Geoscience Resource Recovery LLC v Central Petroleum Limited

This appeal involved the proper interpretation of r 124 Uniform Civil Procedure Rules relating to service of originating processes outside of Australia. One category of case in which such service is permitted without leave, is where the proceeding relates to a “contract … made”. One party contended that that was not the case here, as agreement to the contract was in dispute. The Court of Appeal rejected that argument, holding that it was enough if one party contended that the agreement had been made. The court also considered, and endorsed, the proposition that for a proceeding to relate to a contract (for the purpose of this UCPR rule), some relief must be claimed in respect of it.

Sofronoff P and McMurdo JA and Mullins J

14 September 2018

Background

Central Petroleum (“CTP”) commenced a proceeding in the Supreme Court of Queensland against Geoscience Resource Recovery (“GRR”), seeking declaratory relief that it owed no money to GRR. The dispute between the parties turned in large part on whether or not a certain contract was agreed to in 2012 (the “Disputed Agreement”). [12]. GRR contended that the Disputed Agreement was agreed, and had commenced proceedings in the United States seeking relief in relation to it. [19]. CTP contended that it never agreed to the Disputed Agreement, and so sought the declaratory relief in Queensland. [16].

CTP served the Queensland claim and statement of the claim on GRR in the United States, where GRR is based, without leave of the Court. [1]–[2]. In response, GRR brought an application seeking to strike out the statement of claim, amongst other relief. [4]. One of its contentions in support of the relief claimed was that the proceeding was irregularly commenced because CTP required leave to serve the claim and statement of claim outside of Australia. [3]. It was this application by GRR that was the subject of reasons by the primary judge, who dismissed it. [5]–[6].

The appeal concerns the sole question of whether the primary judge erred in finding that GRR had been validly served with CTP’s originating process. [28]. The resolution of that question involves the interpretation of r 124(1) of the Uniform Civil Procedure Rules 1999 (“UCPR”). [22].

Service outside of Australia under the UCPR

Rule 124(1) of the UCPR permits the service of an originating process outside of Australia without leave by reference to certain categories of proceedings. [22]. The category in issue is provided by r 124(1)(g)(ii), which is for “a proceeding relating to a contract … made by 1 or more parties carrying on business or residing in Queensland” (emphasis added). CTP carries on business in Queensland. [23]. Consequently, the issue in dispute is merely whether service was properly achieved without leave because the proceeding fell within the description of the words emphasised above.

GRR’s key grounds of appeal contended that CTP’s claim would not fall within the emphasised words because (1) there was a dispute about whether the contract was made; and (2) because for a proceeding to relate to a contract, there must be some relief claimed in respect of it (which it alleged was not the case here). [28].

Ground 1 – Whether the existence of the contract must be undisputed

GRR contended that the Queensland proceeding did not relate to a contract made because the very existence of the Disputed Agreement was in issue between the parties. [31]. The key error alleged to have been made by the primary judge was a failure to apply this position as provided by the UK decision of Finnish Marine [1990] 1 QB 1078. [34]. In contrast, CTP submitted that it was sufficient for a proceeding to relate to a contract made if one party contended it was entered into. [38]. In this regard it noted that Finnish Marine had been disapproved elsewhere, and that the weight of authority supported their position, which was reflected in the UK decision of Boss Group [1997] 1 WLR 351. [42]. That was the conclusion reached by the primary judge. [26]–[27].

Gotterson JA, with whom McMurdo JA agreed on this point, and with whom Mullins J agreed entirely, held that the interpretation advanced by CTP and endorsed by the primary judge, was correct. [53]. His Honour firstly noted that the qualifying phrase “relating to” was, on its face, “of general and far-reaching application”. [46]. Secondly, there was no logical reason why a service rule of this kind would discriminate between proceedings on the basis of whether there was a dispute about whether the contract had been made. [49]. Thirdly, his Honour noted that there was no like requirement in other categories provided by r 124(1). [50]. Lastly, his Honour considered that CTP and the primary judge were correct in their assessment of the UK authorities mentioned above. [54].

In conclusion, his Honour said that the word “made” in r 124(1)(g)(ii) serves a limited role, which only requires that “the contract to which the proceeding relates must be one which at least one of the parties to the proceeding alleges was made”. [51].

Ground 2 – Whether relief must be claimed in respect of a contract

Gotterson JA, with whom Mullins J agreed, accepted that in order for a proceeding to relate to a contract (for the purpose of this UCPR rule), the proceeding must seek relief in respect of it. [58]. For example, it would not be sufficient for the proceeding “merely to refer by way of historical narrative to the contract”. [58]. McMurdo JA considered it was not necessary to express a view on this point. [67].

GRR had submitted that no relief was sought in relation to the Disputed Agreement. Ultimately, however, this ground failed because, even if that were the case, Gotterson JA was satisfied that CTP’s statement of claim sought relief in respect of another contract, the agreement to which was not in dispute. [60]–[64].  Accordingly, this ground was not made out. [64].

In the result, having failed to make out either ground, the appeal was dismissed with costs. [66].

W Isdale