Circumstances commonly arise where a Statement of Claim is issued in a court outside of the state where the issuer resides. Currently, the correct process in NSW is to attach the prescribed notice to the defendant which can be found in the Service and Execution of Process Regulations 2018, Schedule 1, Form 1.
A recipient can either accept that the matter will be heard in another state, or they can make an application by way of a motion to have the proceedings moved. The court will then decide the most appropriate state for the case to be heard.
However, if your case is related to consumer credit, the location where the court proceedings will be heard is prescribed by regulation 36 of the National Consumer Credit Protection Regulations 2010* (NCCP Regulations)
Regulation 36(3)of the NCCP Regulations states that:
’ a court proceeding must be brought in a court of the State or Territory where the debtor, mortgagor or guarantor ordinarily resides, if the court proceeding:
(a) is in relation to:
(i) a credit contract; or
(ii) a consumer lease; or
(iii) a mortgage; or (iv) a guarantee regulated under the Act; and
(b) involves a debtor, mortgagor or guarantor.
There is an exception to the above found in regulation 36(4) which provides that should the location of the defendant’s ordinary residence not be known, the court proceedings are to be brought in a court of the State or Territory where they resided at the time the contract, lease, mortgage or guarantee was made. Even agreements that were entered into before the legislation came into effect are affected as there is a carry-over provision.
In general practice, if a defence to a Statement of Claim is filed, the defendant has effectively consented to the jurisdiction and there is little hope of moving the proceedings after this. However, if the Statement of Claim is in relation to a consumer credit contract, lease, mortgage or guarantee as outlined above, even if a defence is filed, the proceedings must be transferred to the local court of the debtor. This is due to the wording of the act that the proceedings must be brought in the state or territory.
This issue was discussed by Magistrate Connell in the unreported judgment of Macquarie Bank Limited ACN 008 583 542 v Wade Short in which Paul Hutchinson of our firm represented the defendant. In this case, the proceedings were stayed by notice of motion despite the fact that the defendant had filed his own defence and the proceedings were well underway. Despite the plaintiff’s arguments that the pleadings should remain in NSW, Magistrate Connell stated that the use of the word ‘must’ in the NCCP Regulations left no room for discretion.
*National Consumer Credit Protection Act 2009, s 330
Go here to view and download the Judgement relating to this case