Bridge and Marine Engineering Pty Ltd v Taylor and Austrack Project Mangement Pty Ltd

[2002] VSC 60

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
INTELLECTUAL PROPERTY LIST

No. 8003 of 2001

BRIDGE AND MARINE ENGINEERING PTY. LTD. (ACN 059 317 396)	Plaintiff/Respondent
v
ROBERT TAYLOR AND AUSTRACK PROJECT MANAGEMENT PTY. LTD. (ACN 065 271 114)	Defendants/Applicants

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JUDGE:	HARPER, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	8 MARCH 2002
DATE OF JUDGMENT:	8 MARCH 2002
CASE MAY BE CITED AS:	BRIDGE AND MARINE ENGINEERING PTY. LTD. v. ROBERT TAYLOR AND AUSTRACK PROJECT MANAGEMENT PTY. LTD.
MEDIUM NEUTRAL CITATION:	[2002] VSC 60

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CATCHWORDS: Transfer of proceedings – Private international law – Courts (Cross Vesting) Act 1987, s.5(2)(b)(iii) – Forum non conveniens – Difference in approach depending on whether alternate jurisdiction outside or within Australia – Oceanic Sunline Special Shipping Company Inc. v. Fay (1988) 165 CLR 197 and Voth v. Manildra Flour Mills Pty. Ltd. & Anor. (1990) 171 CLR 538 distinguished – Bankinvest AG v. Seabrook & Ors. (1988) 90 ALR 407, McKee v. Haften & QBE Insurance Limited [2001] VSC 251 and Toll (FHL) Limited & Ors. v. Finemore & Ors. [2001] VSC 467 followed – "Most real and substantial connection" test applied – Onus of proof – Application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Respondent	Mrs. C. Kenny	Galilee & Associates
For the Defendants/Applicants	Mr. N. Jones	McKean & Park

HIS HONOUR: 

1. By summons dated 4 March 2002, the defendants seek an order that this proceeding be transferred to the Supreme Court of New South Wales. The application is made pursuant to s.5(2)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 which provides in effect that where a proceeding is pending in this court and it appears to this court that it is in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory, then this court shall transfer the relevant proceeding to that other Supreme Court.

1. There has been a difference of approach evidenced in the courts depending upon whether the defendant in a particular case is resident in Australia or resident overseas.  The defendants submit that where, as here, they reside respectively in Victoria and New South Wales, (and I will come to that later) the application is not governed by the doctrine of forum non conveniens as stated by Deane J in Oceanic Sunline Special Shipping Company Inc v. Fay (1988) 165 C.L.R. 197.

1. His Honour in his judgment said at 247-248:

" . . . it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds.  That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and to a significant extent matters of impression.  The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him.  Ordinarily a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff.  Otherwise that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties."

1. The submission that that test is not the appropriate test in this case is made despite the fact that in Voth v. Manildra Flour Mills Pty Ltd & Anor (1990) 171 C.L.R. 538 the High Court applied the test enunciated by Deane J. The two cases are, the defendants submit, distinguishable from the present case. They involve defendants who are resident outside Australia.

1. By contrast the first defendant is a resident of New South Wales.  The second is incorporated in Victoria, although it is present here only to the extent that the address of its registered office is that of its Victorian accountants.  Its directors live in New South Wales.  The result, it is submitted, is that the Act applies in this case.  It did not apply in either the Oceanic Sunline case or in Voth's case for the reason to which I have already adverted. 

1. In support of this submission, the defendants relied upon a decision of the Court of Appeal of the Supreme Court of New South Wales in the case of Bankinvest AG v. Seabrook & Ors (1988) 90 A.L.R. 407. In that case it was held that the legislative scheme established by the Jurisdiction of Courts (Cross-vesting) Act constitutes a code which requires a different approach to that taken by the High Court in each of Oceanic Sunline and Voth's case.

1. In his judgment in Bankinvest at 420, Rogers AJA said:

"It is important that full effect be given by the courts to the imaginative and detailed code for ensuring that throughout Australia disputes are dealt with by the one court and that be the court most appropriate for the particular dispute.  Consistently with the preservation of dual State and Federal Court systems and with State courts dispensing justice within the State boundaries, there has been a legislative recognition of the need to transcend State boundaries in appropriate cases.  No longer is it appropriate to regard the court of another State as a 'foreign' court.  One consequence is that the principles of forum non conveniens, applied in circumstances where the competition is between an Australian and a non-Australian court, have no role to play in the resolution of applications made under the legislation or in its interpretation.  Legislation prescribes the criteria whereby such applications are to be determined.  The criteria are rather more specific in some respects but in referring to the 'interests of justice', call for considerations of a more general kind than the judicially established rules of forum non conveniens".

1. In cases where the defendant is an Australian resident, this court has accepted the approach taken by the Court of Appeal in the Bankinvest case.  Thus in Toll (FHL) Limited & Ors v. Finemore & Ors. [2001] VSC 467, Warren J said at [9]:

"In determining whether to order a transfer under s.5(2) of the Jurisdiction of Courts (Cross-vesting) Act, the court must be satisfied as to which is the 'more appropriate forum' for the hearing and determination of the dispute".

1. Her Honour then cited Bankinvest v. Seabrook in addition to another case.  She continued:

"In Ross Mollison Group Pty Ltd & Anor v. The Really Useful Company (Aust) Pty Ltd & Anor [2000] VSC 256, I observed that the courts have held that the 'more appropriate forum' is usually the forum with the 'most real and substantial connection' with the particular subject matter of the proceeding".

1. Again Her Honour cited the Bankinvest case.

1. So also in McKee v. Haften & QBE Insurance Limited [2001] VSC 251, Gillard J said at [24]:

"The Bankinvest case was the first decision at appellant level to consider the provisions of the Act, and the court gave some guidance as to the proper approach.  The court emphasised that initially the search is for what is called 'the natural forum'.  This means 'more appropriate'.  The expression 'natural forum' was discussed by Lord Goff in Spiliada Maritime Corporation v. Cansulex Limited [1987] AC 465, and described at p.478 as 'that with which the action has the most real and substantial connection'".

1. In one respect, however, the approach of a Judge at first instance must be the same no matter which test is otherwise applied.  In Voth's case at 565, Mason CJ and Deane, Dawson and Gaudron JJ said:

"... in the ordinary case, counsel should be able to furnish the primary judge with any necessary assistance by a short, written (preferably agreed) summary identification of relevant connecting factors and by oral submissions measured in minutes rather than hours.  There may well be circumstances in which the primary judge may conclude that it is desirable to give detailed reasons balancing the particular weight to be given to the presence or absence of particular connecting factors and explaining why the local forum is or is not a clearly inappropriate one.  Ordinarily, however, it will be unnecessary for the primary judge to do more than briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view that the proceeding should or should not be stayed on forum non conveniens (i.e. 'clearly inappropriate forum') grounds".

1. If that is true in a case where the defendant is in a foreign country, it must also be true where the defendant is a resident of Australia  It is in that light then that I turn to consider the particular submissions put by counsel on each side for and against the proposition that in this case the application should succeed on the basis that this court is the one with which the action has the most real and substantial connection.  I turn first to the claim as set out in the statement of claim.

1. The plaintiff there pleads an agreement made between it on the one hand and the defendants on the other.  The parties, it is alleged, agreed that the second defendant could use the plaintiff's intellectual property "in respect of a proposed project in Newcastle, New South Wales, and for no other purpose". 

1. The plaintiff then goes on to plead breaches of that agreement.  Those breaches are, first, that the defendants now claim that they are respectively the owners and inventors of some of the plaintiff's intellectual property incorporated in the Newcastle Port project design and, secondly, that the defendants have represented to various parties interested in joining in the development of the Newcastle Port project that they are respectively the owner and inventor of some of the plaintiff's intellectual property incorporated in that design.

1. The plaintiffs further allege that the defendants have breached the agreement because they have not assisted the plaintiff to undertake, "a sales process in respect of technology including [the plaintiffs] intellectual property for the Newcastle Port Project". 

1. The defendants submit that there is demonstrated by this pleading a real and substantial connection between the subject of the proceeding and the State of New South Wales.  Despite the fact that the project the subject of the relevant agreement is in New South Wales, I disagree.  It seems to me that here the dispute concerns the breach of a contract involving the misuse of intellectual property.  It is not a breach which involves the conduct of either party towards physical objects situated out of the jurisdiction nor are the breaches otherwise such as to bring this proceeding into a class that can be said to have a physical connection with New South Wales.

1. It seems to me that the fact that the project was to be carried out in New South Wales is irrelevant to the claim as pleaded.  Accordingly it cannot on that basis be properly said that this proceeding has a real and substantial connection with that State. 

1. The second basis upon which the defendants support the application is that the plaintiff owns property in New South Wales.  It is true that it does.  On the other hand I accept the evidence put forward in affidavit form on behalf of the plaintiff to the effect that that property has nothing to do with the subject matter of the claim.  Accordingly it seems to me that this basis for the application likewise fails. 

1. Next the defendants submit that the agreement and other agreements by which the parties regulated their relationship all included a term by which the parties submitted to the jurisdiction of New South Wales courts.  I accept that such is the case.  The plaintiff submitted in response that the only agreement relevant in this proceeding is the agreement pleaded in the statement of claim and known and referred to there as, "the technology agreement".  The plaintiff also argues that although that agreement contained a clause that the parties submitted to the jurisdiction of the New South Wales courts, that submission was at best simply one matter to be taken into account in deciding whether or not the courts of this State or of New South Wales are those with which the action has the most real and substantial connection.

1. I should add in this context that the defendants accept that this point is simply one to be taken into account rather than one which has a conclusive effect.  I agree.  In my opinion, while this matter is indeed one to be taken into account, it is not conclusive-although to the extent that it is taken into account, it must favour the defendants. 

1. The defendants also submit that most if not all of their witnesses reside in New South Wales.  There will accordingly be inconvenience if they are required to attend in Victoria to give their evidence.  They also point out that the first defendant is a resident of New South Wales.  Very fairly however, Mr Jones for the defendants accepted that the location of witnesses is no more than a factor to be placed in the scales and again is by no means a conclusive factor. 

1. The plaintiff submitted through Mrs Kenny in response to this point that it intended to call I think some eight witnesses, all but one of whom are resident in Victoria.  Accordingly it was submitted the balance of convenience for the witnesses cannot be said to favour New South Wales and might indeed be said to favour Victoria.

1. In that context Mrs Kenny pointed out that only three named witnesses in the defendants' camp lived in New South Wales; but in response Mr Jones pointed out (and I accept) that the list of the defendants' witnesses may well exceed three and if it does it is at least likely that all or very nearly all of them will be resident in New South Wales. 

1. Apart from the submissions to which I have already referred as being put on behalf of the plaintiff, the plaintiff further submitted that the subject matter of the dispute is the ownership of patents which are registered in Victoria.  It seems to me that that is not a consideration which should bear upon me.  The place of registration of the patents in dispute in this proceeding does not seem to me to be a factor that assists me in determining which forum has the most real and substantial connection with the cause of action.

1. Likewise it seems to me that the fact that the relevant patent documentation was prepared in Victoria does not assist in resolving the difficulties of the application of "the most real and substantial connection" test in this case.  The plaintiff further submits that it, and the second defendant, are incorporated in Victoria and that I should take account of that fact.  Again it seems to me that if I should give that consideration any weight at all it is of very minor importance in determining with which jurisdiction the action has the most real and substantial connection.

1. Finally the plaintiff submits that the defendants have themselves already submitted to the jurisdiction of this court.  They did so, the plaintiff submits, by filing an appearance in respect of one of the defendants and a conditional appearance in respect of the other.  The conditional appearance has since been accepted as being unconditional.  In my opinion that point is without substance because this court has jurisdiction in the circumstances of the case; and therefore the defendants had no choice but to submit to that jurisdiction.  The issue is not the jurisdiction of the court but whether or not that jurisdiction should be yielded in favour of courts elsewhere who have a more real and substantial connection with the proceeding. 

1. In the end, it seems to me that the convenience of the witnesses is, despite the concession made by the defendants, one of the factors with which I must be principally concerned.  On the evidence presently available, that convenience tells in favour of the plaintiff.  So does another consideration.  It is that the plaintiff continues to have some freedom of choice in selecting its forum.  It is true that the law which formerly applied to cases of this kind (and which was that the plaintiff should have a very large degree of freedom in its choice of forum) has now given way to the words of the legislation itself.  There is undoubtedly very good reason why that should be so, since the courts must be and are bound by the relevant legislation.  Nevertheless it remains true I think that the persons seeking to demonstrate that the plaintiff's chosen forum is not that with which the action has the most real and substantial connection have the onus of establishing that proposition. 

1. I am reinforced in that conclusion by the judgment of Gillard J in McKee v. Haften and Anor.  In that case His Honour said at [17]:

"The application is brought by the defendants in the proceeding before this court.  They carry the onus of proof of establishing that in the exercise of the discretion it is in the interests of justice that the proceeding be transferred to the Supreme Court of Queensland. 

[18]  There was some doubt as to whether there was a burden by reason of what was said by Rogers AJA in the Bankinvest case.  In [an earlier decision of mine] however, I disagreed with His Honour's approach and concluded that there was an onus resting upon the applicant.  In James Hardie & Co Pty Ltd v. Thomas Joseph Barry, an unreported decision of the New South Wales Court of Appeal, President Mason at paragraph 100 stated that, in his opinion, there was a burden resting on the applicant for a transfer.  …"

1. I have earlier said that these disputes (that is as to which forum has the most real and substantial connection with the action) must be resolved largely as matters of impression.  Having examined the factors put for and against the application I have come to the conclusion that I ought not to accede to it.  It seems to me that on balance the Supreme Court of Victoria is the court which has a better claim than any to being that with which the action has the most real and substantial connection.

1. Accordingly the application is dismissed.

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