Charoen Pokphand Foods Public Company Ltd v Aqua Star Pty Ltd

[2020] NSWSC 1373

Supreme Court

New South Wales

Medium Neutral Citation:

Charoen Pokphand Foods Public Company Ltd v Aqua Star Pty Ltd [2020] NSWSC 1373

Hearing dates:

8 October 2020

Date of orders:

8 October 2020

Decision date:

08 October 2020

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

1. I order that the motion be dismissed and that unless the parties approach to be heard on costs within 7 days, that Aqua Star pay the costs of the motion, as agreed or assessed.

Catchwords:

CIVIL PROCEDURE — application to strike out, stay or cross vest proceedings — jurisdiction — where foreign company pursuing a debt under contract for shipment of goods — where defendant Victorian incorporated company — where consignee New South Wales incorporated company — factors relevant to cross vesting — application dismissed

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 56, 58

Jurisdiction of Courts (Cross-vesting) Act1987 s 5

Service and Execution of Process Act 1992 (Cth)

Supreme Court Act1970 s 23

Uniform Civil Procedure Rules 2005 r 10, 10.3, 12.11

Cases Cited:

Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41;

Ant & Ballast Pty Ltd v City of Greater Geelong [2019] NSWSC 188

Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd [2019] NSWCA 61

Bankinvest AG v Seabrook (1988) 14 NSWLR 711

BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61

James Hardie & Coy Pty Ltd v Barry & Anor; Seltsam Pty Ltd v Barry & Anor [2000] NSWCA 353

Jardine Lloyd Thompson Pty Ltd v Puri [2016] NSWSC 150

Maritime Insurance Co Ltd v Geelong Harbor Trust Commissioners (1908) 6 CLR 194; [1908] HCA 37

National Commercial Bank v Wimborne (1979) 11 NSWLR 156

Category:

Principal judgment

Parties:

Charoen Pokphand Foods Public Company Ltd (Plaintiff)
Aqua Star Pty Ltd (Defendant)

Representation:

Counsel:
S. Scott (Plaintiff)
A Strauch (Defendant)
Solicitors:
Baker & McKenzie (Plaintiffs)
Kawakami Lawyers (Defendant)

File Number(s):

2020/170888

Judgment

1. By statement of claim filed in June 2020 the plaintiff Charoen, a public company registered in Thailand, seeks a total sum of $1,015,195.26 it claims Aqua Star owes it for goods it shipped from Thailand to Victoria by a consignee, Sea Boss Australia Pty Ltd, in January, February and March 2018. Sea Boss is not a party to the proceedings.

2. The defence pleads that the proceedings have no nexus with this State and that this Court has no jurisdiction. Further, that Aqua Star has an offsetting claim, because the goods delivered were infected.

3. By motion filed in August 2020 Aqua Star seeks orders striking out the claim and in the alternative, staying the proceedings permanently, or transferring them to the Supreme Court of Victoria.

4. The orders sought were opposed.

Issues

5. In issue was whether the Court had jurisdiction in the matter, Aqua Star finally contending that it did not and that without jurisdiction, no orders could be made under the Jurisdiction of Courts (Cross-vesting) Act 1987.

The evidence

6. It was common ground that the parties’ contract was part oral, part written and part implied by conduct, including as to the consignee, which was initially a fourth company, before Sea Boss was appointed by Charoen and the disputed goods consigned to it. That was evidenced by a letter signed by both Sea Boss and Aqua Star in January 2018 which was emailed to Charoen, with the result that it delivered the goods sent by each of the three shipments to Sea Boss.

7. Aqua Star, which is incorporated in Victoria, relied on affidavits sworn by Mr Wu, a director. He deposed amongst other things that:

• Aqua Star operates in Victoria and that Charoen’s claim has no nexus with New South Wales, so that these proceedings should have been brought in Victoria, that being the proper jurisdiction.

• Aqua Star has no office, business or operational presence in this State; the goods were all shipped to Victoria; Charoen’s invoices were all made out to Sea Boss, even though Aqua Star was the contracting company; and Sea Boss had not entered any contract with Charoen.

• He believed that Charoen had previously brought proceedings against Sea Boss, which had been withdrawn, because it had not entered any contract with Sea Boss.

• This matter thus had no jurisdictional connection with NSW, the only entity which had entered a contract with Charoen being Aqua Star, which was located in Victoria and took delivery there.

• That Aqua Star intended to bring proceedings in Victoria for damages arising from the contamination of the goods by disease, but no proceedings have been commenced.

• The only party resident in Australia being Aqua Star and its witnesses were located in Victoria, the balance of convenience favoured the proceedings being heard there.

8. Mr Wu did not indicate who such proceedings would be brought against. But both Charoen and Sea Boss seem to be potential defendants.

9. Charoen relied on an affidavit sworn by its solicitor Ms O’Brien, who deposed amongst other things that:

• she had been acting for Charoen since December 2019, it having previously been represented by her firm in Thailand, but if the matter was transferred to Victoria, carriage of the matter would need to be taken over by a Victorian solicitor and counsel, at unnecessary additional cost to Charoen;

• These proceedings were commenced in this Court in June 2020, the parties’ contract having no jurisdiction clause and the dispute appearing to have connections to Thailand, Victoria and NSW.

• Charoen had served a statutory demand on Seaboss in July 2019 which had resulted in an application to have the demand set aside, filed in August.

• Given Covid-19 related restrictions it was unlikely that representatives of Charoen or Thai witnesses could travel to Australia for any hearing and so would have to participate audio visually.

• The Supreme Court of Victoria is hearing matters virtually, as is this Court, but current restrictions in Victoria preclude people leaving their residences, subject to limited exceptions. The defendant’s solicitors and Mr Wu appear to be subject to those restrictions.

• In the result wherever the matter is heard, it will be heard virtually and Mr Wu and Aqua Star’s solicitors were unlikely to be co-located.

• The level of Seaboss’ involvement in the matters in issue was not yet clear from her investigations, but it was possible that subpoenas would have to be issued to it and evidence led from its representatives, about the shipments.

Jurisdiction

10. By s23 of the Supreme Court Act1970 this Court has all the jurisdiction necessary for the administration of justice in this State.

11. On the evidence the disputed debt does have a connection with NSW, given that Sea Boss is a NSW company. As was Charoen’s case, given the pleaded defence and the ongoing investigation, it may be that steps will be taken to make Sea Boss a party.

12. Rule 12.11 of the Uniform Civil Procedure Rules2005 empowers the Court to set aside originating process. Here there is, however, no issue about regularity of service in accordance with Rule 10 and Aqua Star having filed a defence, it has thereby submitted to the Court’s jurisdiction.

13. It is also long settled that proceedings may be stayed if it would inflict an injustice to put a party to the expense of defending an action here. On the one hand, the Court must see clearly that in stopping an action it does not do injustice and on the other, that it ought to interfere whenever a defendant is subjected to vexation and oppression in defending an action which ought not to have been sued in the Court in which the action is brought, when injustice would not result, if the action were brought in another accessible and competent court: Maritime Insurance Co Ltd v Geelong Harbor Trust Commissioners 6 CLR 194; [1908] HCA 37; (1908).

14. It is thus relevant that what is at issue is a common law debt claim. There is but one common law in Australia: James Hardie & Coy Pty Ltd v Barry & Anor; Seltsam Pty Ltd v Barry & Anor [2000] NSWCA 353 at [95].

15. It is difficult to see that today, such proceedings being able to be conducted as easily by electronic filing and virtual hearing in this Court, as they could in the Victorian Supreme Court, that if the proceedings are heard by this Court, that Aqua Star will be put to either vexation or oppression.

16. The Court will also be slow to interfere when the parties have agreed that proceedings about contractual disputes would be brought in a particular jurisdiction: Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd [2019] NSWCA 61. But there was no such an agreement made here.

17. The defence case pressed was that the Court has no jurisdiction in the matter at all, the proceedings concerning as they do a contract formed and broken either in Thailand or Victoria; having been performed internationally; with goods delivered to Victoria; and with neither party being resident, trading or having any connection with this State. The only connection with the State appeared to be the location of the plaintiff’s solicitor, which was insufficient to give the Court the necessary jurisdiction.

18. Thus while the Court had “subject matter jurisdiction”, that is to hear claims in relation to a contractual dispute such as this, it had no “personal jurisdiction”, to hear this matter.

19. Reliance was placed on National Commercial Bank v Wimborne (1979) 11 NSWLR 156 where it was concluded at 165 that the Court had no jurisdiction to entertain a cross claim brought against a Saudi Arabian Prince who had no assets, place of business, office, resident representative or agent in this State. Nor did it have jurisdiction in relation to a claim against a foreign company which had no ‘presence’ for legal purposes in this State, given that it did not carry on business here: at 165.

20. The circumstances which here arise for consideration are far removed from those considered in Wimborne, given where Aqua Star is located and the current state of the law.

21. In Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41; consideration was given to Pt 10 of the then Supreme Court Rules, which permitted service outside Australia in only limited circumstances. There is no such limitation in Rule 10.3 of the Uniform Civil Procedure Rules, which like the Service and Execution of Process Act 1992 (Cth), permits service of originating process anywhere in Australia.

22. As observed in Agar at [56] “If service was authorised by the Rules, and has been properly effected, the Court's authority to determine the issues that are raised by the proceeding has been regularly invoked.”

23. It is apparent that they have been regularly invoked. As White J observed in Jardine Lloyd Thompson Pty Ltd v Puri [2016] NSWSC 150 at [14]:

“In the present case the contract was made in 2008. That is, it was made long after the Service and Execution of Process Act 1992 (Cth) was enacted that provided by s 15 that an initiating process issued in a State may be served in another State and provided by s 12 that, subject to the Act, service of a process under the Act has the same effect and may give rise to the same proceedings as if the process had been served in the place of issue. As the learned authors of Nygh’s Conflict of Laws in Australia 8th ed say (at [3.16]), the effect of these provisions is that:

“… the jurisdiction of each State Supreme Court now extends to the boundaries of the Commonwealth, with the effect that Australia is a single jurisdictional area at least so far as personal jurisdiction is concerned."

24. That accords with what was decided in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713-714 and BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14], to which I will return

25. The statement of claim contained a notice that it would be served to Aqua Star in Australia, but outside New South Wales under the Service and Execution of Process Act.

26. The challenge to jurisdiction must thus fail.

Cross vesting order

27. In resolving what lies in issue regard must be paid to the overriding purpose specified in s56 of the Civil Procedure Act 2005, facilitating the just, quick and cheap resolution of the real issues in the proceedings. The Court must also act in accordance with the dictates of justice, taking into account the matters specified in s58(2), which include the degree of injustice that would be suffered by the respective parties, as a consequence of any order or direction.

28. Aqua Star still maintained that no order transferring the proceedings to the Victorian Supreme Court could be made, given that this Court had no jurisdiction to entertain the proceedings.

29. Charoen’s case was that the Preamble to the Act demonstrated that it had been enacted in order to preclude that outcome. That must be accepted, given what the Act provides and the relevant authorities have held. The preamble provides:

“WHEREAS inconvenience and expense have occasionally been caused to litigants by jurisdictional limitations in federal, State and Territory courts, and whereas it is desirable:

(a) to establish a system of cross-vesting of jurisdiction between those courts, without detracting from the existing jurisdiction of any court,

(b) to structure the system in such a way as to ensure as far as practicable that proceedings concerning matters which, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, would be entirely or substantially within the jurisdiction (other than any accrued jurisdiction) of the Federal Court or the Family Court or the jurisdiction of a Supreme Court of a State or Territory are instituted and determined in that court, whilst providing for the determination by one court of federal and State matters in appropriate cases, and

(c) if a proceeding is instituted in a court that is not the appropriate court, to provide a system under which the proceeding will be transferred to the appropriate court.”

30. The Court can transfer proceedings to the Supreme Court of Victoria, when there are related proceedings pending in that Court: s5(2) Jurisdiction of Courts (Cross-vesting) Act1987. But Aqua Star has not commenced any proceedings.

31. Transfer must be ordered if the Court is satisfied that having regard to the interests of justice, it is more appropriate that the proceeding be determined by the Supreme Court of Victoria, or that it is otherwise in the interests of justice that the proceeding be determined by that Court: s5(2)(ii) and (iii).

32. In Bankinvest AG at 713-714, Street CJ observed:

The cross-vesting legislation passed by the Commonwealth, the States and the Territories both conferred on each of the ten courts Australia-wide jurisdiction and set up the mechanism regulating the transferring of proceedings from one of these ten courts to another. In relation to transfer, the common policy reflected in each of the individual enactments is that there must be a judicial determination by the court in which proceedings are commenced either to transfer or not to transfer the proceedings to one of the other nine based, broadly speaking, upon consideration of the interests of justice ... It calls for what I might describe as a ‘nuts and bolts’ management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.

33. In BHP Billiton it was observed that:

• “An application for transfer under s5 of the Cross-vesting Act is brought on the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked”: at [14].

• Section 5 imposes a statutory requirement to exercise the power of transfer when it appears that is in the interests of justice and it is not necessary that it should appear that the court in which the proceedings have been commenced is a “clearly inappropriate” forum: at [14].

• The reason why a plaintiff has commenced proceedings in a particular court might, or might not, concern a matter related to the interests of justice: at [15].

• The interests of justice are not the same as the interests of one party and there may be interests wider than those of either party to be considered: at [15].

• The interests of the respective parties might in some respects be common, for example as to cost and efficiency, but in other respects conflicting: at [15].

• The interests of justice are not disembodied, or divorced from practical reality and so the Court’s capacity to deal expeditiously with cases is relevant: at [15].

• There may be conflicting interests of such a kind that justice would not attribute greater weight to one rather than the other: at [16].

• The advantage which a plaintiff might obtain from proceeding in one court might be matched by a corresponding and commensurate disadvantage to a defendant: at [16].

• The reason why a plaintiff commenced proceedings in one court might be the same as the reason why the defendant seeks to have them transferred to another court. In such a case, justice may not dictate a preference for the interests of either party: at [16].

34. In this case, I am not satisfied that Aqua Star has met the onus which falls on it to satisfy the Court that a transfer order must be made. As Ward CJ in Eq discussed in Ant & Ballast Pty Ltd v City of Greater Geelong [2019] NSWSC 188 at [25]:

“25 The factors that have been identified as relevant to determine where the interests of justice may lie, are cited in James Hardie v Barry as follows:

(i) application of substantive law;

(ii) forensic advantage or detriment conferred by procedural law;

(iii) the choice made by a plaintiff or [sic; scil of] a forum and the reasons for that choice;

(iv) substantive connections with the forum;

(v) balance of convenience to the parties and witnesses; and

(vi) convenience to the court system.”

Substantive law

35. What is in issue is a disputed debt which must be resolved by application of the common law. There is but one common law in Australia.

36. This factor thus does not support the conclusion that transfer should be ordered.

Forensic advantage or disadvantage

37. The proceedings are likely to be heard virtually, whichever Court hears them. No procedural disadvantage or additional cost is likely to flow to witnesses if the matter is heard in this Court and Aqua Star did not suggest that it will incur additional costs, if the order is not made.

38. There is unchallenged evidence from Ms O’Brien that Charoen, a foreign company, will incur additional costs because she has advised it that if the matter is transferred, Victorian counsel and solicitors should be instructed, although it should be accepted that is likely to be a Baker and McKenzie partner or employed solicitor who is then engaged.

39. This factor slightly favours the matter remaining in this Court.

Chaeron’s choice

40. As a Thai company with no operational presence in Australia, Charoen undoubtedly had to rely Ms O’Brien’s advice that the proceedings should be commenced in this Court. It was that given the claim in debt which it pursues, that the underlying dispute had connections with Thailand, Victoria and NSW and that there was no choice of law clause, proceedings should be commenced in this Court.

41. Much of the background circumstances are not in dispute. Aqua Star has provided Charoen with a draft counter claim, which I accept raises the possibility that Sea Boss will be joined as a party.

42. Aqua Star is a wholesale distributor of seafood and the product consigned to Sea Boss, the holder of the necessary import license, was frozen prawns which Aqua Star claims were infected with white spot virus. Ms O’Brien is thus pursuing investigations into Sea Boss, the conditions of its license and its involvement in the condition of the prawns.

43. I accept that this factor favours the proceedings remaining in this Court.

Connections with this State

44. If proceedings were on foot in the Victorian Supreme Court, that would be a relevant consideration, but such proceedings seem to be unnecessary, given the defence already filed.

44. The only investigation currently being pursued is in relation to Sea Boss. That also favours the proceedings remaining in this Court.

Balance of convenience

Convenience to the Court system

46. There was no issue that both this Court and the Supreme Court of Victoria could hear this case virtually. That does not favour one court over the other.

47. The location of the parties and their witnesses is likely to be in Thailand, Victoria and NSW and their legal representatives in Victoria and NSW. Balance of convenience is thus neutral, that not favouring the proceedings being heard in one court, rather than the other.

Conclusion

48. In the result I am satisfied that the proceedings should not be transferred to the Victorian Supreme Court, Aqua Star not having established that it is interests of justice that the proceeding be determined by the Supreme Court of Victoria.

Costs

49. The usual order as to costs under the Rules being that costs follow the event, that is an order that Aqua Star pay the costs of the motion, as agreed or assessed.

Orders

50. For these reasons I order that the motion be dismissed and that unless the parties approach to be heard on costs within 7 days, that Aqua Star pay the costs of the motion, as agreed or assessed.

**********

Decision last updated: 08 October 2020