If the respondent files and serves an amended statement of claim removing the fourth and seventh causes of action within 20 working days of the date of this decision, the appellants’ protest to jurisdiction will be dismissed.

If the respondent does not file and serve an amended statement of claim in accordance with B, the appellants’ protest to jurisdiction will be allowed and the proceeding dismissed.

Any issues consequential upon this judgment are to be resolved in the High Court.

The appellants must pay the respondent costs for a complex appeal on a band A basis and usual disbursements. We certify for second counsel.

___________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents	Para No
Introduction	[1]
Background facts	[6]
The causes of action	[19]
The new rules	[20]
Rule 5.49 – Appearance and objection to jurisdiction	[21]
Rule 6.27 - Service overseas without leave	[22]
Rule 6.28 – Service overseas with leave	[24]
Rule 6.29 – the court’s discretion whether to assume jurisdiction	[26]
Principles	[27]
The two-stage inquiry under r 6.29(1)(a)	[32]
Rule 6.28(5)(b)	[37]
Rule 6.28(5)(c)	[43]
Rule 6.28(5)(d)	[47]
The alternative ground under r 6.29(1)(b)	[48]
The “all or nothing” argument	[50]
Conclusion on the correct approach where multiple causes of action are pleaded	[69]
The facts in more detail	[73]
Events leading to the MOU	[73]
The MOU	[79]
Events subsequent to the execution of the MOU	[88]
Discussion	[100]
First cause of action – breach of the Fair Trading Act	[102]
Second cause of action – wrongful use of confidential information	[111]
Third cause of action – breach of contract against Adapt	[119]
Fourth cause of action – breach of contract against Shore	[122]
The fifth to seventh causes of action – economic torts	[123]
Was the judge correct to conclude that New Zealand was the appropriate forum for the trial?	[129]
Disposition	[145]

Introduction

[1] The appellants are three overseas companies who entered protests against jurisdiction when served with proceedings issued against them in New Zealand by the respondent.
[2] In the High Court, Harrison J dismissed an application by the appellants to have the proceeding dismissed.^[1] The appellants challenge that decision in this appeal submitting that the Judge was wrong to conclude, in terms of r 6.29 of the High Court Rules, that it was appropriate for the High Court to assume jurisdiction over them.
[3] This is the first occasion on which this Court has been called upon to consider the new High Court Rules on this topic which came into force on 1 February 2009. It is agreed that the new rules apply despite the fact that the proceedings were served under the former r 219 and the appellants’ objection was filed under the former r 131.^[2] In a number of respects, the new rules effect significant changes to the former rules in relation to service of proceedings overseas.
[4] In brief, the appellants submit the Judge erred in finding that the respondent had established under r 6.29(1)(a) that:

(a) it had a good arguable case on each of its causes of action; and

(b) New Zealand was the appropriate forum for trial.

[5] A central feature of the written argument presented on behalf of the appellants was that the Judge erred in determining that, in a case involving multiple causes of action, the court was entitled to assume jurisdiction so long as any one of the causes of action pleaded satisfied the tests prescribed by r 6.29(1)(a). It was submitted that the court was bound to dismiss the proceeding unless the plaintiff

satisfied the relevant criteria for all of its causes of action. We describe this later as the “all or nothing” argument. However, Mr Hodder SC on behalf of the appellants accepted in the course of his oral submissions that a protest to jurisdiction could be dismissed on terms requiring a plaintiff to amend its pleading to confine the claim to those causes of action found to satisfy the requirements of the Rules. That means that the Court can ensure it assumes jurisdiction only in respect of causes of action that satisfy the criteria by requiring that non-complying causes of action are abandoned, rather than by dismissing the proceeding altogether.

Background facts

[6] The respondent, Saito Offshore Pty Ltd (Saito), is a company incorporated in Victoria, Australia but has its headquarters in New Zealand. It was formed in 2000 under a joint venture agreement between Saito New Zealand Limited (SNZ) and the third appellant, Shore to Shore BV (Shore), a company incorporated in the Netherlands.
[7] SNZ and Shore were equal shareholders in Saito when it was formed. The directors were Mr Gavin Hodder (representing SNZ), Mr Howard Kurdin and Mr Charles Rowland (representing Shore), and Mr John Lau (representing the first appellant, Wing Hung Printing Company Limited (Wing Hung)). The latter is a company incorporated in Hong Kong and has connections through shareholding and directorships with Shore and with the second appellant ADAPT Identification LLC (Adapt). The latter is a company incorporated in the United States. (In this judgment we will refer to Mr Gavin Hodder and the appellants’ counsel Mr J E Hodder SC by their initials to avoid confusion.)
[8] Saito was formed to offer “source marked” labels and tags for use by its customers based in New Zealand, Australia and the Pacific Islands. At that time, Shore carried on business as a supplier of information technology solutions, logistics and product design for the labelling and tag industry through an IT system known as “W.O.R.L.D. IT”.
[9] SNZ and Shore signed a shareholders agreement on 19 January 2001 setting out Saito’s aims and objectives and the rights and obligations of the parties as shareholders. The shareholders agreement contained provisions designed to protect confidential information which SNZ was to provide to the new company. The information included details of SNZ’s customers in Australia and New Zealand and a range of other material described in the agreement.
[10] On 31 December 2003 SNZ and Shore signed a licence agreement for a ten year period commencing on 1 January 2004 with a right of renewal for a further ten years. Under the licence agreement, Shore granted Saito the right to use the W.O.R.L.D. IT system in Australia, New Zealand and specified Pacific Island countries. The licence agreement also provided for Shore to collect payments from the suppliers of Saito’s customers, pay the manufacturers of the labels, remit the balance of the funds to Saito and invoice Saito for its licence fees.
[11] At the same time, the parties signed a share purchase agreement under which SNZ bought Shore’s interests in Saito. It is common ground that this brought to an end the shareholders agreement of 2001 although some of its provisions continued to bind the shareholders as we later discuss.
[12] Saito’s amended statement of claim of 17 April 2009 pleads that from January 2004, Shore and Saito operated generally in accordance with the licence agreement. But from April 2006, it is said that Shore breached its obligations by ceasing to remit funds to Saito. Mr G Hodder and Mr Lau then entered into negotiations in an attempt to resolve the issue. Mr Lau, as well as being a director of Wing Hung, is also a director of the other appellant companies.
[13] This culminated in Mr G Hodder and Mr Lau signing a Memorandum of Understanding (MOU) on or about 18 November 2006. As we later discuss, there is some debate as to who precisely are the parties to the MOU and, more importantly, whether it constituted a binding agreement or left matters for further negotiation and agreement. Saito alleges that the central features of the MOU were that Saito would move from using Shore’s W.O.R.L.D. IT system and replace it with a new system known as the ADAPT IT system supplied by Adapt. The licence from Shore would be terminated and each party released from liability under it.
[14] Saito also pleads that it was an express or implied term of the arrangement that Adapt would co-operate with it to ensure there was a “seamless transition” from the old IT system to the new. Further, it was a term that the old system would continue to be available to Saito until the new system was in place.
[15] Saito also alleges it was agreed that Adapt would enter into a new agreement (not inconsistent with the terms of the MOU) and that the intent of the former licence agreement with Shore would continue under the new arrangement.
[16] Saito pleads that it agreed with Shore on 5 December 2006 to terminate the licence agreement without liability on Shore’s part but, by letter of 13 February 2007, solicitors representing Wing Hung and Adapt advised that they did not intend to proceed with the arrangements contemplated by the MOU.
[17] In May 2007, it is said that Shore disabled Saito’s access to the W.O.R.L.D. IT system and that Adapt refused to provide access to their IT system. In consequence, Saito was left without access to any suitable IT system until January 2008. This and other actions taken by Mr Lau through his companies resulted in Saito losing several customers with consequential loss yet to be quantified.
[18] Saito also alleges that all three appellants wrongfully used its confidential information with consequential loss.

The causes of action

[19] Saito raises seven causes of action which may be briefly summarised:

(a) A claim under the Fair Trading Act against Wing Hung and Adapt based on the “seamless transition” representation.

(b) A claim against Wing Hung, Adapt and Shore based on the alleged misuse of confidential information.

(c) A breach of contract claim against Adapt alleging it repudiated the MOU by refusing to make the new IT system available.

(d) A breach of contract claim against Shore alleging it breached the MOU by disabling Saito’s access to the old system before the new one was available.

(e) A claim against Wing Hung for unlawful interference with contractual relations (the MOU). The interference is said to arise from Wing Hung instructing Adapt not to provide the new IT system.

(f) A claim against Wing Hung that it unlawfully conspired with Adapt to damage Saito by refusing to provide the new IT system.

(g) A claim against Wing Hung for unlawful interference with contractual relations by instructing Shore to disable Saito’s access to the new IT system knowing this would breach the pleaded express or implied terms of the MOU.

The new rules

[20] The former rr 131, 219 and 220 are replaced by rr 5.49 and 6.27 to 6.29 which effect significant changes from the old Rules in a number of respects.

Rule 5.49 – Appearance and objection to jurisdiction

[21] Rule 5.49 sets out the process to be followed when a defendant objects to the jurisdiction of the Court. With one exception, the new rule does not depart significantly from the old. The key features of r 5.49 are:

The rule applies where a defendant seeks to object to the jurisdiction of the Court in respect of proceedings served either within New Zealand or overseas.

The defendant may object to the jurisdiction within the time allowed for filing a statement of defence by filing and serving an appearance stating the objection and the grounds for it.

Any such appearance does not operate as a submission to the jurisdiction of the Court.

A defendant who has filed an appearance may apply to the Court to dismiss the proceeding on the ground of lack of jurisdiction and the plaintiff may apply to set aside the appearance.

In cases where the proceedings are served within New Zealand, the Court determines the applications under sub-rules (4) and (6) as the case may be.

However, in a departure from the old rule, applications relating to service of process effected outside New Zealand under rr 6.27 or 6.28 must be determined under r 6.29 which is an entirely new provision.

In exercising the powers under the rule, the court has wide powers to do so on any terms and conditions the court thinks fit and may give appropriate directions.

Rule 6.27 – Service overseas without leave

[22] Rule 6.27 sets out a list of circumstances where service may be effected out of New Zealand without the leave of the Court. The list has been considerably expanded from the old r 219. For example, it permits service overseas without leave where interim relief is sought in support of judicial or arbitral proceedings that have been commenced or are to be commenced outside New Zealand;^[3] it substantially expands the scope for service overseas where a claim arises under an enactment;^[4] it provides for claims made for restitution or for the remedy of constructive trust;^[5] and it enables service overseas without leave where a party seeks to enforce any judgment or arbitral award.^[6]
[23] Of course, consistent with the authorities under the old rules, the mere fact that the case may fall within one or more of the grounds set out in r 6.27 is not sufficient by itself to justify the court assuming jurisdiction. The merits of the claim and forum conveniens issues (now referred to as the “appropriate forum”) remain for consideration as part of the Court’s overall discretion.

Rule 6.28 – Service overseas with leave

[24] Rule 6.28 replaces the former r 220. It applies where service is not allowed under r 6.27. Rule 6.28 provides:

6.28 When allowed with leave

(1) In any proceeding when service is not allowed under rule 6.27, an originating document may be served out of New Zealand with the leave of the court.

(2) An application for leave under this rule must be made on notice to every party other than the party intended to be served.

(3) A sealed copy of every order made under this rule must be served with the document to which it relates.

(4) An application for leave under this rule must be supported by an affidavit stating any facts or matters related to the desirability of the court assuming jurisdiction under rule 6.29, including the place or country in which the person to be served is or possibly may be found, and whether or not the person to be served in a New Zealand citizen.

(5) The court may grant an application for leave if the applicant establishes that –

(a) the claim has a real and substantial connection with New Zealand; and

(b) there is a serious issue to be tried on the merits; and

(d) any other relevant circumstances support an assumption of jurisdiction.

[25] Rule 6.28 is broadly similar to the former r 220 with the important exception that sub-rule (5) now sets out specifically the matters which the applicant must establish before the court may grant an application for leave to serve out of the jurisdiction. The former r 220(4) stipulated certain matters to which the court was to have regard when exercising its discretion. Essentially, these related to the amounts at issue (or the value of property in dispute) and the appropriate forum for trial. No reference was made in the former rule to the merits of the dispute or to the nature of the connection of the claim to New Zealand even though the authorities clearly established that those issues were highly material to the willingness of the court to assume jurisdiction.^[7] The new r 6.28(5) remedies that omission.

Rule 6.29 – The Court’s discretion whether to assume jurisdiction

[26] There was no equivalent to the new r 6.29 under the former rules. This rule sets out explicitly the matters which the court must take into account when considering a protest to jurisdiction by parties served overseas. It provides:

6.29 Court's discretion whether to assume jurisdiction

(1) If service of process has been effected out of New Zealand without leave, and the court's jurisdiction is protested under rule 5.49, the court must dismiss the proceeding unless the party effecting service establishes—

(a) that there is—

(i) a good arguable case that the claim falls wholly within 1 or more of the paragraphs of rule 6.27; and

(ii) the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d); or

(b) that, had the party applied for leave under rule 6.28,—

(i) leave would have been granted; and

(ii) it is in the interests of justice that the failure to apply for leave should be excused.

(2) If service of process has been effected out of New Zealand under rule 6.28, and the court's jurisdiction is protested under rule 5.49, and it is claimed that leave was wrongly granted under rule 6.28, the court must dismiss the proceeding unless the party effecting service establishes that in the light of the evidence now before the court leave was correctly granted.

(3) When service of process has been validly effected within New Zealand, but New Zealand is not the appropriate forum for trial of the action, the defendant may apply for a stay, or for a dismissal of the proceeding under rule 15.1.

Principles

[27] The jurisdiction of domestic courts is essentially territorial in nature. Where the legislature permits service of proceedings in overseas jurisdictions, it is an exception to the principle of territoriality. A body of private international law has established the general principles upon which a domestic court may assume jurisdiction over foreign parties. Nevertheless, as Mr J Hodder for the appellants submitted, the court does not lightly exercise its discretion to assume jurisdiction over foreign parties. This principle was adopted as long ago as 1885 in Société Générale de Paris v Dreyfus Bros^[8] and has been followed in numerous cases since including the decision of this Court in Kuwait Asia Bank v National Mutual Life Nominees Ltd (No 2).^[9]
[28] The principle has been recently confirmed by the Supreme Court in Poynter v Commerce Commission.^[10] The Supreme Court rejected a suggestion made in this Court that the principle may have less weight now than it did in the past. In delivering judgment on behalf of four members of the Court, Tipping J endorsed observations made by this Court in the decision under appeal identifying two important principles that demonstrate the restraint that courts and legislatures have taken in relation to the extra-territorial application of domestic law. The first is the principle deriving from Dreyfus. The second is that the New Zealand legislature will be slow to assert jurisdiction over conduct occurring wholly outside New Zealand even if that conduct has consequences in New Zealand.^[11]
[29] In disagreeing with this Court’s further observation that the courts have recognised that developments in communications and transport have somewhat reduced the force of the practical considerations behind this principle, Tipping J said:^[12]

We return to the two important principles identified by the Court of Appeal and that Court's diminution of them in [20] of its reasons. The Court there spoke of the practical considerations behind the principles. But comity between nations is the chief rationale for these principles, and it is not diminished by changing practical considerations. We do not read the decision of the High Court of Australia in Agar v Hyde as eroding the general principles. That case contains no support for giving practical considerations the weight which the Court of Appeal appears to have placed on them. The indication in Worldwide NZ LLC v Quay Park Arena Management Ltd that they did warrant that weight, which was largely based on observations in Bomac, was in error. Furthermore, the decisions in Worldwide and Bomac do not provide convincing support for a retreat from the underlying principles the Court of Appeal correctly identified.^[13]

[30] As this Court confirmed in the Kuwait Asia case, the ultimate issue as described by Cooke P is whether there are sufficient grounds for the court properly to assume jurisdiction.^[14] Relevant considerations include:

(a) the nature and extent of the connection of the claim to New Zealand;

(b) the extent to which the claim falls within the letter and spirit of the rule relating to service overseas without leave;

(d) whether New Zealand is the appropriate forum for the litigation; and

(e) any other circumstances relevant to the exercise of discretion.^[15]

[31] In practice, these considerations tend to overlap. As earlier noted, not all of the considerations established by case law were stated in the rules. The evident intention of the new rules is to clarify issues of process and onus of proof as well as to state explicitly the considerations relevant to the exercise of the court’s discretion. Some care should be taken in applying previous authorities given the explicit guidance now contained in the rules.

The two-stage inquiry under r 6.29(1)(a)

[32] Where r 6.29(1)(a) is relied upon, there is a two-stage inquiry. The party effecting service must first establish under r 6.29(1)(a)(i) that there is a good arguable case that the claim falls wholly within one or more of the paragraphs of r 6.27 (relating to the circumstances in which service overseas may be effected

without leave). This part of the inquiry may be regarded as a gateway or threshold which must be established before moving to consider the stage two issues.

[33] The good arguable case test required at this stage does not relate to the merits of the case but to whether the claim falls within one or more of the circumstances under r 6.27 in which service overseas may be effected without leave. This is a largely factual question to be assessed on the basis of the pleadings and the affidavit or other evidence before the court. It may be necessary, however, to consider questions of law (or mixed questions of fact and law) as part of the first stage determination, for example, whether a contract was made in New Zealand or whether it was by its terms or implication to be governed by New Zealand law.^[16] Similarly if there is a question as to whether a binding contract was made at all (as in the present case).
[34] It may be the case under some of the categories in r 6.27(2) that a conclusion in the first stage of the inquiry may substantially answer part of the second stage of the inquiry. For example, if it is established there is a good arguable case that there has been a breach of contract in New Zealand under r 6.27(2)(c) then the claimant should not have much difficulty establishing at the second stage of the inquiry that there is a serious issue to be tried on the merits. We discuss below the distinction between the tests of good arguable case and serious issue to be tried.
[35] If the party effecting service is able to satisfy the first stage test, then the court must consider in the second stage under r 6.29(1)(a)(ii) whether it should assume jurisdiction by reason of the matters set out in r 6.28(5)(b) to (d). For convenience, we repeat what those matters are:

(b) whether there is a serious issue to be tried on the merits;

(d) any other relevant circumstances supporting an assumption of jurisdiction.

[36] The Court is not required at this stage of the inquiry to consider r 6.28(5)(a) which relates to whether the claim has a real or substantial connection with New Zealand. The Court is not required to consider that matter because it is assumed to be established where the party effecting service has shown a good arguable case that the claim falls within one or more of the matters described in r 6.27.

Rule 6.28(5)(b)

[37] Addressing the first of these issues (serious issue to be tried on the merits), the Court must be satisfied there is a serious legal issue to be tried and that there is a sufficiently strong factual basis to support the legal right asserted.^[17] In approaching these questions, the Court will not determine credibility issues where there are conflicting affidavits other than in exceptional cases where one version can be demonstrated by objective evidence to be untenable. In most cases where a protest to jurisdiction is being determined, discovery will not have taken place and the evidence is likely to be relatively limited.^[18]
[38] Harrison J expressed the view in the judgment under appeal that “any distinction between the touchstones of good arguable case and a serious issue for trial is moot”.^[19] In this respect, he was echoing views he had expressed in Bomac.^[20] While noting that the Rules Committee must have discerned a difference, the Judge could not identify a real distinction.^[21]
[39] This Court in Harris expressed some support for Harrison J’s views in Bomac but refrained from commenting on the impact of the new rules.^[22]
[40] The distinction between the good arguable case test prescribed by r 6.29(1)(a)(i) in relation to the threshold issue and the standard of serious issue to be tried on the merits when considering the second stage under r 6.29(1)(a)(ii) evidently follows the distinction adopted by the House of Lords in Seaconsar Far East Ltd v Bank Markazi.^[23] Lord Goff (with whom the other members of the House agreed) concluded that the threshold issue of jurisdiction under the English Order 11 procedure then in force was to be established on the basis of the good arguable case criterion. But the Court of Appeal had erred in applying the same standard when assessing the merits. It was enough for Seaconsar to establish a serious issue to be tried.^[24] It is apparent that the House of Lords considered the serious issue standard was less stringent than the good arguable case criterion.^[25]
[41] The Rules Committee must have adopted the Seaconsar approach in formulating the new rules but, in practice, the distinction between the two standards may be difficult to draw. It is clear however that the good arguable case test does not require the plaintiff to establish a prima facie case.^[26] This recognises that disputed questions of fact cannot be readily resolved on affidavit evidence. On the other hand, there must be a sufficiently plausible foundation established that the claim falls within one or more of the headings in r 6.27(2). The Court should not engage in speculation.
[42] The serious issue to be tried test to be applied at the second stage of the inquiry was described by Lord Goff in Seaconsar as whether “... at the end of the day, there remains a substantial question of law or fact or both, arising on the facts disclosed by the affidavits, which the plaintiff bona fide desires to try ...”.^[27]

Rule 6.28(5)(c)

[43] The party effecting service must also establish that New Zealand is the appropriate forum for the trial.^[28] In considering that issue, the court will be guided by existing authority including the matters canvassed by the House of Lords in Spiliada Maritime Corporation v Cansulex Ltd (“The Spiliada”).^[29] However, an important difference relates to the onus of proof.

[44] Prior to the introduction of the new High Court Rules, it was accepted that the burden of proof lay on a defendant seeking a stay of proceedings on the ground that another forum was more appropriate. It was for the defendant to show there was another available forum which was clearly or distinctly more appropriate. The new rule now places the onus of proof on the party effecting service.
[45] In considering whether another forum is more appropriate, the Court looks for the forum with which the proceeding has the most real and substantial connection. Relevant factors include issues of convenience or expense, availability of witnesses, the law governing the relevant transaction and the places where the parties resided or carried on business.^[30]
[46] We accept that other relevant considerations also bear on the issue of appropriate forum. These include the cautious approach already discussed to the subjection of foreigners to the jurisdiction of a New Zealand court; whether other related proceedings are pending elsewhere; whether the New Zealand court would provide the most effective relief or whether a foreign court is in a better position to do so; whether the overseas defendants will suffer an unfair disadvantage if a New Zealand court assumes jurisdiction; and any choice of jurisdiction previously agreed by the parties.

Rule 6.28(5)(d)

[47] The final consideration is whether there are any other relevant circumstances supporting an assumption of jurisdiction.^[31] This serves to emphasise that the assumption of jurisdiction ultimately involves an evaluation of a range of considerations which are very much fact dependent.

The alternative ground under r 6.29(1)(b)

[48] Unless the party effecting service establishes both of the matters in

r 6.29(1)(a) the Court must dismiss the proceeding unless that party is able to establish, in the alternative, the grounds set out in r 6.29(1)(b). In terms of r 6.29(1)(b)(i), the party effecting service must first establish that leave would have been granted if it had been sought under r 6.28. That inquiry requires the court to consider whether the applicant has established all four of the matters identified in r 6.28(5)(a) to (d). Under the first of these (real and substantial connection with New Zealand) the party effecting service is not required to establish that the claim falls within one or more of the circumstances in r 6.27 since an application under r 6.28 presupposes that service overseas without leave could not be effected under r 6.27. Arguments by analogy with the r 6.27 cases may be relevant but not determinative. Otherwise, the matters already discussed in relation to r 6.28(5)(b) to (d) apply in this context as well.

[49] Where r 6.29(1)(b) is relied upon, the party effecting service must also establish that it is in the interests of justice that the failure to apply for leave should be excused. The interests of justice is a test which may encompass a broad range of considerations. We do not attempt to provide any guidance in that respect since the issue arises only in a very minor respect in this case and because it is undesirable to place any constraints on matters which might fall within that broad rubric.

The “all or nothing” argument

[50] The High Court Judge considered at some length a submission made to him on behalf of the appellants that the Court must dismiss the proceeding if one of Saito’s causes of action failed to meet the test prescribed by r 6.29(1)(a). Reliance was placed on the commentary by the editors of McGechan on Procedure^[32] to the effect that the new rules had restored the early authority of this court in Jones v Flower^[33] which was said to establish that all the causes of action in a proceeding had to come within the equivalent of r 6.27 before service out of New Zealand was permitted.
[51] In the High Court, the submission by the appellants focused partly on the meaning of the word “claim” where it appears in r 6.27(1)(a)(i). The expression “claim” is not defined in the High Court Rules but we agree with the finding of the Judge that the term has a broad meaning in the context of r 6.29 and is not synonymous with the phrase “a cause of action”.^[34] A “claim” in this context, properly construed, is an amalgam of the factual and legal basis for the relief sought. This interpretation is supported by r 5.25 which provides that where a proceeding is commenced the statement of claim must (amongst other things):

(a) show the general nature of the plaintiff’s claim to the relief sought; and

(b) give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action ...^[35]

(Emphasis added.)

[52] Proceedings may also be commenced under Part 19 of the rules by originating application but any such application must also state the relief sought, the grounds justifying the relief and the legal authority relied upon.^[36]
[53] These considerations support our conclusion as to the interpretation of “claim” in r 6.29(1)(a)(i). A “claim” is a broad term which is wide enough to include one or more causes of action.
[54] Harrison J concluded on this point:^[37]

It follows that on a challenge to a proceeding served without leave the plaintiff must sustain its good arguable case by showing that the operative facts on which the claim is based come wholly within one or more of the 22 statutory categories. This is because the jurisdiction of a New Zealand Court is territorial, and as it derives from statute an overseas party cannot lawfully be exposed to a claim falling outside r 6.27: see Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749 per Lord Bingham at 758. A difficulty will not arise, however, where the same or similar facts, satisfying one or more qualifying criteria, are interrelated or common to all causes of action. That commonality is frequently reflected in the similarity of relief sought.

[55] The Judge went on to note that, in practice, an issue was only likely to arise where a plaintiff pleaded in one statement of claim a number of unrelated causes of action some of which fail to satisfy the r 6.27 factual criteria. He considered that situation could be met by the Court dismissing the application unless the plaintiff filed an amended statement of claim confining the claim to those causes of action falling within r 6.27.
[56] In part, the Judge relied on the views expressed by this court in Harris^[38] where the broader approach adopted by Harrison J in Bomac Laboratories Ltd v F Hoffman-La Roche Ltd^[39] and by O’Regan J in Baxter v R M C Group PLC^[40] was discussed. The tentative view expressed by this court in Harris was that where a good arguable case was founded on one cause of action, it was appropriate to permit the other causes of action to proceed as well, at least where they arose from the same sequence of events and were not largely independent of each other.^[41] Harris was decided under the old High Court rules and did not consider the implications of the new rules.
[57] We conclude later that there are some difficulties in using the “operative facts” approach and that the new rules require consideration of each cause of action separately.^[42]
[58] In the decision under appeal, Harrison J distinguished Jones v Flower. In that case the plaintiff had been refused leave to issue proceedings out of New Zealand where his statement of claim pleaded two causes of action. One alleged a breach of contract entered into between two English residents in that country relating to land in New Zealand. Damages were claimed. The second cause of action sought an equitable remedy by way of redemption of the land itself. This Court upheld the refusal of leave to serve out of the jurisdiction under the rules then in force. The court was satisfied that the principal claim was for breach of contract for damages and that the English courts had jurisdiction to deal with that claim. Although it was possible that the New Zealand courts would have jurisdiction to deal with the second cause of action, it was not appropriate for leave to be granted. Stout CJ considered it was doubtful whether the second cause of action came within the relevant rule;^[43] Cooper J considered it was impossible to separate the causes of action but reserved his opinion as to whether an order for leave ought to be made on the basis of an amended statement of claim;^[44] and Chapman J considered that it would be very unfair to bring the defendant into the proceeding and that the two claims could perfectly well be separated.^[45]
[59] We do not think that Jones v Flower can be regarded as clear authority for the proposition that leave must inevitably be refused to serve outside the jurisdiction (or that the entire proceeding must be dismissed when a protest is made) in circumstances where one cause of action falls within one or more of the grounds under r 6.27 but others do not. First, r 6.28 permits leave to be granted to serve outside the jurisdiction in cases not falling within r 6.27. Secondly, if one of the causes of action in a proceeding does not fall within r 6.29(1)(a) then reliance may be made alternatively on r 6.29(1)(b). This latter provision is not dependent upon the claim (or any particular cause of action in it) falling within r 6.27.
[60] In his written submissions, Mr J Hodder argued in this Court that the use of the expression “wholly within one or more of the paragraphs within r 6.27” supported the proposition that unless all of the causes of action within the claim fell within r 6.27, the court was obliged to dismiss the proceedings. In support, he cited a passage in Dicey & Morris on the Conflict of Laws:^[46]

... if proceedings fall within one or more of the clauses [in the English equivalent to r 6.27] it is not permissible to litigate any other cause of action which does not fall within one of the clauses. Where permission to serve out of the jurisdiction is based on one cause of action it cannot be treated as permission based on some other cause of action.

[61] We agree only in part with this passage since there are important and longstanding differences between the rules of court in England and in this country. The key difference is that the English rules permit service overseas without leave only in very limited circumstances.^[47] The general rule is that leave must be obtained to serve overseas and only when grounds set out in a Practice Direction apply.^[48] There is no equivalent in the English rules to r 6.28 of the High Court Rules which permits leave to be granted in cases falling outside the situations described in the English Practice Note (the equivalent to r 6.27 of the High Court Rules).
[62] We accept the second part of the passage from Dicey that where permission to serve out of the jurisdiction is based on one cause of action it cannot be treated as permission based on some other cause of action.^[49] We accept too that the expression in r 6.29(1)(a) “wholly within one or more of the paragraphs of r 6.27” means that if one of the causes of action in the claim does not fall within r 6.27 then the party may not place reliance on r 6.29(1)(a) to the extent any cause of action falls outside r 6.27.
[63] But we cannot agree with the first part of the passage in Dicey because the party effecting service may rely alternatively on r 6.29(1)(b) where a cause of action does not fall within one or more of the circumstances in r 6.27.
[64] Mr J Hodder ultimately accepted in oral argument that the court could dispose of an application under r 6.29 on terms. In particular, it could order that the proceeding be dismissed unless an amended pleading was filed removing any causes of action found not to fulfil the relevant criteria in r 6.29(1)(a) or (b). Presumably Mr Hodder’s concession on this point was founded on the inherent power of the court to make an order on terms since he submitted that r 5.49(7) precluded reliance on the powers available under r 5.49(8).
[65] As earlier noted, r 5.49(7) provides that an application under the rule relating to service out of New Zealand “must be determined under r 6.29”. However, r 5.49(8) provides that, in exercising its powers “under this rule” the court may do so “on any terms and conditions the court thinks just”.
[66] We accept the submission made by Mr Mills QC on behalf of the respondent that r 5.49 is the principal rule prescribing the process for dealing with protests to jurisdiction whether service is effected in New Zealand or overseas. We consider that the power to impose terms under r 5.49(8) remains available to the Court despite r 5.49(7) directing that applications relating to parties served overseas are to be determined under r 6.29. Alternatively, unless clearly excluded, the Court generally has power to make an order on terms. It would be open for the Court, in appropriate circumstances, to order that the proceeding be dismissed unless, within a stipulated period, the plaintiff filed an amended statement of claim confining the causes of action to those falling within r 6.29(1)(a). However, that course could be avoided if the Court were satisfied that leave should be granted under r 6.29(1)(b) to the extent the claim did not fit within r 6.29(1)(a).
[67] Even if all causes of action fall within one or more of the paragraphs of r 6.27, the Court may be of the view, for example, that there is a serious issue to be tried on the merits in relation to only some of the causes of action. In such a case, the Court could dismiss the proceeding unless an amended statement of claim is filed confining the causes of action to those considered to have merit.
[68] By these means, the Court is able to exercise jurisdiction flexibly. The Court would be able to protect an overseas party from those parts of a proceeding found to be lacking in merit or lacking any real or substantial connection with New Zealand. At the same time, a plaintiff who establishes a proper case to bring proceedings against a foreign defendant would be entitled to have the case heard in New Zealand to the extent it meets the criteria in the rules. This would be consistent with the objective of the rules, namely to secure the just, speedy and inexpensive

determination of any proceeding or interlocutory application.^[50] If the all or nothing approach initially advocated by the appellants were adopted, the intending plaintiff would have to commence a fresh proceeding with attendant cost and delay. That would not be in the interests of justice or the objective of the High Court Rules.

Conclusion on the correct approach where multiple causes of action are pleaded

[69] In summary, we do not accept the proposition that if one cause of action does not fall within r 6.27, the proceeding must be dismissed. To the extent that a claim does not fall within that rule, the party serving overseas may rely alternatively on r 6.29(1)(b). If necessary, an application under r 6.29 may be disposed of on terms requiring the party effecting service to file and serve an amended statement of claim confining the causes of action to those found to warrant the court assuming jurisdiction.
[70] We perceive some potential difficulty in the “operative facts” approach suggested by the Judge^[51] and the tentative view expressed in Harris that where a good arguable case is found on one cause of action, it is appropriate to permit other causes of action, at least where they arise from the same set of facts.^[52]
[71] It will often be the case that a number of causes of action are pleaded arising from the same set of facts. This case is a good example. But we consider that r 6.29 requires separate consideration of each cause of action. At the threshold stage of the inquiry, the question whether a particular cause of action falls within r 6.27 will depend on which (if any) of the circumstances set out in that rule applies. As this case demonstrates, this aspect requires an assessment of whether the cause of action is in contract, tort, a claim under an enactment or none of those. And in the second stage, an assessment is required as to whether there is a serious issue to be tried will require separate assessment of both the factual and legal bases for each cause of action. There may be commonalities but it is not permissible to reason that if one cause of action passes muster, the others arising from the same or similar facts must meet the criteria too.
[72] That said, it will often be appropriate to assess the appropriate forum issue and any other relevant factors supporting the assumption of jurisdiction on a global basis where there are multiple causes of action.

The facts in more detail

Events leading to the MOU

[73] For present purposes, the events of most significance occurred in 2006 and 2007. Saito relied on affidavits by its principal, Mr G Hodder, and a former employee, a Mr Shahri. Mr G Hodder explained the events leading to the execution of the MOU on 18 November 2006. This followed Shore’s failure from April 2006 onwards to meet the payments due to Saito under the licence agreement. This led to discussions between Mr G Hodder and Mr Lau who was one of Wing Hung’s directors. Mr G Hodder says that Wing Hung was Shore’s parent company.
[74] Whatever the precise relationships between the appellants may be, it is admitted in the statement of defence that Mr Lau is a director and shareholder of each of the appellant companies. Mr G Hodder states that Mr Kurdin was aware of the ongoing discussions with Mr Lau. The email traffic supports Mr G Hodder’s assertion in this respect.
[75] The only affidavit filed on behalf of the appellants is that of Mr Kurdin. In his affidavit, Mr Kurdin confirms that he is authorised to swear the affidavit on behalf of all the appellants. He is the President and Chief Executive Officer of Shore to Shore Inc (incorporated in the United States) and is also a director of the third appellant, Shore to Shore BV. Shore to Shore Inc was founded by Mr Kurdin along with Mr Lau and others. He admits that all three appellants have common shareholders while asserting that “not all of them are directly related to each other”.
[76] We are bound to say that Mr Kurdin is not particularly forthcoming in his affidavit. For present purposes we accept there is a close connection between the three appellants by virtue of the admitted commonalities in shareholding and directorships.
[77] According to Mr G Hodder, Mr Lau explained that Shore was experiencing financial difficulties. In consequence, Mr Lau agreed that Wing Hung would meet the payments due by Shore to Saito. Wing Hung did in fact do so from June 2006. In August there were discussions about alternative business structures and, by November, the discussions had led to an agreement in principle involving three key elements:

(a) The W.O.R.L.D. IT system supplied by Shore would be replaced with a new IT system to be supplied by Adapt.

(b) Saito would allow Shore to terminate the existing licence agreement with no liability on either party.

[78] On 7 November 2006 Mr Kurdin emailed Mr G Hodder requesting cancellation of the licence agreement, acknowledging that he was aware of the dialogue between Mr G Hodder and Mr Lau about the “transition [of] the business relationship over to Wing Hung Group”. Mr G Hodder’s response was that he believed agreement had been reached on all points for a new relationship but a transition period would be necessary. Cancellation of the existing arrangement could not be accepted at that time but Mr G Hodder hoped that by the end of November all matters would be satisfactorily resolved. Mr G Hodder noted that he was proceeding on the assumption that he and Mr Lau could agree to a new structure that would be satisfactory to Mr Kurdin. Mr G Hodder also stated that he assumed Mr Lau could accept changes on behalf of Mr Kurdin. At no time did Mr Kurdin suggest these assumptions were inappropriate or that Mr Lau did not have authority to negotiate on behalf of both Wing Hung and Shore.

The MOU

[79] The MOU is a document of some two and a half pages in length. While the memorandum is expressed to be between “Wing Hung and Saito Group”, it is signed only on behalf of Saito and Adapt. Saito accepts that the MOU was signed in Shanghai rather than New Zealand. By way of background, the MOU commences:

Market place changes have created a situation where the interest of Shore to Shore Inc in Oceania New Zealand and Australia will be moved to Adapt Ltd based in Hong Kong.

The intent of the current licence arrangements is to continue under new arrangements.

[80] Under a heading “The agreement” a number of “Commercial terms” are stated. It is unnecessary to canvass these in detail. While it is clear the MOU contemplated that a more formal agreement would be prepared, nevertheless a number of the terms are expressed in language which, prima facie, suggest binding commitments. For example, it is stated that Shore and Saito would agree to cancel the existing licence by 31 October 2006 with “this new understanding”; Shore and Saito “will sign and deliver” the cancellation of the current licence agreement to “pave the way for the new agreement below”; Adapt “will be signing” the new agreement with Saito (the document to be drawn by Adapt); Saito “will utilise” Adapt’s IT platform under the new agreed business model; the new system “will come into effect as soon as practicable”; Adapt will reconcile sums due from 1 July 2006 and will make payment direct to Saito from 31 October 2006 (both dates being prior to the date of execution of the MOU); all fixed cost charges payable by Saito under the licence agreement with Shore “will cease” from 1 July 2006 “without affecting the seamless transition to the new business model”; and licence obligations “will all cease without payment by either party (Saito/STS Inc) upon signing this memorandum”.
[81] Understandings as to other matters are then set out under the headings “Print Locations”, “Margins and Transparency” and “Operational and marketing processes”. Some of the matters dealt with under these headings are expressed less definitively although, again, some of the matters canvassed are expressed in obligatory language. Pricing arrangements are stated with some precision.
[82] For the appellants, Mr J Hodder characterised the MOU as a vague document that constituted no more than an agreement to agree. It did not contain any mechanism to enable disputed terms to be settled. No binding contract was reached.
[83] Mr Mills submitted that the terms of the MOU involved a series of commitments that went well beyond an agreement to agree. He relied on the decision of this Court in Fletcher Challenge Energy Ltd v Electricity Corporation of New Zealand Ltd.^[53] In delivering the judgment of the majority, Blanchard J stated the pre-requisites to formation of a contract to be:^[54]

(a) An intention to be immediately bound (at the point when the bargain is said to have been agreed); and

(b) An agreement, express or found by implication, or the means of achieving an agreement (eg an arbitration clause), on every term which:

(i) was legally essential to the formation of such a bargain; or

(ii) was regarded by the parties themselves as essential to their particular bargain.

[84] Blanchard J went on to state that the issues were to be determined objectively and that it was permissible to consider the background circumstances (matrix of fact) as well as the subsequent conduct of the parties towards one another.^[55]
[85] We agree with the conclusion reached by the Judge that, read as a whole, a court could construe the document as intending to create an immediately binding contractual relationship.^[56] While the parties clearly contemplated the completion of a more formal document recording their agreement, Saito has established that the question whether a binding contract was formed at the time the MOU was executed is a serious issue for trial and also meets the good arguable case test for the purposes of r 6.27(2)(b). We take into account particularly the existence of a number of obligations expressed in terms suggestive of immediately binding obligations; the apparent agreement on the essential issue of determining the existing licence agreement without further obligation; the replacement of the existing IT system supplied by Shore with a new system supplied by Adapt; the existence of detailed parameters for the negotiation of prices on specific accounts as they arose; and the lack of any indication of any important matters which were not agreed.
[86] A more difficult issue is whether the MOU could be regarded as binding on parties other than those who signed it (Saito and Adapt). While the Judge considered the agreement could be construed to bind Saito and Adapt, he did not consider whether Wing Hung and/or Shore might also arguably be bound. The fact that Mr Lau was a director of all three companies and felt free to discuss features of the agreement affecting Shore as well as Adapt raises the possibility that the agreement was intended to bind Shore as well. But the only provision directly affecting Shore related to its release from further liability under the licence agreement. This was a provision with obvious benefit to Shore but did not involve the assumption of any burden on Shore’s part. None of the provisions of the MOU imposed any obligation on Wing Hung. Indeed, the only reference to Wing Hung is in the heading already mentioned.
[87] We conclude that it is not reasonably arguable that Wing Hung or Shore were bound by the MOU but both were well aware of its terms.

Events subsequent to the execution of the MOU

[88] Immediately after the execution of the MOU, Mr G Hodder emailed Mr Kurdin. He proposed a transition period to “move across” to the new IT system. He suggested that the full transition could be completed by the end of February 2007. Mr G Hodder sought Mr Kurdin’s confirmation that the transition period was satisfactory and advised that he would then arrange for a “general release without any liability to either party”.
[89] Mr Kurdin responded to Mr G Hodder proposing a 90 day transition target from the date of signing the termination document (which we take to be a reference to the MOU). Mr Kurdin requested Mr G Hodder to provide a checklist of details required to progress the transition to the new system. Mr G Hodder responded shortly afterwards to Mr Kurdin advising that Saito would “target to terminate at the end of November”. We take this to refer to the release of Shore from responsibility under the licence agreement even though the transition to the new system to be provided by Adapt was not anticipated to be fully complete until February as earlier agreed. He also advised that the checklist or schedule Mr Kurdin had requested would be provided.
[90] All these emails were copied to Mr Lau.
[91] Saito proceeded with arrangements to transfer to the new system and, by exchange of emails on or about 5 December 2006, Mr G Hodder and Mr Kurdin agreed that the existing licence agreement was terminated without liability on either side. Mr G Hodder advised that Saito would be moving off the existing IT system over the next 30 days.
[92] Mr G Hodder delegated responsibility for the transition to Saito’s global sales and operations manager, Mr Shahri. Mr G Hodder believed matters were proceeding to complete the transition, but by early February 2007 it did not appear that substantive progress was being made. On or about 13 February 2007, Saito received a letter from solicitors acting for Adapt and Wing Hung dated 13 February 2007 to the following effect:

Re: Memorandum of Understanding between Wing Hung and Saito Group dated 18 November 2006

We act for ADAPT and Wing Hung Group and understand that you have signed the above Memorandum of Understanding dated 19^th November 2006 [sic] with our client, which is subject to a new agreement to be executed.

We are instructed by our client to inform you that as no agreement will be agreed between the parties in the foreseeable future, our client would treat the said Memorandum of Understanding of no further effect of whatever nature.

Thank you for your attention in this matter.

[93] Saito replied to the solicitors advising that it did not agree to the apparent repudiation of the MOU. No response was received until 10 May when a further letter dated 27 April 2007 was received from the solicitors advising that the existing IT system would be disabled on 19 May 2007. The system was then disabled from that date.
[94] Shortly beforehand, on 27 April 2007, Mr Shahri had tendered his resignation from employment with Saito. Investigations conducted by Saito revealed that, unbeknown to Saito, Mr Shahri had been in negotiations with Mr Lau of Wing Hung since late December 2006 with a view to a business relationship with Wing Hung either as an employee or agent.
[95] Mr Shahri agreed to provide an affidavit to support Saito’s court proceedings. This affidavit makes it abundantly clear that he and Mr Lau had engaged in a series of dealings designed to take over the business then being serviced by Saito. Mr Shahri says he approached Mr Lau soon after the MOU was signed. He and Mr Lau agreed that the implementation of the new Adapt system would be delayed until Mr Shahri was in a position to take control of Saito’s business. The Adapt system was never to be rolled out. Instead, matters would continue under the Shore IT system. Steps were taken to induce Saito to believe the transition was delayed.
[96] Mr Shahri says that written offers of employment were received from Mr Lau on 30 January 2007, 28 March 2007 and 13 April 2007. Mr Shahri produced documents confirming this. For example, an email of 28 March 2007 from Mr Lau refers to his having reached agreement with Mr Shahri that day for an agency representation for the Wing Hung Group in the Australasian market. The email detailed plans to secure business from Saito’s principal customers in New Zealand such as The Warehouse, Bendon, Pumpkin Patch, Farmers and Kathmandu. Mr Lau requested a timetable as to how and when these customers would be migrated. Mr Shahri says that The Warehouse and Bendon alone constituted about 80 per cent of Saito’s business.
[97] According to Mr Shahri, part of Mr Lau’s plan was to withdraw the MOU. Mr Shahri says he (Mr Shahri) assisted with drafting the letter of 13 February 2007. Mr Shahri makes it clear that he deliberately withheld information from Mr G Hodder and misled him. For example, Mr Shahri requested (and was granted) leave from Saito on the pretext of visiting his sick mother in India in April 2007. Instead, he went to Hong Kong to further his plans with Mr Lau. Around this time Mr Shahri and Mr Lau were actively involved in endeavouring to ensure that Bendon’s ongoing business would be available under the new arrangements they were planning.
[98] The business relationship between Mr Lau and Mr Shahri did not in the end eventuate. Mr Shahri says that once the letter was sent in May 2007 advising that Saito’s IT support from Shore would be disabled and once relationships with The Warehouse and Bendon were firmly in place, Mr Lau began distancing his organisations from the arrangements he had made with Mr Shahri. Mr Shahri says he now believes he was exploited by Mr Lau for the latter’s benefit.
[99] Neither Mr Lau nor anyone else on behalf of the appellants has gone on oath to dispute Mr Shahri’s account. Mr J Hodder on behalf of the appellants pointed to an unsigned narrative provided by Mr Shahri based on his recollection of events. This was prepared without the documentation produced in his later affidavit. The narrative is somewhat self-serving and is critical of Saito in certain respects. The narrative suggests Mr Lau was not interested in “grabbing” clients and that he preferred not to conclude any written agreement with Mr Shahri until after he had left Saito. However, Mr Shahri’s sworn affidavit and the email correspondence provide support for Saito’s claim of a deliberate plan by Mr Lau to acquire Saito’s principal customers with the assistance of Mr Shahri. Any discrepancies between Mr Shahri’s narrative and his affidavit go essentially to the weight to be attached to his evidence and are properly matters for trial.

Discussion

[100] We now consider whether the Judge was right to conclude under r 6.29(1)(a) that:

(a) Saito had established a good arguable case that fell wholly within one or more of the paragraphs of r 6.27 (the threshold issue); and

(b) The Court should assume jurisdiction by reason of the matters in r 6.28(5)(b) to (d) (the second stage issues).

[101] For convenience, we will consider the threshold issue under r 6.29(1)(a) and the merits under r 6.28(5)(b) separately for each cause of action but we will deal collectively with the remaining issues under r 6.28(5)(c) and (d).

First cause of action – breach of the Fair Trading Act

[102] The statement of claim alleges that each of the appellants engaged in misleading and deceptive conduct contrary to s 9 of the Fair Trading Act 1986 by falsely representing that if Saito agreed to terminate its contract with Shore without liability, Adapt would enter into a contract with Saito that would provide a seamless transition from the old to the new arrangements. It is said that this representation was a continuing one from the date of the MOU until the letter of 13 February 2007 from the lawyers representing Wing Hung and Adapt.
[103] Although not raised by the appellants, there is an initial question as to whether the Fair Trading Act applies to the appellants, none of whom are resident or carry on business in New Zealand. It is clear that the appellants do not fall within s 3 of the Fair Trading Act which relevantly provides:

3 Application of Act to conduct outside New Zealand

(1) This Act extends to the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct relates to the supply of goods or services, or the granting of interests in land, within New Zealand.

[104] However, the Fair Trading Act does apply to foreign parties to the extent their misleading conduct occurs in New Zealand. Saito must therefore establish a good arguable case that any such conduct occurred in New Zealand. If it did, then the Act would apply to the appellants and the threshold question under r 6.27(2)(j)(i) would also be established.
[105] In the majority judgment delivered by Tipping J in Poynter, the judgment of Merkel J in Bray v F Hoffman-La Roche Ltd^[57] was discussed.^[58] A “crucial point of distinction” from Poynter was that, in Bray, Merkel J was able to find that communications into Australia from overseas by the parent companies of Australian-based subsidiaries were sufficient to support a finding that the parent companies had engaged in relevant conduct in Australia for the purposes of the Trade Practices Act 1974 (Cth).^[59]
[106] We agree with the Judge that Saito established a good arguable case that this

cause of action falls within r 6.27(2)(j) (claims under an enactment) on the basis that an act or omission to which the claim relates was done or occurred in New Zealand. The representation alleged was communicated by emails sent to and received by a New Zealand resident in New Zealand by Mr Kurdin with Mr Lau’s knowledge. The representation related directly to the supply of services in New Zealand to a New Zealand-based company. The representation alleged was acted on in New Zealand when Saito agreed to terminate the existing licence and gave up its rights to the existing IT system. This is said to result in loss or damage occurring in New Zealand.

[107] As to the merits, there was a proper basis to conclude there was a serious issue to be tried. Whether or not the MOU was a binding contract, there can be little doubt that Mr Lau represented there would be a seamless transition to the new IT system involving the termination of the existing licence and IT system and its replacement with the new Adapt system. It is reasonable to infer at this juncture that he made that representation on behalf of all three appellants. While at that date there is no evidence to suggest that the appellants did not intend to proceed with the arrangement, the subsequent email traffic between the date of the MOU on 18 November 2006 and the solicitors’ letter on 13 February 2007 demonstrates that Mr Kurdin encouraged Saito to believe that the “seamless transition” was on track.
[108] Mr Shahri’s evidence establishes a prima facie case that Mr Lau was well aware that Saito was being encouraged in this belief and it is reasonable to infer that sometime during this period Mr Lau determined to abandon the arrangements agreed with Saito and to secure Saito’s business for the benefit of his own companies. On that basis, there is a serious issue for trial on the basis that Mr Lau had, from that point, no intention of proceeding with the transition as represented. We are satisfied, as Mr J Hodder accepted, that a statement of future intention is actionable if the alleged intention does not in fact exist.^[60]
[109] The evidence also establishes to the level of a serious issue for trial that Saito was encouraged by Mr Kurdin (with Mr Lau’s knowledge) to terminate the licence agreement. Without any contractual entitlement to IT support from Shore, Saito was effectively left high and dry. The evidence at this stage suggests this was a planned course of deception involving all three appellants through the agency of Messrs Lau and Kurdin. They were assisted in this deception by Mr Shahri according to his evidence. Saito relied on the representation pleaded and suffered loss in consequence.
[110] Mr Mills accepted that the pleadings might require some amendment to refer to the express or implied repetition of the representation originally evidenced by the terms of the MOU. However, as we later mention, we do not see this as a difficulty.

Second cause of action – wrongful use of confidential information

[111] The shareholders agreement defined certain information as confidential and imposed obligations upon the shareholders not to use the confidential information otherwise than for the purposes of the business. The shareholders agreed to maintain confidentiality after they ceased to be shareholders on the termination of the agreement.
[112] This contractual term is binding only upon Shore and not the other appellants. Mr Mills accepted it would be necessary for Saito to rely on the equitable duty of confidence in relation to the other appellants Wing Hung and Adapt. Nevertheless, the information defined by the shareholders agreement is useful evidence of the material which the shareholders in Saito agreed should be treated as confidential when Saito was incorporated.
[113] There are no specific terms relating to confidentiality in the licence agreement although Shore and Saito agreed that any prior understandings between them would continue to apply provided they were not inconsistent with any express or implied provision of the licence.
[114] The appellants’ statement of defence states that the information received by them was not confidential in nature nor received in circumstances where they thought it was confidential to Saito. They maintain that any information received was part of day to day business operations. Wing Hung and Adapt admit that they have been approached by, and have provided services to, a number of customers who, at one time, may have had a commercial relationship with Saito, but they say the development of those new relationships has not resulted from any wrongful use of any confidential information belonging to Saito.
[115] As to the threshold question, so far as this cause of action is contractual (relying on the shareholders agreement against Shore), there is no evidence in terms of r 6.27(b)(i) that the contract was made or entered into in New Zealand. However, at least to the extent the agreement bound Saito, it was to be wholly or in part performed in New Zealand. This cause of action must rely in part on the equitable duty of confidence (as against Wing Hung and Adapt). A duty of this nature is not covered by any of the categories or circumstances defined by r 6.27. In that event, r 6.29(1)(b) comes into play and Saito must establish that if leave had been sought under r 6.28 it would have been granted and that it is in the interests of justice that the failure to apply for leave should be excused.
[116] Under the r 6.29(1)(b) alternative, Saito must first establish that this part of the claim has a real and substantial connection with New Zealand (r 6.28(5)(a)). We are satisfied that there is such a connection with New Zealand since the information alleged to be confidential relates to Saito’s New Zealand-based customers and aspects of their business requirements.
[117] As to the merits, the names of Saito’s customers could not be confidential. They are very much in the public domain. However, we are prepared to accept that customer information held by Saito relating to labelling, tag and branding requirements, design data for labels and tags, pricing and information regarding the

overseas suppliers to Saito’s customers could arguably be regarded as confidential information.^[61] It is less clear whether wrongful use was made of any such confidential information but given the plan of deception already discussed we consider it is reasonable to infer for present purposes that the appellants may well have used confidential information of this type in order to gain business from Saito’s customers and suppliers and to further their own interests.

[118] We conclude that Saito has established a serious issue for trial on the merits as against all three appellants. However, some amendment may be required to the statement of claim in order to address the difference between the contractual and equitable duties of confidence.

Third cause of action – breach of contract against Adapt

[119] Saito alleges that Adapt repudiated the MOU by refusing to make the new IT system available to it. As a consequence, it is said that Saito was left without any IT system to service its customers with consequential loss.
[120] As to the threshold question, the MOU was not made or entered into in New Zealand but Saito argued that the contract was wholly or in part performed in New Zealand (r 6.27(b)(iii)) or that the contract was breached in New Zealand (r 6.27(c)). As to the first, we accept Saito’s submission that the MOU was performed in part in New Zealand by Saito giving up its contractual right of access from New Zealand to the existing IT system supplied by Shore and by taking steps to move to the new system to be supplied by Adapt. We also accept there was a good arguable case that the MOU was breached in New Zealand when Adapt repudiated the MOU and refused to make the new system available to Saito for use in New Zealand.
[121] As to the merits, we have already concluded that Saito established a serious issue for trial on the footing that the MOU was binding on Adapt. The repudiation of the MOU provides an appropriate foundation for this cause of action. In effect, this was a contract for delivery via the internet of IT services to Saito in New Zealand. The failure to deliver those services to Saito would therefore arguably be a breach of contract at the place of delivery.^[62]

Fourth cause of action – breach of contract against Shore

[122] Saito alleges that Shore breached an express or implied term of the MOU that the existing IT system would continue to be available to Saito until such time as the new Adapt system was available. For reasons already canvassed, we do not consider there is a good arguable case that Shore was a party to the MOU.

The fifth to seventh causes of action – economic torts

[123] It is convenient to deal with the last three causes of action under a single heading. Each alleges that one or more of the appellants has been responsible for the commission of one of several economic torts.
[124] As to the threshold question, r 6.27(2)(a) provides that a document may be served out of New Zealand without leave when a claim is made in tort and any act or omission in respect of which damage was sustained was done or occurred in New Zealand or the damage was sustained in New Zealand. We are satisfied the Judge was right to conclude that Saito had established a good arguable case on either of these bases. The essential acts relied upon under these causes of action are denying Saito access in New Zealand to the new Adapt IT system and/or the repudiation of the MOU. Although these acts were initiated outside New Zealand they had their impact in New Zealand. Saito established a good arguable case that the damage alleged was sustained in New Zealand.
[125] In respect of the merits, the fifth cause of action alleges that Wing Hung wrongfully interfered with contractual relations. Specifically, it is alleged that Wing Hung instructed Adapt to breach the MOU by repudiating it. Saito alleges that Wing Hung was well aware of the terms of the contract and that by instructing Adapt to breach the contract was directly interfering with the intention of harming Saito. In light of our earlier findings, we agree with the Judge that a serious issue for trial was established on the merits in this respect.
[126] The sixth cause of action is also brought against Wing Hung alleging that it unlawfully conspired with Adapt to damage Saito’s business by refusing Saito access to the new Adapt IT system. This cause of action does not depend upon the MOU being a binding contract.
[127] Given the close connection between Wing Hung and Adapt (as evidenced, for example, by their solicitors’ letter of 13 February 2007) we are satisfied that the Judge properly concluded there was a serious issue on the merits in respect of this cause of action.
[128] The seventh and final cause of action is similar to the fifth. It alleges that Wing Hung interfered with the MOU by instructing Shore to disable Saito’s access to the existing IT system. However, this cause of action depends on the allegation that Shore was a party to the MOU. For reasons already discussed, we are not persuaded there is a serious issue on the merits that Shore was a party to the MOU.

Was the Judge correct to conclude that New Zealand was the appropriate forum for the trial?

[129] The Judge was of the view that New Zealand was the appropriate forum for the proceedings. In summary, his reasons were that Saito’s client base (which he considered was effectively the subject of the claim) operated substantially in New Zealand and Australia; Saito, although incorporated in Victoria, had its headquarters in New Zealand; Shore participated for some years in Saito as a substantial shareholder; and, arguably, Adapt and Wing Hung had more recently acted in substitution for Shore. Comparing the relative convenience of a trial in New Zealand, Victoria or China, the Judge did not consider there would be undue cost or commercial disruption to the appellants if a trial were conducted in New Zealand. He considered that the primary witnesses were all located within the Asia/Pacific region.
[130] For the appellants, Mr J Hodder submitted the Judge had erred in his finding on this issue. He submitted that Saito was a Victorian company and that its only real and substantial connection with New Zealand was that its parent company and principal are based here. He pointed out that the relevant agreements between the parties (prior to the MOU) provided that the parties submitted to the non-exclusive jurisdiction of the courts of Victoria. It was also agreed that the law of the State of Victoria would apply.
[131] Counsel further submitted that the appellants and their relevant files and documents were in China; their witnesses would come from there or the United States; the principal commercial activity took place outside New Zealand (including, in particular, the appellants’ alleged contact with the suppliers of Saito’s customers in Hong Kong and Shanghai); there would be substantial cost and inconvenience in bringing the appellants’ witnesses to New Zealand for trial; Saito was able to pursue the appellants in China; and because the appellants did not have any assets in Zealand, any judgment obtained in New Zealand could not be enforced here.
[132] We do not consider, as the Judge thought, that “the facts weigh heavily in favour of New Zealand as the forum conveniens”. We regard the issue as more finely balanced. We think a trial in Victoria can be readily excluded as a realistic prospect. Neither counsel suggested a trial there would be appropriate. The only relevant connection to Victoria is that Saito was incorporated there and some of its customers are based there. While the parties agreed (in the contracts prior to the MOU) to the non-exclusive jurisdiction of the courts in Victoria and to the application of Victorian law, we do not consider in the circumstances that these factors would weigh to any extent against a New Zealand court hearing the proceeding although it could be a factor against a court in China hearing the case if, as we later discuss, expert evidence in New Zealand law is required.
[133] The matters at issue in the proceedings have connections both to New Zealand as well as China (including Hong Kong). The suppliers of Saito’s New Zealand-based customers are, we understand, mainly based in Asia. Wing Hung has its headquarters in Hong Kong but its manufacturing capabilities are said to be in Shanghai and Dongguan, China. While Adapt is incorporated in the United States, it carries on business from premises in Shanghai. Shore is incorporated in the Netherlands and is a subsidiary of Shore to Shore Inc. Mr Kurdin has deposed that Shore is no longer in trade, has no assets and is likely to be wound up. None of the appellants has any presence in New Zealand.
[134] On the other hand, Saito was incorporated principally to service New Zealand-based customers and its principal place of business is in New Zealand; for several years, Shore was an equal shareholder in Saito and as such had a substantial business connection with a New Zealand-based company which continued under the licence agreement; the business which Saito has lost is substantially derived from its New Zealand customers; Wing Hung fostered a business relationship with one of Saito’s New Zealand-based employees in order to further its interests; and it was in New Zealand that Saito was denied access to the IT systems essential for its business operations.
[135] Mr J Hodder did not submit that the law of China would apply to Saito’s claims and neither counsel made any detailed submissions on this issue. The assumption was that the law of New Zealand or perhaps the law of Victoria would apply. To the extent that Saito relies on the Fair Trading Act, the law of New Zealand must apply. As to contract, the prior assumption of the parties was that the law of Victoria would govern their contract. It was not suggested that there would be any difficulty in a New Zealand court applying the law of Victoria or that Victorian law differed materially from the law of contract in New Zealand. The choice of law in tort claims is a more difficult issue on which we did not hear any submissions.
[136] Overall, we consider that the law applicable to the claim is predominantly that of New Zealand or Victoria, which favours New Zealand rather than China as the appropriate forum for trial.
[137] It is not entirely clear who the appellants’ witnesses might be. Messrs Lau, Kurdin and a former executive of Shore to Shore Inc (a Mr Rowland) have been mentioned. All three would have to travel to Shanghai from Hong Kong or the United States if a trial occurred there as Mr Kurdin suggested. Two other possible witnesses for the appellants live in Hong Kong and one in Shanghai although the nature of their evidence is not stated.
[138] In the circumstances, it is unlikely there would be any substantial cost advantage to the appellants in having a trial in Shanghai rather than New Zealand. Either way, the appellants’ principal witnesses would have to travel from their place of domicile. Although not raised specifically by the appellants, a trial in Hong Kong may be more convenient for the appellants than a trial in Shanghai or New Zealand.
[139] For Saito, a trial in New Zealand would clearly be more convenient than one in Shanghai or Hong Kong. Mr G Hodder, Mr Shahri, and presumably other witnesses necessary to prove quantum would be required. It may also be necessary to call witnesses from Saito’s New Zealand-based customers as to the confidentiality of their marketing information and the activities of the appellants. Overall, there is likely to be significant inconvenience to one side or the other whether the trial is held in China or New Zealand although any inconvenience might be reduced through the introduction of evidence by video link.
[140] There is nothing to suggest that the appellants would suffer any unfair juridical or other disadvantage if a trial were held in New Zealand. While Saito accepts that it could not enforce a judgment in New Zealand against the appellants, it also pointed out that a judgment obtained in China could not be enforced in that country against Adapt or Shore. Nor it is clear that any judgment obtained in Shanghai, for example, could be easily or directly enforced against Wing Hung in Hong Kong. It is possible that a judgment obtained in Hong Kong might be more readily enforced if Wing Hung has assets there.
[141] Another factor favouring New Zealand as the appropriate forum is the fact that the Court has jurisdiction to deal with the Fair Trading Act claim^[63] because the reach of the legislation extends to the acts complained of. That makes New Zealand the obvious forum for the resolution of that dispute. And if that is so, and the parties will be before the New Zealand court for that purpose, that supports the proposition that New Zealand is the appropriate forum for other claims arising from the same facts which have a real and substantial connection with New Zealand.
[142] On balance, we consider the relevant factors favour New Zealand as the appropriate forum, although not by a great margin. We are influenced by the predominantly Australasian flavour of the business relationship between the parties and the likelihood that Victorian or New Zealand law would apply at least to the principal causes of action in contract and under the Fair Trading Act. Other factors such as the relative convenience for witnesses and enforceability issues are more neutral.
[143] It was not suggested there were any other circumstances relevant to an assumption of jurisdiction in terms of r 6.28(5)(d).
[144] Subject to the exceptions we shortly mention, our conclusion overall is that Saito has established, in terms of r 6.29(1)(a), that there is a good arguable case that the claim falls solely within one or more of the paragraphs in r 6.27 and that the court should assume jurisdiction by reason of the matter set out in r 6.28(5)(b) to (d) in respect of all causes of action other than the fourth and seventh. We are also satisfied that, to the very minor extent necessary in respect of part of the claim for wrongful use of confidential information, leave would have been granted if it had been sought under r 6.28 and that the failure to do so ought to be excused in the interests of justice.

Disposition

[145] In view of our conclusion that the fourth and seventh causes of action do not disclose a serious issue to be tried, the appeal must be allowed. However, since we are satisfied the High Court was correct in its conclusion on the remaining causes of action, we consider that the appropriate course is to dismiss the proceeding unless Saito files and serves an amended statement of claim removing the causes of action we have found not to be viable. Some tidying of the statement of claim would be desirable to deal with the issues discussed in this judgment in respect of the Fair Trading Act and confidential information causes of action. Although Mr J Hodder was critical of the lack of particulars in the current statement of claim, we regard them as adequate for the present.
[146] Accordingly we make the following orders:

(a) The appeal is allowed.

(b) If the respondent files and serves an amended statement of claim removing the fourth and seventh causes of action within 20 working days of the date of this decision, the appellant’s protest to jurisdiction will be dismissed.

(c) If the respondent does not file and serve an amended statement of claim in accordance with (b), the appellants’ protest to jurisdiction will be allowed and the proceedings dismissed.

(d) Any issues consequential upon this judgment are to be resolved in the High Court.

(e) The appellants must pay the respondent costs for a complex appeal on a band A basis and usual disbursements. We certify for second counsel.

Solicitors:
Chapman Tripp, Wellington for Appellants
Davenports West, Auckland for Respondent

^[1] Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd HC Auckland CIV 2008-404-4621, 29 June 2009.

^[2] By virtue of the transitional provisions of s 9 of the Judicature (High Court Rules) Amendment Act 2008.
^[3] Rule 6.27(2)(d)(ii).
^[4] Rule 6.27(2)(j).
^[5] Rule 6.27(2)(l).
^[6] Rule 6.27(2)(m).

^[7] Kuwait Asia Bank v National Mutual Life Nominees Ltd (No 2) [1989] 2 NZLR 50 (CA).
^[8] Société Générale de Paris v Dreyfus Bros (1885) 29 Ch D 239 at 243.

^[9] Kuwait Asia at 54.
^[10] Poynter v Commerce Commission [2010] NZSC 38 at [43].

^[11] Harris v Commerce Commission [2009] NZCA 84, (2009) 12 TCLR 379 at [57] – [61] at [20] and Poynter at [30].
^[12] Poynter at [43].

^[13] Referring to Agar v Hyde (2000) HCA 41, (2000) 201 CLR 552 and Worldwide NZ LLC v Quay Park Arena Management Ltd [2007] NZHC 1942; [2008] 1 NZLR 106 (HC) at [20].

^[14] Kuwait Asia Bank v National Mutual Life Nominees Ltd (No 2) [1989] 2 NZLR 50 at 54 (CA). This approach was not disturbed by the Privy Council on appeal: [1990] 2 NZLR 513 at 524 - 525.

^[15] Kuwait Asia at 54.
^[16] Rule 6.27(2)(b)(i) and (iv).

^[17] See the discussion by this Court in Harris at [57] – [61].
^[18] See the observations of this Court in Harris at [61].
^[19] At [46].
^[20] At [41] – [42].
^[21] At [47].
^[22] At [60].
^[23] Seaconsar Far East Ltd v Bank Markazi [1994] 1 AC 438.
^[24] At 456 – 457.
^[25] At 454C.
^[26] See the discussion in Seaconsar at 453.
^[27] At 452D.
^[28] Rule 6.28(5)(b).
^[29] Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, [1986] All ER 843 (HL).

^[30] See Spiliada at 843, 844 – 855 (per Lord Goff).
^[31] Rule 6.28(5)(d).
^[32] Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers) at HR 6.27.05.
^[33] Jones v Flower [1904] 25 NZLR 447 (CA).
^[34] At [30](2).
^[35] Rule 5.26.
^[36] See McGechan on Procedure at HR19.10.02.
^[37] At [30](3).
^[38] At [66] – [73].
^[39] Bomac Laboratories Ltd v F Hoffman-La Roche Ltd (2002) 7 NZBLC 103, 627.
^[40] Baxter v R M C Group PLC [2003] 1 NZLR 304 (HC).
^[41] At [70] – [71].
^[42] At [69] – [72].
^[43] At 452 – 453.
^[44] At 455.
^[45] At 456.

^[46] Sir Lawrence Collin (gen ed) Dicey & Morris on the Conflict of Laws (13^th ed, Sweet & Maxwell, London, 2000) at 11-129 repeated in the 14^th ed, 2006, at 11.154.
^[47] See now CPR 6.32 and 6.33.
^[48] See CPR 6.36 and para 3.1 of Practice Direction 6B.
^[49] Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER 749 at [21].
^[50] High Court Rules, r 12.
^[51] See [55] above.
^[52] See [56] above.

^[53] Fletcher Challenge Energy Ltd v Electricity Corporation of New Zealand Ltd [2001] UKPC 9; [2002] 1 NZLR 433.
^[54] At [53].
^[55] At [54] and [56].
^[56] At [57].
^[57] Bray v F Hoffman-La Roche Ltd [2002] FCA 243, (2002) 118 FCR 1.
^[58] Poynter at [63] ff.
^[59] Poynter at [69].

^[60] Burrows, Finn & Todd Law of Contract in New Zealand (3^rd ed, Lexis Nexis, Wellington, 2007) at 304.

^[61] See: Indata Equipment Supplies Ltd v ACL Ltd (1998) 25 FSR 248 (CA) where the court afforded protection for special knowledge of the plaintiff’s clients’ affairs; Transet New Zealand Ltd v Dalhunty Power (NZ) Ltd HC Auckland CIV-2007-404-2000, 21 May 2007 where the court protected pricing information; and Lintas New Zealand Ltd v Murphy [1986] 2 NZLR 436 (HC) where specialised knowledge of the plaintiff’s activities in relation to the client’s affairs was protected.

^[62] By analogy with the approach of this Court in Auckland Receivers Ltd v Diners Club [1985] 2 NZLR 652 (CA).
^[63] See [102] – [107] above.

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