Crompton Specialties P/L v BASF Australia Ltd - [2006] SASC 39

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
CROMPTON SPECIALTIES P/L v BASF AUSTRALIA LTD
Judgment of The Honourable Justice Duggan
10 February 2006
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION
Consideration of matters relevant to application to cross-vesting - discussion as to relevance of exclusive jurisdiction clauses - application to cross-vest successful.
Jurisdiction of Courts (Cross-Vesting) Act 1987 s 5(2)(b)(iii), referred to.
BHP Billiton v Schultz and Others (2004) 211 ALR 523; Air Attention WA Pty Ltd v Seeley International Pty Ltd (unreported, Supreme Court of Western Australia CIV 1479 of 1996), applied.
Dawson v Baker (1994) 123 FLR 194; FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117; Sarah Civil Pty Ltd v Stork ICM Australia Pty Ltd [1998] SASC 6713; National Dairies WA Ltd v Wesfarmers Ltd (unreported, Federal Court of Australia, NG 509 of 1996), discussed.

CROMPTON SPECIALTIES P/L v BASF AUSTRALIA LTD
[2006] SASC 39
Application to cross-vest

DUGGAN J. The application before me is made pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (“the Act”). The defendant in the proceedings which are pending in this court seeks an order that they be determined by the Supreme Court of Victoria. The application is opposed by the plaintiff. A summary of the proceedings thus far is set out in reasons which I delivered on 10 October 2005 when dealing with an application for an injunction. The plaintiff has filed an inter partes summons seeking a declaration that the defendant has wrongly given notice of termination of a Distribution and Supply Contract (“the contract”) between the parties.
The plaintiff and the defendant entered into the contract on 1 July 2003. Pursuant to its terms the plaintiff was granted the right to be the exclusive distributor in Australia of certain products supplied by the defendant. The contract was for a term of three years with a right of renewal unless terminated by either party upon notice given at least six months prior to the expiry of the current term.
The Act provides that, where a proceeding is pending in the Supreme Court and it appears to the court that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory, this court shall transfer the relevant proceeding to that other Supreme Court.
The cross-vesting legislation passed by the Commonwealth, the States and the Territories was considered by the High Court in BHP Billiton v Schultz and Others (2004) 211 ALR 523. In their joint judgment at [14] Gleeson CJ, McHugh and Haydon JJ said:
In the context of the Cross-vesting Act, one is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross-vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court “shall transfer” the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a “clearly inappropriate” forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.
The enquiry whether it is in the interest of justice to transfer the present proceedings to the Supreme Court of Victoria has focused on the factors which might be said to connect the proceedings to the jurisdiction of one State or the other. They are the sorts of considerations referred to by Higgins J in Dawson v Baker (1994) 123 FLR 194 and include the law to be applied, proper forensic advantage to one party or the other, residence, domicile, place of occurrence and the balance of convenience to parties and witnesses. The ultimate question, however, is whether it is in the interests of justice to exercise the power.
The defendant’s principal place of business is in Victoria. The board, senior officials and the company secretary reside in Victoria.
The plaintiff’s principal place of business is Adelaide where its head office is located. The plaintiff’s national sales manager resides in Toowoomba, but the remainder of its marketing and sales staff operate from Adelaide.
According to the defendant’s submissions, none of the witnesses it would call in the proceedings reside in South Australia. Five of the eight proposed witnesses are from Victoria, another is resident in Singapore and two are from Western Australia. Mr Hoffmann, for the plaintiff, has challenged the defendant’s contention that all these witnesses would be called, but I am not in a position to make an informed assessment of this assertion at this early stage in the proceedings.
It appears that most of the plaintiff’s witnesses would come from Adelaide. However, some reside interstate and, as I have said, the plaintiff’s national sales manager, who is likely to give evidence, resides in Toowoomba.
The defendant’s solicitors are from Victoria and have no Adelaide Office. The plaintiff’s solicitors are from Adelaide, but have an office in Victoria.
Clause 19 of the contract provides as follows:
APPLICABLE LAW
This Contract shall be governed by and construed in accordance with the laws of the State of Victoria, and the parties submit to the jurisdiction of the Courts of that State.
It is likely that the main legal issue will be the construction of the contract and, in that respect, there would be no relevant difference between the law of Victoria and the law of South Australia. However, it should be pointed out that no statement of claim had been filed at the time the application was heard.
In my view, the matters of convenience to which I have referred such as the location of the head offices and the domicile of the witnesses are reasonably neutral. However, it is necessary to have regard to the jurisdiction clause.
A clause of this nature cannot be determinative of an application to cross-vest. To hold otherwise would be to deny the power and jurisdiction conferred by the legislation: FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117 at 124; Sarah Civil Pty Ltd v Stork ICM Australia Pty Ltd [1998] SASC 6713. However, an agreement between the parties as to jurisdiction and the governing law is a significant factor to take into account in an application under the Act: Sarah Civil Pty Ltd v Stork ICM Australia Pty Ltd; National Dairies WA Ltd v Wesfarmers Ltd (unreported, Federal Court of Australia, NG 509 of 1996).
There has been debate in some cases as to whether particular clauses can be described as “exclusive jurisdiction” provisions. It is my view that, in this case, the parties intended that litigation in relation to the contract would be dealt with by the Victorian courts. It is of some significance that clause 19 refers to both the applicability of the Victorian law and the submission of the parties to the jurisdiction of the courts of that State.
In Air Attention WA Pty Ltd v Seeley International Pty Ltd (unreported, Supreme Court of Western Australia CIV 1479 of 1996), Walsh J considered a clause which provided as follows:
This agreement shall be construed and governed by the laws applicable in the State of South Australia and the parties hereby submit to the jurisdiction of the courts of that State and of any courts having jurisdiction to hear appeals therefrom.
This clause does not differ in any material respect from the jurisdiction clause in the present case. I respectfully agree with the approach which Walsh J took when he said:
One has to interpret the clause in the light of what it says before and I emphasise that the jurisdictional clause which states: “And the parties hereby submit to the jurisdiction of the courts of that State and of any courts having jurisdiction to hear appeals therefrom.” follows specifically from the words which appear before it: “This agreement shall be construed and governed by the laws applicable in the State of South Australia.”
It therefore, in my opinion, inevitably leads to the conclusion that it is an exclusive clause and I so find accordingly.
In the alternative, if I am wrong in the conclusion that I have reached, I would in any event have come to the position that even if it is not an exclusive jurisdiction clause, nonetheless full weight should be given to it because that clause evidences the basic intent of the contracting parties that their obligations were to be determined in accordance with the laws of the State of South Australia. Even if the clause be construed, as I say it should not, to be not exclusive, nonetheless, in my view, that in itself would be sufficient reason to transfer the proceedings in any event to South Australia. Generally speaking one has to take into account, of course, the often-used term “interests of justice”. It has long been held that for a transfer to be ordered there must be some factor connecting the litigation to the court to which it is sought to be transferred. The fact that there are proceedings in both courts at the present moment is not definitive of that in any way. As I have said, the initial litigation was commenced in this State, which favours in general terms it proceeding here. But, in my view the significant matter which tips the balance is the contractual agreement between the parties, which included cl 12.
I have said that the matters of convenience do not come down on one side or the other. However, on my view of the proper construction of clause 19 the parties agreed that any litigation arising out of the agreement should take place in Victoria. Although such an agreement does not take the matter outside the Act, it is nevertheless a significant consideration.
In my view, it is in the interests of justice that the matter be tried in Victoria and an order to cross-vest it to that jurisdiction will be made.