Gary Stroud v M and L Sovacki Trading As Benalla Automatic Transmission Specialists [1992] ACTSC 6 (28 January 1992)

SUPREME COURT OF THE ACT

GARY STROUD v. M. and L. SOVACKI Trading as BENALLA AUTOMATIC TRANSMISSION
SPECIALISTS
S.C. No. 326 of 1991
Practice and Procedure - Private International Law

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Master A. Hogan(1)

CATCHWORDS

Practice and Procedure - Cross Vesting Legislation - Cross Vesting Rules - Leave to serve Writ - Action in ACT Supreme Court - Defendant in Victoria - Tort in Victoria - No Action in Victoria - Leave required - ACT Supreme Court not appropriate - Leave Refused.

Practice and Procedure - Application to Stay - Application to Set Aside Writ or Service - Conditional Appearance - Permissible but not necessary - Amendment of Rules needed.

Private International Law - Tort - Negligence - Occupiers Liability - Tort in Victoria - Defendant in Victoria - Action in Australian Capital Territory - Jurisdiction - Choice of Law - Cross Vesting Legislation - Appropriate Court.

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic). Ss 3,4

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth.) Ss 4,5,9,11

Service and Execution of Process Act 1901 (Cth) Ss. 4,11

Rules of the Supreme Court of the Australian Capital Territory 0.12; 0.13 r17; 0.61A rr1.01(i), 4.01; O.78 rr4, 6.

Supreme Court Rules (NSW) Pt 10 r6A, Pt 11 r8

Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41.

Victorian Broadcasting Network Ltd v Whitlam (1980) 31 ALR 184

Cotter v Workman (1972) 20 FLR 319

Dewhurst v Cawrse (1960) VR 278

Tallerman and Co v Nathans Merchandise (1957) CLR 93

Zappacosta v Queanbeyan Bowling Club Ltd (ACT Supreme Court, Higgins J., 20 December 1991, unreported).

Bankinvest A.G. v Seabrook (1988) 90 ALR 407

Laurie and Carroll [1958] HCA 4; (1958) 98 CLR 310

Voth and Manildra Flour Mills Pty. Ltd. (1990) 171 CLR 583

Flaherty v Girgis [1987] HCA 17; (1987) 162 CLR 574

Further Aspects of the Cross-Vesting Scheme, Griffith, Rose and Gagelar (1988) 62 ALJ 1016

Ritchie's Supreme Court Procedure (NSW) 11.8.4

HEARING

CANBERRA
28:1:1992

ORDER

The application of the Plaintiff made by Notice of Motion dated 25 September 1991 be dismissed.

All further proceedings in the action be stayed.

The Plaintiff pay the defendant's costs of and incidental to the Notices of Motion dated 23 July 1991 and 25 September 1991.

DECISION

The writ in this action was issued on 20 May 1991. The address of the plaintiff endorsed on it is within the Australian Capital Territory. It is addressed to the Defendants at an address in the State of Victoria.

2. The writ is accompanied by a statement of claim, the allegations in which I summarise as follows:
1. The defendants carried on business as proprietors of a

workshop at Benalla in the state of Victoria.
2. The defendants were occupiers of the workshop.
3. The plaintiff was lawfully in the workshop.
4. Thereupon the defendants owed to him a duty to take
reasonable care for his safety.
5. On 25 February 1989 the plaintiff was injured by a hoist
being operated on the premises.
6. The defendants were negligent in their operation of the
hoist.
7. The plaintiff thereby suffered damage.
8. This Court has jurisdiction to hear the case by reason of
the Jurisdiction of Courts (Cross-Vesting) Act 1987 (ACT) (sic)
and also by reason of the Jurisdiction of Courts (Cross-Vesting)
Act 1987 (Commonwealth).

3. The writ is not endorsed for service pursuant to the Service and Execution of Process Act 1901 (Cth)

4. It appears from the schedule of correspondence that the writ has in fact already been served upon the defendants in Victoria.

5. Solicitors within the Territory received instructions to act for the defendant, and wrote to the solicitors for the plaintiff raising the question of jurisdiction. They pointed out that the defendants had no nexus with the Territory, the tort alleged did not occur here, and the plaintiff would not be able to bring himself within the appropriate subparagraph of s.11 of the Service and Execution of Process Act 1901.

6. The solicitors for the plaintiff responded, repeating their contention that the Court has jurisdiction pursuant to the cross-vesting legislation. On 23 July 1991 solicitors for the defendants took out a Notice of Motion seeking an order that the proceedings be stayed.

7. Before taking that step, the solicitors for the defendants did not enter an appearance, either conditionally or unconditionally. O.13 r17 would have authorised them to move to set aside the writ or the service of it without a conditional appearance.

8. At first sight it might appear that there are logical and conceptual arguments in favour of seeking, in these circumstances, an order setting aside the service of the writ. It is obviously not appropriate that the writ itself be set aside, since if the defendants were to choose to enter an unconditional appearance, by so doing they would submit to the jurisdiction of the court over themselves as parties, and the Court would proceed to apply the appropriate substantive law in accordance with the principles set out in Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41.

9. But authority which is directly binding on this Court has laid down that, for those and other reasons, it is not appropriate to set aside the service of the writ either. Although it heard no argument on the point, the Full Court of the Federal Court ruled in Victorian Broadcasting Network Ltd v Whitlam (1980) 31 ALR 184 that the appropriate remedy to be sought in the circumstances is a stay of proceedings.

10. The relief sought in the defendant's Notice of Motion is therefore the correct relief. But, in the absence of express authority in the Rules such as is given by 0.13 r17, were they at liberty to do so without at least filing a conditional appearance?

11. This is the procedure that was adopted in Cotter v Workman (1972) 20 FLR 319, but no objection was there taken to it, and Fox J. dealt with that application as one within 0.13 r17. It was also the procedure used by the applicant defendant in Dewhurst v Cawrse (1960) VR 278. The approval expressed by Dean J. of the procedure used in that case, at 279, 280, appears to me to relate more to the form of relief sought, namely a stay, rather than to any requirement that an appearance be entered. The practice commended (despite Luke v Mayo) in Tallerman and Co v Nathans Merchandise (1957) CLR 93 per Dixon C.J. and Fullagar J. at 107-8 included the filing of a conditional appearance.

12. The Rules do not expressly prohibit the taking of such a step in the absence of a conditional appearance. There are no rules expressly providing a procedure for entering a conditional appearance, or for regulating subsequent procedures if one has been entered. Yet O.13 r17 obviously contemplates the permissibility of filing one. In addition, that rule dispenses with the need to obtain an order to enter, or to enter, a conditional appearance when seeking the relief to which it relates. But nowhere in the Rules is there any indication of the circumstances in which an order is needed for a conditional appearance or in which one may be entered without an order.

13. Other difficulties faced by practitioners in circumstances such as these have been dealt with recently by Higgins J. in Zappacosta v Queanbeyan Bowling Club Ltd (ACT Supreme Court, Higgins J., 20 December 1991, unreported). I respectfully agree with his comment that the Rules do not require a party to file an appearance before applying to test, not only the regularity of the writ or its service (which are expressly within 0.13 r17) but also the power of the Court to entertain jurisdiction over the defendant in respect of the cause of action asserted in the writ (which is not). By making any of those applications a defendant does not submit to the Jurisdiction of the Court, or waive any objections to defects in service.

14. But I also respectfully agree with His Honour's suggestion that attention should be given to amendment of the Rules in this area. In their present form they have long caused concern, and a need for unnecessary research and consideration by practitioners. They should give clear and explicit guidance. In addition to the Victorian Rule 8.08 the Federal Court Rules may provide a model in 0.9 rr6 and 7. There is also what appears to me to be a preferable model, in the New South Wales Supreme Court Rules. Those rules have abolished conditional appearance, and substituted a procedure in Pt 11 r8 which would both cater for all contingencies, and provide a method whereby an address for service is provided to the Court without the expense of filing an unnecessary document.

15. I note in passing the comment made at 11.8.4 of Ritchie's Supreme Court Procedure (NSW) that Pt 11 r8 is not appropriate to raise questions of forum non conveniens. That comment appears to me to be inaccurate. Where a defendant is within Australia, such questions are no longer relevant, as the result of the cross-vesting legislation. Where the defendant is outside Australia Pt 10 r6A expressly makes the procedure applicable. I would commend a similar provision to the Rules Committee.

16. Under O.61A r4.01 of the Rules of this Court, in any matter in which the jurisdiction of the Court may be exercised by the Master pursuant to a provision of that Order, the Master may exercise the Court's inherent jurisdiction relating to the matter. The granting of a stay rests upon the Court's inherent jurisdiction, as the Federal Court pointed out in Victorian Broadcasting Network Ltd. v Whitlam (supra) at p 192.

17. The Master however, can not exercise the Court's inherent jurisdiction in relation to a matter unless it is a matter in which the jurisdiction of the Court may be exercised by the Master pursuant to a provision of O.61A.

18. The application for a stay made by the defendants in this action was not made pursuant to the provisions of any of the Rules. At the time at which it was taken out, therefore, it was not a matter that could be dealt with by the Master.

19. However, the Notice of Motion was adjourned for one reason or another on a number of occasions. On 25 September 1991, solicitors for the plaintiff issued a Notice of Motion seeking an order that the Court grant leave to serve the proceedings on the defendants at their address in the State of Victoria. That leave is sought pursuant to O.78 r6 of the Rules, and is therefore within the jurisdiction of the Master pursuant to O.61A r1.01(i). Both Notices of Motion are being heard together, but in any event, if I were to decide that it was appropriate that a stay should be granted pursuant to the inherent jurisdiction, I would now have power to grant it.

20. Reference is made in the Statement of Claim to cross-vesting legislation of the Australian Capital Territory. There is of course no such legislation. It was the Commonwealth Act which made the necessary cross-vesting provisions in respect of the jurisdiction of this Court. Reference was made during argument to s4 of the Commonwealth Act. That section is not relevant to a consideration of this matter. Sub-section 4(1) deals with the investing in state Courts, or conferring on Territory Courts, of the civil jurisdiction of the Federal Court or the Family Court. Sub-section 4(2) confers on the Federal Court, the Family Court or the Supreme Court of a State or of another Territory the civil jurisdiction of a Supreme Court of a Territory.

21. The legislation which operates in conjunction with the Commonwealth Act and which is directly relevant to this action is contained in Ss3 and 4 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 of Victoria. By section 3(1) of that Act, "State matter" means a matter in which the Supreme Court of Victoria has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State.

22. By s4(3) the Supreme Court of this Territory is empowered by the Victorian legislature to exercise original and appellate jurisdiction with respect to "state matters". This Court is then empowered to exercise the jurisdiction given to it by the Victorian Act by s9(2)(a) of the Commonwealth Act.

23. I agree with the statement made by the learned authors of the article Further Aspects of the Cross-Vesting Scheme, Griffith Rose and Gaegeler (1988) 62 ALJ 1016 at 1022 that the conferral must be taken to imply that the jurisdiction shall be exercised in the ordinary and usual way in which this Court is accustomed to exercise its power, and to confer on the Cross-Vested Court an implied power to regulate relevant procedures.

24. Whether that be so or not, s11(1)(c) of the Commonwealth Act, so far as is relevant, provides that where it appears that the Court will be exercising jurisdiction conferred by the State cross-vesting legislation, then the Rules of Evidence and Procedure to be applied in dealing with that matter shall be such as the Court considers appropriate in the circumstances, being Rules that are applied in a Superior Court in Australia.

25. I consider that the Rules set out in O.78 of the Rules of this Court are appropriate in the circumstances.

26. For my purposes the history and intention of the cross-vesting legislation now in force throughout Australia are best set out in Bankinvest A.G. v Seabrook (1988) 90 ALR 407 per Rogers AJA at 417, 419.

27. I would respectfully emphasise, first, a passage that His Honour cites from the report of the Advisory Committee to the Constitutional Commission on the Australian Judicial System:

"The aim of the cross-vesting provisions is not to effect a
general shake-up of the role of the Courts. Nor is it to give
litigants a free choice of forum for initiating proceedings.
Rather it is to ensure that almost always the Court hearing that
case would have ample jurisdiction to determine all the claims
and defences involved in the case."

28. I note also the intention expressed in the preamble both to the Victorian and to the Commonwealth cross-vesting legislation, where it is stated to be desirable to ensure as far as practicable that proceedings which, apart from the cross-vesting legislation, would be entirely or substantially within the jurisdiction of a State Court are instituted and determined in that Court, and that if a proceeding is instituted in a Court that is not the appropriate Court, to provide a system under which the proceeding will be transferred to the appropriate Court.

29. The explanatory memorandum also quoted by Rogers AJA at p 419 makes it clear that the Court should, by and large, keep within its proper jurisdictional field.
"Courts will need to be ruthless in the exercise of their transferral powers to ensure that litigants do not engage in forum shopping by commencing proceedings in inappropriate Courts."

30. Those statements are made with particular reference to considerations of transfer. The legislative provisions relating to transfer are those set out in s5 of the uniform legislation.

31. Nevertheless, I think that the same statements of policy and purpose must be borne in mind when considering the provisions of the Rules relating to service in O.78.

32. I note the comment made by Higgins J. in Zappacosta v Queanbeyan Bowling Club Limited (Supra) that it may well be that Victorian Broadcasting Network Limited v Whitlam would now be differently decided if service had been able to be effected in the exercise of cross-vested jurisdiction, rather than pursuant to the Service and Execution of Process Act.

33. That may well be so. I would add that for practical purposes law students and practitioners need no longer be tortured by the effort to follow the reasoning in Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310, beyond noting its authority for the proposition that at common law in actions in personam the rules as to legal service of a writ define the limits of the Court's jurisdiction.

34. Where a defendant to an action in personam is outside Australia, authority to effect service must be found in the appropriate legislation, such as O.12 of the Rules of this Court, or Pt 10 of the NSW Rules in their present form.

35. Questions whether this Court is appropriate for determining the cause would then fall to be considered according to the principles laid down by the High Court in Voth v Manildra Flour Mills Pty. Ltd. (1990) 171 CLR 583.

36. Where such a defendant is within Australia, but outside the Territory, there are two possible bases for founding jurisdiction.

37. One is the provisions of s4 of the Service and Execution of Process Act 1901. The Writ must bear the indorsements required by the Act but no prior leave is required before service is effected. However, the plaintiff must either be able to bring the subject matter of the action within one of the categories set out in s11(1)(a) to (f), or be prepared to take the risk that if the defendant does not enter an unconditional appearance leave to proceed in the action will not be granted.

38. Following Cotter v Workman (1972) 20 FLR 318, as Higgins J. pointed out in Zappacosta (supra), O.12 r1 of the Rules of this Court was repealed. It does not now matter whether Cotter v Workman was correctly decided or not, and no question of inconsistency between the Rules and the Act can arise, such as was argued in Flaherty v Girgis [1987] HCA 17; (1987) 162 CLR 574.

39. As a basis of jurisdiction, the Service and Execution of Process Act 1901 operates by applying the rule of the Common Law expounded in Laurie v Carroll (supra), that is, by enacting authority for service of the Writ.

40. The other basis for founding jurisdiction is the cross-vesting legislation. It operates upon a different basis. The legislature having power over a particular law district (in this case, the Victorian Parliament) invests jurisdiction in this and other Courts, (Victorian Act s4) and the legislature having authority over the receiving, or cross-vested Court (in this case the Commonwealth Parliament) authorises the receiving Court to receive and to exercise that jurisdiction (Commonwealth Act s9). The result is that it is difficult, if not impossible, to imagine circumstances in which proceedings instituted in any Australian Court against any defendant present in Australia will fail for want of jurisdiction. It may be noted that this result is not restricted to actions in personam.

41. It does not follow, however, that plaintiffs are or will be at liberty to begin proceedings in whichever court appears to them to be desirable, or that there is now no utility in the provisions of the Service and Execution of Process Act 1901.

42. In cases, such as Zappacosta (supra), where the cause of action is within paras (a) to (f) of s11(1) of that Act, it will continue to be desirable to use its provisions.

43. There will be no need to seek prior leave to effect service, as would otherwise be required by 0.78 r6.03, and there will be no need to seek directions or incur the expense of deciding which is the appropriate Court, as would otherwise be the effect of 0.78 r6.01(b).

44. In cases which do not come within paras (a) to (f) of s11(1), it may sometimes be economical or useful to issue and serve proceedings pursuant to the Service and Execution of Process Act 1903, but that will usually be so only where the plaintiff is sure that the defendant will file an unconditional appearance. If that is not filed, leave to proceed will not be granted.

45. If, as in this case, a plaintiff seeks to bring an action which does not come within those paragraphs, there is no doubt at all that the Court would have jurisdiction to hear and determine it. But unless there is some aspect of the case that makes it useful or desirable or necessary to use the cross-vesting provisions, it is most unlikely that leave to effect service will be granted, or that, if it is and the defendant contests the venue, a stay will not be ordered or an order for transfer to the proper Court will not be made.

46. It is true, as Higgins J. remarked in Zappacosta (supra), that it is a far more rational approach to regard the issue as one of venue rather than jurisdiction, and I think that such a rational result has now been achieved.

47. But the interests of justice can be very important in questions of venue, and plaintiffs who, without sufficient justification, choose one venue simply to suit themselves when another venue is obviously the appropriate one may well find the consequences expensive. Such an approach by the Court is obviously required by the intention expressed in the preamble to the cross-vesting legislation.

48. In Zappacosta (supra) Higgins J. also commented,

"O.78 r6.03 would allow service of process in such a case. Of
course, leave would be required (see O.78 r6.04."

49. Order 78 does not expressly forbid service of process without leave where it is proposed to invoke a jurisdiction arising under a cross-vesting law.

50. Nevertheless, I think it is clear from the structure and purpose of the cross-vesting legislation and the rules, that leave should be sought pursuant to O.78 r6 before such service is effected and I fully and respectfully agree with His Honour's comment.

51. In this action service has already been effected without such leave. If the plaintiff proposed to rely upon that service, I would stay these proceedings. I do not consider that I would have jurisdiction to transfer the proceedings to the Supreme Court of Victoria. The reason is, of course, that the Master has no jurisdiction to exercise any of the powers granted by s5 of the cross-vesting legislation. There are two bases for that statement. One is that 0.61A does not contain a rule which confers jurisdiction on the Master to make such an order. The other is that 0.78 r4.01 requires that an application for transfer or removal under the Act must be heard by a Judge.

52. However, as I understand the submissions of Counsel for the plaintiff, the plaintiff does not seek to rely upon that service. The plaintiff seeks leave of the Court pursuant to the Rules, and if that leave is granted will effect service again, pursuant to the leave.

53. I turn then to the provisions of O.78.

54. In the first place, I note that the Plaintiff has not complied with the provisions of O.78 r6.01. The Plaintiff here proposes to invoke a jurisdiction which arises under a cross-vesting law, yet the Statement of Claim does not include a statement of the provision on which the Plaintiff relies, of the claim in relation to which the party relies on it and of the grounds on which the party relies on it. A bald reference is made to the Commonwealth cross-vesting legislation, but, as has already been pointed out, the relevant legislation is the Act of Victoria, and that mere reference to the whole of the Commonwealth Act, as set out in the pleading, does not fully comply with r6.01(a).

55. The requirements of r6.03 are satisfied, since the proceedings include a matter for determination in respect of which jurisdiction under a cross-vesting law may be invoked.

56. Next, r6.04 requires that I refuse leave unless I am,

"satisfied that the Court may, having regard to the Act, be an
appropriate Court to determine the proceedings."

57. I do not read that rule as requiring me to be satisfied, before granting leave, that this Court will be the appropriate Court. But I must be satisfied that having regard to the Act it is capable of being an appropriate Court.

58. It is relevant to that consideration to note that by r6.05 proceedings may be transferred to another Court under the Act notwithstanding that leave to serve the proceedings outside the jurisdiction has been given.

59. It is obvious from the structure of the cross-vesting legislation that there may well be more than one appropriate Court to determine relevant proceedings, and also that a particular defendant may be within the law district over which more than one appropriate Court has jurisdiction. For example, a person might claim against a resident of the Australian Capital Territory remedies arising under the Common Law and, in addition, remedies which, without the cross-vesting legislation, could be granted only by the Federal Court of Australia and the Family Court of Australia. A writ issued out of this Court, seeking all those remedies, could obviously be served in the Territory without the need for prior leave.

60. The concept of what is an appropriate Court is not defined by the Rules. Rule 6.04 directs me to have regard to the Act. It appears to me that the most relevant considerations are those set out in the various paragraphs of s5, (which deal with the transfer of proceedings) applied in the light of the purpose of the legislation set out in the Preamble.

61. The evidence on the application discloses that the Plaintiff's claim relates to injuries that he received on 26 February 1989 when a hoist on the defendant's premises in Victoria injured his right foot. He attended the Benalla Hospital, where his right big toe was operated on by a surgeon from Melbourne. He was released from Benalla Hospital on the same day and travelled to Canberra, where he came under the treatment of Dr Coyle, a Canberra Orthopaedic Surgeon, and Dr Tyler, a general practitioner at Wanniassa. He underwent further operative treatment at John James Memorial Hospital by Dr Coyle. The Plaintiff's advisers would propose to call at the hearing of the action, the Plaintiff, his wife, Dr Coyle and Dr Tyler. The Plaintiff's advisers do not anticipate that the doctor who carried out the initial operative treatment in Victoria would be called as a witness.

62. The evidence for the defendants is that the defendants have at all material times resided in Victoria, the events complained of occurred in Victoria and that, of four witnesses whom the defendants propose to call, three reside in Victoria and one has not yet been located.

63. Having regard to the provisions of s5(2) of the Cross Vesting legislation, I make the following findings:

1. These proceedings do not arise out of, nor are they related to,
another proceeding pending in the Supreme Court of Victoria.
2. Apart from the relevant cross-vesting legislation these
proceedings are capable of being instituted in the Supreme Court
of Victoria.
3. Apart from the relevant cross-vesting legislation these
proceedings are capable of being instituted in this Court.
4. Apart from the relevant cross-vesting legislation, if the
defendants did not consent to the jurisdiction of this Court over
them in respect of the subject matter of the suit by filing an
unconditional appearance, the Plaintiff would be unable to obtain
leave to proceed pursuant to the provisions of the Service and
Execution of Process Act.
5. There is no evidence that there are any matters for
determination in these proceedings which arise under or involve
questions about the application, interpretation or validity of a
law of Victoria, nor are there any which are not within the
jurisdiction of this Court apart from the cross-vesting legislation.
6. The matter is not a right of action arising under a
written law of the State of Victoria.
7. If this Court were to determine the matter it would apply
the law in force in the Australian Capital Territory, including
the relevant choice of law rules, which would have the effect,
pursuant to Breavington v Godleman (supra), that in this action
the relevant substantive law would be the law of Victoria.
8. Bearing in mind the place of the accident, the number and
type of witnesses to be called on each side, and the place of
residence of the Plaintiff and of the defendants, the balance of
convenience is in favour of a hearing in a Victorian Court,
though not overwhelmingly so.
9. The Plaintiff has chosen this Court as his forum.
10. It seems clear to me, when looking at the particulars set
out in the Statement of Claim and making an educated guess at the
amount really at stake in this litigation,, that the most
appropriate forum for these proceedings would not be a Supreme
Court at all, but the County Court of Victoria.
11. This is not an exceptional case where there are any
jurisdictional uncertainties.
12. There is no multiplicity of proceedings that need to be
tried together in the one Court.

64. Bearing in mind the matters that I have listed above, in the light of the purposes of the cross-vesting legislation, I am firmly of the opinion that if I granted leave to serve this Writ in Victoria, a Judge would inevitably, on the defendant's application, order the action to be transferred to the Supreme Court of Victoria.

65. That may well not be the sole and exclusive test of what is or what is not an "appropriate" Court within 0.78 r6.04.

66. But having regard to the Act, I am not satisfied that in the circumstances, this Court may be an appropriate Court to determine the proceedings.

67. I therefore dismiss the application made by the Plaintiff by Notice of Motion dated 25 September 1991.

68. I order that all further proceedings in the action be stayed.

69. I order the Plaintiff to pay the Defendant's costs.