Local Court of New South Wales CITATION: Direct Telecoms Pty Ltd v Kerrick Pty Ltd [2003] NSWLC 13 JURISDICTION: Civil PARTIES: Direct Telecoms Pty Ltd v Kerrick Pty Ltd FILE NUMBER: 32096 of 2003 PLACE OF HEARING: Sutherland Local Court DATE OF DECISION: 28/08/2003 MAGISTRATE: Magistrate H Dillon CATCHWORDS: Practice and Procedure - Stay of proceedings - Interstate dispute LEGISLATION CITED: Service and Execution of Process Act 1992 s 20 CASES CITED: REPRESENTATION: Dominic Esposito Solicitors for the applicant Mr Zaki (agent) for the Respondent ORDERS: 1. Motion granted. Proceedings stayed pursuant to s 20 (3) of the Service and Execution of Process Act 1992.; 2. Costs of disposal of the motion to be costs in the cause. The defendant in this matter applies an order staying these proceedings pursuant to the provisions of s.20 of the Service and Execution of Process Act 1992 ("SEP Act") on the basis that the most appropriate forum for the matter is a court in the State of Victoria. I have determined that the matter should be decided in chambers. Each party has placed affidavit evidence before me. The plaintiff is a company incorporated in New South Wales, the defendant a company incorporated in Victoria. The plaintiff brings its action by way of Statement of Liquidated Claim in the Small Claims Division of the NSW Local Court, the debt alleged being $2676.89 (plus interest and costs). The plaintiff alleges that it supplied telephony services to the defendant, that it issued a number of invoices and that the defendant failed to pay its bills. The defendant, while not admitting that the appropriate jurisdiction is a court in NSW, has filed what might be termed a "holding defence" in which it denies any contractual relationship with the plaintiff and, alternatively, denies that there was any adequate consideration in the relation to the contract alleged. The defendant's evidence is that a contract was formed by the plaintiff with an entity known as National Telecoms Group ("NTG") for the installation of a telephone system at three premises in Victoria. The plaintiff company is part of the NTG group. The defendant alleges that part of the contract with NTG was that, upon satisfactory installation of the telephone system, the defendant would engage Direct Telecoms as its telephone carrier. It says that NTG failed to install the hardware for its systems as per the contract but that, nonetheless, without notice to the defendant, NTG transferred service provision to Direct Telecoms in breach of the agreement. The affidavit of Mr Dominic Esposito, the defendant's solicitor, attests that the contract was formed in Victoria, that the principal witnesses for both parties are located in Victoria, including the plaintiff's sales staff, and that the plaintiff has a Melbourne office. A document with Direct Telecoms letterhead, on which a South Melbourne address is shown, was annexed to Mr Esposito's affidavit. In answer to the application, an affidavit of Mr Mark Hodges, the plaintiff's solicitor, was tendered. Among the documents annexed to that affidavit was a monthly tax invoice statement from Direct Telecoms to Kerrick Pty Ltd. The return address on that document is an address in Glebe, NSW. There is also further evidence that the registered business office of Direct Telecoms Pty Ltd is in NSW. Finally, there is evidence that in the application for a telephone service which evidences most of the terms of the contract the law of NSW is to govern the contract. Mr Hodges submits that the only contract in question in this matter is that between the plaintiff and the defendant and that the evidence concerning NTG is irrelevant. The SEP Act Section 20(3) of the SEP Act provides that a court may stay proceedings if satisfied that an interstate court which has jurisdiction to hear the matter is the appropriate court. In determining the appropriateness of transferring the matter interstate the court hearing the application under s.20 will consider a number of factors: a) The places of residence of the parties and witnesses likely to be called; b) The place where the subject matter of the proceeding is situated; c) The financial circumstances of the parties, insofar as the court is aware of them; d) Any agreement between the parties as to the forum in which disputes will be decided; e) The appropriate law to be used to determine the dispute; and f) Whether there are related or similar proceedings between the parties or against person related to the party served. Conclusions In this case, the plaintiff alleges a simple breach of contract which it submits can and should be dealt with by way of written evidence in the NSW Local Court's Small Claims Division. On the other hand, the defendant alleges a much more extensive series of issues which it claims are related to the proceedings now before this Court. It seems likely from the evidence that the plaintiff's business address and main office is in Sydney. On the other hand, it would also appear that Direct Telecoms operates in Melbourne and has sales staff there. This indicates that it may have a substantial branch office in Victoria. The contract appears to have been formed in Victoria, notwithstanding that the law governing the contract is the law of NSW. I think that there is probably little which turns on that as the law in Victoria and NSW in relation to business contracts is similar. It is unclear from the affidavits how many witnesses would give evidence in the matter but one suspects that it would be a small number. On the plaintiff's side, to prove its claim, there would be relatively little evidence necessary. It would only be in relation to a defence to a cross-claim involving NTG that real complications may emerge for the plaintiff I would think. As I understand it, however, the cross-claim remains to be seen at this stage but it has been fairly clearly foreshadowed by the defendant. Even if a cross-claim is not brought, it appears to me that the defendant has the more difficult evidentiary task, and is therefore more likely to require a number of witnesses than the plaintiff, as it disputes the existence of the contract or, alternatively, seeks to prove that consideration failed. This may require expert evidence to be given, it is somewhat difficult to tell. While it is true, as Mr Hodges asserts in his submissions, that the NSW Local Court generally requires evidence to be given in written form in the Small Claims Division, parties are also afforded an opportunity to address the Court in relation to the evidence. If lawyers are instructed parties are entitled to be present and to give instructions as the case proceeds. In this case, at least as far as the defendant is concerned, proofs of evidence and business records appear to be in Melbourne as are the witnesses who would give instructions to the defendant's lawyers. In my opinion, a court in the State of Victoria would have jurisdiction to hear the matter as it appears that the contract was formed there. The first leg of s.20(3) is therefore satisfied. Encapsulating the various factors which then need to be considered, the question to be asked is where does the balance of convenience lie? In NSW or in Victoria? In my view, it lies in Victoria for the following reasons. First, though there is some unclarity about this, I infer that the defendant will need to call more witnesses than the plaintiff and that those witnesses are primarily in Victoria. Second, the subject matter of the dispute is a contract formed in Victoria. And third, there may be related proceedings between the defendant, the plaintiff and NTG. Therefore the proceedings in this court ought be stayed pursuant to s.20(3). Orders 1. Motion granted. Proceedings stayed pursuant to s.20(3) of the Service and Execution of Process Act 1992. 2. Costs of disposal of the motion to be costs in the cause. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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