focus on the defendant’s normal work;
(d)suppliers were given to understand that the Calypso Bay project was intended to be a display home.
- After specifying these assertions, Mr Donald then specifically identifies:
(a)four witnesses, each of whom is resident in Queensland, whose evidence is relevant to Assertion (a),
(b)three witnesses, each of whom is resident in Queensland, whose evidence is relevant to Assertion (b), and
(c)13 witnesses, each of whom is resident in Queensland, whose evidence is relevant to Assertions (c) and (d).
All in, Mr Donald identifies some 17 witnesses, all of whom reside in Queensland, whom the plaintiff would propose calling in respect of the issues raised by the defendant in support of its termination of the Agreement.
- In his further affidavit, Mr Lee has identified that four of the defendant’s employees in its accounts department, each of whom resides in South Australia, will be required to give evidence.
- Section 5(2) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Qld) provides:
“Where –
(a)a proceeding (the relevant proceeding) is pending in the Supreme Court (the first court); and
- it appears to the first court that -
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(ii)having regard to -
(A)whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory; and
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and
(C)the interest of justice;
it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory;
the first court shall transfer the relevant proceeding to that other Supreme Court.”
- In Backyard Concepts Corporation Pty Ltd v Jim’s Group Pty Ltd [2007] QSC 295, I noted:
“[6]Since Bankinvest AG v Seabrook[1], it has been accepted that the approach called for in determining the forum which meets the ‘interests of justice’ is that which is seen as ‘the appropriate forum’ in the sense of being that with which the action has the most real and substantial connection.
[7]In World Firefighters Games Brisbane v World Firefighters Games Western Australia Incorporated & Ors[2], Philippides J noted, by reference to authority, that the range of factors considered relevant in assessing which is the ‘more appropriate forum’ are:
(a)the application of the substantive law, if it is peculiar to a particular jurisdiction;
(b)forensic advantages or disadvantages conferred by the competing procedural laws;
(c)the plaintiff’s choice of forum and the reason for that choice;
(d)substantive connections with the forum (eg residence, domicile, place of occurrence and choice of law);
(e)balance of convenience to parties and witnesses;
(f)comparative cost and delay; and
(g)convenience of the court system.”
- In the present case, the defendant places particular emphasis on the exclusive jurisdiction clause in the Agreement. In the Worldwide Firefighers[3] case, Philippides J said at [38]:
“The authorities favour the view that under the cross-vesting legislation, the exclusive jurisdiction clause remains a relevant consideration, on the basis that the “interest of justice” require that due acknowledgment be accorded to such a clause as representing the bargain between the parties and that proper regard be given to the need to hold parties to their bargain. Nevertheless, in my opinion, in considering the weight to be given under the legislation to such a clause, one should not start from the position that such clauses should be viewed with the “strong bias” in their favour previously accorded to them at common law. The weight to be given to such clauses will vary depending on the other surrounding and countervailing circumstances.”
- Dealing first with the range of factors identified by Philippides J in the World Firefighers case, I observe:
(a)There is, so far as I am aware, no difference between the substantive law of Queensland and that of South Australia relevant to this dispute;
(b)Neither party has identified any forensic advantages or disadvantages conferred by the competing procedural laws of Queensland and South Australia;
(c)It would appear that the plaintiff’s choice of forum was founded on reasons of personal convenience in that this is the jurisdiction in which Mr Donald and his solicitors are present;
(d)The dispute would appear to have substantive connections with both Queensland and South Australia, arising from the relevant corporate residence of the litigating parties, the locus of the acts allegedly committed in breach of the Agreement, and the exclusive jurisdiction clause under the Agreement;
(e)It seems to me that there is a clear weighting of the relevant witnesses in Queensland in the sense that there are many more identified witnesses whose evidence is, or would appear to be, directly relevant to the issues which will be sought to be litigated, who are resident in Queensland than the number identified on behalf of the defendant who are in South Australia;
(f)Neither party advances a case that the court proceedings would be any more expensive, or inconvenient, in one jurisdiction rather than the other;
(g)No questions of convenience to either the Queensland or the South Australian court systems arise.
- Clearly, the overwhelming factor in favour of the matter staying in Queensland is the significant number of Queensland resident witnesses prospectively required for a trial of the issues arising from the asserted bases for the termination of the Agreement by the defendant. There would clearly be significant cost, and very considerable inconvenience to those witnesses, if the matter were transferred to South Australia. Given the preponderance of that consideration, it seems to me that it is sufficient to outweigh the significance which otherwise attaches to the exclusive jurisdiction clause in this Agreement.
- Accordingly, I would neither stay the proceedings in Queensland nor order that the matter be transferred to South Australia.
- The application is accordingly refused. There is, in my view, no reason why costs ought not follow the event. The plaintiff has filed a brief affidavit by its solicitor in support of an application for those costs to be fixed. Having regard to the circumstances of this matter, however, I am disinclined to embark on such a process, and will therefore make the following orders:
- The application be dismissed;
- The applicant defendant pay the respondent plaintiff’s costs of and incidental to this application to be assessed on the standard basis.