Ace Insurance Ltd v Moose Enterprise Pty Ltd - [2009] NSWSC 724

CITATION: Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724

HEARING DATE(S): 9 April 2009

JUDGMENT DATE :
31 July 2009

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

DECISION: Defendant permanently restrained from taking further steps in Californian proceedings, save for discontinuing them.

CATCHWORDS: PRIVATE INTERNATIONAL LAW– Inappropriate forum – Application for anti-suit injunction – where insurance policy contains express choice of law clause providing that disputes be determined in accordance with the laws of Australia – where policy contains submission to jurisdiction of Australian courts - where both parties resident in Australia – where insurance contract formed in Australia – where defendant commences action in California in order to gain forensic advantage not available in Australia – Whether jurisdiction clause exclusive or non-exclusive – relevant considerations - where Australian courts are natural forum– where Australian courts would have jurisdiction in any event – held: jurisdiction clause was exclusive – where Australian courts not an inappropriate forum – held: anti-suit injunction should be granted – Whether express choice of Australian law founds implied negative stipulation not to sue in a jurisdiction that would not apply Australian law – nature of choice of law clause – whether promissory or declaratory – held to be declaratory – institution of proceedings in California would be breach of implied negative stipulation arising from choice of Australian law – Whether institution of proceedings in California vexatious or oppressive – whether Californian action gives defendant forensic advantage not available under Australian law – whether Californian courts would have given effect to choice of law provision – whether Californian court would have regarded Australian law as being contrary to fundamental policy of California – held: Californian court would give effect to choice of law clause - moreover even under Californian law defendant would not gain advantage not available in Australia – where California clearly inappropriate forum – held: Californian proceedings unconscionable, vexatious and oppressive

LEGISLATION CITED: (Californian) Civil Code, s 2778

CATEGORY: Principal judgment

CASES CITED: ABF Corporation v Grove Properties Company 126 Cal App 4th 204
AKAI Pty Ltd v Peoples Insurance Co Limited (1996) 188 CLR 418
Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50
Austrian Lloyd Steamship Co v Gresham Life Assurance Society Ltd [1903] 1 KB 249
Banco Atlantico SA v The British Bank of the Middle East [1990] 2 Lloyds Rep 504 (CA)
Bank of Tokyo Ltd v Karoon [1987] AC 45
Britannia Steamship Insurance Assoc v Ausonia Assicurazioni SpA [1984] 2 Lloyds Rep 98 (CA)
British Aerospace Plc v Dee Howard Co [1993] 1 Lloyds Rep 368
Cadre SA v Astra Asigurari SA [2005] EWHC 2626
Cannon Screen Entertainment Ltd v Handmade Films (Distributors) Ltd (11 July 1989, unreported)
Catlin Syndicate Limited v Adams Land & Cattle Co [2006] EWHC 2065
Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588
CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345
Dunbee Limited v Gilman & Co (Australia) Pty Ltd (1968) 70 SR(NSW)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWSC 724
Decision Date: 31 July 2009

CaseChat Overview and Summary

The case of Ace Insurance Ltd v Moose Enterprise Pty Ltd concerned an insurance dispute between the parties, Ace Insurance Ltd and Moose Enterprise Pty Ltd. The dispute arose from an insurance policy that contained an express choice of law clause, which mandated that disputes be determined according to Australian law. Additionally, the policy stipulated that disputes should be resolved by the Australian courts. Both parties were residents of Australia, and the insurance contract was formed in Australia. However, Moose Enterprise Pty Ltd initiated legal proceedings in California, presumably to gain a forensic advantage unavailable in Australia. Ace Insurance Ltd applied for an anti-suit injunction to prevent the Californian proceedings.

The central legal issues before the court were whether the jurisdiction clause in the insurance policy was exclusive or non-exclusive, and if so, whether the Australian courts were an appropriate forum for the dispute. Another issue was whether the choice of Australian law in the policy implied a negative stipulation against suing in a jurisdiction that would not apply Australian law. The court also considered whether the Californian proceedings were vexatious or oppressive, and whether the Californian courts would give effect to the choice of law provision.

The court determined that the jurisdiction clause in the insurance policy was exclusive. It found that the Australian courts were not an inappropriate forum for the dispute, as both parties were Australian residents, the contract was formed in Australia, and the Australian courts would have jurisdiction regardless. The court held that the choice of Australian law in the policy was declaratory in nature, implying a negative stipulation against suing in a jurisdiction that would not apply Australian law. Since the Californian proceedings would breach this implied negative stipulation, the court granted the anti-suit injunction. It concluded that the Californian proceedings were unconscionable, vexatious, and oppressive, as they provided the defendant with an advantage not available under Australian law and were commenced in a clearly inappropriate forum.

The court ordered that Moose Enterprise Pty Ltd be restrained from continuing with the Californian proceedings and that it comply with the terms of the insurance policy by resolving the dispute in the Australian courts.

Orders