Marque Lawyers Pty Ltd v Ryer Development Ltd

1. [1]

   These proceedings concern a claim in contract for payment of legal fees for work performed by the Plaintiff for the Defendant between January 2013 and May 2016. The Plaintiff is a firm of lawyers which conducts its practice in George St, Sydney. The Defendant is a company incorporated in Hong Kong.

2. [2]

   The Defence filed in the proceedings in June 2017 raises by way of defence that the work undertaken was not carried out efficiently or with due care and skill and that unnecessary costs were incurred in breach of the implied terms of the costs agreements.

3. [3]

   The proceedings were commenced in May 2017 and have proceeded efficiently to this stage with current orders in place for the Defendant to complete service of its evidence by 26 October, the Plaintiff having completed service of its evidence by 28 September 2017. The proceedings are listed for further directions on 2 November 2017.

4. [4]

   The Defendant, by way of Notice of Motion filed 22 September 2017 (and as amended in Court on 11 October 2017) seeks transfer of the proceedings to the Local Court of New South Wales. By way of secondary order, it seeks a notation that the preferred venue is Wyong. The order is sought pursuant to s 146(1) of the Civil Procedure Act 2005 (NSW), and the venue of Wyong is sought pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 8.2(1).

5. [5]

   Section 146(1) of the Civil Procedure Act 2005 (NSW) provides as follows:

6. [6]

   Rule 8.2 of the UCPR provides as follows:

7. [7]

   Also relevant to the application are ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW) which provide relevantly as follows:

8. [8]

   In support of its application, the Defendant relies on the affidavit of Michelle Aitken, sworn 22 September 2017. That affidavit deposed to the asserted connections with Wyong that comprised in essence, the place of business of the solicitors for the Defendant, the address of a possible witness for the Defendant, and the Defendant’s business interests in the area, which their main witness, Mr Charlesworth, attends when he is in Australia.

9. [9]

   In opposition to the application, the Plaintiff relied on the affidavit of Nathan Thomas Mattock, sworn 5 October 2017. That affidavit comprised a combination of evidence and submissions.

Applicant’s argument

1. [10]

   Written submissions were provided by counsel for the Defendant. In short, the Defendant argued that whilst it may well have been appropriate to commence proceedings in the Supreme Court of New South Wales in order to use the Pt 11 service provisions of the UCPR to effect overseas service, there was now no reasonable basis to continue the proceedings in the Supreme Court. It was argued in summary that:

2. [11]

   In oral argument, it was submitted by the Defendant that the overriding purpose rule and principle set out in s 56 combined with the objects of case management in s 57 and the discretionary considerations set out in s 58(2)(b) of the Civil Procedure Act 2005 (NSW) militates towards transfer of the matter to the Local Court, particularly given the impact of the proceedings on other Supreme Court users and the efficient use of available judicial resources. In support of this submission, reliance was placed on Bodenstein v Hope Street Urban Compassion [2014] NSWSC 174. In that matter, Justice Beech-Jones determined that it was appropriate to transfer defamation proceedings to the District Court given the sum in issue (approximately $180,000), the lack of apparent involvement of any novel principle or new point of law, the likely delays if the matter remains in the Supreme Court, and whether the case should have been commenced in the District Court in the first place. In making that determination, his Honour dealt with the interaction of the object of ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW) and determined the matter should be transferred to the District Court. This decision illustrates the principles relevant to the discretion to transfer.

3. [12]

   The parallel argument put forward by the Defendant here was to the effect that the judges of the Common Law Division of this Court sit as judges in criminal cases, they hear personal injury cases of some complexity, and deal with complex insurance and possession claims, and therefore (implicitly) their time would be better spent dealing with those matters rather than these proceedings, involving as they do, a small sum.

4. [13]

   It was also argued that there were ways to have the judgment enforced in Hong Kong should that become necessary, in that the common law of Hong Kong will entertain proceedings to recognise and enforce a foreign judgment provided that a foreign court of competent jurisdiction gave the judgment, that the judgment is final and conclusive and the identity of the parties is the same.

5. [14]

   It was submitted that there was no evidence that enforcing a judgment by way of the common law as opposed to utilising the Foreign Judgments (Reciprocal Enforcement) Order process was more difficult, however in oral submissions, counsel for the Defendant properly conceded that the statutory procedure “may be more convenient than the other”. Counsel for the Defendant then went on to submit that is only one factor this Court should take into account, and that pursuit of enforcement by way of the common law of Hong Kong is not “radically more difficult or complex a proceeding” than the Reciprocal Enforcement Order process.

Respondent’s argument

1. [15]

   The Plaintiff made three key submissions. First, on one analysis of s 146, the proceedings did not meet the requirement of s 146(1)(a) in that the proceedings could not have properly been commenced in the Local Court because service of the proceedings outside Australia was required. The Defendant is incorporated in Hong Kong and service would not have been able to be effected in a streamlined way without the ability to use Pt 11 of the UCPR.

2. [16]

   It was submitted that part of the question of proper commencement of proceedings includes the capability to serve the initiating document using relevant available court process. Given that there was no agreement that service would be accepted by the Defendant in New South Wales, there was no clarity that substituted service through the Local Court would be successful given the absence of the Defendant from the jurisdiction, and there being no current address for service with a solicitor in New South Wales because the Defendant’s previous solicitor was the Plaintiff in these proceedings, the proceeding could not “properly have been brought” in the Local Court.

3. [17]

   The second submission was that this Court should not exercise its discretion to transfer the proceedings to the Local Court because if and when the time comes for enforcement of a judgment, there are two potential regimes for enforcement in Hong Kong. The first is statutory, and requires an application to be filed and certain automatic things will follow, whereas the second requires fresh proceedings to be filed, potentially a defence to be filed, evidence regarding jurisdiction of the Local Court to be prepared and served, and a formal determination to be given. It was submitted that whilst those matters may proceed without a hitch, problems can occur when there needs to be an additional analysis and determination by a court in Hong Kong when enforcement is pursued. Supplementary to this point it was argued that it is not consistent with s 56 of the Civil Procedure Act 2005 (NSW) to exercise discretion in favour of transfer of proceedings to a court where there is no corresponding statutory enforcement regime.

4. [18]

   The third submission made was that should the Court be minded to transfer the proceedings to the Local Court, a more appropriate venue would be Sydney (rather than Wyong) given that was the location of the transactions that base the statement of claim, it is the location of the Plaintiff and the balance of convenience considerations favour Sydney.

5. [19]

   In reply, counsel for the Defendant noted that the Local Court would have been able to deal with an application for substituted service, but not if the Defendant was overseas, and that s 56 considerations are relevant to proceedings in this state managed by courts of this state but those considerations do not necessarily apply to proceedings in another jurisdiction after proceedings in this jurisdiction have been finalised.

Determination

1. [20]

   Whilst it is understandable why it was thought to be appropriate to apply for transfer of the proceedings to the Local Court given the size of the judgment, other concerns militate towards refusal of the application. It appears that there was an (understandable) concern that whilst commencement of these proceedings in the Supreme Court so that overseas service could be effected was reasonable, the continuation of those proceedings in this Court could spark negative comment given the comparatively small amount of the debt sought, but there are other overriding considerations relating to enforcement that suggest the Supreme Court is the appropriate place for proceedings to remain.

2. [21]

   Section 57 of the UCPR highlights that consideration should be had to the needs and interests of other litigants and not just those conducting the proceedings in question, as noted by Beech-Jones J in Bodenstein at [8]. However, that consideration is more directed towards the wasting of any court’s time with delays and unproductive applications, not just the time of one court in favour of another. The amount of the claim is well within the jurisdiction of the Local Court, that limit being currently $100,000 plus interest, however, a necessary part of the just, quick and cheap disposal of proceedings includes the enforcement of judgments, as dealt with extensively in Pts 39 and 40 of the UCPR.

3. [22]

   Commencement of proceedings in a court where there is a corresponding statutory recognition of judgment regime which allows foreign judgments to be registered for enforcement is consistent with an overriding purpose of just, quick and cheap resolution of the real issues in the proceedings. It is not consistent with that purpose to remove the proceedings to a New South Wales court where no such reciprocal enforcement arrangement is in place, necessitating the Plaintiff, if successful, having to commence new proceedings for enforcement in a Hong Kong court to enforce any such judgment.

4. [23]

   The matter has progressed efficiently in the Supreme Court. It is almost ready for hearing and can probably be allocated the necessary 1-2 day hearing date shortly.

5. [24]

   Whilst the Supreme Court does deal with matters of significance and complexity, it also deals with appeals from decisions of the Local Court which, on occasion, involve amounts less than the amount of judgment sought in these proceedings. It deals with applications for costs of different types and also deals with appeals which involve points of principle but sometimes very small amounts of damages less than the sum sought in these proceedings.

6. [25]

   It seems to me on application of the overriding purpose rule that the proceedings were properly commenced in the Supreme Court and, in view of the potential enforcement issues, there are persuasive reasons as to why the proceedings should remain in this Court and not be transferred to the Local Court.

7. [26]

   Accordingly, the Defendant’s notice of motion is dismissed.

Costs

1. [27]

   On the question of costs, both parties agreed that the usual costs order should follow, namely that costs follow the event. Accordingly, I order that the Applicant Defendant pay the costs of this notice of motion.