K & M Prodanovski Pty Ltd v Northshore Car Rentals Pty Ltd [2017] NSWSC 625

Supreme Court New South Wales

Medium Neutral Citation: K & M Prodanovski Pty Ltd v Northshore Car Rentals Pty Ltd [2017] NSWSC 625 Hearing dates: 19 May 2017 Decision date: 22 May 2017 Jurisdiction: Common Law Before: N Adams J Decision: (1) The summons is dismissed. (2) The plaintiff is to pay the defendant's costs. Catchwords: PRACTICE AND PROCEDURE – application to transfer proceedings to the Supreme Court pursuant to s 140 of the Civil Procedure Act 2005 (NSW) – where defendant in District Court proceedings has foreshadowed filing of a cross-claim seeking rescission of contract under ACL– summons dismissed Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 140, 144 Competition and Consumer Act 2010 (NSW), s 138B, Schedule 2, ss 237(1), 243 District Court Act 1973 (NSW), ss 44, 135 Cases Cited: Mahommed v Unicomb [2017] NSWCA 65 Provectus Care Pty Ltd v Epicor Software (Aust) Pty Ltd [2009] NSWSC 1281 Category: Principal judgment Parties: K & M Prodanovski Pty Ltd (Plaintiff) Northshore Car Rentals Pty Ltd (Defendant) Representation: Counsel: Mr D Steirn (Plaintiff) Mr G Carolan (Defendant)

Solicitors: Turner Freeman Lawyers (Plaintiff) Mitry Lawyers (Defendant) File Number(s): 2017/78859

Judgment 1. By Summons filed on 14 March 2017, the plaintiff seeks an order pursuant to s 140(1) of the Civil Procedure Act 2005 (NSW) ("CPA") that the proceedings between the parties in the District Court of New South Wales, Sydney Registry, with case number 2016/00114957 be transferred to this Court. The defendant opposes the application. 2. The plaintiff in this Court is the defendant in the proceedings in the District Court and the defendant in this Court is the plaintiff in the District Court. Although the proceedings in this Court have been commenced by Summons, for ease of reference I propose to refer to the plaintiff in this Court as the applicant and the defendant as the respondent. 3. At the hearing of the Summons the applicant relied upon the pleadings in the District Court as well as affidavits sworn in support of this application by Terence Louis Goldberg, solicitor, on 5 May 2017 and 14 May 2017 (with exhibits). Mr Steirn of counsel appeared for the applicant and Mr Carolan of counsel appeared on behalf of the respondent. 4. The background to the District Court proceedings emerges from the Statement of Claim filed in the District Court on 14 April 2016. The applicant owned a Lamborghini that was involved in a motor vehicle accident on 22 May 2009. The vehicle was damaged and was no longer roadworthy. Between 12 October 2012 and 27 May 2013 and again between 14 June 2013 and 20 October 2013, the applicant was unable to use his vehicle as it was being repaired. During those periods, he hired replacement vehicles from the respondent. 5. It is pleaded that, on or about 18 February 2015, the applicant and the respondent agreed that the respondent would seek to recover the costs arising from the rental agreement from the party who was at fault in the accident ("the Contract"). The Contract was express and in writing. It was entirely contained in two documents: an "Authority for NSCR [the respondent] to Manage Claim" dated 18 February 2015 ("the Authority") and "Assignment of Debt Claim Number 144520" ("the Assignment"). It is pleaded that it was a term of the agreement that the applicant assigned to the respondent all of its right, title and interest in the debt. 6. The respondent pleads that the applicant breached the agreement prior to 14 December 2015 by ceasing to assist the respondent with the proceedings to recover the rental costs from the person at fault in the accident. Further, or in the alternative, it is pleaded that the applicant's termination of the agreement was wrongful and constitutes repudiation. The respondent also claims to be entitled to be indemnified for its loss and damage. The claim is for $88,110 in unrecovered rent, plus interest and the legal costs not recovered from the party at fault. 7. The applicant does not admit that there was any rental agreement between the parties. Rather, it is pleaded in the Defence that the vehicles were provided as "courtesy vehicles". In a Statement of Cross-Claim filed on 23 June 2016, the applicant seeks rescission of the Contract constituted by the Authority, the Assignment and a letter of authority ("the Letter"). Rescission is sought on the basis that an employed solicitor of the firm acting for the respondent made misrepresentations to Tony Prodanovski, who was a director of the applicant. Those misrepresentations were to the effect that the Authority, the Assignment and the Letter were required by the respondent so that its costs could be recovered and that there would be no implications for Mr Prodanovski or the applicant arising from those documents because the claim was to be made against a third party. 8. In Mr Goldberg's affidavit of 14 March 2017, he states that he is instructed that the applicant wishes to claim relief under s 237(1) of the Australian Consumer Law by way of rescission of the rental agreements and contract. He states that, should this Court see fit to transfer the District Court proceedings to this Court, he is instructed to amend the Defence and Statement of Cross-Claim to seek relief under the ACL. Mr Goldberg exhibited the proposed amended cross-claim to his affidavit. In that document at [6], it is pleaded that, "The applicant seeks relief in the nature of rescission of the Authority, the Assignment and the Letter." At [10] of the same proposed amended cross-claim, the applicant "seeks an order for rescission of the Authority, the Assignment and the Letter pursuant to s 237(1) of the Australian Consumer Law." 9. The applicant seeks an order that these proceedings be transferred from the District Court to this Court on the basis that the District Court may not have jurisdiction to make an order for rescission under the ACL. It was contended that such remedy is an exercise of equitable jurisdiction.