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RICHARD GARNETT[*]
[A new Australian test for stay of proceedings in transnational cases was laid down by the High Court in 1990 in Voth v Manildra Flour Mills. From that point on, an Australian court would only decline jurisdiction where it considered itself a ‘clearly inappropriate forum’ to resolve a dispute. At the time of the decision it was suggested by some writers and judges that the new test would encourage Australian courts to exercise jurisdiction in cases where there was little connection to the country, with the result that harm would be done to international relations. The purpose of this article is to examine the decisions since Voth v Manildra Flour Mills to determine if these criticisms have proven justified and also to provide a framework in which the cases can be analysed.]
In 1990, in the case of Voth v Manildra Flour Mills Pty Ltd,[1] the High Court of Australia propounded a new principle governing the stay of Australian proceedings in transnational cases. Henceforth, an Australian court would only order a stay of its proceedings where the court considered itself a ‘clearly inappropriate forum’. In proposing this test, the High Court consciously departed from the principles established in England by the House of Lords in Spiliada Maritime Corporation v Consulex Ltd[2] and followed in other Commonwealth countries, where the doctrine of forum non conveniens has been adopted. Briefly stated, this test requires that local proceedings be stayed where there exists a ‘more appropriate’ court for trial.
Although the High Court claimed in Voth that the difference between the ‘clearly inappropriate’ and the ‘more appropriate’ tests was slight,[3] a few commentators warned that the effect of the High Court decision may be to encourage Australian courts to exercise jurisdiction over matters which have little connection with Australia.[4] The purpose of this article will be to examine whether subsequent decisions have proven the sceptics to be correct, and consequently, whether the Voth test should be retained. At first glance it would appear that Voth has had a prodigious effect on the extent to which Australian courts exercise jurisdiction in transnational cases. Of the 51 cases decided since Voth, orders for a stay of proceedings have been issued in only 10 — or approximately 19 per cent — of those cases. However, it is suggested that a closer examination of the circumstances present in those cases is required before any clear conclusions can be drawn. At the same time, an attempt will be made in this article to create a framework for analysing the decisions in which Voth has been applied.
In considering the issue of stay of proceedings in Australia, two situations have been traditionally distinguished. First, where a defendant has been served with process within the jurisdiction under the common law rules of service and secondly, where a defendant has been served outside the jurisdiction under the statutory provisions applicable in all State and Territory Supreme Courts and the Federal and Family Courts. The traditional position in both England and Australia was that, in the case of common law service upon a defendant within the forum, jurisdiction had been established by the plaintiff as a matter of right and so should not be lightly declined by the nominated court.[5] By contrast, in the case of service outside the jurisdiction, it was required that before the court would agree to hear the case, it had to be persuaded in advance, in an application for leave to serve the writ, that the action or the defendant had some territorial or other connection with the forum. Additionally, in service out cases, it was also well established that the court had a discretion to stay the action on the basis that there existed a more appropriate forum elsewhere.[6]
However, in England from the 1970s onwards, the House of Lords began to erode the distinction between common law cases (in which jurisdiction was rarely declined) and service out cases (in which jurisdiction was less easily assumed). Hence, a movement developed towards amalgamation of the tests.[7] This trend culminated in the Spiliada decision in 1986, in which it was recognised that a general doctrine of forum non conveniens now applied to both common law and service out cases. In other words, where a defendant in either case could show that a foreign tribunal was a more appropriate forum for trial, that is, ‘with which the action ha[s] the most real and substantial connection’,[8] then a presumption would arise in favour of a stay. In determining which forum was ‘more appropriate’, attention would be paid to matters such as the location and accessibility of witnesses, the law governing the transaction, and the places of business and residence of the parties.[9] However, in a special case, if the plaintiff was able to show that they would be denied a ‘legitimate juridical advantage’ by a stay being ordered, then, in the interests of ‘justice’,[10] a stay may be refused. Examples of such advantages would include: better recovery of damages under the law of the forum, a more generous limitation period, greater scope for discovery and the presence of assets within the forum to satisfy a judgment.[11] However, the primary elements in the ‘more appropriate forum’ test were the connections between the respective jurisdictions, the action and the parties. The result of Spiliada was therefore the creation of a unified approach to stay of proceedings in England, regardless of whether the defendant was served within or outside the jurisdiction.
Although Spiliada was followed in New Zealand,[12] in 1988 in Oceanic Sun Line Special Shipping Co v Fay[13] the High Court of Australia, by a majority, refused to adopt its principles. Although three different views were expressed in that case as to the correct approach to be taken to stay applications, it was the judgment of Deane J (with whom Gaudron J concurred) which proved to be the most significant, as it was to form the basis of the later High Court decision in Voth.[14]
Oceanic Sun involved a defendant who had been served out of the jurisdiction, and so, strictly speaking, did not involve an inquiry into the correctness of Spiliada, since apparently Australian courts had always applied the doctrine of forum non conveniens to such cases.[15] Nevertheless, Deane J assumed that a defendant who had been served out of the jurisdiction was to be treated in the same way as one who was subject to the common law jurisdiction of the court. That is, in both cases, the defendant was subject to the plaintiff’s ‘prima facie right to insist upon’ the exercise of jurisdiction.[16]
Deane J went on to state that for a defendant to obtain a stay, they must
satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings ... Otherwise, that onus will ordinarily be discharged by a defendant ... if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties.[17]
Two points should be noted. Firstly, to obtain a stay, the defendant must show that there is an alternative forum available which is competent to hear the plaintiff’s suit. Secondly, while in Spiliada the House of Lords spoke of a stay being granted where a foreign tribunal was ‘more appropriate’, Deane J’s test in Oceanic Sun requires proof that the local forum is ‘clearly inappropriate’. Deane J himself confirmed this point later in his judgment when he noted that ‘the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is a clearly inappropriate one.’[18]
Deane J also gave some further guidance as to the application of the ‘clearly inappropriate forum’ test. As the court must start with a recognition of the prima facie right of the plaintiff to choose its forum,[19] the test will not be easy for a defendant to satisfy. In particular, where any significant connection between the action and the forum exists, such as that the defendant resides there or the law of the forum applies to the action, then it would be difficult to describe the forum as clearly inappropriate.[20]
In Voth, a majority of the High Court adopted the ‘clearly inappropriate forum’ test proposed by Deane J in Oceanic Sun.[21] Voth involved two New South Wales corporations suing a Missouri resident for allegedly providing negligent advice to a Missouri subsidiary regarding its liability to tax under US law, which led to a loss being suffered by the plaintiff companies in NSW. The plaintiffs were granted leave to serve the defendant out of the jurisdiction. The defendant then sought a stay of proceedings, which was granted by a 5:1 majority of the High Court, on the basis that (according to four of the five majority judgments) NSW was a ‘clearly inappropriate forum’.[22]
According to the joint judgment, NSW was a clearly inappropriate forum because the action was overwhelmingly connected to Missouri.[23] This followed from the fact that the basis of the plaintiffs’ claim was negligent advice which occurred in that State, its law was likely to apply, Missouri was the place of residence of the defendant, and the professional standards of accountants practising in that State would be relevant to liability. In addition, a large part of the damage was referable to US tax law and the bulk of the evidence was located in Missouri. By contrast, the connections between the action and NSW were slight; it was really only the plaintiffs’ place of residence and the jurisdiction in which much of the damage was suffered. However, the judges did acknowledge that the plaintiff possessed two ‘juridical advantages’ when suing in NSW: greater recovery of legal costs and the award of interest on damages. However, in the view of the court, these matters were of ‘diminished importance’[24] given the very strong connections to the foreign jurisdiction.
What principles can be extracted from the joint judgment regarding the ‘clearly inappropriate forum’ test?
The first point made by the court is that the test must be applied in all cases whether the defendant was served within or beyond the jurisdiction. The only difference is that the onus of proof shall vary in each case. In the case of service out of the jurisdiction — where prior leave of the court is required — the onus of showing that the Australian forum is not clearly inappropriate shall rest on the plaintiff. In the case of common law service or service out of the jurisdiction — where leave is not required — the onus of persuading the court that it is clearly inappropriate shall rest on the defendant.[25]
The second point to note is that, whilst the Spiliada ‘more appropriate forum’ test necessarily involves a comparative, balancing exercise as to the suitability of one forum over the other, the ‘clearly inappropriate forum’ test focuses only upon the suitability of the local jurisdiction. So, while the availability of an alternative forum and whether it would give the plaintiff adequate relief will be relevant to determining whether the local forum is clearly inappropriate, it was possible (according to the majority), that an Australian forum could conceivably be found to be ‘clearly inappropriate’ even if no other forum was available to the plaintiff.[26] This observation qualifies the statement of Deane J in Oceanic Sun[27] referred to earlier, in that it suggests that the identification of an alternative, competent forum is not a precondition of a stay being granted, at least not in all cases. By contrast, the grant of a stay under the Spiliada ‘more appropriate forum’ test would seem to require the identification of another available forum.[28]
Thirdly, whilst the majority in Voth reaffirmed that the plaintiff has a prima facie right to the exercise of jurisdiction by the forum under either the common law or statutory rules of service, this right was not to be given too much weight.[29]
Fourthly, the court in Voth indicated that the discussion by Lord Goff in Spiliada as to ‘relevant connecting factors’ and ‘legitimate personal or juridical advantage’ would be equally valuable in applying the ‘clearly inappropriate forum’ test.[30] The connecting factors, most of which had been referred to by Deane J in Oceanic Sun, encompassed any significant connection between the forum and the subject matter of the action, the places of business of the parties and (especially) the law governing the transaction. To recap, examples of ‘personal or juridical advantage’ would include: the availability of greater damages in the forum, the existence of a more favourable limitation period, or the existence of assets within the forum for the satisfaction of any judgment obtained.
In terms of the relationship between connecting factors and juridical advantages, Lord Goff had suggested that the issue of connections was to be given priority when considering whether to order a stay. In his view, where a foreign jurisdiction was found to be the ‘natural’ forum on the basis of connecting factors, then it would be a rare case where specific juridical advantages to the plaintiff would preclude a stay being awarded.[31]
The attitude of the High Court in Voth to the relationship between connections and advantages is less clear. While it may appear at first glance that a ‘clearly inappropriate forum’ test, as opposed to a ‘more appropriate forum’ test, could give more weight to a plaintiff’s advantages, the actual decision on the facts in Voth suggests otherwise. The court, despite stating that such advantages were of ‘valuable assistance’, nevertheless chose to ignore clear benefits to the plaintiff (by way of recovery of costs and damages) which would have been attained by suing in NSW because of the action’s much closer connection to the US.[32]
Finally, the High Court stated that the distinction between the ‘clearly inappropriate forum’ and ‘more appropriate forum’ tests was only slight and that the same result would be likely to be reached in most cases by applying either test.[33]
In this article, when considering the cases which have applied Voth, it is this last statement by the High Court which will be tested. In particular, would the same result have been achieved in a given case had the Spiliada principles been applied instead of Voth? It will be argued that, in a number of cases, a stay would most likely have been ordered had the ‘more appropriate forum’ test been applied. Part of the reason for this conclusion is that the Voth test may have forced Australian courts into the position of focusing upon the connections between the action and the Australian forum, or on the advantages enjoyed by the plaintiff when suing here, rather than looking at the issue from a truly transnational perspective and comparing the entitlements of both the Australian and foreign forums to try the action. Any test which professes almost to ignore one half of the equation (the foreign forum) in inter-jurisdictional conflicts is unlikely to yield the same results as one which takes into account, on a relatively equal basis, the claims of both jurisdictions.[34] This observation is interesting in light of the High Court’s declaration in Voth that the difference between the Voth and Spiliada tests is slight.[35]
As has been noted, in the overwhelming majority of cases since Voth, orders for stay have been refused. In analysing the decisions, attention will be paid to the criteria referred to in Voth as relevant to stay applications, namely: (i) the right of the plaintiff to choose its forum; (ii) the existence of an alternative forum abroad; (iii) the balance of connecting factors; and (iv) any legitimate juridical advantage to the plaintiff. In addition to these matters, two other factors will be examined: the existence of pending proceedings in a foreign court; and the presence of a jurisdiction clause in an agreement between the parties.
These last two criteria, in particular, have been very significant in a number of the cases in which stays of proceedings have been granted by Australian courts, and arguably, have themselves become exceptions to the Voth principle.
Before considering the way in which the Voth test has been applied by Australian courts, a comment should first be made about which party bears the onus of proof in cases in which it is alleged that an Australian court is a ‘clearly inappropriate forum’.
In Voth, the High Court noted that a distinction was to be drawn in terms of the onus of proof between cases involving service out of the jurisdiction, where prior leave of the court is required, and those in which prior leave is not required or the defendant was served within the jurisdiction. In cases where prior leave was required, the onus was said by the court to be on the plaintiff both at the stage of the application for leave and on any subsequent appearance by the defendant to set aside service. The onus here extends to showing: (i) that the action is connected to the forum in one of the ways specified in the applicable rules of court;[36] and then (ii) that the forum is not a clearly inappropriate one to hear the matter. By contrast, in cases of service out of the jurisdiction where prior leave is not required or where jurisdiction has been invoked as of right under the common law rules, the onus lies on the defendant to bring an application to stay proceedings on the basis that the forum is clearly inappropriate.[37]
Interestingly however, despite the High Court’s seemingly clear statement that where prior leave to serve is required, the onus shall rest on the plaintiff in a subsequent application to set aside service, courts in later decisions have taken differing views on the question of where the onus lies. Order 8 Rule 2 of the Federal Court Rules, for example, still provides for prior leave to be obtained before a plaintiff may serve a defendant out of the jurisdiction. Nevertheless, some judges have taken the view that while the plaintiff has the onus of showing that the action falls within one of the categories enumerated under the rules of court to establish jurisdiction, once this requirement is satisfied, the onus then shifts to the defendant to show that the Australian forum is clearly inappropriate.[38]
However, other judges of the Federal Court have maintained (and, it is submitted, correctly) that Voth requires that the onus remain on the plaintiff in all aspects of the application to set aside service, including showing that the forum is not clearly inappropriate, regardless of the particular rules of court.[39] While it is unclear whether this difference of opinion on the issue of onus has led to courts reaching different results on the question of whether a stay should be granted, this remains a possibility. The issue of onus of proof in cases where prior leave to serve out of the jurisdiction is required must therefore be clarified.
It will be recalled that in Voth the High Court warned that the plaintiff’s right to choose the forum was to be given only modest weight in stay applications. Generally speaking, courts seem to have heeded this warning,[40] although occasionally, in rather extreme circumstances, the principle has been relied upon to overcome an absence of connections to the forum.
In Teare v British Nuclear Fuels plc,[41] the plaintiff brought a claim in Victoria for personal injuries arising out of his employment in England over 20 years previously. All evidence apart from some expert medical testimony lay in that country. Nevertheless, his action was allowed to proceed on the basis that because he was unfit to travel abroad and close to death, Victoria was the only jurisdiction in which he would have a chance to attend the trial of the proceeding. The court also referred to the plaintiff’s prima facie right to invoke the jurisdiction as a ‘powerful’ factor in its decision to refuse a stay. A similar approach was taken in two more recent cases involving employee claims,[42] where in both a stay was refused because NSW was likely to be the only jurisdiction where the plaintiff’s case could be heard before they died.
Such cases, however, are not likely to be common, and given the extremity of the facts, the same result may also have been reached by applying the Spiliada principle.
While the High Court stated in Voth that the availability of an alternative forum abroad capable of giving the plaintiff relief would be relevant to determining whether a forum is clearly inappropriate, it also suggested that this may not be an absolute requirement in all cases. Nevertheless, there have been at least two cases since Voth in which Australian courts have refused to grant a stay primarily on the basis that another available forum had not been identified by the defendant.
In Schmidt v Won,[43] the defendant, while arguing that the Australian forum should decline jurisdiction in favour of a court in South Korea, did not identify any particular court in that country which would have jurisdiction over the matter or the parties. Similarly, in Conagra International Fertiliser Co v Lief Investments Pty Ltd,[44] the defendant was refused a stay when it failed to show that a Chinese court would undertake jurisdiction in respect of a dispute between two non-Chinese parties.[45]
According to the courts in both these cases, the identification of an alternative forum was a necessary precondition of a stay being ordered, so that, presumably, issues such as connecting factors and juridical advantages would not even be considered if this requirement was not met. While it is not clear that the approach in these cases directly accords with that of the High Court in Voth, it is unlikely that a different result in these decisions would have been reached had the Spiliada principle been applied.
Lord Goff had indicated in Spiliada that the critical factor in determining whether a local court or foreign tribunal was more appropriate was the degree of connection between the forum, the transaction and the parties. As part of this inquiry, the location of witnesses and other evidence, and the governing law of the transaction were all important. As the High Court noted in Voth, the issue of connecting factors was also to be of great significance in ascertaining whether an Australian court was a ‘clearly inappropriate forum’, and in cases decided since Voth courts have given most emphasis to this issue. While it will be asserted that in a number of Australian cases, a stay may have been granted had the Spiliada test been applied on the basis of inadequate connections to the Australian forum, it is submitted that there have also been decisions, falling into four groups, in which the results would not have been different under Spiliada.
The first group of cases, in which the same result would have been achieved under Spiliada, involved proceedings in which a foreign plaintiff has entered the Australian forum and commenced proceedings against an Australian resident. In this situation, courts have been reluctant to order a stay of proceedings on the basis that a resident sued in its home jurisdiction cannot seriously complain that the proceedings are oppressive and vexatious. It is the defendant’s connection with the forum therefore, which is given most weight in the stay determination.[46]
Thus, in Banque Paribas v Jarrett,[47] the court refused to order a stay, even though most of the evidence for trial was situated in England and the governing law was likely to be English, because these were advantages to the foreign plaintiff which it had chosen to forego by bringing proceedings in Victoria rather than England; a Victorian defendant could not be heard to complain of the plaintiff’s choice. A similar result was reached in a defamation action in NSW by a New Zealand politician against an Australian company, arising through the publication of the offending material in that State.[48] In fact, the court felt that there was an even stronger case for refusing a stay because not only was the defendant Australian, but the cause of action arose entirely here.[49]
More recently, in James Hardie Industries Pty Ltd v Grigor,[50] a majority of the NSW Court of Appeal[51] relied on the fact that the defendant was a company resident in NSW to refuse a stay of personal injury proceedings brought by a New Zealand plaintiff. In reaching this conclusion, the majority suggested that in a product liability action by a foreign defendant against a local plaintiff, there were strong reasons of policy for an Australian court to exercise jurisdiction:
Any modification of the existing law should not overlook the scenario of an Australian manufacturer of a dangerous product seeking to dump it in a foreign market with less stringent controls ... any legislative restriction of a foreign plaintiff’s resort to a local court through the application of the forum non conveniens doctrine should at least address those issues.[52]
It is suggested that the logic of this reasoning would apply equally to resolution of a stay application under either the Voth or Spiliada principles.
The second category of case in which Australian courts have refused to order a stay of proceedings, but in which, arguably, the same result would have been reached by applying Spiliada, is where an action has been brought between two Australian resident parties in relation to a tort which occurred fortuitously in a foreign country. Here, the courts’ willingness to allow proceedings to remain in Australia has been based upon the assumption that, because the foreign jurisdiction has few continuing connections with the claim, its interest in asserting jurisdiction is unlikely to be great. Related to this point, the other reason relied upon by courts to refuse a stay in this context is that it has often been unclear whether a foreign court has or would exercise jurisdiction over the claim. It is therefore likely that, even applying Spiliada to this example, the combination of the absence of connections with the foreign jurisdiction and doubt as to its amenability for suit would also preclude a stay.
Thus, in McEntee v Connor,[53] a claim by one Australian resident against another relating to personal injury arising out of an incident which occurred while the parties were temporarily resident in Japan, was not stayed. In the court’s view, not only was it unclear whether a Japanese court was available or that the defendant would be amenable to its jurisdiction, but there were also ‘no or insufficient connecting factors’ to Japan. In particular, the parties had no connection to that country, nor were there any witnesses there.[54]
Similarly in Millett v Hookham,[55] an action between two Australian residents for personal injury arising out of an accident in Poland was not stayed as the parties lived only 100 kilometres apart and much evidence as to the plaintiff’s ongoing loss was situated in Australia. The only possible continuing connection to Poland was that the defendant may have had a contribution claim against a third party there, but this was dismissed as too speculative and weak to overcome the overwhelming connection with Australia based on the parties’ shared place of residence.
More recently, in Schmidt v Won,[56] the point was made even more emphatically by the Victorian Court of Appeal. There, an action between two Australian residents arising out of the misappropriation of the proceeds of the sale of land in a foreign country was not stayed. In the court’s view, the fact that the parties to the action were both Australian residents meant that for all practical purposes, the Voth test was incapable of being satisfied — that is, it could never be shown that an Australian court was a ‘clearly inappropriate forum’. An application to stay proceedings under Voth by one Australian resident against another was therefore inappropriate because it was likely to be futile.[57]
A slightly different scenario, but one which deserves to be considered under this category, occurs in relation to a foreign tort action, where the plaintiff is an Australian resident, and the defendant, although not an Australian resident, has close connections with this country. So too, all evidence relating to the action is located in Australia. Hence, in Placer (PNG) Pty Ltd v Anderson[58] and Diethelm & Co Ltd v Bradley,[59] actions were allowed to proceed in Australia arising out of accidents which occurred abroad, the first in the context of employment and the second during a holiday. In both cases, the plaintiff was initially ‘recruited’ by the defendant in Australia, immediately returning there after the accident, wherein all relevant witnesses were located in that country. A perceived inequality of commercial power between the plaintiff individual and the defendant corporation may also have influenced the decision about whether to order a stay in each case on the basis that the cost of litigating abroad would be far more onerous for an individual. It is likely that application of the Spiliada test would have yielded a similar result.
The third category of case in which stays of proceedings have not been granted under the Voth principle, in circumstances in which arguably a similar result would have been achieved under Spiliada, has arisen where the plaintiff is an Australian resident and the defendant from abroad, but all the connections with the case are in this country, apart from the defendant’s residence. In Merpro Montassa Ltd v Conoco Specialty Products Inc,[60] a claim for breach of s 52 of the Trade Practices Act 1974 (Cth) (‘TPA’) by an Australian resident against a US corporation was allowed to proceed where all the alleged unlawful conduct by the defendant was performed in Australia, all witnesses were here and the case concerned the interpretation of an Australian statute. The only ‘international’ aspect of the case was therefore the defendant’s place of residence, which was insufficient to make Australia a ‘clearly inappropriate forum’ in the terms of Voth, or, it is submitted, a less appropriate forum in the terms of Spiliada.[61]
To the same effect was Century Insurance Ltd (In Liq) v New Zealand Guardian Trust Ltd.[62] This case concerned a claim by an Australian resident individual and a company being wound up in Australia against a New Zealand bank for allegedly misappropriating funds deposited with it at its place of business in Australia. This case was allowed to proceed in this country because, similar to Merpro, all connections with the action were Australian and the only foreign aspect of the case was the place of incorporation of the defendant.[63]
There have also been a number of cases involving an Australian plaintiff and a foreign defendant where stays have been refused, even though the claims have had only a slight connection with this country. Typically, in such cases, almost all of the factors relating to the defendant’s liability have arisen in the foreign jurisdiction but due to the fact that some loss or damage has been suffered in Australia, the Australian proceedings have been allowed to continue. It is highly debatable, in this category of case, whether the same result would have been achieved by application of the Spiliada principles.
Hence, in Al-Ru Farm Pty Ltd v Hedleys Humpers Ltd,[64] a local plaintiff was entitled to bring claims against a foreign shipper of goods, notwithstanding the fact that all events upon which the causes of action were founded arose in England and were likely to be governed by English law and that almost all witnesses were located in England. The court noted that the only factor in favour of suit in Australia was that the goods which were the subject of the action were now in the forum, and ‘it would be absurd’ if they were returned to England for litigation there.[65] It is suggested that this is a case in which a different result would have been reached under Spiliada; there being no juridical advantage to the plaintiff in suing in Australia, England was undoubtedly the more appropriate forum based on connecting factors.
Another case which smacks of excessive protection of local residents is Phosphate Co-operative Company of Australia Ltd v SGS Supervision Services Inc.[66] There, another Australian importer of goods was held to be entitled to sue a Canadian company in Australia for negligence in relation to the inspection of a ship which was to carry the plaintiff’s goods to Australia. Again, it was admitted by the court that given the connections between the claim and the foreign jurisdiction, Canadian law would be likely to govern, and also, that the bulk of the more significant evidence would come from there. The only evidence which lay in Australia was again the damaged goods. There was, in addition, no juridical advantage pleaded by the plaintiff to justify suit in Australia.[67]
An extreme example of generosity to local plaintiffs under Voth occurred in WFM Motors Pty Ltd v Maydwell.[68] That case involved an action to enforce a guarantee entered into in Hong Kong, in which that region’s law would almost certainly apply. The court frankly acknowledged the tenuous contacts with NSW but felt that, because the plaintiff had a very strong prima facie case and the issues were of ‘extreme simplicity’, a stay would be inappropriate.[69]
One last comment on the cases in which stays have been awarded even though the preponderance of connecting factors lies with a foreign jurisdiction is that, in a number of cases,[70] courts have sought to address the problem of evidence being located in another jurisdiction by noting technological developments in Australian courts, whereby witnesses can be examined by way of video link and documents can be sent instantaneously. This means that the defendant will be put to less inconvenience than previously would have been the case if a stay were refused. While this point has substance, it still remains the case that the tribunal which has the closest connection to the subject matter of the action is in the best position to adjudicate and to dispense justice, of course any legitimate juridical advantage to the plaintiff aside.
Overall then, it is suggested that, in these cases, there is a strong chance that a stay would have been awarded had Spiliada been applied, on the basis that the foreign jurisdiction would have been considered a ‘more appropriate’ forum.
Interestingly, of the cases which have applied Voth there has only been one in which it can be clearly said that the connections were almost equal between the Australian and the foreign jurisdictions. Shepherd Woolskins Pty Ltd v Bighorn Sheepskin Company[71] involved an action to recover the purchase price of goods supplied by an Australian company to a Texas company. The court noted that, while the entirety of the negotiations between the parties leading up to the conclusion of the contract for the supply of goods occurred in Texas, almost all of the performance of the contract, in particular, the manufacture and delivery of the goods, occurred in Australia. Ultimately, the court felt that in a situation of almost evenly split contacts, what determined the issue was the fact that the Voth test favoured jurisdiction in Australia, by requiring that the defendant show that an Australian forum was clearly inappropriate, not merely less appropriate. However, the defendant could not show this and so a stay was refused. Hence, the incidence of equal connections between jurisdictions may be another type of case in which application of Spiliada would yield a different result. However, as the Australian experience shows, such cases are not likely to be common.
In a number of cases, Australian courts have granted a stay of proceedings under the Voth principle, on the basis that the action and parties have little or no connection with the Australian forum. It will be recalled that the Voth decision itself was an example of such a case. Needless to say, it is unlikely in this category of case that there would be a different result achieved by application of the Spiliada principles.
The case of Adeang v The Nauru Phosphate Royalties Trust[72] involved an action by a Nauruan resident against a Nauruan Government instrumentality for breaches of duty in relation to a fund, administered by the defendant, located in Nauru. The court stayed the action because neither the action nor the parties had any connection with Australia,[73] and all issues relating to liability would be governed by Nauruan law, in particular Nauruan statutes. As the case was a matter between Nauruans about the disposition of Nauruan money when that disposition is governed by Nauruan law, Australia was unmistakably a ‘clearly inappropriate forum’.
To the same effect was Williams v The Society of Lloyd’s.[74] This case concerned an action by a Victorian resident arising out of the conduct of business in the London insurance market by the defendants, who were both English companies. A stay was granted, again because the action related to conduct almost entirely performed in a foreign jurisdiction, and which went ‘to the very foundation of the conduct of the Lloyd’s market in London.’[75] As a result, virtually all evidence, both oral and documentary, lay in England and since such evidence was ‘likely to be extremely large’ in amount, it would be ‘vexatious and oppressive’ to the defendants if the trial were to take place in Victoria.[76] Similarly, in Bank of America v Bank of New York,[77] a stay was granted over a claim by one American bank against another, arising out of a contract between the parties which had been negotiated and concluded in the US and was governed by US law. The only connection with NSW was that, under the contract, the plaintiff agreed to purchase loans owing to an Australian subsidiary of the defendant. Finally and most recently, in Laminex (Australia) Pty Ltd v Coe Manufacturing Co,[78] claims by an Australian company against two American companies arising out of the supply of goods were stayed, where the entire conduct giving rise to the causes of action occurred in the US.
In considering the cases in which the issue of connecting factors has been relevant to the exercise of the discretion to grant a stay under the Voth principle, the conclusion is reached that in only two types of case would the result perhaps have been different had the Spiliada principle been applied instead: where the connections with the foreign jurisdiction were equal to, or greater than, those with Australia.
The High Court in Voth recognised that advantages to a plaintiff in suing in the foreign forum, such as a more favourable limitation period, greater scope for recovery of damages, and better trial procedures, may all be relevant factors in determining whether a local action should be stayed. However, as discussed above, the court, in a manner similar to that of the House of Lords in Spiliada, appeared to place such matters second in priority to the connecting factors between the action, the parties and the forum so that where a case was overwhelmingly connected to a foreign jurisdiction, any advantages under local law would be irrelevant.[79]
However, it is interesting to note that Australian courts in subsequent decisions have taken a liberal view of what constitutes a juridical advantage to a plaintiff as well as giving the factor great weight in their decisions not to stay proceedings, sometimes even where the action has been more closely connected with a foreign tribunal.
The first type of juridical advantage which has been recognised has been where a plaintiff has brought a claim for breach of s 52 of the TPA, and an Australian court has refused a stay of proceedings because it is unclear whether a foreign tribunal would allow the claim to be brought. On this issue, Australian courts have been strongly influenced by the comments of an English judge, Browne-Wilkinson V-C in Australian Commercial Research & Development Ltd v ANZ McCaughan Merchant Bank Ltd.[80] The judge, in considering whether an English court could hear a claim under the Australian TPA, confessed that he had
considerable doubts whether the English court if called on to adjudicate this matter would apply the ... Act ... as part of the applicable law in this action ... [but that] [e]ven if ... [it did] it is manifest that the Australian courts are very much better qualified to deal with that Act than any English court would be.[81]
This passage was referred to with approval in DA Technology Australia Pty Ltd v Discreet Logic Inc,[82] where a Canadian company was denied a stay of proceedings on the basis that the plaintiff may have been unable to rely on s 52 had the case been heard before a Canadian court. Significantly, the Australian court also relied upon the fact that no equivalent relief to s 52 would be available to the plaintiff under Canadian law. The court also stated that reasons of comity militated against placing the Canadian court in the position of having to decide whether to apply the TPA when an Australian court had stayed a proceeding in which essentially the same relief was sought. So in this case an attempt at least was made to ascertain whether the plaintiff would indeed have suffered an injustice had the matter been stayed by considering whether equivalent relief was available in the foreign forum; the court did not simply decline the stay upon the mere pleading of a breach of s 52 alone.
Unfortunately, the same praise cannot be bestowed upon the decision of Rolfe J of the Supreme Court of NSW in CE Heath Underwriting & Insurance (Australia) Pty Ltd v Barden.[83] There, it seems that jurisdiction was allowed to be exercised over a number of English resident defendants, seemingly only because, amongst a number of claims pleaded, there were added claims for breach of s 52 of the TPA and s 42 of the Fair Trading Act 1987 (NSW). While the court conceded that the plaintiff’s action was much more closely connected with England than Australia, the fact that the English tribunal ‘would not apply’ the Australian statutes, meant that the plaintiff would suffer a loss of juridical advantage if a stay were ordered. [84] What was disappointing about the judgment was the fact that the court refused to consider evidence from the defendant that other causes of action existed under English law which equated to the Australian statutory claims. It is suggested that such an approach is oppressive to foreign defendants before Australian courts and creates the impression that Australian plaintiffs can carry their rather unique statutory protection with them whenever they engage in international commercial transactions. Certainly, it will encourage plaintiffs to plead breaches of the TPA before Australian courts simply to secure the exercise of jurisdiction here.
Fortunately, however, in a recent decision of the Supreme Court of NSW, Laminex (Australia) Pty Ltd v Coe Manufacturing Co,[85] an approach closer to that in DA Technology was taken to the issue of juridical advantage based on the TPA. There, in response to an argument that an American State court would not apply the provisions of the Australian TPA, the NSW court referred to legislation of that State[86] in order to show that the plaintiff would have relief equivalent to that available under the TPA. It is suggested that such an approach is far more consistent with both what the High Court in Voth and the House of Lords in Spiliada intended regarding the treatment of juridical advantages. Where a plaintiff would be able to obtain relief in a foreign forum broadly equivalent to that available at home, it could not be said that it had suffered a denial of ‘justice’.[87]
Another type of case in which the notion of juridical advantage has been invoked, is that involving a party to an action in Australia (usually against another Australian resident), seeking to join a foreign third party to the existing proceeding. This category of case may be divided into two sub-groups: firstly, where a defendant to an action in Australia wishes to bring a ‘third party’ action for contribution or indemnity against a foreign entity; and secondly, where a plaintiff to an action in Australia seeks to join a second, foreign defendant to an existing proceeding.
In both these contexts, the party seeking to join the foreign defendant will normally argue that, if the Australian court was to refuse the application and stay the proceeding, then it would be forced to bring a further and additional claim in a foreign country against this party, even though the substance of the proposed action is closely connected to that already pending before the Australian court. Australian courts have generally been receptive to this version of the juridical advantage argument, on the basis that ‘splitting’ of proceedings arising out of the same substratum of fact between jurisdictions is undesirable, both for reasons of duplication of judicial time and effort, and injustice to the party who must bring the second action in the foreign jurisdiction.
However, it will be argued that of the two types of case described above in which the avoidance of dual proceedings defence has been relied upon, in only the former example, that is, where the defendant is seeking to implead a third party, should the defence be accepted as legitimate. The reason for this view is that, in this case, the third party is sought to be joined to the Australian proceeding almost as a defensive measure by the defendant to the principal proceeding to offset any successful claim by the plaintiff. Conversely, in the latter case, it is the plaintiff to the Australian proceeding which has chosen, often simply as a matter of its own convenience, to add the foreign party as a second defendant to the action. It could therefore be argued that the conduct of the defendant in seeking to join a foreign third party is, in general, less oppressive to that party than that of the plaintiff seeking to add a second, foreign defendant. Nevertheless, Australian courts, failing to draw this distinction, have routinely ordered stays under the Voth principle in both types of case. Again, it is submitted, this approach is an example of the juridical advantage defence being taken beyond what was intended in Voth and Spiliada, where its application was supposed to be limited to parties who could not obtain ‘justice’ in a foreign jurisdiction.
An example of the first type of case, that is, where a defendant sought to implead a third party, arose in Melban.[88] In the principal proceeding, the plaintiff, M, had sued the defendant, E, for breach of contract and negligence in the delivery of defective goods. E then brought third party indemnity proceedings against a Scottish manufacturer, S, in the event E was found liable to M. The court refused to stay the third party proceeding on the basis that it was ‘desirable to have issues of fact common to the litigation between plaintiff and defendant and defendant and third party heard at the same time and by the same tribunal.’[89] This factor therefore amounted to a juridical advantage to E in favour of proceeding against S in Victoria, which overcame the relative lack of connections between S and the forum. Moreover, the court noted, this was not a case where the defendant (or third party claimant) had ‘picked on this court for reasons of mere convenience to itself. It [chose] this Court because it [was] sued here and wish[ed] to seek indemnity from [another] person.’[90] In other words E’s suit against S only arose because it had itself been sued, and so amounted to a defence to the original proceeding brought by M.
An even clearer case of a court favouring a local defendant against a foreign third party in an indemnity action was Diethelm & Co Ltd v Bradley.[91] Again, the court repeated the view from Melban, that where third party and original proceedings involve common issues of fact and law, it is undesirable for them to be split between jurisdictions, as ‘[t]he added cost and inconvenience of this procedure is manifest.’[92] What made this case a clearer one for refusal of a stay, was that, unlike Melban, the connecting factors between the NSW forum and both the original and third party actions were significant.[93]
There have also been examples of the second type of case mentioned above, that is, where a plaintiff has sought to join a foreign defendant to proceedings already on foot in the forum. It will be recalled that, in this category, it was suggested that the justification for recognising the juridical advantage defence is less apparent. In James Rolfe Transport (Vic) Pty Ltd v Livdon Engineering Ltd,[94] a Victorian court refused to order the stay of a claim for indemnity brought by an Australian resident plaintiff against a New Zealand resident insurance company arising out of the supply of a defective product by the defendant, an Australian company. The court held that, even though the policy was made in New Zealand and the New Zealand company had had no contact with Australia, because ‘[t]he territorial limits imposed by the policy include[d] Australia’,[95] the company could be subject to Australian jurisdiction. It is suggested that this case represents a misuse of the juridical advantage principle. Here, a foreign defendant was dragged into proceedings in Victoria, with which it had little connection, essentially because the plaintiff merely wanted to sue a second defendant in the same proceeding. The court failed to take into account the likelihood of inconvenience to the defendant and should have stayed the action and directed the plaintiff to sue the company in New Zealand.
The same criticism can be made of Gem Plastics Pty Ltd v Satrex Maritime t/a South African Express Line.[96] Here, an Australian plaintiff was held to be entitled to join a foreign defendant insurer to an existing marine cargo claim brought against a local carrier in NSW, even though the foreign party’s connection with the forum was negligible. Again, the issue of convenience was seen only through the eyes of the plaintiff, with the fact of pending proceedings in NSW making it manifestly more convenient for all the actions to be heard in one court in one set of proceedings.[97]
An interesting question, which has been raised by a number of recent cases, is whether the ‘clearly inappropriate forum’ test in Voth applies where a defendant seeks a stay of proceedings in the forum on the basis that litigation is pending in respect of the same subject matter in a foreign court. The first point to note is that, in this example, if a stay is not given, there is a heightened danger of parallel proceedings continuing in both jurisdictions, with the prospect of inconsistent results. Such an outcome has the potential not only to give rise to confusion and excess costs for the parties involved, but also to harm transnational judicial relations.
Two cases must be distinguished: firstly, where a party has instituted proceedings in a foreign jurisdiction and then that party, as defendant to an action in Australia, seeks to rely upon the foreign proceeding as the basis for a stay of the local action; and secondly, where a party faces suit both in Australia and abroad and seeks to rely upon the foreign action as the basis for stay of the local proceeding. The cases are distinct because, in the first example, the plaintiff to the Australian action is the defendant abroad, while the defendant in Australia is the plaintiff abroad whereas in the second category, the defendant is being sued twice in different jurisdictions.
While courts in decisions since Voth have assumed that Voth principles apply to the situation where a stay of an Australian action is sought by the defendant in reliance upon proceedings commenced by it in another jurisdiction in respect of the same subject matter, there is a clear discernible trend in the more recent decisions to give great weight to the existence of pending proceedings in the exercise of the discretion to grant a stay.
In decisions before Voth, courts treated the existence of pending proceedings as a matter to be considered vis-à-vis the court’s overall discretion to stay proceedings, but, at the same time, as a matter which could be offset by other considerations. Hence, in In The Marriage of Gilmore,[98] a stay of a wife’s action for a property settlement was refused, notwithstanding the fact that the husband, three months later, instituted identical proceedings in New Zealand. In the court’s view, the fact that parallel proceedings may result from a failure to stay the Australian action had to be ‘disregarded’[99] because, on the facts of the case, there were other factors which established that Australia was not a ‘clearly inappropriate forum’.[100] It is suggested that, even though the foreign proceedings were commenced after the Australian action, the court gave insufficient weight to this issue and consequently paved the way for an unfortunate jurisdictional conflict with a New Zealand court on the matter.[101]
A more receptive approach to the issue of pending proceedings as a basis for a stay, although not itself leading to that result, was evident in The Daeyang Honey.[102] There, a court refused to stay the proceedings because of connections between the action and the Australian forum. The defendant sought to rely upon the fact that it had, two months prior to the commencement of proceedings in Australia by the plaintiff, itself commenced an action in Japan against the plaintiff in relation to the same issue. The court noted that the foreign proceedings, being earlier in time, should be entitled to considerable weight in the process of determining whether a stay should be granted. However, in this case, their significance was diminished because the foreign action involved a claim for a negative declaration, which the court felt had a ‘degree of artificiality’.[103] The court also approved statements made in a number of English decisions, in which it was said that the seeking of negative declarations in transnational cases can involve ‘improper attempts at forum shopping’.[104] In The Daeyang Honey,[105] the court was sceptical about the foreign proceedings because their object appeared to be to deny the plaintiff in the Australian proceeding the benefit of a more favourable limitation period under Australian law.[106] Hence, the court reasoned that the plaintiff would be denied a juridical advantage if forced to sue in Japan. The foreign proceedings therefore amounted to a tactical manoeuvre by the defendant, rather than a serious attempt to resolve the dispute and, thus, were given little weight in the exercise of the discretion.[107]
In the case of Rocklea Spinning Mills Pty Ltd v Consolidated Trading Corporation,[108] the importance of pending proceedings in another jurisdiction as a factor to consider in the decision to grant a stay was again downplayed. Here, the foreign proceedings were commenced three weeks after the action in Victoria and were in respect of the same subject matter. The court firstly rejected the view that the mere existence of pending proceedings by themselves amounted to conclusive evidence that an Australian forum was clearly inappropriate.[109] Nor did the fact that the foreign court had refused to stay its own proceedings have ‘any bearing on the question’[110] whether the Victorian court was clearly inappropriate. At most, the court said the pendency of foreign proceedings will be a relevant factor in the exercise of the discretion to stay, as proof of what the High Court in Voth had referred to as ‘the availability of relief in the foreign forum.’[111] In this case, however, the weight to be given to the foreign pending proceeding was reduced because the Victorian proceedings had been commenced first and would therefore be likely to be concluded before those in the foreign country.[112] There were also ‘connecting factors’ between the action and Victoria which justified the refusal of a stay.
The status of pending proceedings must, however, be seriously reassessed following the decision of the High Court in Henry.[113] That case involved an application by a wife to stay proceedings for divorce in Australia brought by her husband, the principal basis relied upon being that she had commenced identical proceedings in Monaco some three months earlier. While the Full Court of the Family Court, relying upon Gilmore,[114] refused to stay the proceeding, a unanimous High Court, on appeal, reversed the decision. However, while all judges agreed on the result, there were, in the two judgments delivered, two very different approaches taken to the issue of the status of pending proceedings.
In the first judgment, given by Brennan CJ, an approach was taken very similar to that of the Victorian Court of Appeal in Rocklea. In his view, the existence of a pending proceeding in a foreign jurisdiction, even where it was instituted first, amounts to no more than a demonstration that an alternative forum exists to which the defendant would be amenable, as required by the High Court in Voth. To give the proceeding greater weight than this, however, would be to infringe the High Court’s injunction in Voth that the comparative merits of the competing fora were not to be focused upon, and so, in effect, convert the ‘clearly inappropriate’ forum test into a Spiliada-type ‘more appropriate’ forum approach. Instead, in applying Voth, ‘the focus’ must be solely upon ‘the advantages and disadvantages of proceeding in the selected forum.’[115]
Nevertheless, Brennan CJ still ordered a stay of proceedings in Henry for the reason that there was no connection between the marriage of the parties and Australia.[116] Therefore, in the view of Brennan CJ, this was a case similar to those described above,[117] in which stays were granted on the basis of a near total absence of connecting factors with the forum.
By contrast, in the joint judgment of Dawson, Gaudron, McHugh and Gummow JJ, much greater priority was assigned to the existence of pending proceedings in the exercise of the discretion to stay a local action, to the extent that, arguably, an exception to the Voth test has been created. What is particularly noticeable about the judgment is the much more significant concern with issues of comity and transnational judicial relations, factors which underlay the Spiliada ‘more appropriate forum’ test.
Their judgment begins by noting that, even where foreign proceedings are pending which involve the same or related factual issues as those involved in the local proceedings, but not the same legal issue or not the same parties, a temporary stay of the local proceedings should be issued to enable the foreign court to determine the factual issues. The joint judgment approved a decision in which such a remedy had been granted.[118] The concern to minimise the possibility of overlapping jurisdiction is manifest.
However, the judges said, ‘more compelling considerations in favour of a stay’ arise where ‘there are proceedings in another country which has jurisdiction to entertain those proceedings and the proceedings are between the same parties and with respect to the same issue or controversy.’[119] In this context, the judges noted, there is likely to be significant ‘inconvenience and embarrassment to parties’[120] given the possibility of ‘entirely different outcomes’.[121] Therefore, it was necessary to give pending proceedings much greater prominence when applying the Voth test. Henceforth, it would be ‘prima facie vexatious or oppressive in the Voth sense of those words’ to commence a second or subsequent action in an Australian court, if an action is already pending with respect to the matter in issue between the same parties.[122] Seemingly, the presumption in favour of a stay could be rebutted in a case where the connecting factors with the Australian forum were much more numerous than with another jurisdiction, but this is likely to be a rare situation.
However, the judgment noted that no question of a stay can arise unless the courts of the respective countries both have jurisdiction with respect to the parties and the action. If there is a question as to the jurisdiction of the foreign court, it may be necessary to adjourn the local proceedings to enable the foreign court to determine the question. Where both courts have jurisdiction, then the following factors may be relevant in determining whether a stay should be ordered. Firstly, it must be determined whether each court will recognise the other’s orders and judgments. If the orders of the foreign court would not be recognised in Australia, then ‘that will ordinarily dispose of any suggestion that the local proceedings should not continue.’[123] If, however, the orders of the foreign court would be recognised in Australia, it will then be relevant to consider the extent to which ‘any orders need to be enforced in other countries and the relative ease with which this can be done.’[124] On this point, it will also be relevant to consider ‘which forum can provide more effectively for complete resolution of the matters involved in the parties’ controversy.’[125] Secondly, focus should be placed upon the order in which the proceedings were instituted,[126] the stage which they have reached, and the costs which have been incurred. Thirdly, it will also be relevant to examine the connection of the parties and the action with each of the jurisdictions and whether ‘having regard to their resources and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing.’[127]
It is suggested that the combined effect of these comments is to create an exception to the Voth test where foreign pending proceedings exist, in respect of the same subject matter and parties, as a local action. In determining whether an Australian forum is clearly inappropriate in this context, it is not enough, contrary to Brennan CJ’s exhortations, to focus merely on the advantages and disadvantages of suit in this country. A much wider comparative examination of the merits of litigating both here and abroad is required, so as to give proper weight to the fact that parallel proceedings are on foot with a much greater risk of conflicting results between courts. Not only is such an approach more conducive to comity between courts, it also reduces the cost and inconvenience incurred by parties when having to simultaneously defend and pursue identical proceedings in different countries, which may be a great distance from each other. It is an approach, it could be argued, which is much more similar to the Spiliada ‘more appropriate forum’ test.
In a broader sense, it may also be said that the comments in the joint judgment illustrate the unworkability of the Voth test more generally, particularly regarding its insistence that an Australian court disregard the comparative suitability of the forums, and look only at the advantages and disadvantages of litigating in this country. The problem with this reasoning, as Henry illustrates, is that it is impossible to determine the advantages and disadvantages of litigating here without undertaking an examination of the comparative merits of suing abroad. Thus, while Brennan CJ was correct in suggesting that the effect of the joint judgment is to move toward a Spiliada-type test, it is suggested that, in any stay application, with or without pending proceedings, some sort of comparative analysis of the claims of the competing jurisdictions is inescapable.
Not surprisingly, the four judges who formed the joint judgment in Henry reached the conclusion on the facts that a stay must be granted. Here, proceedings were pending in Monaco in respect of the same subject matter and parties, and a divorce decree granted in those proceedings could be enforced in Australia. Secondly, in accord with the views of Brennan CJ, the judges held that the Australian court had little connection with the action or the parties.[128]
The High Court decision in Henry has been considered in a number of subsequent decisions. In News Corporation v Lenfest Communications Inc,[129] the Supreme Court of NSW had to consider the effect of foreign pending proceedings on an application to stay a local action. Here, the foreign proceeding was in respect of the same subject matter and parties, and the foreign court was capable of granting the plaintiff the same relief it was seeking locally. However, the proceedings had been brought a month after the NSW action had been commenced. The court distinguished Henry on this basis, saying that there the foreign pending proceeding was brought well before the Australian action. Here, by contrast, the obvious conclusion to draw was that the foreign ‘litigation was clearly ... a response to the bringing of proceedings by ... [the defendant]’[130] and so must be discounted. Secondly, the court noted that the foreign proceeding was, as in The Daeyang Honey,[131] a claim for a negative declaration. Although such proceedings were not to be ‘necessarily ... deprecated as forum shopping or as a tactic to influence a jurisdictional contest’, the ‘timing and nature’ of the foreign litigation here suggested that, in fact, this was the case.[132] Accordingly, the existence of the foreign action would not weigh heavily in the exercise of the discretion to stay the local proceedings.
It is submitted that the decision in News Corporation is interesting because it qualifies the reasoning in Henry in two main respects. Firstly, News Corporation asserts that the order of commencement of proceedings may in fact be of decisive significance in determining whether the local action should be allowed to proceed, rather than merely one factor to be balanced in the equation.[133] Secondly, the nature of the relief sought in the foreign proceeding may also be of great significance, such as where an Australian court considers that an action abroad has not been brought in good faith or only with the aim of precluding Australian jurisdiction. The seeking of a negative declaration by a party in a foreign action may more readily lead to this conclusion. In this regard, the reasoning of Gummow J in The Daeyang Honey[134] appears to have survived Henry.[135]
Most recently, the High Court has once again had occasion to consider the issue of the effect of foreign pending proceedings in CSR Ltd v Cigna Insurance Australia Ltd.[136] In that case, CSR, a company incorporated in Australia, had been engaged in the sale and production of asbestos to companies in Australia and the US. Subsequently, a number of personal injury claims were commenced against CSR in both countries and CSR sought indemnity from Cigna Australia, its insurer, who denied liability.
CSR then sued Cigna and its parent company, Cigna Corporation, (which was incorporated in the US) in the US. In the American action, CSR sought (i) declarations against both Cigna Australia and Cigna Corporation that it was entitled to an indemnity in respect of the US asbestos claims, and (ii) damages from Cigna Corporation in tort and under the US antitrust legislation. Approximately three weeks after the commencement by CSR of proceedings in the US, Cigna Australia brought suit in NSW against CSR seeking, inter alia, negative declarations to the effect that they were not liable to indemnify CSR in respect of the Australian and US asbestos claims.
CSR then applied to stay the proceedings of Cigna, and the High Court, by a majority of 6:1 (Brennan CJ dissenting), granted the order. The judgment of the majority commenced by noting that this case was similar to Henry, in that it involved an application for a stay based on the existence of pending proceedings in another jurisdiction. However, unlike Henry, where both local and foreign proceedings were in respect of the same subject matter, in CSR v Cigna, there was no ‘correspondence’ between the proceedings, for two reasons: firstly, because the NSW proceedings, in contrast to the US proceedings, extended to the Australian as well as the US asbestos claims; and, secondly, and ‘more importantly’, correspondence was lacking because the US proceedings, unlike the NSW action, involved a claim against Cigna Corporation which (both parties agreed) could not be pursued in Australia — that is, for damages under US antitrust legislation.[137]
The majority then commented that, had the question of whether NSW was a ‘clearly inappropriate forum’ been answered solely by reference to the issues pleaded in the NSW proceeding, a strong argument would have existed for saying that it was not. Most of the connections with the indemnity claim lay in Australia. Since it was the place of issue of the insurance policies, Australian law was likely to determine liability and ‘the main protagonists’ in the litigation were two Australian companies which carried on business here.[138]
However, when the US proceedings were focused upon, the suitability of the Australian forum for resolution of the dispute became more doubtful. As the US action involved the further issue of the liability of Cigna Corporation under the US antitrust law, and this matter could not be tried in Australia, it followed that Australia was a ‘clearly inappropriate forum’ for the litigation of the issues raised in the US proceeding.[139]
The majority then laid down the following proposition:
[W]here different issues are involved in the local and foreign proceedings, albeit that the different proceedings arise out of the same sub-stratum of fact, the question is not whether the Australian court is a clearly inappropriate forum for the litigation of the issues involved in the Australian proceedings. Rather, the question must be whether, having regard to the controversy as a whole, the Australian proceedings are vexatious or oppressive in the Voth sense of those terms.[140]
In determining whether, having regard to the controversy as a whole, the NSW proceedings were vexatious or oppressive, the majority noted that the ‘central purpose’ of Cigna in instituting this action was ‘to prevent the continuation of the US proceedings’.[141] The judges reached this conclusion on the basis that the NSW proceedings were commenced after the US action, they involved claims by Cigna for negative declarations, and they were done in the knowledge that less than full relief would be available to CSR in NSW. Thus, the court concluded, where Australian proceedings are ‘brought for the dominant purpose of preventing another party from pursuing remedies available in the courts of another country and not available in this country [they] are oppressive in the Voth sense.’[142]
The action which clearly illustrated that Cigna had such a purpose was the claim it made for a negative declaration in the Australian proceeding, which had ‘the appearance of one brought in the hope of concealing that the dominant purpose of the NSW proceedings ... [was] to prevent CSR from pursuing its ... [antitrust] claim in the US proceedings.’[143] Once again, a court has taken a sceptical view of negative declarations, treating them as tactical measures designed to attract jurisdiction, although in this case such relief was sought by the plaintiff in the Australian proceeding, rather than by the defendant (to the Australian proceeding) in a foreign action.
Finally, the majority said that there was nothing to suggest that the relief sought by Cigna in NSW would be unavailable to it in the US proceeding by way of cross-claim or defence. Thus, the court concluded that a stay of the NSW action should be granted, on the basis that such proceedings were oppressive, having had the object of trying to thwart the defendant from obtaining more complete relief in the US. Australia was therefore a ‘clearly inappropriate forum’ for resolution of the dispute as a whole, taking into account both the Australian and American proceedings.
In commenting upon this case, three main points can be put forward. Firstly, CSR v Cigna continues the trend begun in Henry towards modification, and (possibly) erosion, of the Voth principle in the context of stays based on foreign pending proceedings. While in Henry, the new principle that a presumption in favour of a stay would arise where foreign proceedings were on foot in relation to the same subject matter and parties as a local action was stated, CSR v Cigna went a step further by indicating that foreign pending proceedings, even those not in respect of an identical subject matter as a local action, may be grounds for a stay, where the purpose of the local proceeding is to deprive the defendant of rights only available in the foreign action. Again, as was noted in Henry, the focus has shifted from the suitability of the Australian forum in isolation, to a concern with the comparative appropriateness of the foreign and local jurisdictions.
A second comment which may be made about CSR v Cigna is that it seemingly allows a plaintiff to a foreign proceeding to preclude Australian jurisdiction over a matter by simply adding causes of action (however weak) under foreign statutory law, which it knows could not be pleaded before an Australian court. In this sense, the High Court’s reasoning is reminiscent of the decisions discussed in Part VII, in which the plaintiff to an Australian action was able to avoid a stay of local proceedings on the basis that it had pleaded a claim under section 52 of the TPA which a foreign court would not recognise.[144]
The third issue which arises from CSR v Cigna is the extent to which its principles may be applied beyond the context of pending proceedings, so as, in effect, to give rise to a new, separate test for restraint of local actions based on the motives of the plaintiff. It is suggested that, in the absence of a foreign pending proceeding in which fuller relief is sought than would be available in an Australian action, it would be almost impossible for a defendant to prove that the plaintiff’s purpose in commencing an action in Australia was to deprive the defendant of rights under foreign law. Conceivably, a defendant would have to argue that, if a trial were to take place before a foreign court, its rights would be more fully protected than if the action in Australia were allowed to proceed. The advancement of such a speculative argument would place an Australian court to whom application for a stay was made in a very difficult position. It would be forced to assess what rights a defendant may have had, had a case gone to trial before a foreign court, and then to determine whether the plaintiff was aware of such (hypothetical) rights, and whether, by commencing an action in Australia, it had sought to thwart them.
Furthermore, it is argued, to extend the principle from CSR v Cigna to the situation where no foreign action is pending would be to place an enormous restriction on the right of the plaintiff to choose its own forum. Although this factor was downplayed in Voth as having only slight weight in the exercise of the discretion to restrain local actions, in this context it could play an important role.
Fortunately, in the two cases decided since CSR v Cigna involving applications to stay local proceedings — both before the Supreme Court of NSW — any argument that the principle from that case may apply outside the context of pending proceedings was firmly rejected. In the first of the cases, Conagra,[145] it was argued by the defendant that the dominant purpose of the plaintiff in commencing proceedings in NSW was to ensure that the case would not be heard in China. The court however held that the applicability of the reasoning in CSR v Cigna was limited to the situation where proceedings were on foot in a foreign jurisdiction, and these had been instituted before the Australian action.
While the court in Conagra accepted that the motive of a plaintiff in suing in Australia may, in many cases, be to deprive a defendant of access to the courts of another country or rights under its law, this is part and parcel of the strategic nature of international litigation. To apply the reasoning of CSR v Cigna to every case in which a stay was sought would mean that not only would a court have to determine whether it was a ‘clearly inappropriate forum’, but ‘also the purpose ... for bringing the proceedings ... and whether that was to deprive the defendant of some juridical advantage it would have in another court had it instituted proceedings in that court.’[146] The focus would therefore shift from an analysis of connecting factors with the forum to more intangible and difficult to assess criteria, such as a party’s motivation in its choice of forum. Ultimately, the court said, all that could be required of a plaintiff, in terms of motivation, was that it must have ‘regularly instituted [its proceedings] in good faith in pursuit of a legitimate advantage’.[147] However, there would be a prima facie presumption that this had occurred.
Nevertheless, even assuming that the principle from CSR v Cigna could be applied outside the context of pending proceedings, the court thought that the test was not satisfied on the facts of Conagra. Here, the defendant had not pointed to any aspect of Chinese law which would have provided it with a juridical advantage, nor any matter which it would not be able to raise by cross-claim in NSW which would be available to it in a Chinese court.[148]
As further proof that it is unlikely CSR v Cigna will be extended beyond the ambit of pending proceedings, the very recent decision in Laminex[149] should be noted. There it was confirmed, with little reasoning, that the principle from CSR v Cigna did not apply in general stay cases.
Returning to the question posed earlier in the article about whether application of the Spiliada test to a given type of case would lead to a different result, it is suggested that, in the case of pending proceedings, the answer would be in the negative. Firstly, this is so because where such proceedings are in respect of the same subject matter and parties, the High Court in Henry has effectively replaced the Voth test with a Spiliada-type approach which focuses upon the comparative merits of the two forums.[150] Secondly, in the context of proceedings not involving the same claims and parties, the High Court in CSR v Cigna has maintained that the proceedings ‘as a whole’ must be considered, while at the same time introducing a new element which concentrates on the motivation of the plaintiff in bringing the Australian action. Whether this new principle will result in the more frequent restraint of Australian proceedings in transnational cases remains to be seen.
It appears that, where the defendant seeks a stay of an Australian action based on the fact that it is also being sued in respect of the same subject matter in another jurisdiction, courts will be more sympathetic to the grant of such an order. In such a situation, the defendant is said to be ‘doubly vexed’[151] and therefore, more arguably a victim of vexation and oppression in the terms of Voth. Hence, in The Sentry Corporation v Peat Marwick Mitchell & Co,[152] a court ordered the stay of a cross-claim by a defendant against a plaintiff in Australia, on the basis that the defendant had commenced the same claim against the same party abroad. More recently, in Discovision Associates v Distronics Ltd,[153] an action in Victoria was stayed where the plaintiff had instituted proceedings against the same defendant in two other jurisdictions. What is interesting about this decision is that although the claims in the Australian and the foreign proceedings were not identical,[154] they did arise out of the same sub-stratum of facts, and so, according to the court, the broad ‘issues’ were the same.[155] Thus, the local action would be stayed, owing to the fact that the prosecution of multiple actions against the defendant imposed an ‘unfair burden’[156] on that party.[157]
It is also worth noting a number of cases in which the problem of ‘double vexation’ for a defendant has been resolved, not by a stay of local proceedings being granted, but on the basis of the plaintiff undertaking to the Australian court that it will not prosecute its foreign action.[158] This provides something of an alternative remedy for the defendant, although it is perhaps less attractive than a stay, particularly if the defendant is resident abroad.
It is likely that, in this type of case, application of the ‘more appropriate forum’ test would yield similar, if not identical, results.
Parties, particularly those in commercial relationships, will often try to provide for some certainty, in the event of a dispute arising, by including a jurisdiction clause in any concluded agreement. This, in essence, is a provision in a contract whereby parties agree to submit any disputes between them to a designated court. The precise status of jurisdiction clauses regarding the Voth test for stay of proceedings has not been completely resolved.[159]
The traditional view of jurisdiction clauses was that a distinction was to be drawn between ‘exclusive’ and ‘non-exclusive’ clauses. An exclusive clause involved parties having intended not only to confer jurisdiction on a particular court in respect of a dispute, but also to preclude any other court from exercising jurisdiction. A non-exclusive clause, by contrast, did not prevent a party from suing in an alternative forum. The result of this distinction was that, where an Australian court was confronted with a claim which had been brought in contravention of a foreign exclusive jurisdiction clause, it was required to stay the proceeding, in the absence of strong reasons to the contrary.[160] However, in the case of a non-exclusive clause, the application for a stay was to be resolved by the general principles governing restraint of local proceedings.[161]
In Oceanic Sun[162] the High Court had to consider the effect of a Greek jurisdiction clause on an application to stay proceedings in NSW. Although the court found that the clause had not been incorporated into the parties’ contract, and thus was not relevant to the stay question, it will be recalled that two members of the court in that case (Deane and Gaudron JJ) went on to propound a general principle governing stay of local proceedings, namely, the ‘clearly inappropriate forum’ test, which was ultimately approved in Voth. However, one judge in Oceanic Sun, Brennan J, did consider, in obiter, which test would have been applied to resolve the stay issue, had the exclusive jurisdiction clause been found to have been incorporated. He suggested that the ‘strong cause’ test from Huddart Parker still represented the law, at least as far as exclusive clauses were concerned.[163]
After Oceanic Sun and Voth,[164] there have been a number of cases in which courts had to consider jurisdiction clauses and, generally, the traditional distinction between exclusive and non-exclusive described above has been maintained. In other words, ‘strong reasons’ have been required to prevent a stay where a foreign exclusive jurisdiction clause was present.[165] However, where only a non-exclusive clause was involved, a stay would only be granted where the Australian forum was ‘clearly inappropriate’ within the terms of the Voth principle.[166]
A notable dissentient from this view was Rolfe J of the Supreme Court of NSW, who took the view that Voth had created one test for stay of proceedings in transnational cases which was to be applied regardless of any jurisdiction clause, exclusive or otherwise.[167] In his view, the presence of an exclusive jurisdiction clause was only one of many factors to be considered when exercising the overall discretion to stay proceedings, with no special weight attached.
However, the approach of Rolfe J has not been adopted by other courts,[168] and in the recent High Court decision, Akai Pty Ltd v The People’s Insurance Co Ltd,[169] the view that ‘strong reasons’ are required to prevent a stay of proceedings where parties have entered into an exclusive clause, was reaffirmed unanimously.[170] Two judges went further, emphasising that ‘an application for a stay to enforce an exclusive jurisdiction clause ... [should not] be assimilated to a case in which a stay is sought on the principle of forum non conveniens’.[171] Hence, it appears that an application to stay proceedings based upon an exclusive jurisdiction clause will not be considered as falling under the Voth principle. The status of non-exclusive clauses was not discussed by the High Court in Akai, although presumably, the presence of such a clause would remain one factor to be considered under the Voth test when determining whether an Australian forum was clearly inappropriate.
How then can the position of Australian courts with respect to stay of proceedings be described? It should be remembered that commentators were split at the time of the Voth decision, as to whether the ‘clearly inappropriate’ test would lead to fewer restraints on plaintiff suits than existed under the Spiliada ‘more appropriate forum’ test.[172] In a sense, the case law has proven both the optimists and the sceptics correct. While it was argued above that only in a relatively small number of cases would a different result have been achieved by application of the Spiliada principle, it could be argued that this is because, to a certain extent, the High Court has chosen to amend or replace the Voth test in contexts where it was felt to be unworkable, notably in cases involving pending proceedings and exclusive jurisdiction clauses.
Moreover, it is suggested that the High Court may well decide to depart from Voth completely in the near future, due to a realisation that its principles are too rigid and narrow to deal with the variety of situations that can arise in transnational disputes. In particular, it may be argued that a test which states that inter-jurisdictional disputes should be resolved only by focusing upon the appropriateness of the local forum is excessively myopic. Surely, the claim of a foreign jurisdiction to trial of a matter is entitled to recognition which is at least equal to that of the forum and any decision on the place of litigation which fails to accord this will serve only to foster a lack of respect and disharmony between courts. While a balancing exercise such as that required under the Spiliada test is not easy for a court to perform, it is suggested that this remains the best approach for fully representing all relevant interests in a jurisdictional dispute. Domestic courts can no longer see themselves as only having a responsibility to develop the law of a particular country. Now, with the expansion of international trade and commerce, they must act as part of an integrated global network of adjudication. It is submitted that the adoption of the ‘more appropriate forum’ test in Australia would better accord with this objective.[173]
[*] BA, LLB (NSW), LLM (Harv); Senior Lecturer in Law, Monash University.
[1] [1990] HCA 55; (1990) 171 CLR 538 (‘Voth’).
[2] [1986] UKHL 10; [1987] 1 AC 460 (‘Spiliada’).
[3] Voth [1990] HCA 55; (1990) 171 CLR 538, 558.
[4] See especially Lawrence Collins, ‘The High Court of Australia and Forum Conveniens: The Last Word?’ (1991) 107 Law Quarterly Review 182, 187; Ellen Hayes, ‘Forum Non Conveniens in England, Australia and Japan: The Allocation of Jurisdiction in Transnational Litigation’ (1992) 26 University of British Columbia Law Review 41, 54. A New Zealand judge has also expressed similar concerns about the effect of Voth in Primesite Outdoor Advertising Ltd v City Clock (Australia) Ltd (1991) 4 PRNZ 472, 476 (Thorp J). Other academic commentators doubted that the respective tests would lead to opposite results: Peter Brereton, ‘Forum Non Conveniens in Australia: A Case Note on Voth v Manildra Flour Mills’ (1991) 40 International Comparative Law Quarterly 895, 898; Judd Epstein, ‘Australia’ in J J Fawcett (ed), Declining Jurisdiction in Private International Law (1995) 79, 86–7.
[5] For a defendant to avoid the assertion of jurisdiction it had to show that the institution of proceedings in the forum by the plaintiff was ‘oppressive or vexatious’: St Pierre v South American Stores Ltd [1936] 1 KB 382, 398.
[6] Voth [1990] HCA 55; (1990) 171 CLR 538, 562.
[7] This movement was hardly surprising given the number of cases where common law jurisdiction had been exercised over defendants who had been only fleetingly present in the forum. See, eg, Baroda v Wildenstein [1972] 2 QB 283.
[8] Spiliada [1986] UKHL 10; [1987] 1 AC 460, 478, quoting The Abidin Daver [1984] AC 398, 415.
[9] Spiliada [1986] UKHL 10; [1987] 1 AC 460, 478.
[10] Ibid.
[11] Ibid 482–4.
[12] Club Mediterranee NZ v Wendell (1987) 1 NZLR 216.
[13] [1988] HCA 32; (1988) 165 CLR 197 (‘Oceanic Sun’).
[14] [1990] HCA 55; (1990) 171 CLR 538, 550–1.
[15] This point was made by Collins, above n 4, 186, and was effectively conceded by four members of the High Court in Voth [1990] HCA 55; (1990) 171 CLR 538, 562–3 (Mason CJ, Deane, Dawson and Gaudron JJ), in their reference to the Victorian case of Lewis Construction Co Pty Ltd v Tichauer SA [1966] VicRp 45; [1966] VR 341.
[16] Oceanic Sun [1988] HCA 32; (1988) 165 CLR 197, 243.
[17] Ibid 248.
[18] Ibid.
[19] Ibid 241.
[20] Ibid 245.
[21] Voth [1990] HCA 55; (1990) 171 CLR 538, 564.
[22] Mason CJ, Deane, Dawson and Gaudron JJ wrote a joint judgment endorsing the ‘clearly inappropriate forum’ test: ibid. Toohey J, while agreeing that a stay should be granted, chose to follow his view in Oceanic Sun, that is, that the ‘more appropriate forum’ test should be applied: ibid 590.
[23] Voth [1990] HCA 55; (1990) 171 CLR 538, 570–1.
[24] Ibid 571.
[25] Ibid 564–5.
[26] Ibid 558. An example of such a situation would be where an action was time barred in a foreign jurisdiction but had no connections with the Australian forum. However, more recently, Brennan CJ has suggested that such an outcome ‘could be contemplated only in an extreme case’: Henry v Henry [1996] HCA 51; (1995) 185 CLR 571, 578 (‘Henry’).
[27] [1988] HCA 32; (1988) 165 CLR 197, 248.
[29] Voth [1990] HCA 55; (1990) 171 CLR 538, 566, 571. This marks a divergence from the views of Deane J in Oceanic Sun [1988] HCA 32; (1988) 165 CLR 197, 241.
[30] Voth [1990] HCA 55; (1990) 171 CLR 538, 564–5.
[31] Spiliada [1986] UKHL 10; [1987] 1 AC 460, 478.
[32] Nygh suggests that the High Court’s reasoning is ‘internally inconsistent’ on this point: P E Nygh, Conflict of Laws in Australia (6th ed, 1995) 108.
[33] Voth [1990] HCA 55; (1990) 171 CLR 538, 558. The majority did, however, accept that where it could be said that a foreign tribunal was the ‘more appropriate’ forum, but it could not be said that the local tribunal was ‘clearly inappropriate’, a stay may be awarded under the Spiliada principle but not under Voth: at 558.
[34] In this regard, it is rather surprising that one commentator has said that the Voth test provides Australian courts with a ‘wider discretion than exists in English Law’: Lakshman Marasinghe, ‘International Litigation: Choice of Forum’ (1993) 23 University of Western Australia Law Review 264, 271. The more common defence of the Voth test (when compared to Spiliada) is that it provides a simpler and more certain standard to apply because the court is not required to balance the competing merits of the local and foreign forums and their respective legal systems. Instead, the court only has to consider the appropriateness of the Australian tribunal in isolation. In this regard see Peter Prince, ‘Bhopal, Bougainville and OK Tedi: Why Australia’s Forum Non Conveniens Approach Is Better’ (1998) 47 International and Comparative Law Quarterly 573, 588; Epstein, above n 4, 87. However it will be argued in this article that, regardless of whether the Voth or Spiliada tests are applied, a comparison of the competing jurisdictions and their entitlement to hear the action is inescapable.
[35] Even among commentators supportive of Voth, it is acknowledged that different results between the tests are likely to occur where the connections between the jurisdictions are equally divided: see, eg, Brereton, above n 4, 899. There seems to be a consensus, however, that on the facts of Voth, the result would have been the same whichever test was applied: Collins, above n 4, 187.
[36] For example, in a contract action, that the contract was made or breached within the forum, or governed by the law of the forum.
[37] Voth [1990] HCA 55; (1990) 171 CLR 538, 564–5. In the case of service out of the jurisdiction, where prior leave is not required, it seems that the plaintiff would bear the onus of showing, on an application for leave to proceed, that the action falls within one of the designated categories for service out. However, the onus would rest upon the defendant to prove that the Australian court is a ‘clearly inappropriate forum’. In decisions since Voth, Australian courts have unanimously taken this approach. See, eg, WFM Motors Pty Ltd v Maydwell (Unreported, Supreme Court of New South Wales, Bryson J, 23 April 1993); Melban Pty Ltd v Eu Chin Nominees Pty Ltd (Unreported, Supreme Court of Victoria, Ormiston J, 16 March 1992) (‘Melban’); CE Heath Underwriting & Insurance (Australia) Pty Ltd v Barden (Unreported, Supreme Court of New South Wales, Rolfe J, 19 October 1994).
[38] See, eg, Westpac Banking Corporation v P & O Containers Ltd (1991) 30 FCR 320, 324; Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd [1996] FCA 1224; (1996) 68 FCR 539, 552.
[39] See, eg, Phosphate Co-operative Company of Australia Ltd v SGS Supervision Services Inc (Unreported, Federal Court of Australia, Gray J, 7 April 1993); Century Insurance Ltd v New Zealand Guardian Trust Ltd (Unreported, Federal Court of Australia, Lee J, 16 May 1996).
[40] It is interesting to note, however, that some courts have referred to the Voth test as evidencing the ‘reluctance of the courts to grant a stay of proceedings and affirm[ing] a plaintiff’s right to proceed in the ordinary way. For the court to impose a stay on proceedings impairs the right ordinarily enjoyed by a plaintiff. It is a bold step and should be taken only with great care’: Dart Industries Inc v Buckley & Nunn Ltd [1991] AIPC 90-838, 37,948 (Ashley J). It is suggested that this conclusion overstates the significance of the plaintiff’s right to suit and goes beyond what the High Court intended in Voth. Interestingly, Nygh has argued that it was this type of ‘unfortunate interpretation of Voth which led to the denial of a stay in almost all cases decided in lower courts since’: P Nygh, ‘Voth in the Family Court Re-Visited: The High Court Pronounces on Forums Conveniens and Lis Alibi Pendens’ (1996) 10 Australian Journal of Family Law 163, 169. A recent example of inappropriate reliance on the principle that a plaintiff has a right to choose its forum occurred in Chan Wing (Vanuatu) Ltd v Moti (Unreported, Supreme Court of Queensland, Chesterman J, 26 March 1998). There, an action between two foreign residents was allowed to proceed in Queensland despite the existence of only slender connections between the forum, the parties and the action.
[41] (Unreported, Supreme Court of Victoria, Harper J, 19 October 1993).
[42] Port Line Ltd v Lacey (Unreported, Supreme Court of New South Wales, Court of Appeal, Priestley, Meagher and Beazley JJA, 26 July 1996); James Hardie & Co Pty Ltd v Coyle (Unreported, Supreme Court of New South Wales, Court of Appeal, Mason P, Sheller and Cole JJA, 5 May 1998).
[43] [1997] VSC 24; [1998] 3 VR 435.
[44] (Unreported, Supreme Court of New South Wales, Rolfe J, 27 October 1997) (‘Conagra’).
[45] McEntee v Connor [1994] TASSC 47; (1994) 4 Tas R 18, 25 contains statements to the same effect.
[46] One commentator has however suggested that, in the case of a foreign plaintiff suing a local defendant, application of the Voth and Spiliada principles would yield different results with a stay much more likely under Spiliada: Prince, above n 34, 586–8. However the writer fails to support this assertion by reference to any English case. Therefore, his claim that Spiliada ‘discriminates against foreign plaintiffs’ seems unjustified.
[47] (Unreported, Supreme Court of Victoria, Ormiston J, 25 July 1991).
[48] Prebble v Australian Broadcasting Corporation (Unreported, Supreme Court of New South Wales, Levine J, 6 September 1996).
[49] Conagra (Unreported, Supreme Court of New South Wales, Rolfe J, 27 October 1997) can also be included in this category.
[50] (Unreported, Supreme Court of New South Wales, Court of Appeal, Spigelman CJ, Mason P and Beazley JA, 18 June 1998) (‘Grigor’).
[51] Mason P and Beazley JA; Spigelman CJ dissenting.
[52] Grigor (Unreported, Supreme Court of New South Wales, Court of Appeal, Spigelman CJ, Mason P and Beazley JA, 18 June 1998) 7.
[53] [1994] TASSC 47; (1994) 4 Tas R 18.
[54] Ibid 25.
[55] (Unreported, Supreme Court of Australian Capital Territory, Connolly M, 19 April 1996) 4.
[56] [1997] VSC 24; [1998] 3 VR 435. The failure of the defendant to identify an alternative foreign court to which the matter could be submitted has already been discussed at above nn 43–45 and accompanying text.
[57] The court noted that, where parties reside in different States of Australia, the appropriate relief for a defendant who wished to challenge the forum’s jurisdiction would be an application to transfer the case to another Australian forum under the cross-vesting legislation: ibid 450 (Ormiston JA). Presumably, where the parties reside in the same state or territory, even this relief would be unlikely to be granted.
[58] (Unreported, Supreme Court of Queensland, Court of Appeal, Davies JA, Williams and McKenzie JJ, 18 April 1997).
[59] [1995] ATPR 41-388 (NSWSC).
[60] [1991] FCA 70; (1991) 28 FCR 387 (‘Merpro’).
[61] Other cases involving actions for breach of s 52, in which stays were refused because the only real connection with a foreign jurisdiction was that it happened to be the defendant’s place of residence, include: Sedgwick Ltd v Bain Clarkson Ltd [1995] FCA 1193; (1994) 56 FCR 578; Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd [1991] FCA 70; (1996) 28 FCR 387; News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553. It is suggested that, as the Australian court was the more appropriate forum in each case, the result would have been no different under Spiliada.
[62] (Unreported, Federal Court of Australia, Gray J, 7 April 1993).
[63] To the same effect was Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 20 ACSR 760 (‘Bell Group’), where claims against a number of former directors of an Australian company for breaches of duty in relation to the affairs of that company were allowed to proceed. The fact that the defendants had become overseas residents by the time of the suit was treated as an almost fortuitous circumstance. See also Chapman v Gooch Ware Travelstead (Unreported, Federal Court of Australia, French J, 25 August 1998) where a stay was refused because the foreign defendant had entered a ‘transaction with a strong Australian connection’. Similarly, in Hyde v Agar (Unreported, Supreme Court of New South Wales, Court of Appeal, Spigelman CJ, Mason P and Stein JA, 19 October 1998) 65–6, it was said that it would ‘take quite exceptional circumstances’ for an action against a foreign defendant relating to a tort committed in Australia to be stayed. See also, to the same effect, HIH Casualty & General Insurance Ltd v Meados Indemnity Co Ltd (Unreported, Supreme Court of New South Wales, Rolfe J, 16 December 1998).
[64] (Unreported, Supreme Court of South Australia, Matheson J, 10 January 1991).
[65] Ibid 19.
[66] (Unreported, Federal Court of Australia, Gray J, 7 April 1993).
[67] A further case involving receipt of damaged goods in Australia, in which a plaintiff was entitled to proceed here — even though all relevant events relating to liability occurred abroad — was GNB Battery Technologies Ltd v Nichicon (Singapore) Pty Ltd (Unreported, Supreme Court of Victoria, Ashley J, 23 June 1994).
[68] (Unreported, Supreme Court of New South Wales, Bryson J, 23 April 1993).
[69] Ibid 18. Westpac Banking Corporation v P & O Containers Ltd (1991) 30 FCR 320 would seem to fall into the same category. There, the foreign defendant was denied a stay even though all wrongful acts occurred abroad and all relevant witnesses were located there.
[70] See, eg, CE Heath Underwriting & Insurance (Australia) Pty Ltd v Barden (Unreported, Supreme Court of New South Wales, Rolfe J, 19 October 1994) 58–9; News Corporation Inc v Lenfest Communications Inc (1996) 21 ACSR 553, 575.
[71] (Unreported, Supreme Court of New South Wales, James J, 9 December 1993).
[72] (Unreported, Supreme Court of Victoria, Hayne J, 8 July 1992) (‘Adeang’).
[73] The fact that the defendant held assets in Australia was irrelevant.
[74] [1994] VicRp 19; [1994] 1 VR 274.
[75] Ibid 325.
[76] Ibid.
[77] [1994] NSWCA 17; [1995] ATPR 41-390 (NSWCA) (‘Bank of America’).
[78] (Unreported, Supreme Court of New South Wales, James J, 19 December 1997) (‘Laminex’).
[79] This view has been confirmed in a recent English decision, where a stay was granted because of the action’s greater geographical connection with a foreign forum, even though suing in England would have been advantageous to the plaintiff: The Rothnie [1996] 2 Lloyd’s Rep 206 (QBD).
[80] [1989] 3 All ER 65 (Ch D).
[81] Ibid 72.
[82] (Unreported, Federal Court of Australia, Gummow J, 10 March 1994) (‘DA Technology’).
[83] (Unreported, Supreme Court of New South Wales, Rolfe J, 19 October 1994).
[84] In fact, the court set aside a number of claims in the writ which had been served out of the jurisdiction on the basis that they lacked the requisite nexus (under the statutory rules) to NSW. The only claims which survived were those for negligence (because some damage was suffered in NSW) and the claims under the TPA and the Fair Trading Act 1987 (NSW) (because NSW was the place where the allegedly unlawful representations were received).
[85] (Unreported, Supreme Court of New South Wales, James J, 19 December 1997).
[86] Unlawful Trade Practices Act, OR REV STAT ch 646, ss 605–56 (1997).
[87] Spiliada [1986] UKHL 10; [1987] 1 AC 460, 482. As has been said by English commentators, the juridical advantage to the plaintiff must be ‘real’: P M North and J J Fawcett, Cheshire and North’s Private International Law (12th ed, 1992) 228. An example of a more ‘real’ juridical advantage may be s 25(3) of the Dust Diseases Tribunal Act 1989 (NSW), which was relied upon by a majority in Grigor (Unreported, Supreme Court of New South Wales, Court of Appeal, Spigelman CJ, Mason P and Beazley JA, 18 June 1998) 5 to refuse a stay. This provision allows for the admission of certain evidence concerning dust exposure and disease in a suit where it has already been admitted in other proceedings, not necessarily between the same parties. The result is significant savings in cost and time to plaintiffs.
[88] (Unreported, Supreme Court of Victoria, Ormiston J, 16 March 1992).
[89] Ibid 13.
[90] Ibid 14.
[91] [1995] ATPR 41-388 (NSWSC).
[92] Ibid 41-388, 40,327.
[93] Another decision in which a defendant was entitled to bring indemnity proceedings against a foreign third party in NSW was Sunbeam Corporation Ltd v MTI Qualos Pty Ltd (Unreported, Supreme Court of New South Wales, Giles CJ Comm D, 14 December 1995). Although the third party proceeding lacked a connection with the forum and would most likely be governed by Swiss law, these factors were outweighed by the inconvenience to the defendant of having to bring subsequent proceedings abroad. Again, this is another case of juridical advantage under the law of the forum being used to overcome a predominance of connections to the foreign jurisdiction. See also, most recently and to the same effect, University of South Australia v G N B Battery Technologies Ltd (1997) 192 LSJS 1.
[94] (Unreported, Supreme Court of Victoria, McDonald J, 4 March 1991).
[95] Ibid 15.
[96] (Unreported, Supreme Court of New South Wales, Rolfe J, 9 June 1995) (‘Gem Plastics’). See also the subsequent decision: Gem Plastics Pty Ltd v Satrex Maritime t/a South African Express Line (1995) 8 ANZ Insurance Cases 61-283, where Rolfe J was forced to reconsider matters in light of the test in Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418, as opposed to the Voth test which he originally applied.
[97] See also Bell Group (1996) 20 ACSR 760, 776 where an additional factor relied upon to refuse the stay of the action against the English defendants was that proceedings in respect of the same subject matter had already been instituted in the forum against a number of Australian parties. The court therefore felt that to stay the action against the foreign parties would result in an undesirable splitting of proceedings at significant extra cost. However, while this aspect of the court’s reasoning may be questioned, it is suggested, as was noted above, that given that the action was overwhelmingly connected with Australia, the stay was justifiably refused.
[98] [1993] FamCA 3; (1993) 16 Fam LR 285 (‘Gilmore’).
[99] Ibid 293.
[100] In particular, there were significant connections between the action, the forum and the parties and there existed a juridical advantage to the wife under Australian law.
[101] Gilmore v Gilmore (Unreported, High Court of New Zealand, McGechan J, 3 May 1993).
[103] Ibid 115, 117.
[104] See, eg, The Volvox Hollandia [1988] 2 Lloyd’s Rep 361, 371 (Kerr LJ).
[106] Ibid 115.
[107] Ibid 117.
[108] [1995] 2 VR 181 (‘Rocklea’).
[109] Ibid 183.
[110] Ibid.
[111] Voth [1990] HCA 55; (1990) 171 CLR 538, 558.
[112] Ibid.
[113] [1996] HCA 51; (1995) 185 CLR 571.
[114] [1993] FamCA 3; (1993) 16 Fam LR 285.
[115] Henry [1996] HCA 51; (1995) 185 CLR 571, 581. However, Brennan CJ did note one exceptional situation where a foreign pending proceeding may be decisive in rendering a local forum ‘clearly inappropriate’, that is, where ‘the institution of ... those [the local] proceedings was delayed until the proceedings in the foreign forum were nearing completion’: at 581. In essence, this is a bad faith exception, that is, where the local action has no objective other than to frustrate the defendant’s proceeding abroad. Henry, however, was not such a case; both parties had instituted separate proceedings in different countries within three months of each other, both genuinely desiring the exercise of jurisdiction by each one’s chosen tribunal.
[116] Ibid 580. In particular, they had never lived in Australia as husband and wife, there were no children of the marriage here whose custody and welfare would have been relevant and there was little property of the spouses which would have been affected by a divorce decree.
[117] Bank of America [1994] NSWCA 17; (1995) ATPR 41-390, 40,334 (NSWCA); Adeang (Unreported, Supreme Court of Victoria, Hayne J, 8 July 1992).
[118] Sterling Pharmaceuticals Pty Ltd v The Boots Co (Australia) Pty Ltd (1992) 34 FCR 287, cited in Henry [1996] HCA 51; (1995) 185 CLR 571, 590.
[119] Henry [1996] HCA 51; (1995) 185 CLR 571, 590.
[120] Ibid.
[121] Ibid 591.
[122] Ibid.
[123] Ibid 592.
[124] Ibid.
[125] Ibid.
[126] The court suggests, however, that, if a foreign proceeding was instituted first, it should be given greater weight in the discretion to grant a stay. This is not a mandatory requirement and so a foreign action, even where commenced after the Australian proceeding, may be the basis for a stay. There is English authority to the same effect: The Coral Isis [1986] 1 Lloyd’s Rep 413, 416–17.
[127] Henry [1996] HCA 51; (1995) 185 CLR 571, 592–3.
[128] Ibid 593.
[129] (1996) 21 ACSR 553 (‘News Corporation’).
[130] Ibid 573.
[132] News Corporation (1996) 21 ACSR 553, 573.
[133] This conclusion seems to be supported by two recent cases where stays of Australian actions were awarded on the basis that competing foreign proceedings, in respect of the same subject matter, had been instituted earlier: In the Marriage of Kemeny [1998] FamCA 34; (1998) 23 Fam LR 105 (‘Kemeny’); Ainsworth v Aristocrat Leisure Ltd (Unreported, Supreme Court of New South Wales, Macready M, 28 August 1998). In fact, in Kemeny, the foreign court had already delivered judgment in respect of the matter in dispute. Nevertheless, one writer has suggested that giving the order of proceedings too much weight in stay applications may lead to an undesirable ‘race to the filing counter’: Nygh, ‘Voth in the Family Court Re-Visited’, above n 40, 170.
[135] This conclusion may be supported by the fact that Gummow J was one of the four judges who authored the joint judgment in Henry [1996] HCA 51; (1995) 185 CLR 571.
[136] (1996) 189 CLR 345 (‘CSR v Cigna’).
[137] Ibid 399.
[138] Ibid 400.
[139] Ibid.
[140] Ibid 400–1 (emphasis added).
[141] Ibid 401.
[142] Ibid.
[143] Ibid 402.
[144] See above nn 80–87 and accompanying text.
[145] (Unreported, Supreme Court of New South Wales, Rolfe J, 27 October 1997).
[146] Ibid 74.
[147] Ibid 75.
[148] Ibid.
[149] (Unreported, Supreme Court of New South Wales, James J, 19 December 1997).
[150] In this regard, it is interesting to note the similarities between Henry and the House of Lords decision in de Dampierre v de Dampierre [1988] AC 92 in which Spiliada was applied to stay an English divorce action on the basis that proceedings in respect of the same subject matter and parties were pending in France.
[151] McHenry v Lewis [1882] UKLawRpCh 260; (1883) 22 Ch D 397, 399 (Jessel MR).
[152] [1990] FCA 278; (1990) 24 FCR 463.
[153] (1997) 39 IPR 140 (‘Discovision’).
[154] The Australian action was for breach of a licensing agreement, whereas the actions in the UK and the US were for breach of patent.
[155] Discovision (1998) 39 IPR 140, 145 (Beach J).
[156] Ibid 146.
[157] The action also had little connection with Australia, and foreign law would almost certainly have applied. In this respect, Discovision possesses some similarities with the cases discussed earlier in which stays were awarded: above nn 72–78 and accompanying text.
[158] See, eg, Enzacor Technology Pty Ltd v Ko (Unreported, Supreme Court of Victoria, Smith J, 22 March 1993); Bell Group (1996) 20 ACSR 760. In Bell Group, the court also noted that the commencement by the plaintiff of the same action against the same defendant in a foreign forum may not be oppressive where the institution of these proceedings is designed to protect the plaintiff from expiry of a limitation period in that jurisdiction. However, the plaintiff must undertake to discontinue the foreign action as a condition of being allowed to proceed in the forum: Bell Group (1996) 20 ACSR 760, 774.
[159] For a more detailed discussion of the treatment of jurisdiction clauses by Australian courts, see generally Richard Garnett, ‘The Enforcement of Jurisdiction Clauses in Australia’ [1998] UNSWLawJl 33; (1998) 21 The University of New South Wales Law Journal 1.
[160] Huddart Parker Ltd v The Ship Mill Hill [1950] HCA 43; (1950) 81 CLR 502 (‘Huddart Parker’).
[161] Contractors Ltd v MTE Control Gear Ltd [1964] SASR 47.
[162] [1988] HCA 32; (1988) 165 CLR 197.
[163] Ibid 224.
[164] The status of jurisdiction clauses was not considered by the High Court in Voth as no such clause was present on the facts.
[165] See, eg, Williams v The Society of Lloyd’s [1994] VicRp 19; [1994] 1 VR 274; Leigh-Mardon Pty Ltd v PRC Inc [1993] FCA 324; (1993) 44 FCR 88; CSP Computer Security Products Pty Ltd v Security Dynamics Technologies Inc (Unreported, Federal Court of Australia, Heerey J, 12 March 1996); Apscore International v Grand Canyon Technologies (Unreported, Federal Court of Australia, Lehane J, 12 December 1996).
[166] Armitage Brick Ltd v Thiess Contractors Pty Ltd (Unreported, Supreme Court of Queensland, Court of Appeal, 25 August 1992); Enzacor Technology Pty Ltd v Ko (Unreported, Supreme Court of Victoria, Smith J, 22 March 1993).
[167] Gem Plastics (Unreported, Supreme Court of New South Wales, Rolfe J, 9 June 1995).
[168] See, eg, Oceanic Sun [1988] HCA 32; (1988) 165 CLR 197, 224 (Brennan J), 259 (Gaudron J).
[169] (1996) 188 CLR 418 (‘Akai’).
[170] Ibid 445 (Toohey, Gaudron and Gummow JJ); 427–8 (Dawson and McHugh JJ dissenting on other grounds).
[171] Ibid 428 (Dawson and McHugh JJ).
[172] See generally above n 4.
[173] It is interesting that the High Court admitted in Voth that the Spiliada test was more desirable ‘from an abstract (and international) viewpoint’: Voth [1990] HCA 55; (1990) 171 CLR 538, 557 (Mason CJ, Deane, Dawson and Gaudron JJ).
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