New South Wales Supreme Court CITATION : United Card Services Pty Limited v Object Consulting Pty Limited;United Petroleum Pty Limited v Paypoint Solutions Pty Limited [2010] NSWSC 743 HEARING DATE(S) : 30 June 2010 JUDGMENT DATE : 30 June 2010 JURISDICTION : Equity JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 30 June 2010 DECISION : 1. Order that the summons in proceedings 2010/156364 be dismissed. 2. Order that the plaintiff pay the defendant's costs of that summons. 3. In proceedings 2009/290484 order that the plaintiff's notice of motion filed on 4 June 2010 be dismissed. 4. As between the plaintiff and the defendants in proceedings 2009/290484, the defendants' costs of the notice of motion will be their costs in the proceedings. CATCHWORDS : PRACTICE AND PROCEDURE – application under Civil Procedure Act, s 140 for transfer of proceedings from Local Court to Supreme Court and to be heard with existing Supreme Court proceedings – proceedings relate to same general transaction – application refused – no satisfactory explanation for delay in making application – no evidence that damages claim exceeds Local Court jurisdictional limit – different parties to proceedings – Local Court proceedings would not give rise to res judicata or issue estoppel binding parties to Supreme Court proceedings – prejudice arising from further delay to proceedings LEGISLATION CITED : Civil Procedure Act 2005 (NSW) CATEGORY : Procedural and other rulings 2010/156364 Plaintiff: United Card Services Pty Limited PARTIES : Defendant: Object Consulting Pty Limited 2009/290484 Plaintiff: United Petroleum Pty Limited Defendant: Paypoint Solutions Pty Limited FILE NUMBER(S) : SC 2010/156364; 2009/290484 Plaintiffs: H W M Stitt COUNSEL : Defendant (2010/156364): M J Darke Defendant (2009/290484): M Khocheiche SOLICITORS : Plaintiffs: Porter Davies Lawyers Defendants: Charles Hockey IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Wednesday, 30 June 2010 2010/156364 United Card Services Pty Limited v Object Consulting Pty Limited 2009/290484 United Petroleum Pty Limited v Paypoint Solutions Pty Limited JUDGMENT 1 HIS HONOUR: This is an application under s 140 of the Civil Procedure Act 2005 (NSW) for the transfer of proceedings from the Local Court to this Court. 2 The Local Court proceedings were commenced on 20 August 2009 by Object Consulting Pty Limited ("Object Consulting") against United Card Services Pty Limited ("United Card Services"). In those proceedings, Object Consulting claims that moneys are owed to it by United Card Services pursuant to the contract referred to in para [7] below. 3 On or about 7 September 2009 United Petroleum Pty Limited ("United Petroleum") commenced proceedings in this Court by summons. The defendants to the Supreme Court proceedings are Paypoint Solutions Pty Limited ("Paypoint Solutions") and Good Business Technology Pty Limited ("GBT"). By its summons, United Petroleum sought declarations that Paypoint Solutions and GBT had breached various agreements said to have been made by those defendants with United Petroleum. 4 On 25 March 2010, United Petroleum filed a statement of claim in this Court against Paypoint Solutions and GBT which outlines the nature of the claims made against those defendants and includes a claim for damages. I am told that United Petroleum proposes to amend or, if leave is necessary, to seek leave to amend that statement of claim. No defence has yet been filed in the Supreme Court proceedings. 5 The parties to the proceedings in the Local Court are different from the parties to the proceedings in the Supreme Court. However, United Card Services and United Petroleum are related companies and I was told that United Petroleum is the holding company of United Card Services. 6 In the Local Court proceedings, Object Consulting alleges, and United Card Services admits, that in January 2009 United Card Services delivered a brief to Object Consulting for the provision of IT management services by Object Consulting to United Card Services relating to the transfer of United Card Services' IT system and technology from GBT, operating in Sydney, to United Card Services and its technology host, Wavenet Pty Limited ("Wavenet"), operating in Melbourne, and for the training of United Card Services' employees for the purposes of using the technology transferred in the infrastructure project. 7 In the Local Court, Object Consulting pleads, and United Card Services admits, that United Card Services accepted a proposal and engaged Object Consulting to provide IT management and consultancy services for the project, consistent with a proposal forwarded by Object Consulting on or about 9 January 2009. Object Consulting pleads, and United Card Services admits, that during the course of the project, United Card Services confined the scope of Object Consulting's engagement with respect to the transfer of infrastructure. 8 A defence was filed by United Card Services in the Local Court on 21 September 2009. That defence has subsequently been amended. In substance, by its amended defence, United Card Services says that Object Consulting failed properly to perform the services it was required to deliver, as a result of which the services provided were worthless to United Card Services. In effect, the pleading alleges an extinction of the obligation to pay the purchase price by reason of alleged breaches by Object Consulting of the agreement between it and United Card Services. 9 United Petroleum did not join Object Consulting as a defendant in the Supreme Court proceedings and has still not sought to do so. 10 United Card Services filed a cross-claim in the Local Court on 26 October 2009. That pleading has also been amended. In its amended cross-claim United Card Services alleges that it suffered damages as a result of the alleged failure of Object Consulting to carry out the terms of the contract between those parties. It pleads that it is unable to quantify fully the damages it has suffered. It pleads that it is undertaking investigations to determine the total of such loss or damage, but the amount of such loss or damage is said to exceed the claim made by Object Consulting. 11 No particulars of the damages claimed by United Card Services against Object Consulting in the proceedings in the Local Court have been provided. 12 On 2 March 2010 the Magistrate in the Local Court made orders, including orders for the service by Object Consulting and United Card Services of their lay and any expert evidence. At that time, United Card Services was required to serve its evidence in the Local Court by 21 May 2010. The proceedings were listed for hearing on 20 July 2010 and the matter listed for review on 22 June 2010. 13 Those orders were made following an earlier callover in the Local Court on 25 January 2010. At that time the proceedings were adjourned for four weeks so that United Card Services could consider applying, and so that it could apply, if it chose to do so, for the transfer of those proceedings to this Court. 14 On 23 February 2010 the solicitors for United Card Services advised the solicitors for Object Consulting that their client had not yet determined whether to seek a transfer of the matter to the Supreme Court. 15 It is clear that both proceedings relate to the same general transaction or transactions. In its defence to cross-claim in the Local Court, Object Consulting pleads that, if it is liable to United Card Services, then the claim of United Card Services is an apportionable claim. Object Consulting pleads that Wavenet and GBT are concurrent wrongdoers, being persons whose acts or omissions have caused loss to United Card Services. 16 On 2 June 2010, the solicitor for Object Consulting received a draft notice of motion filed in Supreme Court proceedings. By that notice of motion, United Petroleum sought an order that the Local Court proceedings be transferred to this Court to be heard together with the proceedings between United Petroleum and Paypoint Solutions and GBT. That notice of motion was duly filed on 4 June 2010. 17 On 22 June 2010, the Registrar of the Local Court made orders that if the matter were not transferred from that Court to the Supreme Court, United Card Services should serve all evidence upon which it relies by 5 July 2010. The Local Court proceedings remain listed for hearing on 20 July 2010. It was not until 22 June 2010, at the prompting of the solicitors for Object Consulting, that United Card Services filed the summons seeking an order under s 140 for the transfer of the Local Court proceedings to this court. There is no satisfactory evidence for that delay. 18 The solicitor for United Petroleum and United Card Services, Ms Frost, deposed that she was instructed by the General Manager of United Petroleum that: " the loss and damage that the plaintiff and/or United Card Services has suffered by reason of the conduct of Object Consulting the damages [sic] will exceed the jurisdictional limit of the Local Court of New South Wales being $60,000. " 19 There is no evidence and no particulars as to how United Card Services, as distinct from United Petroleum, is said to have suffered any loss or damage as a result of the alleged breach of contract by Object Consulting. 20 Counsel for United Card Services and United Petroleum submitted that the two proceedings should be heard together because they both relate to the same transaction and that the evidence in one case will be relevant to the evidence in the other. Counsel also submitted that there would be serious prejudice to United Petroleum and United Card Services if findings were made in the Local Court that gave rise to a res judicata or an issue estoppel. He submitted that any prejudice that Object Consulting might suffer by the delay in the hearing of its claim for debt would be fully compensated for by orders for costs and by interest on the debt, if Object Consulting is ultimately successful in establishing that it is owed the money it claims to be owed. 21 Counsel submitted that, to avoid the possibility of conflicting findings of fact and to avoid the fragmentation of hearings of issues that relate to the same general dispute and which relate to the same transactions, there should be only one hearing in one court and that should be a hearing in the Supreme Court. 22 Had United Card Services brought this application promptly and had United Petroleum and United Card Services conducted the litigation in the Local Court and the Supreme Court in a prompt and proper manner, then there would be much to be said for that contention. However, those companies have not conducted themselves, it seems to me, as they ought to have done in compliance with their obligations under s 56 of the Civil Procedure Act. In deciding the application I must apply the principles in ss 56, 57 and 58 of the Civil Procedure Act. 23 It is far from clear from the evidence relied upon in this application that United Petroleum has a claim against Object Consulting. Had it had such a claim, one would have expected the claim to have been brought by Object Consulting's being joined as a defendant to the proceedings in this Court when those proceedings were first instituted, or at least at the time the statement of claim was filed in March of this year. 24 There is no material that shows that United Card Services has a claim for damages against Object Consulting which exceeds the jurisdictional limit of the Local Court. The highest the evidence of the solicitor for United Petroleum and United Card Services goes, is that one or other of those companies, or both, has a claim for damages which exceeds $60,000. There are no material facts deposed to which would establish the quantum of any such claim or how any such damages have been suffered by United Card Services, as distinct from United Petroleum. Notwithstanding that United Card Services was originally required to serve all of its evidence by 21 May and is now required to serve its evidence by 5 July, no evidence was adduced on this hearing to demonstrate how United Card Services has such a claim for damages. 25 I am not persuaded that findings of fact or law in the Local Court in the proceedings between Object Consulting and United Card Services will give rise to any res judicata or issue estoppel in the Supreme Court proceedings. The parties in both proceedings are different. If there were any findings which created issue estoppel between Object Consulting and United Card Services, which I expect there will be, I see no reason why that is a matter of prejudice to any party. It is an intended consequence of the judicial resolution of proceedings between parties that the parties are bound by the findings made. 26 Whilst I accept that an award of interest on the debt claimed by Object Consulting would mitigate the prejudice to Object Consulting in the delay in determination of its claim for debt, the award of interest would not remove all prejudice. If Object Consulting is entitled to the money it claims, it would be prejudiced by being kept out of the funds. 27 The Supreme Court proceedings have progressed in what appears to be a quite leisurely way. Although the proceedings were commenced as long ago as September 2009, a defence by Paypoint Solutions and GBT has still to be filed, and, as I have indicated, I understand the plaintiff will be seeking to further amend the statement of claim. I do not think that it would be just to Object Consulting for its claim to be delayed whilst the parties to the Supreme Court proceedings conduct that litigation at their apparent leisure. I will be making orders, in due course, in relation to the progress of the Supreme Court proceeding. 28 For these reasons, I order that the summons in proceedings 2010/156364 be dismissed. I order that the plaintiff pay the defendant's costs of that summons. In proceedings 2009/290484 I order that the plaintiff's notice of motion filed on 4 June 2010 be dismissed. 29 Object Consulting was not joined as a respondent to that notice of motion so far as appears from the face of the document, although it ought to have been so joined. It has appeared on that notice of motion, as well as the summons and I order that the plaintiff pay the costs of Object Consulting of that notice of motion. Those costs may be assessed forthwith and will be payable forthwith, after agreement or assessment. 30 The defendants in the Supreme Court neither consented to nor opposed the application. Their solicitor has been present in court. 31 As between the plaintiff and the defendants in proceedings 2009/290484, the defendants' costs of the notice of motion will be their costs in the proceedings. ****** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.