|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 19 December 2018
|
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
|
|
CIV-2016-404-3206
[2018] NZHC 3276 |
|
BETWEEN
|
HELI HOLDINGS LIMITED
Plaintiff
|
|
AND
|
CHOPPER WORX PTY LIMITED
Defendant
|
|
Hearing:
|
4 December 2018
|
|
Appearances:
|
C Hunter for the Plaintiff
D M Kraitzick for the Defendant
|
|
Judgment:
|
12 December 2018
|
JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 12 December 2018 at 4.00pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
McElroys, Auckland
MinterEllisonRuddWatts, Auckland
HELI HOLDINGS LTD v CHOPPER WORX PTY LTD [2018] NZHC 3276 [12 December 2018]
[1] The plaintiff (Heli Holdings) commenced a proceeding against the defendant (Chopper) in December 2016. There were some delays effecting service, but that was eventually effected on 17 May 2018. On 22 August 2018, Chopper filed an appearance under protest to the New Zealand jurisdiction.
[2] Heli Holdings has filed an application to set aside that appearance, and that application is opposed by Chopper.
[3] I now give judgment on Heli Holdings' application to set aside Chopper's protest to jurisdiction.
The parties
[4] Heli Holdings is a wholly-owned subsidiary of a New Zealand-based company called Airworks Holdings Ltd (Airworks NZ). The website of Airworks NZ shows that its business involves the leasing of helicopters in a variety of locations, one of which is South Africa. A subsidiary of Airworks NZ, Airworks Africa Pty Ltd (Airworks Africa), operates a helicopter leasing and operations business from premises at Wonderboom Airport, Pretoria.
[5] Chopper also has business premises at Wonderboom Airport. It does not operate its business outside South Africa.
The facts
[6] In 2014 Heli Holdings and Chopper negotiated an agreement under which Heli Holdings would lease a helicopter, "Aircraft 7031", to Chopper. Negotiations between Heli Holdings and Chopper were conducted primarily by email, between Heli Holdings' Queenstown offices and Chopper's premises in South Africa. In the course of the negotiations a Heli Holdings' staff member, Mr Mike Hall, also visited South Africa and met with Chopper staff.
[7] The lease agreement (the Lease) was entered by Heli Holdings and Chopper on 18 December 2014. Mr Deon Rossouw, the sole director of Chopper, signed the
Lease in South Africa, and Mr Wayne Christie, General Manager of Heli Holdings, signed in New Zealand.
[8] At the time of signing the Lease, Aircraft 7031 was located in Germany. Heli Holdings shipped Aircraft 7031 from Germany to Airworks (South Africa) for the purposes of the Lease. Aircraft 7031 was modified by Airworks Africa with the installation of new engines, and it was supplied to Chopper in South Africa on 9 March 2015.
[9] Under the Lease, Chopper was to make payments to Heli Holdings' New Zealand bank account in US dollars. Heli Holdings alleges that Chopper failed to make a payment US$78,750 under the Lease on 1 January 2016 (although a partial payment of US$40,000 was made).
[10] On 26 May 2016 a meeting was held between Mr Rossouw and Mr Hall. At that meeting it was agreed that Chopper and Heli Holdings would each pay half the cost of (i) repairing a damaged skid on Aircraft 7031 and (ii) carrying out an inspection of a damaged borescope.
[11] Heli Holdings says that Chopper did not pay its share of these costs, but that on 27 May 2016 it undertook to do so by 3 June 2016. Heli Holdings says that no payment was ever received.
[12] On 9 June 2016 New Zealand based staff from Heli Holdings travelled to South Africa to service Aircraft 7031. It was ascertained that extensive repairs were required, including to the engines. Heli Holdings contends that the damage was caused by Chopper's operation of the aircraft. The engines were rated for 1,800 hours of flight time from the beginning of the Lease, but they had only been used for approximately 460 hours. In their damaged condition, they had no flight time left. Heli Holdings says in its statement of claim that the cost of the engine repairs was US$340,011.07.
[13] Mr Rossouw acknowledges that the damage to the engines occurred in South Africa, but he denies that the damage was caused by Chopper, or that Chopper is liable
for the damage. The damaged engines were shipped to New Zealand and they were repaired in New Zealand by Airworks NZ for Heli Holdings.
[14] On 28 June 2016, Mr Rossouw sent an email expressing Chopper's intent to terminate the Lease. On 28 August 2016 Mr Christie responded, advising that Heli Holdings accepted Mr Rossouw's email as effective notice of termination of the Lease as at 27 July 2016.
[15] Heli Holdings says that on 1 July 2016 Chopper again failed to make a lease payment of US$68,588.71. Chopper disputes this amount; it says the amount it was obliged to pay was US$35,564.52. Heli Holdings says that neither sum has been paid to it.
[16] Chopper and Heli Holdings continued to attempt to resolve the matter under the dispute resolution mechanisms in the Lease. When no progress was made, Heli Holdings filed this proceeding.
Heli Holdings' statement of claim
[17] Heli Holdings pleads three causes of action: breach of contract, bailment, and negligence. It says that Chopper has admitted liability for the following sums:
(i) US$8,748.50 for repairs to the damaged skid and borescope;
(ii) US$38,750 associated with payment due under the Lease for the month of January 2016; and
(iii) US$35,564.52 for the Lease of Aircraft 7031 for July 2016.
[18] In its breach of contract cause of action, Heli Holdings relies on certain provisions in the Lease that required Chopper to pay the rent, to operate maintain or store Aircraft 7031 so as to keep Aircraft 7031 in good operating condition as at delivery, and generally to keep it in good working condition state and repair. It also relies on provisions in the Lease requiring Chopper to replace Aircraft 7031's engine when it was damaged or in need of repair, and to return Aircraft 7031 in the same
condition in which it was supplied. Heli Holdings claims US$517,069.32 on its breach of contract claim, plus interest and costs.
[19] The same sums are claimed by way of damages in its bailment and negligence causes of action.
Chopper's defence
[20] As Chopper has filed a protest to the New Zealand jurisdiction, no statement of defence has been filed. However, Mr Rossouw stated in his affidavit in opposition that, in the course of one of a number of meetings in South Africa during the final stages of the negotiations for the Lease, Chopper's Operations Manager Mr Richard Wolfe told Mr Hall about what he regarded as dangers posed to aircraft engines by African weather conditions. Mr Wolfe is said to have told Mr Hall that there was a need to install a filter to guard against such damage. Mr Rossouw said that Heli Holdings chose not to install this filter.
[21] The same issue had been raised in correspondence between the parties. On 15 June 2016 Heli Holdings had written to Chopper setting out the results of power checks conducted on Aircraft 7031's engines by Heli Holdings' engineer, Mr Michael Goulden. Mr Goulden found that the compressors on both engines were "beyond Honeywell limits for erosion and leading edge curling". The engines were considered to be unserviceable. Heli Holdings considered that the damage went beyond ordinary wear and tear, and that Chopper was liable for the repair costs under the provisions of the Lease.
[22] Heli Holdings sent an inspection summary to Mr Rossouw, as Appendix 1 to a letter dated 8 August 2016.
[23] Mr Rossouw responded by letter to Mr Christie dated 17 August 2016 as follows:
4. We refer to your Appendix 1 – Michael Goulden's Inspection Summary (600hr Inspection). We believe that many of the defects identified in this summary can be attributed directly to poor performance and inadequate maintenance on the part of the appointed Airwork Africa AME. In respect to the costs pursuant to the removal
of the engines and retrofit of the replacement engines, we disagree with your statement. We will require more time to study the work pack / time sheets before commenting further on this point.
...
7. We do not accept any responsibility for damages or excessive wear and tear attributable to erosion of the engines. Heli Holdings were informed on several occasions by [Chopper] (both before and during the project), that [Aircraft 7031] was going to operate in African conditions and therefore required fitment of sand filters to prevent premature aging of the engines. We therefore believe that Heli Holdings were negligent in terms of their responsibility as the Lessor to protect their asset. This was also acknowledged in writing by you. In an effort to reduce the impact of this unfavourable situation and the safety risk that it posed, we instructed our pilots to reduce off-site landings as far as possible.
[24] It is not apparent from the documents filed what defence Chopper may have to Heli Holdings' claim for unpaid rent and the costs relating to the damaged skid and borescope.
Clause 26.1 of the Lease
[25] Clause 26.1 of the Lease provided as follows:
26 GOVERNING LAW
26.1 This Agreement shall be governed by, and construed in accordance with, the laws of New Zealand, including all matters of construction, validity and performance. Lessor and Lessee hereby expressly submit to the non-exclusive jurisdiction of the New Zealand Courts situated in the courts of New Zealand. Lessee further agrees that any legal action or proceeding against it or in any of its assets may be brought in New Zealand or in any jurisdiction where Lessee or any of its assets may be found.
Applications to set aside a defendant's protest to jurisdiction — legal principles
[26] Rule 6.29 of the High Court Rules materially 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
...
[27] Under r 6.28(5)(b), (c) and (d), the Court is required to enquire into whether there is a serious issue to be tried on the merits, whether New Zealand is "the appropriate forum for the trial", and "any other relevant circumstances that might support an assumption of jurisdiction".
[28] It is not disputed that there is a good and arguable case that Heli Holdings' claim comes within one or more of the paragraphs of r 6.27. Nor does Chopper suggest that there is no serious issue to be tried. The matters in issue are accordingly the appropriate forum, and whether other relevant circumstances support New Zealand as the jurisdiction in which Heli Holdings' claims should be heard.
[29] The onus is on Heli Holdings to show that New Zealand is the appropriate forum. The guiding test is which of the competing forums has the most real and substantial connection with the dispute.1 The relevant factors include:2
(a) the law governing the relevant transactions;
(b) any choice of jurisdiction previously agreed by the parties;
(c) issues of convenience or expense; availability of witnesses;
(d) places where parties resided or carried on business;
(e) whether other related proceedings are pending elsewhere;
(f) whether the New Zealand Court would provide the most effective relief or whether the foreign Court is in a better position to do so; and
2 Wing Hung Printing Co Limited v Saito Offshore Pty Limited, above n 1, at [45] and [46].
(g) whether the overseas defendant will suffer an unfair disadvantage if a New Zealand Court assumes jurisdiction.
[30] In Advanced Cardiovascular Systems Inc v Universal Specialties Ltd, the Court of Appeal considered a case arising out of a contract containing a clause that provided that the Courts of California would have exclusive jurisdiction to determine any dispute. Notwithstanding the exclusive jurisdiction clause, the Court of Appeal noted that it is settled law that a New Zealand Court has a discretion to exercise jurisdiction if it otherwise exists. However, it can also be regarded as settled law that the discretion will not be exercised unless there is a strong cause or the existence of exceptional circumstances for denying the contractual provision its operative effect.3
[31] The effect of a non-exclusive jurisdiction clause was discussed by the Court of Appeal of England and Wales in Deutsche Bank AG v Highland Crusader Offshore Partners LP.4 The case was concerned with an application in the United Kingdom for an injunction to restrain the respondents from pursuing litigation against Deutsche Bank in Texas. The Court of Appeal considered that, notwithstanding the existence of a clause in the parties' contract conferring non-exclusive jurisdiction on the English Courts, there was no general presumption that proceedings brought in a non-contractual forum were vexatious or oppressive, unless strong grounds, which had been unforeseeable at the time the contractual jurisdiction was agreed or were otherwise exceptional, could be demonstrated.
[32] Delivering the principal judgment, Toulson LJ said: 5
It stands to reason that by agreeing to submit to the non-exclusive jurisdiction of state X the parties implicitly agree that X is an appropriate jurisdiction, and therefore either party should have to show a strong reason for later arguing that it is not an appropriate jurisdiction. The cases support this approach ... On the other hand, a non-exclusive jurisdiction clause self evidently leaves open the possibility that there may be another appropriate jurisdiction. The degree of appropriateness of an alternative jurisdiction must depend on all the circumstances of the case. In addition to the usual factors, the wording of the non-exclusive jurisdiction clause may be relevant, because of the light it may throw on the parties' intentions. Another possibly relevant factor ... may be
3 Advanced Cardiovascular Systems Inc v Universal Specialties Ltd [1997] 1 NZLR 186 at 190.
5 At [64].
whether the choice of non-exclusive jurisdiction was specially negotiated or was contained in a standard form of contract. (Citations omitted.)
[33] His Lordship further noted that the starting point when considering the effect of a non-exclusive jurisdiction clause must be the wording of the clause. It is conceivable that a jurisdiction clause which is not fully exclusive may nevertheless be drafted in such a way as to have the effect of barring parallel proceedings in certain circumstances.6
[34] Later in his judgment Toulson LJ said:7
... I see no cogent reason why it should automatically be assumed that nomination of a non-exclusive forum should give priority or dominance to that forum over any other. It ignores all variables. The non-exclusive jurisdiction clause may in one case represent the result of specific negotiations; in another it may result from the use of a standard form of contract. In one case there may be another forum which is obviously appropriate applying the normal factors; in another case there may not be.
The arguments
[35] Mr Hunter relied on the following factors in support of his argument that the High Court of New Zealand is the appropriate forum:
(i) the Lease was governed by New Zealand law;
(ii) Chopper has submitted to the New Zealand jurisdiction;
(iii) Chopper has consented to Heli Holdings suing in New Zealand;
(iv) the Lease was partially performed in New Zealand;
(v) the Lease was breached in New Zealand (by non-payment of rent payable into Heli Holdings' New Zealand bank account);
6 At [105].
7 At [108].
(vi) Heli Holdings is a New Zealand resident;
(vii) there are significant numbers of witnesses in New Zealand, meaning that it would be more convenient for a trial of the proceeding to take place in New Zealand;
(viii) the repair of Aircraft 7031 took place in New Zealand.
[36] In addition to those factors, Mr Hunter noted that this proceeding has already been started in New Zealand, and that the High Court of New Zealand has the ability to take evidence from overseas by video link (a procedure that would not be available if the dispute were heard in South Africa).
[37] Mr Hunter submitted that the case is analogous to Chevalier Wholesale Produce Ltd v Joes Farm Produce Ltd,8 a case in which Associate Judge Bell dealt with a challenge by the Fiji-based defendants to the New Zealand jurisdiction. The contract between the plaintiff and the first defendant was for the provision of produce to the first defendant in Fiji. The second defendant had provided a guarantee. The Associate Judge found that New Zealand was the appropriate forum, even though the substantial obligation of delivery was in Fiji, the defendants had no place of business in New Zealand, and the cost of proceeding in New Zealand was likely to be higher. In addition, the defendants had Fiji-based witnesses they would wish to call who were barred from entry to New Zealand. The principal factors favouring New Zealand as the forum were that payments were to be made in New Zealand, and the relevant contracts were governed by New Zealand law. The New Zealand Court was considered to be in a better position to assess the merits of the plaintiff's claim given that choice of law.
[38] Mr Hunter noted that the evidence of those who carried out the inspection and repair of the engines will be important at trial. Heli Holdings says that the inspection and repair work was principally undertaken by:
(ii) Mr Lars Kroonenberg, a New Zealand resident. Mr Kroonenberg is an aircraft engineer who inspected the damaged engines;
(iii) Mr Jason Simmons, an Australian resident. Mr Simmons is also an aircraft engineer;
(iv) Various Airwork New Zealand staff.
[39] For completeness, I record that Mr Hunter did not pursue at the hearing a submission that Chopper's protest to jurisdiction was filed outside the period of 30 working days following service allowed for filing such a notice.
[40] Mr Kraitzick submitted that whether the Court will assume jurisdiction over a foreign party is very much fact-dependent, and is a discretion that will not be lightly exercised.9 The ultimate issue is whether there are sufficient grounds for the Court to properly assume jurisdiction, weighing up all the circumstances of the case.10
[41] Even where there is an exclusive jurisdiction clause (not the case here), Mr Kraitzick submitted that the Court still retains a discretion to ignore the clause if a careful weighing of all of the factors indicates strong grounds that justify defeating the jurisdiction clause and finding another forum more appropriate.11 In this case, the purpose of cl 26.1 of the Lease was to delineate the available forums, namely New Zealand and those to which Chopper might be connected. In fact, the only available forum under the clause is South Africa, being the only jurisdiction with a real and substantial connection to Chopper and the Lease (Chopper having no presence or assets in New Zealand).
9 Poynter v Commerce Commissioner [2010] NZSC 38, [2010] 3 NZLR 300 at [30], [31] and [43].
10 Wing Hung, above n 1, at [30].
11 Advanced Cardiovascular Systems Inc v Universal Specialties Ltd, above n 3, at 190 and 191.
[42] While no evidence has been given relating to the negotiation of cl 26.1, an inference may properly be drawn that it was a boilerplate clause. In those circumstances, and with other discretionary factors pointing in favour of South Africa, less weight should be given to cl 26.1 insofar as it might be thought to indicate that New Zealand is the appropriate forum, as opposed to an appropriate forum. Clause 26.1 is in fact neutral on the question of which forum is more appropriate.
[43] Mr Kraitzick noted that the Court of Appeal has held that it is generally more efficient for a judgment to be obtained in the forum where enforcement will take place.12
[44] Mr Kraitzick summarised the factors that favour the South African jurisdiction as follows:
(i) Mr Wolfe, Chopper's Operations Manager who informed Mr Hall of the dangers African weather conditions posed to aircraft engines, and the need to install a filter to guard against such damage, is based in South Africa. Evidence relating to that conversation will need to be given by Mr Wolfe at trial.
(ii) Mr Kraitzick identified another eight witnesses domiciled in South Africa, two of whom are connected directly with Heli Holdings (Ms Marais, Airworks Africa's Operations Manager with whom Chopper dealt on day-to-day management and operational matters arising under the Lease, and Mr Shane Beeton, a Heli Holdings mechanic who worked full time on the site in South Africa under contract to Chopper). In contrast, of the six likely witnesses identified by Heli Holdings who are domiciled in New Zealand, only three might be necessary at trial (Mr Goulden, Mr Hall, and Mr Kroonenberg).
(iii) Any advantage New Zealand might have in the ability to take evidence by video link is nullified or reduced because of the 11 hour time difference between South Africa and New Zealand (acknowledging
12 Exportrade Corp v Irie Blue New Zealand Ltd [2013] NZCA 675, (2013) 21 PRNZ 680 at [55](e).
that there is no provision for South African Courts to take evidence from overseas by video link).
(iv) It will be cheaper and more efficient to litigate in South Africa.
(v) Heli Holdings has a clear connection to South Africa (for example, through Airworks Africa), but Chopper has no connection to New Zealand.
(vi) The management and day-to-day operations relating to the Lease took place in South Africa.
(vii) Replacement parts for Aircraft 7031 were supplied by Heli Holdings to Chopper from stock held in South Africa.
(viii) The lex situs of the claimed debt is South Africa, not New Zealand.13
(ix) Aircraft 7031 was at all material times located in South Africa. The bulk of Heli Holdings' claims concern damage to the engines, and that damage occurred in South Africa. The claim will necessarily focus on evidence of use of Aircraft 7031 in, and in relation to, climatic conditions of South Africa.
DISCUSSIONS AND CONCLUSIONS
[45] The only issue is whether New Zealand is the appropriate forum for the trial. Chopper accepts that there is a good arguable case that the claim satisfies one or more of the grounds under r 6.27, and it also accepts that there is a serious issue to be tried on the merits. Chopper's one contention is that the appropriate forum for the hearing of the dispute is South Africa.
[46] As Toulson LJ observed in Deutsche Bank AG, the starting point must be to construe the relevant jurisdiction clause.
13 Ludgater Holdings Ltd v Gerling Australia Insurance Company Pty Ltd [2010] NZSC 49 at [27].
[47] First, I do not accept Mr Kraitzick submission that cl 26.1 is a "boilerplate clause", dropped in without a great deal of thought from some solicitor's bank of precedents. The first sentence of the clause is clear enough, but thereafter the clause is less clear, and it has the distinct look of a "non-legally qualified" business person endeavouring to draft a clause for the circumstances of the particular case. For example, the words "situated in the courts of New Zealand" at the end of the second sentence appear to be superfluous — the jurisdiction of New Zealand Courts will inevitably be exercised in the courts of New Zealand. The third sentence in the clause also has the look of lay drafting about it, in that the relationship between the third sentence and the reference to "non-exclusive jurisdiction" in the second sentence is not entirely clear, and the wording "against it or in any of its assets" is either missing some words or has one word too many for the sense intended (presumably the draftsperson meant either "against it or any of its assets", or alternatively "against it or in respect of any of its assets ...").
[48] So it was not a boilerplate clause, and cannot on that account be regarded as less significant in the Court's assessment of whether the justice of the case should permit Heli Holdings to pursue its case in New Zealand.
[49] Turning to the construction of cl 26.1, some meaning clearly has to be given to the third sentence. I do not accept Mr Kraitzick's submission that the third sentence was intended to do no more than delineate the available forums in which litigation could be commenced. The first point to note in that regard is that the third sentence applies only to Court proceedings commenced by Heli Holdings — it does not apply to any proceeding Chopper might wish to bring under the Lease. The second point about the last sentence is that it expressly states that Heli Holdings may bring such a proceeding in New Zealand (or in any other jurisdiction where Chopper might have assets). The wording effectively gives permission to Heli Holdings to start a claim in New Zealand, as it has done.
[50] Even if cl 26.1 had stopped after the second sentence, I think the clause would have constituted a powerful consideration in favour of Heli Holdings on the appropriate forum issue. In Deutsche Bank AG Toulson LJ observed that it stands to reason that someone submitting to the non-exclusive jurisdiction of a particular State
is implicitly agreeing that that State is an appropriate jurisdiction. Strong reasons will normally be required for one party or the other to argue later that the agreed State is not an appropriate jurisdiction. To similar effect, I observed in my recent decision in Vector Ltd v Sunverge Energy Inc that: 14
The fact that the parties chose New Zealand law to govern their contracts, and agreed to submit to the non-exclusive jurisdiction of the New Zealand Courts in respect of all matters relating to the Umbrella Agreement, are powerful considerations in Vector's favour on the appropriate forum issue.
[51] When the second sentence of cl 26.1 is read with the third sentence, Heli Holdings' position is even stronger. If the third sentence is to be given the full meaning its words appear to require, the sentence must give Heli Holdings something additional to what it already had under the second sentence of the clause. That requirement for something "additional" in the third sentence is certainly met by the provision allowing Heli Holdings to sue in any jurisdiction where Chopper might have assets, but what is added by the statement that Chopper "further agrees that any legal action ... may be brought in New Zealand"? Those words would be redundant if all the third sentence was intended to do was to allow Heli Holdings the right to sue in other jurisdictions (outside New Zealand) where Chopper might have assets.
[52] There is no evidence before the Court in the way of the background, or "factual matrix", which might assist in the interpretation of cl 26.1. However, I think some inferences may reasonably be drawn. First, the rent was payable by Chopper to Heli Holdings in New Zealand, and when the parties entered into the Lease they would reasonably have expected that the most likely circumstance in which Heli Holdings might wish to sue Chopper would be if Chopper failed to pay the rent. Understandably, Heli Holdings would not have wished to have to issue a rent recovery action in South Africa, and it makes commercial sense that it would have required the ability to issue any such proceeding against Chopper either in New Zealand, or in some other jurisdiction where it knew that Chopper had assets and any judgment it obtained could be enforced against those assets. However, the parties' commercial perspectives would have been different if they turned their minds to the possibility that Chopper might wish to sue Heli Holdings. Such a scenario could well have been concerned with
14 Vector Ltd v Sunverge Energy Inc [2018] NZHC 1936 at [95].
matters arising wholly in South Africa, where, absent any other considerations, it would be more convenient for both sides to have the dispute determined in South Africa. While the New Zealand Courts would remain an available forum in such circumstances, the non-exclusive jurisdiction provided for in the second sentence of cl 26.1 was intended to acknowledge the possibility that there might be some circumstances where the various factors of convenience favoured South Africa so strongly that it should not be considered a breach of the Lease if Chopper were to make a claim in the South African Courts.
[53] That is the best sense I can make of cl 26.1 read as a whole. While it is clear that even an exclusive jurisdiction clause can be overridden if exceptional circumstances exist which would justify denying the contractual provision its operative effect,15 the bar is set lower where the jurisdiction clause is non-exclusive. The second sentence of cl 26.1 sets the bar at the lower, non-exclusive jurisdiction, level, but in my view the third sentence was intended to create the (high bar) exclusive jurisdiction, but only for claims commenced by Heli Holdings. The result, on the authority of the Advanced Cardiovascular Systems Inc case, is that there would need to be "strong cause", or the existence of "exceptional circumstances", before it would be appropriate for the Court to deny Heli Holdings the right to sue under the Lease in New Zealand.
[54] In my view no such strong cause, or exceptional circumstances, are apparent on the evidence produced, and Heli Holdings' prima facie right to sue in New Zealand has not been displaced by any countervailing circumstances.
[55] I note first that the issue over the different South African weather conditions, and the alleged need for a filter to protect the compressors, was (on Chopper's own account) a matter that was known at the time the parties negotiated the Lease. In both Deutsche Bank AG and the judgment of Waller J in British Aerospace Plc v Dee Howard Co16 the Courts noted that a party running a "forum inconveniens" argument will not normally be able to rely on factors that would have been eminently foreseeable
15 Advanced Cardiovascular Systems Inc v Universal Specialties Ltd, above n 3, at 190.
16 British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd's Rep 368 at 376.
at the time the parties entered into their contract containing the exclusive jurisdiction clause.
[56] The other factors argued by counsel on the forum conveniens issue appeared to me to be either neutral, or insufficient to displace the effect of what I regard as an exclusive jurisdiction clause created by the last sentence of cl 26.1. While both parties initially contended that they had long lists of witnesses who might realistically be expected to have to travel a long way if the trial takes place in the other side's jurisdiction, in the end counsel both acknowledged at the hearing that witness travel was probably a neutral factor. Similarly, while the New Zealand Court does have the ability to take evidence from overseas by audio visual link, and apparently South Africa Courts do not, I think that apparent advantage to the New Zealand jurisdiction is to a fair degree nullified by the time difference, especially for witnesses whose evidence might take some time to hear (the likelihood is that a New Zealand Court would have to sit late at night, or very early in the morning, to hear evidence by video link from South Africa).
[57] On what seems to be the major issue in dispute, namely the provision of a helicopter for use in South African conditions with engines that were allegedly not fitted out with necessary filters, I do not have sufficient before me to conclude that the identities and locations of witnesses likely to be called on that issue are together sufficient to point to South Africa as the appropriate forum rather than New Zealand. First, the engines were inspected and repaired by witnesses who are based in New Zealand. That evidence will obviously be important, and it appears to be primarily New Zealand-based.
[58] I doubt that there is likely to be much dispute about general operating conditions for helicopters in South Africa. Chopper has not produced evidence that Aircraft 7031 was used in any particular unusual locations in South Africa, which might have had special features that could have damaged the engines — the issue raised by Chopper appears to relate purely to the difference between climatic conditions generally in South Africa and those in New Zealand. If that is right, the issue seems unlikely to be one where there would be significant disagreement between each side's experts.
[59] Certainly the evidence of the South Africa-based pilot, and those such as Mr Beeton who maintained Aircraft 7031 while it was in South Africa, could be very relevant, but Chopper has not provided sufficient information for me to conclude that the convenience of their evidence being heard in South Africa could amount to strong cause, or exceptional circumstances, which would justify the Court declining to give effect to the last sentence of cl 26.1. Against that, the evidence of the inspections carried out by Mr Goulden and others, and the repair work on the engines carried out in New Zealand, is concrete and of obvious relevance to the case.
[60] I mention also that Chopper has not made clear what defence it has, if any, to some parts of Heli Holdings' claim (the claims for unpaid rent and Chopper's contribution to the costs of repairing the damaged skip and the borescope).
[61] Mr Kraitzick referred generally to Heli Holdings having a "connection" with South Africa (in the form of the sister company Airworks Africa) whereas Chopper has no connection with New Zealand. But I do not consider that is a significant factor given the need for Heli Holdings to call New Zealand-based witnesses and its rights under cl 26.1.
[62] Both parties provided some evidence on the relative costs of running litigation such as this in New Zealand as against South Africa. There was also some evidence about the likely time the case would take to come to trial in each jurisdiction. I accept that, particularly with the lower value of the South African Rand (roughly 10 Rand to one New Zealand dollar), the litigation would probably be a bit cheaper in South Africa. But the difference is not that great, whether considered alone or with other factors, to justify the Court declining to give effect to what it regards as the intent of cl 26.1. Similarly, the likely delays in getting the case to trial were not sufficiently different in the two jurisdictions to affect the overall issue in Chopper's favour.
[63] Neither party has raised any "other relevant circumstances" under r 6.28(5)(d) that might have suggested any conclusion different to the conclusion I have reached, namely that the application must succeed. I accordingly make an order setting aside Chopper's protest to the New Zealand jurisdiction.
Result
[64] Chopper's notice of appearance and protest to the New Zealand jurisdiction is set aside. Costs are awarded to Heli Holdings on a 2B basis in the usual way, with disbursements to be fixed by the Registrar.
[65] Chopper is to file and serve its statement of defence within 30 working days of the date of delivery of this judgment.
Associate Judge Smith
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2018/3276.html