CSR Limited v Cigna Insurance Australia Limited

[1996] HCATrans 342

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  Nos S119 and S120 of 1996

B e t w e e n -

CSR LIMITED

Appellant

and

CIGNA INSURANCE AUSTRALIA LIMITED and those entities set out in Schedule A hereto

First Respondents

THE GENERAL INSURANCE COMPANY OF TRIESTE AND VENICE and those entities set out in Schedule B hereto

Second Respondents

CSR AMERICA, INC

Third Respondent

Office of the Registry
  Sydney  Nos S123 and S124 of 1996

CSR AMERICA, INC

Appellant

and

CIGNA INSURANCE AUSTRALIA LIMITED and those entities set out in Schedule A hereto

First Respondents

THE GENERAL INSURANCE COMPANY OF TRIESTE AND VENICE and those entities set out in Schedule B hereto

Second Respondents

CSR LIMITED

Third Respondent

BRENNAN CJ
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 13 NOVEMBER 1996, AT 10.17 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR J.C. KELLY, SC, for the appellant, CSR Limited in S119 and S120 of 1996, the two matters in which it is the appellant and is also the third respondent in the other two matters.  (instructed by Freehill Hollingdale & Page)

MR D.M.J. BENNETT, QC:   If the Court pleases, I appear for CSR America Incorporated, the appellant in S123 and 124 of 1996 and the third respondent in the other matters.  (instructed by Allen Allen & Hemsley)

BRENNAN CJ:   Is it proposed that you should follow Mr Jackson, Mr Bennett?

MR BENNETT:   Yes, your Honour.

MR R.R. STITT, QC:   May it please your Honours, in each of those matters I appear with my learned friends, MR J.T. GLEESON and MR A.S. BELL, for the respondents and there are two preliminary matters which I wish to raise before my learned friend commences.  (instructed by Phillips Fox)

BRENNAN CJ:   Yes, Mr Stitt?

MR STITT:   Your Honours, the first preliminary matter relates to the question of parties and, in addition to the first respondents, we now act and appear on behalf of the second respondents named in Schedule B to the pleadings which are those entities set out in that schedule.  We do not act, nor do we appear, for those parties which have not been specifically named and have been merely described as John Does, Nos 1 to 250.  I have instructions at the appropriate time and if the Court requires it to amend the summons to include those parties as plaintiffs, and if this Court requires it, each of those parties is prepared to give the usual undertaking as to damages in respect of the anti-suit injunction.

Could I just remind your Honours that when Mr Justice Rolfe granted the interlocutory anti-suit injunction, there were then 42 plaintiffs, and at the request of the Court, those plaintiffs gave the usual undertaking as to damages.  Since 15 August 1995, the Court has not required, nor has CSR requested, that the balance of the first respondents give the usual undertaking as to damages but, as I say, I am now in a position to give that undertaking as to damages if and when this Court requires it.

McHUGH J:   Have we jurisdiction to allow an amendment of the summons?

MR STITT:   In respect of parties, I would submit, your Honour, yes.

McHUGH J:   Yes.

MR STITT:   Because it is just regularising the situation.

BRENNAN CJ:   We can see when we get further into the matter whether there is any substance that requires consideration of that point.

MR STITT:   As your Honour pleases.  The second preliminary point which I wish to raise at the outset‑ ‑ ‑

McHUGH J:   Can I just get it plain in my mind.  You want to amend the summons in the primary court, in the Supreme Court ?

MR STITT:   Yes, just to add those parties as plaintiffs.  The second preliminary matter which I wish to raise is to move to revoke the grant of special leave on the ground that the Amchem point which is now said to be central to this appeal was not taken and was not argued before his Honour Mr Justice Rolfe.

KIRBY J:   You concede in your written submissions that it was raised obliquely.  Are you withdrawing that concession now?

MR STITT:   No, your Honour.  What we said if it was raised it was raised obliquely, but the submission which we make in support of this application is that it was not raised and it was not argued.  Now, your Honours, I am prepared now to deal with that preliminary point if the Court wishes me to do so.  I raise it at the outset so that if the Court thinks it more appropriate for Mr Jackson to proceed then the Court knows that that is my position.

BRENNAN CJ:   I think that latter course is the one that we will follow, Mr Stitt.

MR STITT:   As your Honour pleases.

BRENNAN CJ:   Mr Jackson.

MR JACKSON:   Your Honours, I was going myself to mention one procedural matter which has largely been taken away.  It was simply that, as your Honours would be aware now, the second respondents were named by the first respondents as defendants in the action.  I was going to say there were originally more of them but some had moved from being defendants to plaintiffs.  I was going to say that they had not yet been served in the present proceedings.  They had not been served by us in the US proceedings because we are restrained by the anti‑suit injunction from taking further steps in those proceedings.

KIRBY J:   What is the position so far as the trial was concerned?  We were told something on the special leave application that it has been set down.  Has that date been varied or is it still pending and when is it?

MR JACKSON:   It has not been set down, your Honour.

KIRBY J:   I see.

MR JACKSON:   Could I go to the substance of the appeals.  As your Honours are aware, they are concerned with decisions of the Court of Appeal refusing leave to appeal from two decisions of Mr Justice Rolfe in the Supreme Court of New South Wales, one being an anti‑suit injunction, if I could use that expression, granted on 15 August 1995; the second being an order refusing a stay of the Australian proceedings, that order being made on 20 February 1996.  Your Honours will see those referred to in our written submissions in paragraphs 1 to 3. 

The United States proceedings were instituted in a Federal Superior Court, the United States District Court, the particular district being that of New Jersey.  Reasons for instituting the proceedings in that district rather than some other one in the United States appear in paragraphs 5, 6 and 7 of our written submissions.

Your Honours, if I could pause at that point, there is, in our submission - I am referring particularly to paragraph 7 of our submissions -nothing very heterodox about suing an insurer in the jurisdiction in which the insured or alleged insured is, itself, being sued by third parties.  Your Honours, as we note in paragraph 7, the policies in respect of which we sued were in respect of our operations world wide.  One could expect claims to be made against us in the courts of countries other than Australia; we are an Australian company, but are a multi or trans‑national company, whatever be the exact description of it - whatever those words precisely mean.

The second thing, your Honours, is that there was no exclusive jurisdiction provision in the policies.  They permitted but did not require claims to be made in Australian courts.  Can I invite your Honours to note in passing that one of the sets of policies in fact contained an agreement by the insurers to submit to the jurisdiction of the United States’ courts, which, of course, the present proceedings inform, at least break, but the respondents in this action seek rectification of that policy.

McHUGH J:   There is only one policy that has that clause, is there?

MR JACKSON:   One set of policies.

McHUGH J:   One set of policies.

MR JACKSON:   Yes.  Your Honours, another policy or perhaps set of policies allowed proceedings on the policies to be brought in New Zealand as well as in Australia, again not exclusive jurisdiction, but allowed proceedings to be brought.  Your Honours will see that referred to in our submissions in reply.  Could I just your Honours the reference?  It is page 22, paragraph 71, and it is the fourth line of the quoted passage.

GUMMOW J:   Mr Jackson, at some stage I would be assisted by an explanation of these phrases “primary” and “secondary layer” policies.

MR JACKSON:   Your Honour, I will endeavour to do that.

GUMMOW J:   One thinks one knows, but one might be quite wrong.

MR JACKSON:   Yes.  Your Honour, it may be convenient if I am able to give your Honour a document which simply sets out what the layers are.  Perhaps I could endeavour to do that maybe a little later today.

GUMMOW J:   Yes, thank you.

MR JACKSON:   Your Honours, could I also invite your Honours to note one matter to which we refer in paragraph 35 of our submissions - that is, our submissions in‑chief - and that is that many claims have been made against us in the United States, and they have been made in a variety ways.  That is referred to, if I could take your Honours to it for just a moment, page 108 of the primary judge’s reasons, and what your Honours will see in the passage commencing under the heading, “The circumstances giving rise to the present litigation,” commencing particularly about line 35, his Honour refers to the fact that we have been engaged “mainly as a third party or a cross‑defendant ‑ ‑ ‑

BRENNAN CJ:   Whereabouts is this, Mr Jackson?

MR JACKSON:   I am sorry, your Honour, volume 1, page 108.  The numbers, your Honour, are at the top right‑hand corner - the small numbers.

BRENNAN CJ:   Yes.

MR JACKSON:   Could I just say, your Honours, that his Honour’s reasons on the anti‑suit injunction are in volume 1; his reasons in relation to the stay are in volume 3.  Your Honours, I was referring to page 108, about line 35, with a view to indicating the variety of ways in which we have become enjoined as a party in the litigation in the United States.  What I was seeking to say was this, your Honours; that his Honour said that we have been engaged:

mainly as a third party or cross‑defendant in circumstances where those suffering from such illness, or their dependants, have sued their employers -

and, your Honours, he goes on to say:

In some cases CSR has been sued directly.

The point of referring to that is the one that we seek to make in paragraph 35 of our submissions, and that is that the approach taken by the primary judge, if correct, would mean that we could have been, and should have been, restrained from joining the relevant insurers as third parties in the proceedings in which we were sued, even if one took the simplest case of one person suing us directly in the United States.  In other words, in bringing third party proceedings there, we should, on his Honour’s reasoning, be restrained.

TOOHEY J:   Mr Jackson, in what capacity was CSR joined in these proceedings?  I appreciate it was described as a sales agent for Midalco.  Midalco is a, what, wholly owned subsidiary?

MR JACKSON:   Your Honour, the relationship appears in paragraph 5 of our submissions, at page 2.

TOOHEY J:   Yes, the relationship does, but not the capacity in which CSR was sued.

MR JACKSON:   Your Honour, no doubt a variety of allegations are made, as your Honour might expect.  The principal allegation, and, your Honour I am speaking really in a very global sense, is that we were a party who participated in, for example, the distribution of goods, to put it shortly, that we should have known were likely to cause damage, or that we were negligent in the way we dealt with them; matters of that kind.  Your Honour, I am sorry to put it in such a round way, but there is a very large number of cases, and your Honour will see, of course, that Midalco was formerly the company which operated the Wittenoom Mine.

BRENNAN CJ:   Mr Jackson, the basic case, as I understand it, that is put against you, is that you agreed that you were not liable ‑ the insurers were not liable under their policies and you so admit it.  Now, is that not at the heart of it all?

MR JACKSON:   Well, your Honour, it is an important matter, of course, and I do intend to deal with that and I am happy to come to it now if your Honours want me to.

BRENNAN CJ:   Well, in whatever order you like, but it would just seemed to me that if one was approaching this as a forum non convenience case, that is one thing, but if it is a question of whether or not there is an agreement, the bringing of suit which is in breach, then it is another.

MR JACKSON:   Yes, well, your Honour, could I say I do intend to deal with that.  I intend to deal with it with a number of aspects of it and, in doing so, to seek to demonstrate that the case really is not one where one can draw that conclusion.  Your Honour, it might be convenient if I were to come to that issue immediately and then what I propose to do after that is go back to the submissions that we wish to make.  Could I, your Honours, go in that regard first to our submissions in paragraph 34?  Your Honours will see that in paragraph 33 we seek to deal broadly with the various contentions. 

Could I just indicate to your Honours where the documents are and then I wish to say something about them.  The documents, your Honours, are to be found in volume 4.  May I list them, your Honour?  There are four documents.  The first is a letter of 29 November 1991 from CSR to insurers notifying them of claims.  That is at page 843.  May I add a qualification to it?  The document does not contain the supporting material which went with it which was very substantial, dealing with information concerning a large number of claims.  That is the first document, your Honours.

The second document is dated 20 February 1992.  It is a letter from Ebsworth and Ebsworth on behalf of insurers and your Honours will see it commencing at page 846.  The third document is dated 17 March 1992 and that is at page 850.  That is the letter from CSR, a letter drafted by the solicitors for, if I could put it neutrally, insurers, signed by us, drafted by the other side or, as we would say, part of it.  The fourth thing, your Honours, is a letter of 28 April 1992 from CSR to CIGNA.  That is at page 851.

The two documents which are relied upon as constituting the contract to sue are the latter two, that is, the document at page 850 and the document at page 851.  Your Honours, what I want to say in relation to those documents consists of a number of matters concerning the parties, the consideration and the interpretation of the documents.  In dealing, your Honours, with the question of parties - and could I take your Honours to page 850 - what your Honours will see is that the letter commences with a reference:

to various letters from CSR to underwriters dated 29 November 1991 and the response -

they are the two earlier documents.  The first thing that is said - your Honours will see the three paragraphs of it.  I will come to their meaning in a moment.  As to the parties, your Honours, we would submit that by the time the 1990/91 primary layer policy had been written - and that is the policy that was relevant at that time - there had been significant changes in the persons who were the insurers, significant changes from those who were insurers in the earlier period, 1978 to 1992; some people the same of course, but there had been significant changes.

In particular, there had been a change such that by the time the 1990/91 primary layer policy was written, only CIGNA Insurance Australia Limited was a primary layer insurer of the four who had been primary layer insurers at the commencement of the period in 1978.  The first thing we would say is that in consequence of that, two things.  The first is that it is arguable that the only insurers who were parties to that contract, if one existed, were the insurers who were at risk under the 1991/92 policies who were considering renewal of the policy for the 1992/93 policy period.  What we would submit is that there is nothing to indicate that any promise not to sue was made by us to the 1992 insurers so that they held that promise, in effect, on trust for all the insurers who had preceded them in the years 1978 to 1992.

McHUGH J:   But, Mr Jackson, where is all this going?  I cannot believe that special leave would ever have been granted in this case if we were going to be taken through this amount of detail.  You seem to me, at the moment, to be digging a trench for the revocation of special leave.

KIRBY J:   I think you are answering the question from the Chief Justice which you are obliged to do.

MR JACKSON:   Your Honours, that is what I was endeavouring to do, and I am sorry the answer will take a few moments because, as his Honour said, it is an important matter and I am seeking to indicate the three areas that are related to it.  Your Honour, I will endeavour to do it quickly but it will take me a few minutes to do it. The point we would seek to make in the first place is that if one is looking at the letter, the insurers who might have the benefit of any such promise are insurers who were not all the insurers who were insurers at an earlier period.  The second thing concerns the letter of 20 February 1992 which your Honours will see at page 846 to which that document resulted in the letter on page 850.  Now, if one looks at the first paragraph of that the letter it is expressed to be written on behalf of CIGNA, including INA and Monarch, and CIGNAs co‑insurers in various layers of the programme between 79 and 88.  Your Honours, it does not refer to the whole of the period from 1978 to 1992 - it refers to part of the period only - nor does it state that they are acting on behalf of all insurers in all layers in respect of the renewal of the 1992 policy. 

The second matter concerns the question of consideration. Now, your Honours, the primary judge found that the consideration for the contract was provided by the insurers considering bona fide the renewal of the policies for the current year and subsequently renewing the insurance. In our submission, the first thing is that pursuant to section 13 of the Insurance Contracts Act the insurers had a duty of good faith to persons with whom they were in contractual relationship.  The second thing is that any consideration flowed only from the 1992 insurers who were considering renewal. 

The third matter concerns the interpretation to be placed on the document.  Could I take your Honours to the document at page 850 once more and to the three paragraphs of it.  In relation to paragraph 1 of it your Honours will see that it contained a statement that CSR withdrew the requests, et cetera, referred to in the correspondence of 29 November 1991.  That did not cover all insurance policies.  It was limited to certain of the policies between 1979 and 1985.

BRENNAN CJ:   1988, was it not?  Page 846.

MR JACKSON:   Your Honour, I am sorry.  I know the document says 1988.  For a reason that I will have to go back to and check, I think it should be 1985.  It may be that the documents that were attached to it or with it made it clear it was 1985.  Your Honours, the second thing is that the first paragraph of the letter at page 850 stated that the notification and requests for indemnity were unconditionally withdrawn.  It says nothing about giving such a notification or requests for indemnity in the future.  If one goes then to paragraph 2 of it, what your Honours will see is that it contains an acknowledgment that the insurance cover between the years 1979 and 1988:

does not and was not intended to extend to asbestos related claims with respect to the operation of the Wittenoom mine and/or the sale of asbestos mined at Wittenoom.

Your Honours, immediately a question arises as to the ambit of paragraph 2 in relation to the expression “claims by persons arising out of the sale of the asbestos”.  Those terms are no doubt wide enough to cover claims by persons such as stevedores and perhaps those exposed to various other things in relation to - I am sorry, may I start that again.  No doubt those words are wide enough to deal with some aspects of persons injured by handling the asbestos mined at Wittenoom in connection with the sale of it.  For it to go to the nature of the claims presently in question would require an exceptionally wide interpretation of it.  The next thing, your Honours, is that if one goes then to paragraph 3 of the document, what it says is that it simply notes the assertion by the underwriters as set out in that document.

If I could go then to the other document relied on which is at page 851, your Honours will see that it dealt essentially with the drafting of a new asbestos inclusion to be included in the 1993 policies.  It included an acknowledgment about the terms of the asbestos exclusion in the expiring programme.  There is nothing, in our submission, in that letter which would support the proposition that the policies then expiring included all the policies which had been in existence over a period of quite some years before and there is nothing on the face of that letter to indicate that we would not make any further claim under the policies in relation to asbestos claims not covered by the earlier letter.  For example, one sees no reference to the 1978 policies.

Could I also say, and this is the last aspect of this to which I come, that we have not, of course, in the proceedings in New South Wales, or in these proceedings I should say, yet defended or cross‑claimed because of the currency of the appeals.  But, your Honours, even if the position be that the documents, or one or other of them, amounts to a contract not to sue there may well be available a number of causes of action resulting in the contract being set aside or rendered inefficacious.  In that regard, we would refer, for example, to section 52 of the Trade Practices Act to actions based on estoppel and a number of other possible causes of action.  Your Honours, dealing with those matters, of course, would raise in any event all the issues raised in the two actions presently in being.

TOOHEY J:   But it does mean that the matter is proceeding on a somewhat uncertain footing.

MR JACKSON:   It is not really, with respect, your Honour.  I am not entirely sure what your Honour means by that.

TOOHEY J:   You are foreshadowing various defences that may be raised, the outcome of which is completely unknown.

MR JACKSON:   Your Honour, all I was seeking to say was that your Honour the Chief Justice asked me whether we were not bound by the contract.  I was seeking to say there are three reasons which I earlier mentioned that, broadly speaking, would either mean the contract did not apply or was not completely efficacious.  I also sought to say that whilst it is not really a case of saying it is a simple contract not to sue, ergo you should be restrained, because it may be that in the proceedings, assuming they ultimately go ahead in New South Wales, that we would, in any event, have defences to such a claim.

BRENNAN CJ:   It is not a question for us to decide whether either the letter does amount to a contract finally or whether or not there are defences which might result in it being set aside or some counter‑ claim arising.  Do we proceed on the footing that that is, or either of those possibilities, is open on a litigation in New South Wales?

MR JACKSON:   I am sorry?

BRENNAN CJ:   If either of those possibilities is open on the litigation in New South Wales, that is that it will be found to be a contract which is efficacious or that it may be set aside or that other counter‑claims may arise.

MR JACKSON:   We would submit that one could not find in - perhaps I will put it at two levels, your Honour - we would submit first of all that looking at the documents one could not find that, as a matter of construction of them and as a matter of the interpretation of them in relation to parties and consideration, one could not find that on their face they operated as a complete bar to proceedings being instituted in some place, at all, perhaps I should say, operate as a complete bar to our instituting proceedings on the policies.

KIRBY J:   I do not want to get into the detail because as the Chief Justice says it is really not for us to determine, but on the face of things, this was a course of negotiations, you took a step and presumably, the insurers thereafter took certain steps on the basis of your step.  That seems an unpromising foundation for you then to come and say, “Well, notwithstanding what we did, we can still go back to square one”.

MR JACKSON:   Your Honour, we would say two things about that.  The first is that it is a question of what we did and what they, and who they were at the time, because, what is being sought to be said is that we are barred in respect of claims relating to policies to which ‑ in considerable difference of insurers over years, where, by and in respect of the past, by what we have said in relation to the future.  There is also a question of construction, of what the documents actually say.  We cannot be held to more than we said.

The next thing, of course, your Honour, is that, in any event, in the proceedings in the United States, we are seeking to have those agreements, if they are agreements, either set aside, or to obtain relief based on damages by reason of the circumstances, bringing about entry into them.

KIRBY J:   Is this what the Sherman Act does?

MR JACKSON:   Yes.

KIRBY J:   It gives relief against agreement, you say, of this kind?

MR JACKSON:   Well, your Honour, it gives relief in the sense of entitling us to damages, for example, and also, and there may be questions about this ‑ there may be a question about having the agreement set aside, but that would become academic in the end.

BRENNAN CJ:   Am I right in thinking that the claim based on the Sherman Act proceeds on the footing that the agreement, if it is an agreement, is valid and effective.

MR JACKSON:   Yes, your Honour.  I say that with one qualification, and that is that the way in which the pleading is framed would seem to leave open the possibility that the court might exercise jurisdiction in some way not to enforce it.

BRENNAN CJ:   Yes.

MR JACKSON:   But your Honour is quite right in what your Honour put to me.  So, yours Honours, what I have just said, in relation to the ‑ ‑ ‑

McHUGH J:   Sorry, could I just get this clear?  It does not matter for the purposes of the Sherman Act that the agreement is a valid agreement in the country where it was made, does it, if it affects US commerce? 

MR JACKSON:   That is so, your Honour, yes.  Your Honour, that is so, with perhaps one or two qualifications, because some aspects of agreements made in other countries, particularly in circumstances where the legislation of other countries provides some sanction for them, and in circumstances where that might, for example, be by reason of an agreement between United States and that other country ‑ something that might otherwise attract the Sherman Act provision might not.

KIRBY J:   This, as I take it, is one of your points, that a New Jersey court would be in a much better position to understand and apply the Sherman Act than we would be in Australia?

MR JACKSON:   I accept that, your Honour.  May I add one qualification to it, and that is the expression, “New Jersey court”, because ‑ I say that, your Honour, because your Honours will have seen, on a number of occasions, that the United States District Court appears to have been described in a variety of ways, which - for example, the District Court of New Jersey, and so on.  Your Honour, I will not labour the point, but it is describes ‑ ‑ ‑

KIRBY J:   I should have said, “a court in New Jersey”.  I do appreciate the difference.

MR JACKSON:   Yes.

BRENNAN CJ:   Just one further question, Mr Jackson.  Is it common ground that the question of the existence of an agreement constituted by the document at page 850, and the effect of any such agreement, if one exists, is to be determined according to the law of New South Wales?

MR JACKSON:   Well, as to both those things, the answer is yes, your Honour; but subject, in the case of the second, of course, to the efficacy of it being something dealt with by the law of the United States.

BRENNAN CJ:   For the purposes of the United States law.

MR JACKSON:   Yes, your Honour.  Because, your Honour, the fact that a contract in breach of the United States law may be one that itself is, as a matter of the proper law of the contract, a contract made pursuant to the law of some other country does not mean it does not result in a breach of the Sherman Act.

GUMMOW J:   Well, the Sherman Act might apply regardless of there being a non‑US governing law.

MR JACKSON:   Yes, your Honour.

GUMMOW J:   In other words, the Sherman Act might render it unenforceable, despite what the situation might be in another jurisdiction, the proper law of which was the proper law of the contract.

MR JACKSON:   Yes, your Honour, I accept that.

McHUGH J:   Before you leave this point, what is the relevant market that is alleged to be affected here?  For Sherman Act purposes, does one simply just look at the US market, or can one go beyond that?

MR JACKSON:   Well, your Honour, the expression, I think, is “commerce” in the United States, but your Honour will ‑ ‑ ‑

McHUGH J:   Yes.  But relevantly, we are talking about an insurance market, are we not?

MR JACKSON:   Yes, your Honour.  An insurance market for a company, a great deal of whose business is, or was, carried on in the United States at the time.

GUMMOW J:   It would not be just domestic commerce in the United States, would it?  It would be foreign commerce in the United States as well, surely.

MR JACKSON:   Yes, your Honour.  We did, in fact, carry on a great deal of business in the United States at the time so, even if one took the narrowest view of it, it applies to insurance in respect of that part of the United States commerce.  Your Honours, could I go back to paragraph 34 of our submissions, and what I wanted to refer to particularly was paragraph 34(b).  There is absolutely no reason, in our submission, why a contract not to make the claims could not be relied on in the United States District Court by way of a defence to the claims for indemnity.  Your Honours, issues will arise, of course, as to the efficacy of the agreement, but there is no reason why it could not be relied on.

Your Honours, we would seek to make, also, the point referred to in subparagraph (c) that, if there was a contract, it was intended to have a world‑wide operation and there is not any particular reason why it could only, or best, be enforced by the courts of New South Wales.

BRENNAN CJ:   That is not quite right, is it?  I mean, if the agreement is one which says, “We agree not to sue you anywhere” and there is an action brought elsewhere to sue, then why should not New South Wales enforce it by an injunction?

MR JACKSON:   Your Honour, I accept the possibility that in terms of the existence of thea jurisdiction to do so but, your Honour, to put it in that way, with respect, leaves out of account the fact that we have, on any view of it, a number of policies with a number of people, some of whom are in Australia, many of whom are not.  The policies are intended to cover our operation anywhere.  Now, in relation to those operations, the way in which the contract, if there is one, would operate is, in effect, as a qualification to the ambit of the cover provided by the policies.

BRENNAN CJ:   Yes.

MR JACKSON:   Now, your Honours, if we are sued - for example, let us assume that we are sued.  If one were to assume that we were sued in the United States in respect of something that was not asbestos related or in relation to which there was a debate about that issue.  Now,  your Honours, in relation to that cause of action brought against us by a third party in the United States, we ourselves would be entitled, we would submit, to join the insurer as a third party.  Now, there is no reason, we would submit, why the question of whether the policy responded, to use that word, to the claim.  The argument on one side being that it did not because it fell within the terms of the letter, assuming it is efficacy, the argument on the other side being the reverse.  There is no reason why that issue could not be properly decided in the United States proceedings.

BRENNAN CJ:   One would not think that if there were any enforcement by the courts of New South Wales it could possibly go beyond the scope of the agreement, if any, found by the courts of New South Wales either as to subject matter or as to parties.

MR JACKSON:   Your Honour, I am sorry, I was not suggesting that the United States courts would go beyond the terms of the agreement.  What I am simply seeking to suggest, and perhaps I misunderstood what your Honour said, is that in a case of that of the kind which I was mentioning, there is not any particular reason why the issue arising in the United States in relation to the United States action in relation to cover which is world-wide, why the ambit of, in effect, the exception to it is not something that could not be decided by the United States courts and doing so perfectly properly.  There is no particular reason why that issue should be dealt with by the courts of New South Wales.

DAWSON J:   Except it may be decided to kill that sort of argument once and for all rather than to have it raised in a multiplicity of actions.

MR JACKSON:   Your Honour, that is what we are seeking to do in the action in the United States.

KIRBY J:   You say the natural place for it to be dealt with is in the place where the litigation is on foot which tenders the relevance of the insurance ‑ ‑ ‑

MR JACKSON:   Yes, your Honour.

KIRBY J:    ‑ ‑ ‑ with the thousands of plaintiffs and the litigation is on foot.  It is a natural thing for you to join the insurers into it and that is a natural step.  It is the contained litigation.  Here, a special, new and different litigation has begun in this country which touches a point that could conveniently, justly and lawfully be determined in the litigation which is already on foot in the United States.

MR JACKSON:   Your Honour, I wish I had been able to put it as well as that, but I adopt that, with respect.

KIRBY J:   That is what I understand it did.

McHUGH J:   Yes, but how does the US District Court for New Jersey get jurisdiction to deal with the enforceability of a contract made in New South Wales?  Under its pendant jurisdiction, is it?

MR JACKSON:   Essentially, your Honour, yes, because of the claim.  The claim is under the federal statutes and then the pendant jurisdiction following on from that.  That is where it comes from, your Honour, to put it shortly.  Your Honours, I was I think at paragraph (d) on page 13 of our submissions and, your Honours, what we submit there is that the result of what has been decided is to determine finally that the issue of the contract, or no contract, is to be determined in Australia and it does not allow the United States court the opportunity to express a view on the question whether it should entertain the matter further.

DAWSON J:   Mr Jackson, just fill me in with one matter.  There is a permanent injunction claimed, is there, as part of the relief?

MR JACKSON:   Yes, your Honour.

DAWSON J:   It would really be, in one sense, unnecessary, and that is part of the point you make, if in fact the plaintiffs were to succeed in Australia because the matter may then be res judicata.

MR JACKSON:   Yes, your Honour.  Your Honour, that is what commonly happens of course if one has litigation proceedings proceeding in two places, and what ordinarily will happen will be that one will come to finality and many of the issues, some agitated, are then covered by estoppels or res judicata.  Now, your Honour, there may be in some cases some difference in the law between jurisdiction A and jurisdiction B about the extent to which and the circumstances in which a finding by one court is binding on another court, but in the ordinary course of events, there is not really, in our submission, any suggested difference in this case would make ‑ ‑ ‑

DAWSON J:   So that in this case, whilst there is an application for a permanent injunction, by and large, if the proceedings are brought to a conclusion in New South Wales, it would not have much effect.

MR JACKSON:   As a practical matter, it would determine, your Honour ‑ ‑ ‑

DAWSON J:   So that, in essence, you say that a grant of an interlocutory injunction really is granting permanent relief in the sense that it would stop the proceedings in the American jurisdiction subject to matters that are not covered by the judgment in New South Wales?

MR JACKSON:   Yes.

DAWSON J:   So that considerations governing the granting of an interlocutory injunction of this sort are somewhat different to considerations which ordinarily apply.

MR JACKSON:   Yes, your Honour.  There really are two further aspects to it too, if I could put them this way.  The first is that we make the submission, which I will come to in a moment, that the appropriate course in cases of this kind is first to invite the foreign court to decline to exercise its jurisdiction.  I use that expression globally to indicate the several ways in which a court may decline to do so.  The second thing we would seek to say is that in a case of this kind - and this is really the matter to which we referred in paragraph 34(d) of our submissions - what his Honour’s grant of the interlocutory injunction has done has been to mean that the question of the effect of the so‑called contract is one that is to be decided in New South Wales rather than to be decided in the United States, because the decision on granting a permanent injunction must be one that turns on the efficacy to be attributed to that agreement.

DAWSON J:   I am trying to see what part a permanent injunction would play if in fact the matters in issue are determined, which is the existence or not of the contract which is crucial - that is what we are talking about at the moment.  If it was determined that there was or was not a contract, that would be determinative of that issue presumably in the United States?

MR JACKSON:   Yes.

DAWSON J:   So that there would be no point in restraining the proceedings in the United States because they could only proceed in relation to matters which were not determined in the New South Wales court.

MR JACKSON:   Yes.  Your Honour, I suppose as a matter of form rather than as a matter of substance the grant of a final injunction might perhaps be regarded so far as the New South Wales proceedings are concerned as something that was interlocutory.  Perhaps yes, perhaps no.  It depends whether one looks at the form of them as being something happening in proceedings or one looks at the substance of them in relation to the effect which they have.  If one looked at it from the latter point of view, they decide in the Australian court the issues which it is sought to agitate in the United States court.  Your Honours, of course the effect of the grant of the anti‑suit injunction means that the claim under the Sherman Act cannot proceed because ‑ ‑ ‑

McHUGH J:   Well, it can proceed but as a separate matter, can it not?

MR JACKSON:   No, your Honour, we are restrained from the ‑ ‑ ‑

McHUGH J:   At the moment you are until this is disposed of, I suppose, but is it seriously suggested that some time in the future you cannot run your Sherman point in the United States?

MR JACKSON:   Your Honour, we had thought so.

McHUGH J:   Mr Jackson, you have been going almost an hour and we have not really got to what is the important point of principle.  My understanding is that your case is quite simple.  You say proceedings were started in the United States in a court of competent jurisdiction which can handle all the claims and that is where it should stay, at least until that court is given an opportunity to say that it should not hear the proceedings, that it can be better disposed of in Australia.

MR JACKSON:   Well, your Honour, that is fundamentally what we seek to say.  May I come to that at page 6 of our submissions.  We seek to develop in paragraph 20 the broad proposition that an anti-suit injunction, although, theoretically, being something in personam does, in fact, operate as an interference with the exercise of jurisdiction by the other court or may well be so perceived.  I do not intend to take your Honours to each of the references we have set out under paragraph 20.  May I take your Honours to a couple of them, however.  The first to which I wish to go is British Airways Board v Laker Airways (1985) 1 AC 58, and I simply wanted to refer your Honours to what was said there by Lord Scarman at page 95. Your Honours will see, between letters D and E, his Lordship says:

I would emphasise that it states an approach and a principle which are of general application.  The approach has to be cautious because an injunction restraining a person within the jurisdiction of the English court from pursuing a remedy in a foreign court where, if he proves the necessary facts, he has a cause of action is, however disguised and indirect -

they are words on which I would place emphasis -

an interference with the process of justice in that foreign court.

Now, we said in the text of paragraph 20 that that was recognised sometimes vigorously in a number of decisions.  Could I refer your Honours to the case to which we refer at the top of page 7, that is Laker Airways v Pan American World Airways 559 Fed Supp 1124.  At page 1128 in note 14 - - -

KIRBY J:   We have one, Laker v Sabena, but that is a different case?

MR JACKSON:   Yes, it is, your Honour.  Your Honours will have the reference there.  May I just read a very short passage from note 14 where what Justice Green says:

The British court appears to have rationalized its action on the ground that its injunctions operate only on the plaintiff, not this Court.  At least in this country, as the Supreme Court held over a century ago, there is no difference between addressing an injunction to the parties and addressing it to the foreign court itself. 

Various references are given, and then his Honour goes on to say, speaking of Mr Justice Parker in the High Court in England:

Mr Justice Parker has also stated that the type of injunction he issued “does not represent an interference by one court with the proceedings of another.”  With utmost respect, this Court must differ.  It can hardly be said that an order which, for example, directs a party not to file further papers in this Court, as did the order of the British court on March 2, is anything other than a direct interference with the proceedings in this Court.

GUMMOW J:   Now, that passage is taken up by Lord Hoffman in Barclays Bank v Homan.

MR JACKSON:   Yes, your Honour.

GUMMOW J:   It is one of these cases.

MR JACKSON:   It has been referred to on a number of occasions including in the Canadian Supreme Court decision Amchem, your Honour.  The third and last passage to which I will go in that regard is the one to which we refer in Canada in Amchem Products Inc v Workers Compensation Board. I understand your Honours may have the Dominion Law Reports reference which is (1993) 102 DLR (4th) 96, and it is at page 105D. Your Honours will see at the end of that paragraph:

While the restraining order operates in personam on the plaintiff in the foreign suit and not on the foreign court itself, it has the latter effect and therefore raises serious issues of comity.

Yours Honours, may I add, in relation to the cases we have referred to there, without taking your Honours to the text of it, one observation concerning the first of the Australian cases there referred to, Pegasus Leasing Limited v Cadoroll Pty Limited ‑ ‑ ‑

GUMMOW J:   Before we come to Pegasus, the decision of Lord Hoffmann is in Maxwell Communications, No D.

MR JACKSON:   Yes, thank you, your Honour.  Your Honour, I am going to come to that in another connection in a moment.

Yours Honours, in Pegasus Leasing, and I hope your Honours will not regard this as sour grapes, having been on the losing side of the case in the Full Court of the Federal Court, but the matter, in the end, did not come here, but it was ‑ I just invite your Honours to note one aspect of it and it is this:  the majority in the Full Court of the Federal Court took the view that an injunction should issue restraining parties from proceeding in the Supreme Court of a State.  Yours Honours, it was not a case where the Federal Court had exclusive jurisdiction, but it was a case where both the Federal Court and the Supreme Courts of the States had the same jurisdiction conferred or invested on them by the Parliament of the Commonwealth.  And, if your Honours are referring to it, the ‑ when I say “propriety” but in the sense of meaning appropriateness, of one court exercising federal jurisdiction, issuing an injunction to restrain parties from proceeding in another court exercising the same federal jurisdiction in Australia, is an issue about which the Court might have some reserve, if I can put it that way.

Yours Honours, what we seek then to say and what we have in paragraph 21 is that because the practical effect of the grant of the injunction is to determine for the foreign court whether that court is to exercise its jurisdiction, that is potentially likely to be regarded as a breach of comity by the foreign court.  We give your Honours some references to it.  I will not take your Honours to the detail of them, except to refer to one, and that is the one which is referred to in paragraph (c) on page ‑ ‑ ‑

McHUGH J:   But, before you do, so that I can conceptualise this whole matter and where these arguments are leading and what these cases stand for, what is your theory of the cases?  What is the principle upon which you contend this case should be decided, if there is one?  Or, is it a question of balancing various factors?

MR JACKSON:   Your Honour, we contend that this is the, if I can put it this way first, the ordinary kind of case involving anti‑suit injunctions and that in the ordinary kind of case the Court should not grant an anti‑suit injunction, interlocutory or final, unless the party seeking the injunction has been to the court of the jurisdiction which has been invoked in the other country and asked that court to stay its hand or otherwise bring the proceedings to an end.

KIRBY J:   As a matter of law or as a matter of discretion?

MR JACKSON:   Your Honour, we would submit that it is a matter of law in the sense of being a rule of practice.

DAWSON J:   And it is fairly based on comity?

MR JACKSON:   Yes, your Honour.

DAWSON J:   And only comity, perhaps practicalities.

MR JACKSON:   Both comity and practicality, your Honour.  I say both because if I could just take your Honours to what we say in paragraph 28 of our submissions, it is this:  in terms of the practicality of it, if that course is followed then, in our submission, the matters to which we refer to in paragraph 28, or the situations to which we refer in paragraph 28 will occur, but a particular aspect of it is, as this case really demonstrates, that unless one does that the position of the foreign court is likely to be entirely hypothetical and you can have a case go on till the cows come home, like this case, arguing about something that the foreign court might or might not entertain in the end.

KIRBY J:   But are there not two difficulties?  One is the appellate structure of the foreign court; you might then get yourself locked into that.  The second is that it makes it more difficult for the local court, which may be the more natural venue for the determination of the issue according to its law, to then interfere later whilst it is pending in the foreign court, or to reach a conclusion different from the foreign court.

MR JACKSON:   Could I say a number of things in response to that, your Honour?  The first is really a question of taking one of the ones towards the end of what your Honour put to me.  The first is, I suppose, a question of what the local law is, and if the local law, if I can put it that way, the Australian law is that injunctions should only be granted rarely, and after that course has been followed, then that itself is part of the local law.  In relation to difficulty, if one is speaking about the jurisdictions of various, to take the simplest case, the common law jurisdictions of the world, then in those circumstances there is not any particular difficulty, we would submit.

There would be very few cases in which one would expect there to be any injunction granted once the matter has been considered by the other court, and that court has decided to entertain jurisdiction.  Certainly there may be some, but the circumstances, your Honours, would be very limited.  For example, one example might be if one went to a stage anterior, if there was no ability to apply to the other court for a stay or other termination of it.  That is one possibility.  Another possibility is if it appeared that the other country was a country where the courts were in some disarray; for example by reason of violent upheavals in the country, or if one took, for example, some of the court proceedings in the former Yugoslavia in times of great disarray.

A third situation might be if one could say that the courts of the country were courts which were not, in our sense of the term, courts, for example, being subject to the dictate of the executive.  That might be a situation in which, notwithstanding the fact there had been some application made and refused, one could say it would be appropriate to grant the injunction but there are really, your Honours, relatively few cases, in our submission, where it would be appropriate.  Perhaps one way of describing them in the circumstance to which your Honour refers would be to adopt, in effect, the classification that has been quite frequently referred to as being to limit the grant of the injunction to cases falling, broadly speaking, within two classes; one class being the class where the carrying on of the foreign proceedings is something that would interfere with the exercise of jurisdiction by the Australian court.  I will come to indicate what I mean by that in just a moment.

The second class of case is where not to grant the injunction would mean there was some interference with what could be identified as being the public policy of the Australian forum.  I will give your Honours a reference a little later, if I may, to where those criteria may be seen but could I perhaps just add one more thing in relation to that, your Honour, and it is this:  one does need to bear in mind, of course, that the legal systems of various countries do differ.  If one had a situation, for example, where the courts, so far as they were dealing with people from other countries, for example, courts of one country so far as they are dealing with people from another country, were not to exercise jurisdiction except with the permission of the executive government, or if told by the executive government not to continue to exercise jurisdiction, had ceased to exercise jurisdiction, then it may be a question whether, in those circumstances, the right course for someone contending that the foreign court or contending that there should be an injunction, would be to seek the exercise of that power.

All I am seeking to convey, your Honours - but I will not labour the point - is that there are a number of possible situations, but, broadly speaking, the situation is that for which we contend.  The last thing I would say, your Honours, is in relation to the appellate structure your Honour mentioned, and it is this.  Litigation in almost every country has the ability for there to be appeals, and that is usually a salutary part of the system.  The fact that in one country as much as here someone seeks to utilise the appeal structure does not mean that one should take the view that seeking the intervention of the courts there should be prohibited or a factor against one here.  But I do not know that I can advance that any further.

McHUGH J:   When you, in answer to my question, used the term - “ordinary case” I think was the term you used; you certainly used the word “ordinary” - did you intend to include all cases that did not fall within these two categories?  These two categories about interference with the exercise of the jurisdiction of the Australian court or an interference or refusal to apply the policy of the forum, they are the extraordinary cases, are they, where an Australian court might interfere by way of an anti‑suit injunction?

MR JACKSON:   Your Honour, I would answer that by saying yes.  It is possible perhaps that someone could add a third category or fourth category, but broadly speaking that is what we would say.

GAUDRON J:   And you are speaking solely in terms of where the foreign proceedings were first commenced, because there might be quite different considerations if they were commenced after domestic proceedings?

MR JACKSON:   Not entirely, your Honour.  The context in which I am speaking of course is where that has happened.  But what we would seek to say is that if there are proceedings in being in two jurisdictions and a party seeks to restrain the further prosecution of those proceedings by order of an Australian court, then the Australian court should not grant that order unless the other party has first been to the other court and asked that court to stay its hand.

GAUDRON J:   That is a bit awkward because, if the other court adopts that policy as well, you have a stalemate.

MR JACKSON:   Well, your Honour, it is not really a stalemate, with respect.  What you have is a situation where you have two proceedings in being.  But one should not start, in our submission, from the proposition that the courts of the two countries are likely to be hard nosed about it in the sense of saying that both actions will proceed.  They may but, your Honours, in the end one is likely to have a situation where one of them comes to an end in any event.  One of them comes to an end first and that is that as a practical matter.

DAWSON J:   Then it is a race as to who gets there first.

MR JACKSON:   Your Honour, sometimes at a fairly snail’s pace of course.  What may well happen is that - let us say that one has two opposed parties, one of whom, for example, is an American company, one of whom is an Australian company.  The Australian company starts proceedings against the American company in the United States and vice versa in Australia.  The perceived advantages and disadvantages of litigation are changed.  It is not as though there is a continuum where what is always seen is the advantage in proceeding in one jurisdiction.  Sometimes things change and particularly things like the expedition with which cases are heard or the desire not to have expedition.  Your Honours, that sometimes does happen of course.

GUMMOW J:   It seems, Mr Jackson, to me that Henry v Henry may suggest there is some particular importance to be attached to the circumstance that there is on foot an existing proceeding in a foreign court.

MR JACKSON:   Your Honour, what I was going to say about Henry v Henry is that it does do that.

GUMMOW J:   Therefore it is in your favour.

MR JACKSON:   That is, I think, at page 489-90 of Henry v Henry.  May I come to that a little later?  All I was seeking to say in answer to your Honour Justice Gaudron was that the - your Honour asked me did it all turn, I think, in effect, on being the first ‑ ‑ ‑

GAUDRON J:   I was asking were we to understand your submissions in the context proceedings having been first initiated in a foreign court?

MR JACKSON:   Your Honour, the answer is yes to that, but I was seeking to leave open the possibility that a similar principle might apply in other cases.  I take your Honours to paragraph 28 of our submissions.  May I go to paragraph 29 at page 11 where we seek simply to say that to deprive a person of the right to invoke the jurisdiction of another country where this Court’s jurisdiction may be founded on no more than presence is serious and the Court should be in a position to know what is the real danger to which the applicant is subject.

Your Honours, I was about to take your Honours, I think, to page 8 of our submissions to the decision in Gau Shan Co Ltd v Bankers Trust Co 956 F 2d Series 1349.  Your Honours, it is in relation to the proposition that the grant of an anti‑suit injunction is potentially likely to be regarded as a breach of comity by the foreign court.  The particular passage, your Honours, is at page 1355 in the first column.  Your Honours will see the first new paragraph on that page, and we would refer to that paragraph and to the paragraph immediately following, the first one commencing, “The inappropriate use of antisuit injunctions”.  Your Honours, we have referred in paragraph 22 to what is a very frequently used description of the notion of comity and it is referred to in the various decisions which we have set out in paragraph 22.

McHUGH J:   Mr Jackson, neither the United States Federal Courts nor Australian courts apply the Spiliada principle.  Do all these problems disappear if the Spiliada principle became the operative principle?

MR JACKSON:   Your Honour, part of them mutes, perhaps, part of them grows.  The part that diminishes is that if courts are more inclined to the view that the test is not clearly an appropriate forum in relation to stay ‑ the more appropriate form, if I can put it that way ‑ then the expression of that is a kind of palliative ‑ I do not mean that badly, your Honour, but it is a softer way of expressing the test.  But, of course, if that is the test, what one does then see is a considerable amount of argument and evidence, and, in the end, decisions, about what is to be the more appropriate forum.

Issues of that kind cannot be left out of account altogether, but, if I may say so, with respect, in relation to some observations in Voth v Manildra, as this case demonstrates, they tend not to be dealt with in the solitude of the judges’ chambers, and a great deal of time can be spent on them, so that, your Honour, it makes a slight change one way, but it is likely to increase the time involved in the litigation.

McHUGH J:   It may, but it may bring about a solution.  I mean, take this case; your opponents go to the United States; they ask for a stay; may well be refused because American federal courts do not apply Spiliada.  You come before Justice Rolfe, and you ask for a stay here, and he applies the clearly inappropriate test ‑ stalemate, two sets of proceedings.  Have we not got to seek to find a solution which will effectively, from a commercial point of view, make one or other forum the forum to litigate the issue?

MR JACKSON:   Your Honour, a commercial resolution of the issue, if I can use that expression, is to take the view that was advanced in the sense in Henry v Henry, and that is to say, if you have got proceedings instituted in one jurisdiction, then to claim, in effect, in another jurisdiction exactly the same thing, or the reverse of the same thing is, prima facie, something that should not be permitted.

McHUGH J:   That may be a practical solution; that you have an all or nothing rule, in effect, or close enough to it.  It is the first one to the barrier wins the race.

MR JACKSON:   All that it means, your Honour, is that the first one to the barrier, or the one who is at the barrier first, may be the one who selects what course the race is to be run on, as distinct from who is going to win.

McHUGH J:   Yes.

MR JACKSON:   It might be the purse is larger, your Honour ‑ larger or smaller ‑ but, of course, as I say, these things change too in the course of litigation.  Your Honours, I have referred your Honours to page 1355 of Gau Shan.  What I was going to say was that, as your Honours will see in paragraph 24, the doctrine of comity is, of course, one that one does see in other parts of the law, and we would simply refer to those things.

Your Honours, we mention in paragraph 23, the events leading to the Foreign Proceedings (Excess of Jurisdiction) Act as being an example of circumstances where difficulties can arise because of lack of attention, as it were, to comity and what happened, to put it shortly, your Honours, was that in the United States the, in effect, provisions that allowed roping in of Australian defendants resulted in there having to be enacted by the Parliament legislation which effectively prevented the amounts recovered being enforced in Australia.  Your Honours, may I perhaps give your Honours a copy of two documents in relation to that, and I will do it at a later stage, one being a copy of that Act and the other being a summary of the events that took place including the parliamentary discussion of the need for its enactment.

GUMMOW J:   It was amended, was it not, Mr Jackson, at some stage?

MR JACKSON:   Yes, your Honour.  There was, of course, an earlier Act too.

GUMMOW J:   That is what I have got in mind, I am sorry.

MR JACKSON:   Your Honour may recall it deals with really two aspects; enforcement of the judgment and then costs, I think.  Your Honours, could I move then to paragraph 25?  The principles, of course, derived from the principles in equity ‑ and your Honours will see that referred to in the decisions to which we have there referred - Your Honour Justice Gummow summarised it in National Mutual Holdings v The Sentry Corporation 22 FCR 209. May I take your Honours to that? It is a passage, your Honours, commencing really at page 231, the last paragraph on the page and the passage goes through to the top of page 233. Your Honour noted about three‑quarters of the way down page 232 that:

The conduct of foreign proceedings which have a tendency to interfere with the due process of the domestic court may, in the circumstances of a particular case, generate the necessary equity -

Your Honours, could I just invite your Honours to note one thing in relation to our learned friend’s submissions?  I am referring to the first respondent’s submissions in relation to the anti-suit injunction.  Could we just say this, that although the principle - I will come to my learned friend’s submissions in a moment - although the principles derive from an equitable source, it does not mean, of course, that particular instances of the exercise of that jurisdiction necessarily remain authoritative in modern times and that is a matter to which Lord Goff adverted in a case to which I will come in a moment.  Could I take your Honours to paragraph 2.3 of our learned friends’ submissions and what your Honours will see is that, in discussing the history of the topic, in paragraph 2.3 there is a reference to:

The importance of the in personam operation of the jurisdiction is well‑illustrated by Bushby v Munday, Cloves and Cracroft -

But, your Honours, that case was adverted to, if I may say so, by Lord Goff when on the Court of Appeal in Bank of Tokyo Ltd v Karoon. The case is reported as a note in (1987) 1 AC 45 and at page 60 in the first new paragraph on that page his Lordship said:

But the jurisdiction to grant such an injunction has only rarely been exercised in this country.  The earliest cases in which the jurisdiction was established do not necessarily provide authoritative examples of its exercise today; indeed one of them -

and he refers to that case -

was later to be described by Lord Brougham as going to the “very verge of the law” - - -

KIRBY J:   Is there somewhere where the history of anti‑suit injunctions in the English law is explained, and the earliest example illustrated?

MR JACKSON:   I can give your Honour a reference later to that.  There are some articles about the topic but ‑ ‑ ‑

KIRBY J:   Yes.  I have seen quite a few articles coming through lately on this subject and, if there are any that you think might be helpful, I would be grateful for a copy of them.

MR JACKSON:   Yes.  Your Honour, could I just say that you will see we refer to a number of decisions, including that of your Honour Justice Gummow, in the paragraph of our submissions earlier to which I referred, in paragraph 25, and each of the cases there referred to contains some discussion of it.  Your Honour will see, also, a reference, I think, to 42 American Jurisprudence which has got - that is in paragraph 25 of our submissions.

KIRBY J:   It is just that if one is looking for the first time in this Court possibly at what the principles are or should be, I think we should endeavour to approach it with a view to, as far as possible, especially in this sort of area, reaching harmony with other major common law countries, especially those with whom we trade a lot.

MR JACKSON:   Indeed, your Honour.  Your Honour, that will, in effect, take me to paragraph 26 of our submissions.  What I was going to say, your Honours, is that if one is looking at the attitude adopted in earlier times, what your Honours will see is that much less enthusiasm, if I could put it that way, was expressed for the taking of proceedings in countries other than those which were England, or which were of the proceedings in the English colonies and dominions.  But in modern times, the courts have become more prepared to respect the jurisdiction and the competence of the court of other countries.

Your Honours will see that discussed by Justice Hoffmann, as he was, in Re Maxwell (1992) BCC 757 at page 762, in the paragraph commencing the middle of the page, where his Lordship said:

In the last 20 years, however, there has been a shift in the attitude of the English court to foreign jurisdictions -

and, your Honours, it is that paragraph, and the one immediately following it.

KIRBY J:   I have a recollection that there is some discussion by Lord Goff of this in Spiliada as well.

MR JACKSON:   Yes, your Honour.  Your Honours, it is referred to - I do not intend to take your Honours through all the references we have set out in paragraph 26, but may I just give your Honours a reference to - your Honour mentioned a number of jurisdictions.  Could I give your Honours a reference to Morguard.  I will just take your Honours to Morguard Investments (1990) 76 DLR (4th) 256 and the particular passage, your Honours, is one that commences at page 269.

BRENNAN CJ:   I think we also have the Supreme Court Reports.

MR JACKSON:   In that case, your Honour, it is at page 1096.  Your Honours should see a reference to Spencer v The Queen and the definition of the word “comity”.  Immediately following that is a reference to Justice Dickson stating:

“common interest impels sovereigns to mutual intercourse” between sovereign states.  In a word, the rules of private international law are grounded in the need in modern times to facilitate the flow of wealth, skills and people across state lines in a fair and orderly manner.

Your Honours, that is discussed for a couple more paragraphs and under the paragraph commencing:

This formulation suggests that the content of comity must be adjusted in the light of a changing world order.

That is developed through the next couple of paragraphs and in particular it goes on to the paragraph commencing “However that may be”.  This is at 270 of the Dominion Law Reports:

However that may be, there is really no comparison between the interprovincial relationships of today and those obtaining between foreign countries in the 19th century.

That goes on to the end of that paragraph when he moves into the situation between different provinces.

KIRBY J:   The difference in fashioning a principle of law as distinct from a matter of discretion is that what do you do if the other country is a country of which you are unaware or a bit suspicious or you are just not sure?  I mean, that does not arise in this case, but you are urging what you said was a principle of law, that you always have to go and ask that jurisdiction.  What does one do if it is The Gambia which has our tradition but has had some recent unrest?  The problem of drawing lines will not go away.  That is why it must be discretion.

MR JACKSON:   Yes, your Honour.  I do not suggest that the issue does go - if one took - one does start from the proposition that an application is being dealt with by a judge for an anti‑suit injunction.  The person seeking the injunction would, in the circumstances to which your Honour adverts, provide a reason for not having sought the stopping of the proceedings in the other country.  If one demonstrated there was civil unrest, for example, in the country and the case could never be heard, then that would be a sufficient reason for not doing so.  But, your Honours, in areas of this kind, when one speaks about principles, for example, the principles in relation to the grant of equitable relief or equitable forms of relief, very frequently one is speaking about what would be the ordinary situation, what the ordinary situation is to be, as distinct from saying that this applies in every case.

Could I give your Honours one example?  If one took what might be described as the principle that a court exercising equitable jurisdiction would not grant a specific performance of a contract to, for example, build a house, which is an example that used to be used, or to do some other project.  Your Honours, that is no doubt true as a general proposition, but much must depend in the end on a couple of things, such as the degree of specificity of what has to be done or how little or how much has to be done.  If one turned it around to a situation where all that had to happen was for one minor thing, and that only one person had the ability to do it, then one might well see the court saying, in a case like that, it is appropriate, but the broad principle remains as a principle.

Similarly your Honours, if one took the proposition that a court cannot order a person to work, for example, cannot order a person to work.  Your Honours, no doubt, as a principle that is true, but there may well be exceptions to it.  If, for example, one person who is an employee refused to work and he or she was the only person who had the password to the computer operations of a company, then the court might compel that person to take the steps necessary to unlock the computer, as it were.  So, in speaking in this area about what are the principles, one does have to recognise that they are principles relating to the grant of relief in the end, and necessarily, because of the nature of being equitable, they must allow for there to be some exceptions.  I am sorry, that was a long answer to your Honour’s question.

McHUGH J:   Does there have to be exceptions?  Why does not Lord Scarman’s statement of the equitable principle in Laker cover all the cases when he said that the equitable right not to be sued abroad arises only if the inequity is such that the court must interfere to prevent injustice?  Does that not say it all?

MR JACKSON:   Broadly speaking, your Honour, that is what one would expect an ultimate rule to be, that the court can interfere if it is necessary for it to do so in order to prevent injustice but, your Honour, it carries with it a number of concepts built into what his Lordship was saying.  A particular feature built in is the question of what is meant by “injustice” in the relevant circumstances.  Your Honours, that ‑ ‑ ‑

McHUGH J:   It has got to be injustice through Australian eyes authority.

MR JACKSON:   Yes, your Honour, but what we would seek to say is that there is not any particular reason why, prima facie, being sued in another jurisdiction is something that would be regarded as injustice.  There are circumstances which might make it so, but one should not really start from the proposition that to be sued in another jurisdiction is injustice.  It might be made to be unjust by, for example, demonstrating a couple of the things to which I referred before; one, that the courts, for example, were subject to the dictates of the executive and thus were not courts, in a sense, and one of the American cases to which our learned friends refer is setting up some new test in the United States is really one where the commercial court of one of the cities of France was a court that were staffed by, in effect, part‑time arbitrators and was not a court in a relevant sense.

Your Honours, one could also have a situation where the way in which the courts decided things or the results that might follow from the courts’ decisions were ones that could not be accepted by an Australian court.  For example, if one had a situation where a person, if sued successfully in the foreign jurisdiction, not only had to pay the amount of the judgment but lost a hand as well, that might be something that was regarded as too condign a result to be attractive to Australian eyes.  Your Honours, there are a number of situations, but what your Honour says is right, but is right in a sense that, if I may say so with respect, as your Honour states, but it does carry with it a number of underlying concepts.

BRENNAN CJ:   That might give rise to a practical problem of enunciation.  One advantage of couching an approach in such general terms is the Court does not have to declare, as it were, its hands with regard to the assessment of foreign jurisdictions and it seems to me particularly in Australia’s case to be something about which this Court would need to be extremely sensitive in defining the approach to be taken if the criterion is one which is going to descend to particulars so far as the capacity of foreign jurisdictions to do justice is concerned.

MR JACKSON:   Yes.  Could I say in relation to that, first, in a sense, a minor matter, and then something more substantial.  The minor matter is that in one of the cases - and perhaps I could identify which one it is later - I think it was Lord Diplock in one of the earlier cases, expressed the view that cases in this general areas, stays and anti‑suit injunctions, were cases where it was inappropriate to utilise the system of having a certificate from the Australian executive indicating the state of, to put it loosely, another country or the relations with other countries, because the litigation was said to be private litigation run on public.  That is the first thing. 

The second thing, your Honours, is that one can appreciate immediately the need, particularly in the case of some of Australia’s trading partners, for example, the need for there to be caution in the manner in which, two things, any principle might be expressed, but, secondly, any principle might be applied.  Now, in relation to the latter of those things, there are two things that flow from it.  One is that it militates, in our submission, in favour of the proposition which we seek to advance, namely, that the relationships between countries are better served by Australian courts not granting injunctions preventing people from proceeding in the courts of other nations without first allowing those courts to decide whether they will continue to entertain the matter. 

The second thing, your Honours, is this: that no matter how carefully one expresses or deals with applications of this kind, there would seem to be, in our submission, some remaining need for the parties to be able to demonstrate that the court of the other country, or the proceedings in the other country, are ones that in the end should not be allowed to go ahead.  I accept that.

McHUGH J:   That is very difficult in some situations.  The principle for which you contend seems to me at the moment to have a lot to be said for it, when we are dealing with countries such as are involved in this particular case.  But, Australia is now trading with numerous countries, more so than probably at any time in our history and, in some of those jurisdictions, there may well be suspicions from time to time that the judiciary is, to put it bluntly, less than honest; that there is enormous delay.  What is to be done?  What is a litigant to be done?  Is the court to make some finding that the quality of justice in those countries is inferior to what ‑ ‑ ‑

KIRBY J:   Can I add to that that there would be the problem, if you lay down your principle that you have got to go to those countries, I can think of, and you can doubtless too, a number, without naming them, to which you would go and it would be unthinkable for their pride that they would say, “Oh no, you can go and litigate this in Australia.”  They would say, “Yes, you’ve got to litigate it here.”, for various reasons.

MR JACKSON:   Could I just say, in relation to those things, that with the position being in the way in which it has been left by Mr Justice Rolfe’s judgment, the position which currently obtains is that one sees the other, in our submission, equally unpleasant side of the coin.  Because, what you have is a situation where the Australian court prevents proceedings going ahead in the other jurisdiction.  And, your Honours, that can amount to an equal offence, at least equal offence, one might think. 

Your Honours, if one goes from the world of commerce to, say, the world of dealing with children and the custody of children, things of that kind, your Honours, one can see that there may well be offences created, in a sense, however one does it.  What we are seeking to say, though, is that, if you have a situation where there is an application for an anti‑suit injunction, then, unless there is some good explanation for not having done so, one should first go to the court of the other country.  I do not know that it is possible to put it more specifically than that, and whether one has that rule or not, your Honour, there would have to be some discussion in the Australian case of why the proceedings in the other country are not to go ahead, in any event.

KIRBY J:   It will crop up with Voth, anyway, will it not, in the ordinary stay situation?

MR JACKSON:   Yes.

KIRBY J:   These problems do not go away in this area.

MR JACKSON:   No, your Honour, it does not.  But that is what I was going to say; if one looks at, for example Gau Shan, the case to which I was about to refer, 956 F 2d ‑ ‑ ‑

McHUGH J:   You did refer to it.

MR JACKSON:   I am sorry, did I, your Honour?

McHUGH J:   You did refer to it, at page 1355.

MR JACKSON:   But I think I was about to go to page 1354.  What I wanted to say about it was what appears in the right column on the page, 1354 ‑ it is the passage that commences at the top of the page and goes through to about three‑quarters of the way down the right column.

BRENNAN CJ:   One just wonder whether that statement would have been made in those terms if the court in question had been other than the Hong Kong court.  That is only a matter of speculation.

MR JACKSON:   Yes, your Honour.  One does not know, really.

BRENNAN CJ:   No, there is no purpose in commenting on it, it is just this whole discussion about the question of comity seems to me to be riddled with real problems if we are endeavouring to express any very closely tied principle for the present day.

MR JACKSON:   Your Honour, we recognise, of course, that one cannot, in effect, state the rule as an absolute, or state a principle as an absolute, but what we do submit is that one should first go to the court of the other country unless some good reason appears, and that is what comity required.

DAWSON J:   And one can draw from a passage such as that the suggestion that because of international economic activity one has to accept, perhaps, inadequacies, or the inadequacies, to our eyes, of the courts of the countries with which one trades.  That is just a fact of life.

MR JACKSON:   Yes, your Honour.  One hears frequently the expression “level playing field”, of course, in relation to the dropping of barriers to trade, but what your Honour says is right in a sense that if one does enter onto the field one does have to recognise that there are two teams and playing at different ends of it.

I was going to take your Honours to paragraph 27 of our submissions, and what we seek to say there is something that in a sense I have almost covered.  We seek to say the practical implementation of the principle is that an anti‑suit injunction should not be granted unless the foreign court has been asked to decline jurisdiction or someway hold that it has not got jurisdiction.  Could I take your Honours to what was said about that by the Supreme Court of Canada in Amchem 102 DLR (4th) 118?

Your Honours, prior to arriving at this part of the case there has been a discussion of the law relating to injunctions of this kind and relating to stays in various jurisdictions including this country, and then at page 117 at the bottom of the page Justice Sopinka set out the test and he then referred, at the top of page 118 to the passage in Morguard to which I referred a moment ago, and then in the first new paragraph on page 118 said, “it is useful to discuss some preliminary aspects”.  Your Honours will then see about half‑way down that paragraph just after the letter c:

In this respect the anti‑suit injunction is unique in that the applicant does not have to establish that the assumption of jurisdiction by the foreign court will amount to an actionable wrong.  Moreover -

then he speaks about the order resulting in a permanent injunction.  Then the next sentence between d and e:

In order to resort to this special remedy consonant with the principles of comity, it is preferable that the decision of the foreign court not be pre‑empted until a proceeding has been launched in that court and the applicant for an injunction in the domestic court has sought from the foreign court a stay or other termination of the foreign proceedings and failed.

He then discusses, through the remainder of that page, what happens in the several possibilities in the foreign court.

KIRBY J:   It is just stated in expression that is too general, it seems to me with respect, having regard to the points that Justice McHugh made earlier, that there are foreign courts and foreign courts.  We must be careful here that we are not getting trapped into the replacing one regime of contempt for foreign courts to another in which we trust every foreign court.

MR JACKSON:   Well, your Honour, I do not know that I can say more in response to that than to say that perhaps the qualification that one might add to it is for some good reason one has not been to the other court.

KIRBY J:   Well, that runs into the embarrassment that the Chief Justice referred to.  This Court, or a court in the hierarchy in Australia, has to sit in judgment of the honesty, integrity and ability of foreign courts, some of them in our neighbour’s countries with whom we trade; headlines in overseas newspapers.

MR JACKSON:   Yes.

KIRBY J:   It is a slightly embarrassing situation to get yourself in, if you can avoid it, as a court.

MR JACKSON:   Well, your Honour, as was put to me by one of your Honours earlier, the position, of course, is that that is something that can arise already and does frequently arise, of course, in relation to the question of stays and, your Honour, if one is dealing with the question of a stay, one has to take into account the existence of proceedings in another country and, your Honour, those ‑ ‑ ‑

BRENNAN CJ:   But is that right?  I mean, is the question not whether the Australian forum is a clearly inappropriate forum?

MR JACKSON:   That is the test in Voth but, your Honour, if one goes from that to Henry v Henry the position expressed by the majority in that case does seem to contemplate that one does not disregard the existence of proceedings that are in being in another country and the appropriateness of those proceedings would inevitably be a matter that the Court could take into account in deciding whether or not to grant the stay of the Australian proceedings.  Could I also say, your Honour, the issue in relation to an anti‑suit injunction does not go away by saying that the course that we would suggest is the one that should be followed.  I am sorry, your Honours, I am putting that round the wrong way. 

The potential difficulty is one that does not go away by saying one does not adopt the test that we are proposing because if one assumes that the issue is to be at large where the question whether one has been or not been to the foreign court is not a particularly relevant matter in determining whether to grant the stay, then, in those circumstances, the question of the appropriateness of the foreign court is one that would be likely to be raised in any event.  Every consideration that would be put would be likely to be put and perhaps more loosely in a case of the kind to which we are referring.

BRENNAN CJ:   It could be put a different way, could it not, and that is one of the factors relevant to the Australian court entertaining an application of this kind is whether or not an application has been made to the other court.

MR JACKSON:   Your Honour, that is what we ‑ ‑ ‑

BRENNAN CJ:   I was putting it just as a factor for taking into account.

MR JACKSON:   Your Honour, undoubtedly it is a factor.  Our submission is that in the ordinary course of events it should be a - condition precedent perhaps overstates it, but it is an important factor and a course that should be followed before the court grants an injunction unless some good reason is shown why that course has not been followed or, if followed, has not been successful.

BRENNAN CJ:   Mr Jackson, could I take you back to a passage that you just cited to us from Amchem at 118c:

In this respect the anti-suit injunction is unique in that the applicant does not have to establish that the assumption of jurisdiction by the foreign court will amount to an actionable wrong.

One cannot imagine that assumption of jurisdiction by a foreign court would ever amount to an actionable wrong.  Is his Lordship really saying there to establish the invocation of jurisdiction of a foreign court?

MR JACKSON:   I take your Honour’s point.  What his Lordship is speaking of, of course, in the context is a situation as between the parties to the proceedings in the court of the forum, as it were, rather than a foreign court.  What he is seeking to say, we would submit, is that it is possible to obtain an anti-suit injunction in circumstances where there is not an underlying cause of action which would give rise ‑ underlying cause of action as, for example, breach of contract or so on ‑ to a right to obtain various forms of relief including an injunction in support of those.

Your Honours, what he seems to be saying then is that one can obtain an injunction, anti-suit injunction, in circumstances where that is not demonstrated.  Our learned friends in their submissions distinguish between the - they would call that I think, your Honours, the exclusive equity jurisdiction rather than the auxiliary.

McHUGH J:   Does not that appear if you go back two sentences where his Lordship says that injunctions are not granted unless “some threatened action by the defendant will constitute an actionable wrong.”  Then he goes on, skipping the next sentence to say, “In this respect the anti‑suit injunction is unique,” because you do not have to show that the “assumption of jurisdiction” is an “actionable wrong”.  That is all he is saying, is it not?

MR JACKSON:   Yes.

BRENNAN CJ:   Now, if that is so, what is the situation where the invocation of a jurisdiction by the foreign court does amount to an actionable wrong?

MR JACKSON:   That would have to be circumstances such as ones where there was, for example, a contract to sue only in one jurisdiction or a contract, perhaps, to arbitrate, something of that kind.

KIRBY J:   Perhaps it would be also vexatious litigation when you are vexing a party by commencing in a clearly inappropriate place.  That might be what he might be referring to.  It is not really an actionable wrong if you do not conform to a contract.  It may be a breach of the contract but it is not an actionable wrong.  What is the actionable wrong?

MR JACKSON:   Your Honour, I am not certain that his Honour is speaking of wrong in the sense of meaning tort in that passage.

McHUGH J:   No.  If you go back from the earlier sentence that I referred there when he spoke “an actionable civil wrong”.

BRENNAN CJ:   Yes, talking about a quia timet, something that is basically a timet injunction.

MR JACKSON:   Yes.

BRENNAN CJ:   That is why I wonder whether Amchem might be fine authority for the support of a general proposition, but if we are looking at, not perhaps the present case because that is a matter of dispute, but let us take the case where there is an agreement not to sue in a particular jurisdiction and the action is commenced in that jurisdiction and that other jurisdiction has jurisdiction to entertain the action.  Now, does Amchem have anything to say to that situation?

MR JACKSON:   Your Honour, it does, in this sense.  Your Honour, one is really talking about a band of things, in a sense. What I mean by that is this; if it be the position that in proceedings for an anti‑suit injunction in Australia there is an admitted contract, the terms of which are established and they are ones that, prima facie, appear to apply to the circumstances, and there is no dispute about that - either dispute as to the efficacy of the contract or its interpretation, anything of that kind - then one might well think that, in those circumstances, perhaps good reason has been shown why there is no need to go to the foreign court.

If, however, the situation is that, for example, the application of the contract to the particular proceedings is in doubt as matter of construction, although the existence of a contract is admitted, or if it be that the efficacy of the contract - and by that I mean the ability to enforce it, for example, by matters occurring prior to entry into the contract, misrepresentation and so on - if those matter are, themselves, an issue, one really does not have - well, if I could say two things about.  The first is that one really does not have the kind of simple case that lies at the heart of the cases which may support the view that in the simple case where there is an admitted contract that covers the situation, then, in those circumstances, the injunction could more readily be granted.  The second thing really is, your Honours, that the issues are ones which can be, themselves, decided by the foreign court and, no doubt, are part of the matters that would be put in issue in the foreign court. 

Your Honours, that is why we have sought to submit, in an earlier part of our submissions, that the adoption of the view that contracts not to sue fall into a special class has - now, your Honours, we have not used these words - it has, in a sense, a seductive attraction at first.  But, your Honours, it is a temptation to which one should not readily succumb, in a sense, because it is stated in the very narrowest way one could understand it.  But once one goes beyond the very simple class of case, there is no particular reason why issues of that kind cannot as well be dealt with by the foreign court as by the domestic one.

BRENNAN CJ:   I understand you to be saying this, are you not, that if it is a clear and uncontested case of an agreement not to sue in a foreign court and the action is taken in breach of that agreement, then an anti‑suit injunction may issue but, if there be a dispute as to whether there exists such an agreement or whether such an agreement is void or voidable, then those issues are as much litigable in the foreign court as in the domestic court and the Amchem principle should apply.  Is that the proposition?

MR JACKSON:   Yes, your Honour.

BRENNAN CJ:   Can I just add one further question, Mr Jackson.  If the Amchem principle should apply, is it right that the Australian court should then, if there be a foreign action on foot, stay, in accordance with the Voth principle, the litigation in which the question of an agreement is being litigated?

MR JACKSON:   Yes, your Honour, and could I put that in two different ways.  The answer is yes.  At the least, the Australian court should stay the Australian proceedings pending the determination of the application to stay the foreign proceedings but, prima facie, if there are proceedings in being in the other country that are going ahead and no application has been made to stay them or the court of the foreign country has decided not to stay them, then the Australian court should stay its own proceedings.

Your Honours, in paragraph 27 of our submissions, we have given a number of instances where the same proposition has been referred to.  I shall not take your Honours to the particular references.  May I just ask your Honours to note, however, in relation to the ones that are numbered (c) and (e) that the - your Honours do not have the page references.  In relation to (c) the page reference is page 9 and in relation to (e) the page reference is page 3.

I have to say, your Honours, the pages are computer printouts and, although they do not have the odd printing, the pagination is part of the text as distinct from being at the top or bottom of the page.  Yours Honours, I have already gone to paragraphs 28 and 29, so I shall not go over those, but may I take your Honours to ‑ and I have also been to paragraphs 30 and paragraph 31.  Perhaps I could move on then to paragraph ‑ ‑ ‑

KIRBY J:   Has there been a notable case where the United States has shown deference to Australia?  I mean, one should not be entirely concerned about mutuality in these things, we should get our own principles right, but one gets an impression that the United States with its long‑arm statutes and its attitude to its own courts is not quite so forthcoming, as you are urging we should be.

MR JACKSON:   Your Honour, I will have that checked.  I think the answer is no, that there is not a case, but there certainly are cases where the judgments of either country are recognised, each in the other, of course, as one might expect, under the ordinary rules.

KIRBY J:   Yes, thank you.

MR JACKSON:   Your Honour, I think the answer is no.  There were, until recently, relatively few cases in relation to Australia.  The Westinghouse litigation, of course, did cause trouble.  Your Honour, perhaps I might also say the Americans, of course, are not in a sense Robinson Crusoe in relation to long‑arm statutes.  The New South Wales rules of court do go some distance themselves beyond what was previously the approach taken and what is the approach taken some other jurisdictions in Australia.

McHUGH J:   Are there many American cases where the United States courts have refused jurisdiction?  Gau Shan is one.

MR JACKSON:   Yes, I will try to get your Honour a list in that regard.  Could I give your Honour that after lunch?  I may be able to give your Honour a summary of some of the cases.

Could I move then to paragraph 36 of our submissions, and this is a matter which I have mentioned in passing earlier, and that is the fact that the injunction immunises CIGNA from suit even though it is not an applicant for the anti‑suit injunction and was not a party either to the policies or to the alleged contract not to sue. 

KIRBY J:   Would you just explain that factually to me, how that point is made good?

MR JACKSON:   CIGNA Corporation, if I could just say first of all, is the parent company of the CIGNA Australian company.  CIGNA Corporation is the party which we allege organised a boycott of us in the United States.  It was not an applicant for the anti‑suit injunction.  It also is not a party to the contract not to sue or any of the policies.

BRENNAN CJ:   How has it become affected?

MR JACKSON:   Your Honour, we are affected because the injunction restrains us from proceeding in the United States in the action in which it is a party.

McHUGH J:   You cannot sue CIGNA Corporation in the United States even though on your pleadings they were the ones who arranged the boycott of you in the USA?

MR JACKSON:   Yes.

BRENNAN CJ:   That is an argument that the injunction, if it might otherwise go against the parties to the alleged agreement, was cast too widely.

MR JACKSON:   Well, your Honour, it is a point we simply seek to make in passing, in effect, to say that the - another reason why the injunction should be set aside.  I do not put this at the forefront of our argument, of course, but I simply mention it in passing that one of the things that happened is what we refer to in paragraph 36.  I should say, your Honours, that that paragraph forms part of ‑ ‑ ‑

BRENNAN CJ:   Was CIGNA a party in any way to these proceedings?  It was not, was it?

MR JACKSON:   Yes, it was, your Honour. 

BRENNAN CJ:   CIGNA Corporation?

McHUGH J:   CIGNA Corp.

MR JACKSON:   CIGNA Corporation.  It was originally one of the third defendants and then became one of the plaintiffs.

BRENNAN CJ:   I see.

MR JACKSON:   I was just going to say, your Honours, in relation to paragraph 36, it is just simply one of the matters introduced by paragraph 32 of our submissions.  Your Honours, could I deal then with the question that we refer to in paragraph 37 and that is the primary judge’s view that there was a case of prima facie vexation and oppression by our instituting the proceedings in the United States.  Your Honours, could I just say a couple of introductory things?  The first is that there seems to be an underlying value in what is said by the primary judge that there is something “wrong”, if I could put that word in inverted commas, in our suing in the United States.

We would simply seek to say hypothetically, why can we not sue insurers whereever it is appropriate to do so in circumstances where the policies have world-wide cover, the place we are suing is the place where the claims that are made upon us which we seek to enforce against them are the claims to be made in that jurisdiction and also, your Honours, where we sue, on a United States statute, one of the persons involved?

McHUGH J:   Could you in the proceedings in the US have joined the insurers as a third party?

MR JACKSON:   In various of the proceeding, yes, your Honour.

McHUGH J:   Would an anti-suit injunction have gone?

MR JACKSON:   Your Honour, that is the point we seek to make in I think paragraph 35 of our submissions, that if one took the simplest case where we had simply been sued as a defendant, if we had joined them as a third party then, according to the reasons in the courts below, we would be restrained from doing that which, with respect, seems absurd.

Your Honours, dealing again with the question of the vexation and oppression, your Honours, if one leaves aside the fact of there being two pieces of litigation in question, all that seems to be said by the judge that is capable of amounting to vexation and oppression is the fact that all the documents that we had in relation to the claims that were made up to that time were documents that had been transmitted to Australia and were, in fact, in Australia, because they had been brought here for the purpose of the other piece of litigation, the NZI Case to which your Honours will see a reference.

Your Honours, if we are entitled to institute proceedings in the United States, as we are and in the circumstances to which I have adverted, in our submission, it is very difficult to see why one could regard our doing so as falling within any relevant concept of vexation or oppression.

GUMMOW J:   Well, the primary judge seems to have attached some significance to your failure, if that is the word, to notify before you sue.

MR JACKSON:   We did seek to say two things about that.  The first is one to which we adverted in paragraph 9 of our submissions, page 4, and it is right to say the primary judge dwelt on this topic.  He referred to it four times.  In the absence of any requirement to give the notice, we would submit that giving it or not giving it could not affect whether we should be restrained from proceeding.  That is the first thing.  The second thing, your Honours, is that the one thing one might see from the letters to which I made reference earlier is that the insurers had given a fair indication that they were not too interested in paying anything in respect to claims of this kind.

KIRBY J:   One of the points that is made by the respondents in their submissions is that the agreement to submit to a court in Australia was, it is said, subject to a further agreement that the lead insurer would be bound by the results and that this would not occur in New Jersey.  It is on page 55 of their submissions.

MR JACKSON:   Your Honour, the position, of course, is that if one looks at the various ‑ ‑ ‑

KIRBY J:   If they were to lose such a litigious advantage, that would be a very significant loss, if that is factually so and it was open to the primary judge to so find.

MR JACKSON:   But, your Honour, all I am seeking to say about it is this; that it was an option given to us.  There was not an agreement by us to sue in Australia; we were given the option by the terms of those clauses to sue in Australia.  If we did, then they were bound by the judgment against the lead insurer.  We were not under any obligation by those provisions to sue anywhere.

KIRBY J:   Well, that is lost if the proceedings in New Jersey continue. 

MR JACKSON:   Well, your Honour, that is why we have an option.  We can do it or not.

GUMMOW J:   But you say it is a condition inserted for your favour as an Australian company, if need be, to sue this gaggle of foreigners who are the insurers in Australia?

MR JACKSON:   Yes, your Honour.  And the judge accepted that it was not an exclusive jurisdiction clause; it was simply one that gave us a right to do it.

KIRBY J:   Well, you have against that the fact that the contract was made in Australia and presumably the witnesses, if there were any dispute on that exchange of letters and what was contemplated, would be here in Australia, and an Australian court is perfectly able, as we know, fairly, justly and lawfully to determine the issue.

MR JACKSON:   Yes, your Honour.  And the United States District Court -- if I may, with respect, adopt the same adjectives - is able to do so equally, and able to deal with any issue arising in relation to the activities of CIGNA Corporation in the United States or elsewhere in the world.  Of course, your Honour, the two parties who entered into the policies and so on are parties in relation to whom, first, we carry on - and I will not labour the point - activities worldwide for the premiums that are received, they agree to insure us worldwide.  Your Honours, in relation to our worldwide activities, it is likely that we will be subject to liabilities which are to be determined by the laws of the places where the various activities are carried on, and those laws are ones which may operate in some places in our favour, some places theirs.  But the best place to have issues of indemnity - particularly the ambit of indemnity- resolved are places where the primary liability is itself resolved.

KIRBY J:   I do not remember reading any suggestion that you lose a litigious advantage by not being able to proceed in the United States.  You remember in Voth this discussion about losing certain advantages in respect of statutes of limitations.  Is there anything of that kind in this case or is it simply an application of the law to be found?  It is difficult in the United States to find our law of contract and trade practices as it is, perhaps, for us to find their Sherman Act  but it can be done.

MR JACKSON:   Your Honour, I am sorry, I did not ‑ ‑ ‑

KIRBY J:   The question is whether there is a litigious advantage that you undoubtedly lose by having to proceed in New South Wales.

MR JACKSON:   The Sherman Act claim, your Honour?

KIRBY J:   Why could not a New South Wales court consider and apply that?  Is it of a penal character or is it of such that it would be against public policy for a court in this country to apply it?

MR JACKSON:   The first thing I would say is - I was going to say it did not seem to be an issue that the Australian court had no jurisdiction, but the reason, I think, is because there is an exclusive jurisdiction given to the United States District Court.

McHUGH J:   No, that is not it.  It is if you go back to the old private international law cases there is no equivalent New South Wales cause of action.

MR JACKSON:   Yes, your Honour.

McHUGH J:   I mean, it is not a cause of action which you can sue on in New South Wales, could you, if it had occurred here?

MR JACKSON:   Your Honour, I think that is right actually.

GUMMOW J:   There is no Phillips v Eyre satisfaction.  This is..... damages for a start, I suppose.

MR JACKSON:   Yes, your Honour, and I adopt those things with respect.

KIRBY J:   I think, if I can say so, that it would be desirable that we have clear, because if you do lose a litigious advantage of that character, then that could be very significant, and if it has not been considered or properly considered, that could be a very important consideration in my thinking in the matter.

MR JACKSON:   Yes.  Your Honour, it is dealt with in the reasons, but very briefly, and I think what his Honour said was that it was not in dispute, but I will see if I can give your Honour something more solid on that.  Your Honours, the last thing I wish to mention in relation to the anti‑suit injunction is the matter to which we refer in paragraph 38.  Your Honours, it is true to say that the proceedings in the ‑ the present proceedings go beyond, to the extent to which there is a beyond, the claims made against us in the United States, but subject to that, your Honours, the case that is made is fundamentally one which is the obverse of the case that we seek to make in the United States.  Could I turn then, your Honours, to the question of the stay and ‑ ‑ ‑

BRENNAN CJ:   In the light of the discussion that you just had with Justice Kirby, that is not literally correct, is it ‑ I mean, the Sherman Act?

MR JACKSON:   Not in respect to the Sherman Act, no.

BRENNAN CJ:   And I suppose a problem that might arise is whether or not, if there were an agreement of the kind that is alleged against you, an implied term of that agreement is that it should exhaust the commercial relationship between the parties to such an extent as to exclude the prospect of action under the Sherman Act.  If that were a question ‑ I do not know whether it is or not on the pleadings or on the way in which it has been conducted so far - but if it were, that would be something which could only be determined by the Supreme Court of New South Wales, I would have thought.

MR JACKSON:   There is no particular reason ‑ fundamentally, your Honour, that would be a question of, in one sense, construction of the agreement.

BRENNAN CJ:   Yes.

MR JACKSON:   Construction of the agreement in a slightly unusual way, but really, your Honour, in the end, no more than that.  Now, your Honour, I say no more than that ‑ ‑ ‑

BRENNAN CJ:   No.  One could not then contemplate the District Court in the United States so construing the agreement.

MR JACKSON:   Your Honour, there would not be any particular reason why the United States District Court could not take the view that, in dealing with that question, it was dealing with a question of Australian law and, in dealing with the question of Australian law, one was looking at what the Australian policy was.  Now, it would not conflict, at all, necessarily, with the United States’ policy to take the view that persons in Australia were entitled to arrive at an agreement of that kind.

BRENNAN CJ:   No, but if they did arrive at an agreement of that kind, one would think that the United States court would say, “That does not deprive this court of jurisdiction under the Sherman Act”.

DAWSON J:   Almost certainly.

BRENNAN CJ:   So, then the question arises:  cause of action under Sherman Act or not, one answer conceivably in New South Wales, a different answer in the United States?

MR JACKSON:   Well, your Honour, that is a possibility, of course, whenever one does have - if I can use the expression, a kind of jargon expression - transnational litigation.

BRENNAN CJ:   I accept that.  I am just suggesting to you that paragraph 38 is not literally accurate.

MR JACKSON:   Your Honour, I accept that.

BRENNAN CJ:   Yes.

MR JACKSON:   What I would seek to say is that it is substantially what the case is.  The point that your Honour mentions is not one that has been taken - perhaps I should say “yet taken” - in the case.

BRENNAN CJ:   Yes.

MR JACKSON:   In our submission, it would not compel the determination of that issue by an Australian court because, your Honour - perhaps I did not express myself very clearly in answer to your Honour.  What I was seeking to say was this, that if one has a situation of a United States court coming to apply the Sherman Act, now, an anterior question would really be whether the parties have agreed that no action would be brought under, to put it shortly, the Sherman Act as part of their agreement.  Now, the American court decides that that was what the parties did do.  It would then be a question for that court to decide one, or perhaps two, things.  One thing would be - and probably the ultimate question would be whether to adopt that view is something that is contrary to the policy of the United States.

If it were, your Honour, that is the end of it, the Sherman Act applies.  The would be another question, however, whether the Sherman Act provisions were intended to apply to agreements of that kind.  That question, which really is a question of construction of the Sherman Act, is not necessarily answering against us.

If I could come then to the question of the stay, and I am referring to page 15 of our submissions, paragraphs 39 and following.  I suspect that in passing I have dealt with a number of these matters already.  There is, of course, some relationship between stays and anti‑suits injunctions.  That is referred to in Amchem 102 DLR 105. May I take your Honours to that very briefly? The paragraph commencing after letter d:

Although both the remedy of a stay and an injunction have as their main objectives the selection of an appropriate forum for the trial of the action, there is a fundamental difference.....In the case of the stay the domestic court determines for itself whether in the circumstances it should take jurisdiction whereas, in the case of the injunction, it in effect determines the matter for the foreign court.

And then the reference to comity follows. 

Your Honours, we then seek to submit that it has become relatively common for there to be proceedings of this kind and we give some examples.  If I could turn then to paragraph 41, your Honours.  What we would submit is that the observations made by members of the Court in Henry v Henry 70 ALJR 480, at pages 489 to 490, do demonstrate that it may be vexatious and oppressive to have parallel proceedings in an Australian court. If I could take your Honours to page 489, the heading “the relevance of proceedings in another jurisdiction,” one goes on to page 490, in the first new paragraph on that page where it was said:

There appears to be an assumption in Gilmore that the duplication of proceedings in another country is not, of itself, relevant to the question whether Australia is a clearly inappropriate forum. 

Then in the next paragraph:

Foreign proceedings usually fall for consideration in a context in which -

and we would invite your Honours to read the whole of that paragraph, and your Honours will see, for example, the sentence commencing “Even in cases of that kind,” and then the remainder of the paragraph.  Then at the bottom of the left column of page 490, the observation:

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue.

And your Honours, that is developed through that paragraph and the next paragraph.  Would this be a convenient time, your Honour?

BRENNAN CJ:   Could I have an indication of the length of time that you expect your submissions to take, Mr Jackson?

MR JACKSON:   Twenty minutes, your Honour.

BRENNAN CJ:   Mr Bennett, how long do you expect your submissions to take?

MR BENNETT:   An hour, your Honour, to perhaps an hour and a half.

BRENNAN CJ:   The Court will adjourn until 2.15 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.16 PM:

BRENNAN CJ:   Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honours.  Your Honours, before I go on, could I mention one matter that I should have referred to a little earlier, and that is, to an affidavit of Mr Coughlin, which is filed on behalf of the other side.  He is an American lawyer, and he deposed, amongst other things, to the courses open in the United States proceedings in relation to the means of bringing them to a premature end, as it were, or staying them.  Your Honours will see that at page 864, in volume 4, in paragraph 17.  It goes over to the top of the next page, and, your Honours, there is no shortage of available procedures.  Could I also say, your Honours, at page 870, in a further paragraph of his affidavit ‑ ‑ ‑

BRENNAN CJ:   The only one that would be relevant would be, “Improper venue”, is that right?

MR JACKSON:   Your Honour, possibly:

Lack of jurisdiction over the person ‑

and perhaps:

Failure to state a claim upon which relief can be granted ‑

Those are possibilities.  Yours Honours, at page 870, as part of paragraph 27, and at the top of the page, about line 10, he went on to say that it was his:

opinion that specific attention will be addressed to the various interactions between CSR and its insurers ‑ ‑ ‑

McHUGH J:   Which paragraph is this?

MR JACKSON:   It is part of paragraph 27, and it is the part starting at the top of page 870.  Yours Honours, it is the whole of the remainder of the paragraph that is on page 870, but I wanted to refer particularly to the part commencing about line 24, where he said:

In particular, I would expect that the court -

which is the United States court -

will pay particular attention to a series of correspondence between.....between 29 November 1991 and 28 April 1992, the culmination of which -

et cetera.  So, your Honours, what is apparent, of course, is that that issue - the issue of the contract or no - is one that the United States court would be prepared to enter into.

McHUGH J:   Is there anything in the materials to indicate the extent to which you would have the advantage of pre‑trial depositions and more extensive discovery in the District Court than you would in the Supreme Court of New South Wales?  Certainly pre‑trial depositions you would.  Are they available?

MR JACKSON:   May I give your Honour a reference, perhaps, to that later?  Certainly the position would seem to be that there is discovery available at an earlier point and, of course, discovery which, in some cases, means discovery by interrogation of potential witnesses.  Could I endeavour to give a summary of that later?  May I go back to a number of matters your Honours raised this morning and endeavour to give your Honours some responses to them?  Your Honour Justice Gummow asked what was the difference between a primary and secondary layer and so on.  Could we answer your Honours by reference to a particular year of the policies, in effect, and if one takes 1978 to 1979, the primary general liability policy appears at pages 914 to 932 and, your Honours, it provides cover up to $1 million.

McHUGH J:   Per claim?

MR JACKSON:   I am sorry, your Honour, I will have to look again to tell your Honour that.  I think the answer is, yes, but it is up ‑ ‑ ‑

McHUGH J:   One occurrence.

MR JACKSON:   Per occurrence, yes.  These are not, if I might interpolate, claims-made policies, they are occurrence policies.

The second thing is this, that there is then a Lloyd’s first layer excess policy.  That commences at page 934.  That provides cover of an additional $2.5 million.  That is on top.  There is then a Lloyd’s second layer excess policy at page 965.  That provides cover of an additional $3.75 million; again on top of the two preceding ones.  Each is excess over the others, and if one took, for example, a verdict of $1.5 million, the first layer insurer would pay $1 million and then the Lloyd’s first layer excess insurers would pay $500,000.  So there is no apportionment, it is just layer on layer.

BRENNAN CJ:   And of those three, the second of them is known as the first layer, is that right?

MR JACKSON:   Yes, your Honour.  In fact, the description given is “first layer excess policy”, then “second layer excess policy”.

The second matter concerns the question whether the letter of 29 November 1991 referred, in effect, to 1985 or to 1988.  Your Honours, the copy of the letter that appears at page 843, to which I referred earlier, does not attach any of the schedules referred to in the letter.  There is another copy at page 1803 in volume 8 of the appeal book and, in particular, at pages 1813 to 1835 it contains a notification schedule.  The notification schedule shows different policies in different layers, some of them going to 1985, some going to 1988 - or the others going to 1988.

Now, your Honours, the ones going to 1985, to put it shortly, are the primary layer policies, the 1988 are layers above the primary layer policy.  So the position is that so far as the primary layer policies were concerned, the only ones referred to were up to 1985.  Your Honours, the third matter concerns the - I have referred to the Excess of Jurisdiction Act this morning.  Your Honours, we have arranged to give your Honours a document which contains a second reading speech, a summary of the events which happened and a copy of the Act itself.  Could I give your Honours copies of that?  Your Honours, perhaps I could give that to the Court at the adjournment.

Your Honour Justice Kirby asked whether there were any articles or cases showing the history of anti‑suit injunctions.  Now, your Honours, in relation to that, we have given your Honours some references in our submissions already.  May I perhaps add these?  In terms of cases:  Airbus Industrie v Patel.  It is unreported decision of 31 July 1996.  We have provided your Honours with copies of that per Lord Justice Hobhouse at pages 10 to 13.  That is the first thing.  In Re Maxwell Communications Corporation plc [No 2] (1992) BCC 757, Mr Justice Hoffmann, as he was, at page 761 to 763, your Honours. Thirdly, the Aerospatiale Case (1987) AC 871, to put it shortly, per Lord Goff at pages 892 to 896 and, your Honours, an article by Professor Hartley called “Comity and the Use of Anti‑suit injunctions in International Litigation” (1987) 35 American Journal of Comparative Law 487.

KIRBY J:   Do you have a copy of that?  I am not sure whether we have that in our library.

MR JACKSON:   Your Honours, I think we have provided that to the Court.  I will check on that and, if we have not, I will make sure we do.

McHUGH J:   Excuse me, Mr Jackson, I missed the relevance of the Foreign Proceedings (Excess of Jurisdiction) Act.  What was the relevance of that Act when you read it?

MR JACKSON:   Your Honour, all I was seeking to demonstrate with it was that conduct, if I could put it loosely, by courts as distinct from conduct by legislatures and executive government can give rise to international difficulties, and the need ultimately to enact that legislation was a reflection of that, and your Honours will see it was legislation that was passed in a bipartisan way, and your Honours will see in the second reading speech Senator Tate speaking on behalf of then Opposition saying that it had become a matter of such importance that legislation was, in effect, needed and that issues of comity arose that had got to the point where they had gone beyond the judiciary in a sense and needed legislation.  Your Honour, it is simply an example of what can occur.

Your Honours, I was also asked were there any United States cases demonstrating a deference to Australia and also cases of the United States courts refusing jurisdiction.  In relation to the first of those matters, your Honours, could I just say that there is a decision in which a judgment of the Victorian Supreme Court is recognised in the United States; that is John Sanderson & Co (Wool) Pty Ltd v Ludlow Jute Co Ltd 569 F 2d 696 at 192F.

So far as United States courts declining jurisdiction, in addition to Gau Shan, can I give your Honours two references.  The first is, if I can just put it shortly, Compagnie des Bauxites de Guinea v The Insurance Company of North America, (1981) 651 F 2d 877, declining to grant an anti‑suit injunction, the other forum being the United Kingdom. Secondly, China Trade and Development Corporation v M.V. Choong Yong (1987) 837 F 2d 33, again declining to grant an anti‑suit injunction in respect of proceedings in Korea.

McHUGH J:   South or North Korea?

MR JACKSON:   South, your Honour.  In relation to the position concerning the Sherman Act, your Honours will see - perhaps I will simply give your Honours a document which sets out the various references I want to give further in relation to that rather than going through a list of them now. 

Could I turn then, your Honours, back to our written submissions, and I am referring to page 16 of them, and, in particular to paragraph 42.  Could I just say one further thing, your Honours, about paragraph 42(b).  It is that ‑ if your Honours look at paragraph 42(b), and also look at paragraph 37(d) on page 14, the passages to which reference is made in paragraph 37(d) indicate the matters there referred to, that the proceedings in Australia were instituted because of our proceedings in the US and, we would submit, and the extracts are there, to prevent the issues in that action being litigated in the United States.

Now, your Honours, could I turn then to paragraph 46 of our written submissions, and what your Honours will see is that ‑ and I will take your Honours to two references in a moment ‑ the approach taken by the primary judge in deciding the appropriateness of the New South Wales Court, was to look to the issues raised by the insurers in the New South Wales proceedings, and that that is so, your Honours, appears from page 706 in volume 3, in the passage lines 35 to 40, where his Honour says:

Therefore one returns to the point in issue in the present applications, viz whether this Court is a clearly inappropriate forum to litigate the issues raised by the insurers.

That his Honour means what he says is apparent also from page 731 about line 22 where his Honour says:

The matters to which I have referred satisfy me that when one looks at all the relevant factors it cannot be said that this Court is a clearly inappropriate forum.  At the risk of repetition I observe that in my judgment New South Wales is an appropriate forum for the issues propounded by the insurers.

In Oceanic Sun Line Special Shipping Company Inc v Fay 165 CLR 197, at page 248 about point 4 on the page, the way in which the issue was described was that Justice Deane said:

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.

When one speaks of “the dispute between the parties”, what, in our submission, is being spoken of is the dispute between the parties in terms of the matter at issue between the parties in the sense in which one would use that expression, for example, in relation to federal jurisdiction, the whole of the controversy between the parties.  Your Honours will see, if I could just give one reference to this, and I am afraid your Honours do not have it on a list - in Fencott v Muller 152 CLR 570. There is a discussion of the nature of the term “matter” and in particular, if one goes to page 608 of that decision, what is spoken of as the “matter” is the:

erroneous to exclude a substantial part of what is in truth a single justiciable controversy and thereby to preclude the exercise of judicial power to determine the whole of that controversy.  What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships.

That is in the joint judgment of four members of the Court.

Your Honours, in relation to that, we would seek to say that to look simply, in effect as his Honour did, at the pleadings in the New South Wales action is to exclude part of the controversy between the parties and part of the dispute between them.  That affects of course the view taken by his Honour in relation to the question of the stay.

BRENNAN CJ:   What his Honour is simply dealing with there is applying the Voth test to the issues in the litigation before him, is he not?

MR JACKSON:   What he is doing, your Honour, is to seek to do that.  Where, in our submission, his Honour, with respect, erred was in not identifying the dispute between the parties by reference to the matters that were in issue between them in not just the New South Wales proceedings

but the other proceedings that existed as well.  That was germane to the question, in our submission, whether the case was one where the New South Wales court was in the relevant sense clearly inappropriate.

Could I come then, your Honours, to the orders sought which we set out in paragraphs 49 and 50.  Could I just give your Honours two references to cases where, leave to appeal not having been given by the intermediate appellate court, this Court has itself dealt with the matter.  What I mean by that is that itself made the order that the Court of Appeal should have made in the first place.  One is Grant v Downs (1976) 135 CLR 674. The other is Onus v Alcoa of Australia Ltd (1981) 149 CLR 27. If we are correct in relation to the anti‑suit injunction, the result should have been, in our submission, that the anti‑suit injunction should not have been made and the motion should have been dismissed with costs.

In relation to the stay, what we would submit is that a stay should have been granted.  The stay would have been capable of being lifted, no doubt, if an appropriate case was made out in later circumstances after the matter had gone before the American court.

DAWSON J:   In other words, a stay to enable parties to make application in New Jersey?

MR JACKSON:   Well, your Honour, a stay having that effect.  It would be a stay, then there would be an application to lift it, perhaps, in certain circumstances.

BRENNAN CJ:   Thank you, Mr Jackson.  Mr Bennett.

MR BENNETT:   Your Honours, I adopt all the arguments put by Mr Jackson.  There are, however, five areas upon which I wish briefly to expand.  Those are the five areas dealt with in my outline of argument, commencing on page 4.  The five areas are, firstly, some general submissions about the relationship between stays and anti‑suit injunctions, and how the Amchem principle fits into that; secondly, and perhaps most briefly because my learned friend has dealt with it, some submissions about the need for restraint in relation to anti‑suit injunctions and comity; thirdly, the special position of negative declarations; fourth, the special position of interlocutory anti‑suit injunctions in the auxiliary jurisdiction, where they are based on agreements not to sue; and, fifthly, some remarks about the Voth test and its application in this case in the light of Henry v Henry.  I will then conclude with some short submissions relating to the special position of my client, as opposed to my learned friend Mr Jackson’s client.

Starting with the relationship between the two, logically, when a court is faced with litigation in a foreign country, and litigation in Australia, the court can do one of three things:  it can say its own proceedings, in one sense the ultimate exercise in comity; it can grant an anti‑suit injunction, described sometimes as the most aggressive course, although as your Honours will see in a moment, there were more aggressive courses than that available, and that, of course, prohibits the prosecution of the foreign proceedings; or it can do neither.  If it takes the first course, the foreign action proceeds.  If it takes the second course, its own action proceeds.  If it takes the ‑ ‑ ‑

McHUGH J:   Well, not necessarily, because the foreign court might issue an anti‑suit injunction against its nationals.  So, you may have a stalemate.

MR BENNETT:   You may, your Honour.  That is unlikely, because of what I am about to say about anti‑anti‑suit injunctions, which play their role in preventing that.  But I will come to that in a moment, if I may.  Thirdly, it may, as I say, do neither.  If it does neither, the ball, in one sense, moves to the foreign court.  It may grant a stay, in which case the Australian action proceeds.  It may grant an anti‑suit injunction, in which case the foreign action proceeds.  Or it may do neither.  It is only if both courts do neither that one then has the final unseemly possibility of the race to judgment, and the duplication, and the evils which flow from that.

Complicating that is the factor of the anti‑anti‑suit injunction.  Yours Honours will recall what happened in this case was that a few days after we commenced our American proceedings, his Honour issued, ex parte, an anti‑anti‑suit injunction.  All that does is stop us moving for an anti‑suit injunction in the United States.  Now, if one just looks at that from the point of view of comity a moment, in my respectful submission, that is quite horrifying, because what is being said there is, “Not merely are we going to stop you proceeding in the foreign jurisdiction, but the foreign jurisdiction might take the same aggressive approach that we take, and, in order to prevent that happening, we are going ex parte to hold the fort our way by stopping you taking that step.” 

It gives the Latin phrase “carpe diem” a whole new meaning, and, in my respectful submission, that is one of the greatest evils which flows from anti‑suit injunctions, and it illustrates very well the extreme aggressive approach it takes.  It says, “Not only are we not going to allow the other jurisdiction to decide whether it ought to proceed or not; we are not even going to allow it to take the step that we are going to take, to stop it.”  And, in my respectful submission, that is a serious problem.        There is no simple answer.  In an ideal world, perhaps there might be a tribunal of international determination which decides which courts hears disputes, and on which judges of different courts sit.  Nothing like that exists, obviously.  So, one has to work out, and the courts have to work out, the best solution.

McHUGH J:   Not necessarily.  I mean, they do in the absence of treaties, but perhaps international treaties are the best answer to this ‑ ‑ ‑

KIRBY J:   Or contracts.

MR BENNETT:   Well, they might be, your Honour, and I propose to show your Honours what has been done in Europe, where the treaty, in effect says, “Where you start first prevails”, but I will come to that in a moment, if I may.  If the courts have to deal with it, my central submission is that Amchem offers the best solution, and that Amchem is, slowly, being accepted by other courts in the common law world as the best way to go, and the reason is not hard to find, because what Amchem says is this: “Let’s do this in an orderly way.  The first question is:  is either court going to abnegate in favour of the other court?”  And, in an ideal world, there is a good chance that one or other court will do that.  And each court ought to be given that opportunity.  That is what Amchem recognises and permits. 

If one court then grants a stay, that basically solves the problem.  If one court does not grant a stay, then the other court has to make a decision as to what it does, and it may say it will grant a stay.  It will, no doubt, be encouraged in its attitude by the fact that the foreign court has not granted a stay.  So that is a stronger reason why it should.  But, if it also refuses to grant a stay, only then does one move to the second stage, where the courts have to consider whether anti‑suit injunctions are appropriate, and one has, I suppose, then, three possibilities: court A has an anti‑suit injunction; court B has an anti‑suit injunction, or neither court does and there is a race to judgment.

At least the process, we would submit, is orderly and the comity is respected and in most cases the problem will be solved before one gets to the stage of an unseemly battle between the courts as to which is going to prevent proceeding in the other jurisdiction.  Of course one can make all the obvious points.  One can be more ready to apply the Amchem rule where one has a foreign jurisdiction which respects the principles of comity.  Comity can be spread by example and your Honours have seen the references in the various American and English cases to comity and absence of comity.

Now, I want to just very briefly take your Honours to a couple of the cases referred to in paragraphs ii and iii on page 5 of my submissions.  Stern and Pollack is an unreported decision which your Honours have but I will not take your Honours to, where Amchem was simply cited with approval.  Allstate is a case which went a little further.  That was a decision of Justice Lindgren and I provided your Honours with copies of the unreported judgment and his Honour at page 82 said this in the second full paragraph on that page:

In accordance with the practice usually followed as revealed by the cases Bank of Tokyo; Amchem prima facie, and subject to two matters discussed below, it would be desirable that the New York court have the opportunity of deciding the proposed cross defendants’ objections to joinder, prior to this Court’s determination of their motions for anti‑suit relief.

So, one permits the foreign court to go ahead and deal with something corresponding to a stay. 

Your Honours have been referred briefly to Barclays Bank v Homan (1993) BCLC 680 and the passage is at page 687. I will just very briefly take your Honours to the passage. It runs from the middle of the page to the bottom. My learned friend, I think, referred to it briefly but I take your Honours to it because it is one of the clearest and most direct statements applying this approach in England. Justice Hoffmann who seems to have been in almost all the anti‑suit injunction cases either as counsel or a judge says this:

In the last 20 years, however, there has been a shift in the attitude of the English court to foreign jurisdictions -

this is just above point e on 687, starting with “The Atlantic Star”:

Today the normal assumption is that an English court has no superiority over a foreign court in deciding what justice -

and comity and:

both comity and common sense suggest that the foreign judge is usually the best person to decide whether in his own court he should accept or decline jurisdiction, stay proceedings or allow them to continue.

That, of course, is precisely the Amchem approach:

In other words, there must be good reason why the decision to stop the foreign proceedings should be made here rather than there.

That really is the point of the anti‑suit injunction.

KIRBY J:   Can I suggest that Justice Hoffmann would be dealing with a country where normally their trade is with North America or with Europe, you know, the great bulk of it, whereas the trade of this country is more likely to be in the region where perhaps the situation of the courts is not quite the same.  This is the problem with this unqualified approach of the English principle.

MR BENNETT:   May I deal with that?  I was going to deal with that under the second heading, but I will deal with it now.

KIRBY J:   You take your own course.

MR BENNETT:   The first matter to note is that it may well be that if one were free of the inhibitions of the type to which the Chief Justice has referred in Voth and in Henry about the difficulties and the embarrassment of weighing the merits of a foreign jurisdiction, if we were free of that inhibition we might well say the United States has a system we respect, Ruritania has a system we do not respect and, therefore, we apply one rule to Ruritania and one rule to the United States.  Of course, there is a very great problem in doing that.  If one does not do it at all, one has to choose between two highly unfortunate possible consequences.  One is that one fails to render comity to jurisdictions which would normally be regarded as entitled to it and one has the unseemly race to seize jurisdiction wherever possible and so on.  The other extreme is to say we will always abnegate or have a rule which abnegates very strongly with the result that the dictatorship of Ruritania where the judge acts on the instructions of the prime minister or the dictator is able to seize control of a dispute. 

Now, the answer, we would submit, lies in the well‑known phrase from other areas of law, “except in exceptional circumstances”.  If one starts by saying the appropriate rule is a rule which assumes and recognises comity and one then applies that, such a rule, I would submit, can be applied with comparative safety to most of the countries with which Australia trades and to most of the countries with which we are likely to deal.

McHUGH J:   I am not sure that that is right, Mr Bennett.  I do not know whether you have read the decision of the Seventh Circuit in Allendale Mutual Insurance v Bull Data Systems, but there the Seventh Circuit injuncted American companies from litigating arson that had taken place in France in a commercial court in France.  They took the view that they were businessmen, the judges were really businessmen, they were arbitrators, and they did not hear oral witnesses so they injuncted them.  What do you do about that sort of problem?

MR BENNETT:   Your Honour, in my respectful submission, it is a surprising conclusion and it is one which a court in this country would be unlikely to take, except perhaps in the most extreme circumstances, and one only has to think of most of the countries in the region with which we trade to see that they have legal systems which are eminently entitled to respect.

KIRBY J:   I do not think we can take notice of that.  There are some, but one would hesitate to take notice of that statement.

MR BENNETT:   Your Honour Justice McHugh asked a question possibly referring to one in the other category earlier, but we would submit that if the choice is assuming that everyone is good or assuming everyone is bad, to put in blunt and colloquial terms, it is better to take the first course than the second, and that even if there are very difficult questions as to whether one would admit evidence that in Ruritania the president tells the judges what to do and the president is the brother-in-law of the litigant, even if one - there are difficult questions about whether one would admit that evidence or not and how one would use it, but we would submit the appropriate way to use it is to say, except in exceptional circumstances, that sort of inquiry is not one the Court embarks on.  The example I have given is one where there would be exceptional circumstances, but one would not have exceptional circumstances because one says, “We consider the judiciary of country X to be less honest or less independent than the judiciary of country Y”.

KIRBY J:   The approach that you take essentially says, “Well, we have a problem here, but if we had to choose a general principle, it is better that the general principle of the law in 1996 should follow the flag of trade in 1996, which is increasingly international, and if parties don’t like that, then they can have international arbitration clauses which take themselves out of the local law so far as they can protect themselves by contract, or they can seek to get the benefit of the exceptional circumstances exemption, but the general principle should follow the flow of international trade”.

MR BENNETT:   Yes, precisely, your Honour.  If the party chooses to trade in Ruritania and Ruritania is a country of the type I have described, that party has accepted that situation and it may, in individual cases, produce problems, but it is going to produce less problems overall than a system which respects comity.  It is not just a question of regions.  The United States private international law, for many years, was much more inward looking than the private international law of England, largely because of the South American countries which it has dealt with at a time when they had courts considerably less independent than they are today.  One can understand that.  But we would submit that the modern trend is exemplified by Amchem and the approach taken around it.

McHUGH J:   I am not sure it is in the United States though, is it?

MR BENNETT:   Your Honour, one only has to read the cases referred to in Amchem in the United States ‑ and I will take your Honours to one or two of them in a moment ‑ to see that a very high regard is placed on comity and offence is sometimes taken when it is not given, as in the judgment in Laker v Sabena where the remarks of the judge, in effect, taking offence were picked up in subsequent English cases and accepted.

McHUGH J:   I know, but this only deals with one stage of the problem.  It might deal with the anti‑suit injunction but then there is the question of the stay.  It seems to me that you are only shifting the problem back one remove.  Certainly in relation to what is the appropriate forum, the United States courts still seem to me to have a much more restrictive view than applies in Europe or in England.

MR BENNETT:   It is hard to discriminate and, of course, the United States has a very large number of courts with very different attitudes in this sort of area in different circuits.  One would expect, for example - one would not be surprised to see a more liberal attitude in the Second or Third Circuit than in the Seventh Circuit, to take an obvious example.

McHUGH J:   I would have thought the Seventh Circuit would be a very liberal court.  Most of it is manned by economic rationalists.  There are a large number of them; you have got Posner and Easterbrook and people like that.

MR BENNETT:   Yes, that is true, your Honour.  The primary submission is that we ought not to look at factors of the type your Honour Justice Kirby is putting to me in relation to the trading neighbours in general, to say that comity ought not to be extended.  Indeed, to say that is in many ways more insulting and more creating the situation where there may be criticism than to do so in individual cases.

KIRBY J:   I am merely saying that the cases that are being laid before us are cases involving litigation vis‑a‑vis the United States, the United Kingdom, Australia and Canada.  I am thinking of other cases which happen to be in our region where the courts do not have the same tradition, and they do not have the same independence.  Therefore it is an appropriate question of this Court to ask, when we are looking at our trading patterns and the application to principle in our context, “Are these principles devised for the North American and European context appropriate for us?”.

MR BENNETT:   My submission is that they should certainly be applied where one is dealing with countries in that context.  Where one is dealing with other countries one may have to make a judgment as to whether one acts the same way or differently in the individual case.  But one ought not to decline to act that way in relation to other countries which extend comity because of the possibility that cases may arise with my hypothetical Ruritania or other countries which one does not name.

The second case to which I wish to remind your Honours is the decision of Pan American World Airways Inc v Andrews (1992) SLT 268. I only want to refer to it very briefly - it is one of the cases I have given to your Honours - just to show your Honours that the approach is now being taken more widely. At page 270 at the bottom of the page in the second column at K, Lord Kirkwood said this:

In the foregoing circumstances, it was submitted that the raising of proceedings in the United States would result in injustice and would be vexatious and oppressive.  The Scottish courts have jurisdiction and justice can be done in Scotland at substantially less inconvenience and expense than in the United States.

On the issue of balance of convenience, counsel submitted that it was important that interim interdict be granted to prevent the raising of proceedings in the United States.

So an interlocutory anti‑suit injunction was sought.

As soon as proceedings are raised in the United States, the petitioners will begin to incur expense and suffer inconvenience.  Further, once proceedings were raised in the United States, the status quo would have altered and it could then be argued by the respondents that the balance of convenience had swung in their favour.  However, counsel admitted that even if proceedings were raised in the United States, it would still be competent for the Court of Session to pronounce an interdict preventing the respondents from continuing with these proceedings.

So it is referred to, but what is stressed, we would submit is that the - I was reading it from the wrong page, your Honours - it is page 271, the following page.  The same point on the page:

With regard to the issue of balance of convenience, counsel for the petitioners did not inform me when the petitioners first became aware.....nor was I told why there was such a degree of urgency.....and counsel conceded that even if proceedings were raised in the United States it would still be open to the petitioners to seek to have the respondents interdicted from continuing with these proceedings.  If interim interdict was granted and the petitioners were given an opportunity to prove their averments, there must be a real danger that the proof could not take place before the triennium expires on 21 December 1991.  If that happened, the respondents might be forced to raise proceedings in Scotland in order to protect their position and if the petition subsequently failed on the merits the respondents could be too late to raise proceedings in the United States.  On the other hand, if proceedings are raised in the United States and the plea of forum non conveniens is upheld, the petitioners would not have suffered the serious inconvenience and additional expense on which they are founding.  If their plea of forum non conveniens is rejected in the United States, it would still be competent for the petitioners to apply to the Scottish courts for interdict -

In other words, what is being said is they should move first on forum non conveniens, i.e. for a stay in the United States, and only then if that fails, consider the question of anti‑suit injunction.

I have referred your Honours also to a case dealing with the approach prior to Amchem.  That is Bank of Tokyo Ltd v Karoon which my learned friend has referred to, and I simply give your Honours the reference to page 63D.  I will not read it to your Honours but it hints at the same approach prior to Amchem.  The first submission then is that Amchem represents the appropriate compromise in these cases and that the Court should take the view that except in exceptional circumstances one should be required to seek a stay from the foreign jurisdiction or plead forum non conveniens there or do whatever is appropriate prior to seeking an anti‑suit injunction.  Exceptional circumstances, I suppose, could occur where the Australian court must intervene to protect Australian jurisdiction or policies or in other extreme circumstances.

BRENNAN CJ:   How do you deal with the case of the agreement not to sue?

MR BENNETT:   Your Honour, we submit that is a totally different situation for a number of reasons.  Where one is dealing with the auxiliary jurisdiction, one first has to distinguish an exclusive jurisdiction agreement saying “I will not sue in America; I will only sue in Australia” from a general agreement not to sue.  Here of course it is an even lower level than that.  Here it is a statement, “I’m going to withdraw my claim”, and that is arguably construed, or on a prima facie basis construed as being an agreement not to sue, so it is a step further down still.  If one has an agreement of a general nature, one must distinguish the enforcement of the agreement not to sue from the question of which jurisdiction determines the validity and effect of an agreement not to sue.

An agreement not to sue can never stop you testing, by litigation, the validity of the agreement not to sue.  If I give to a person for consideration a promise not to sue him, that does not prevent me commencing proceedings challenging the validity of that very agreement.  One must always be able to do that.  And similarly, if one has a general agreement not to sue, that cannot prevent one, here or overseas, testing the validity of that agreement.  That is actually the fourth topic I am going to be dealing with, and there is authority directly in my favour on it.  That is the decision in Settlement Corporation v Hochschild, which basically says what I have just said, and I will take your Honour to it in due course.

But my submission will be that one of the things that has occurred in this case is that the trial judge has confused the enforcement of an agreement not to sue with the question of where one should determine where, as opposed to the result, whether or not there is such an agreement.  The second topic is the need for restraint.  If there is one common phrase which appears in every case on this topic, it is a reference to the need for restraint in this area, and a rejection of what was said in the cases in the last century, “Oh, we are only enjoining the litigant, not the foreign court.”  All the modern cases say, in substance, “You are doing exactly that, and that has to be looked at from the point of view of comity.”

My friend has taken your Honours to many of those cases.  We have listed many more here.  The only two I specifically wanted to take your Honours to are Maxwell Communications and an additional case.  In relation to Maxwell Communications in (1992) BCC 575, my learned friend ‑ ‑ ‑

BRENNAN CJ:   Should that page be 757, rather than 575?

MR BENNETT: Yes, it should, your Honour. It is (1992) BCC 757 and the passage is at page 762. Now, this is a passage my learned friend did mention to your Honours. I just wanted to say a couple of extra things about it. My learned friend, Mr Stitt, has cited in his submission the paragraph at the bottom of the page, the paragraph beginning with the words:

It is the exceptional cases in which justice required the English court to intervene -

We submit, of course, that this case is not in that exceptional category.  The central proposition, we would submit, is the proposition between D and E:

that both comity and common sense suggest that the foreign judge is usually the best person to decide whether in his own court he should accept or decline jurisdiction, stay proceedings or allow them to continue.

That passage, the passage in the following paragraph represent what, we would submit, should be regarded as the general rule.  The other case ‑ ‑ ‑

GUMMOW J:   That is the same judgment as is reported as Barclays Bank v Homen ‑ ‑ ‑

McHUGH J:   Yes.

GUMMOW J:    ‑ ‑ ‑ in (1993) BCLC.

MR BENNETT:   Yes, I realised that as I was taking your Honour to it.  I had not realised that when I did the submissions, your Honour.  I apologise for that.

McHUGH J:   It is the same passage ‑ ‑ ‑

MR BENNETT:   It is, your Honour.

McHUGH J:    ‑ ‑ ‑ in the last 20 years.

MR BENNETT:   Yes, I realised that as I went to it.  The other case is Compagnie des Bauxites de Guinea v Insurance Company of North America 651 F 2d 877. That is a decision, appropriately enough, of the Third Circuit Court in 1981 and the relevant passage is at page 887 and at the top of page 887 under the heading VII in the first column, in the opinion of the Court, this passage appears:

We now turn to the order enjoining the excess insurers from maintaining the action commenced by them in London.  The general principle established “[e]arly in our history,” is that one court will not interfere with or try to restrain proceedings in another in an ordinary action in personam.  “[W]here the judgment sought is strictly in personam, both the state court and the federal court, having concurrent jurisdiction, may proceed with the litigation at least until judgment is obtained in one.....This principle has often been applied in cases similar to the present case where one of the actions is in a foreign jurisdiction.

In Donovan, the Supreme Court applied this general principle notwithstanding the lower court finding that the second action was harassing and vexatious.  Thus, the district court’s finding that the action instituted in the English courts was duplicative, and therefore harassing and vexatious, does not affect our decision.

That is, of course, almost a reference to Henry, in a way, because it suggests that the second action is the one which is harassing and vexatious:

Likewise, there is no difference between addressing an injunction to the parties and addressing it to the foreign court itself.  Enjoining the parties necessarily affects the court and compromises “the comity which the federal courts owe to courts of other jurisdictions.”

So, that is the approach taken, certainly in the Third Circuit which, if my memory is correct, includes New Jersey.

McHUGH J:   I know, but in that Allendale Case that I put to you earlier, the Seventh Circuit said:

When a federal court is asked to abstain in favour of a parallel litigation pending in another court, the presumption is against abstention -

and then there are cited a number of US Supreme Court decisions.  It goes on to say:

the general rule being that a federal court has a duty to exercise the jurisdiction that Congress has given it.

MR BENNETT:   Your Honour, certainly different views have been taken in different circuits.  One wonders if even the Seventh Circuit, the judges who gave that decision would have given the same decision in relation to an Australian court.  They may well not have.

McHUGH J:   But what do you say about this proposition, that when a Federal Court is asked to abstain in favour of parallel litigation pending in another court, the presumption is against abstention?  So if that principle applies in the Third Circuit, it means that we would just carry on with the US litigations.

MR BENNETT:   Your Honour, Compagnie des Bauxites suggests that it is not applied in the Third Circuit.  It is one of those areas in which the circuits differ.  I remind your Honours that Amchem itself ‑ ‑ ‑

McHUGH J:   Yes, I know, but that only solves - even if you are right about that, you are asking us to formulate a general rule which is going to apply to many jurisdictions in the United States where they may have different views, at least under the Supreme Court, rules on inter‑circuit conflict.

MR BENNETT:   Your Honour, I am asking your Honours to decide this case.  If, in a subsequent case, a hard case arises, one will have to decide whether it is distinguishable or not.  Certainly we put at the higher level that it is a general rule.  At the lower level, we say certainly, if one applies a discriminatory rule, it should be applied favourably in this case.  But ultimately, your Honour, comity spreads by example and one wonders if sentiments like those in the Seventh Circuit would continue to be expressed if more courts took the sort of approach taken by the Canadian Supreme Court in Amchem, the approach we are asking this Court to take.  It is the example which moves everyone in the right direction.  It is when other courts move in the wrong direction that one gets the retaliation and one gets a greater use of anti-suit injunctions and the problems which arise from it.

KIRBY J:   We have not been cited a New Zealand case yet.  Is there a New Zealand on this or not?

MR BENNETT:   I am not aware of any, your Honour.

KIRBY J:   Or an Indian case or any other major common law country?

MR BENNETT:   Your Honour, we have not searched as far afield as that in relation to this.

KIRBY J:   We should certainly have a look to see if there is anything in the New Zealand Court of Appeal on the matter.

MR BENNETT:   We have not, specifically, your Honour.  I am told by Mr Kelly that that has been looked at and that there is nothing there which would be of assistance.

The third issue which I wish to address is the special position of negative declarations and, again, I can do this very briefly.  One starts with the proposition that, as a general rule, a defendant cannot make himself plaintiff by seeking a declaration.  If someone writes me a letter of demand saying, “Unless you pay a $1,000 I will sue you.”, I normally cannot go to court and obtain a declaration that I do not owe the $1,000.  The general approach taken by the courts is that, in that situation, one ought to wait until one is sued.  That is the starting point and there are a number of reasons for it.  One reason is that it might turn out to be hypothetical if he does not sue.  The other, I suppose, is that the potential plaintiff is the natural dominus litis and one should not obtain whatever procedural rules may favour or not favour plaintiffs by reversing the situation, and I have given your Honours the two leading cases on it.  I will not take your Honours to them. 

However, there are, of course, exceptions to that.  There are commercial situations where it is sensible to seek a negative declaration.  What, however, one cannot do, we would submit, is what is done here.  What is done here is this:  we are, in a sense, the natural plaintiff.  We make a claim against an insurance company.  There are issues which arise in relation to our claims.  One of those issues is a defence which, although it is characterised differently by my learned friend, really is a defence of release, or contract to release.  He calls it a contract not to sue.  We raise, by way of reply, if one likes, a number of issues in relation to that and, in the United States proceedings we do both in our statement of claim.  There is nothing surprising about that.  Modern pleading, unlike traditional common law pleading, frequently involves putting matters in the originating pleading, which might, at common law, have been in the replication.

There is nothing surprising today in seeing a claim in contract against an infant, for example, with an allegation in the statement of claim that it has been ratified since the infant came of full age, whereas, at common law, one would have waited for a plea of infancy and then put that on a replication.  The importance of that is that it demonstrates that we are the moving party.  We are the one that wants them to pay us money.  They are not seeking any affirmative relief against us.  The relief they seek against us is purely defensive.  The relief they seek against us is to say, “We have a defence to this claim because you have signed these letter, therefore, we want to stop you suing us. 

Now, one can characterise that in a number of ways, but it is a essentially a negative matter.  We started.  We moved first in the United States in our affirmative claim, seeking indemnity under the policies and seeking to set aside, in various ways, the letter agreement, if one can call it that, and seeking to assert that it is not binding, for various reasons.

My learned friend then comes to Australia and puts on entirely reverse claims.  It is perhaps not 100 per cent mirror image; it does not include the Sherman Act claim.  It does not have a couple of other things in it, but basically puts on negative claims seeking declarations that he does not owe us indemnity largely because of this agreement and seeking to enforce the agreement not to sue, which is really an elaborate way of saying that is one possible effect of a release or withdrawal of a claim, and he then says, “Because I’ve commenced this proceeding for negative relief in Australia, not only should the Australian court hear it and grant me negative relief”, like the man who seeks a declaration that he does not owe the debt that is claimed against him, he also says, “Because I am seeking this negative relief, your claim in the United States shouldn’t go ahead”, and then further says that he wants an anti‑suit injunction to stop us proceeding with it.

BRENNAN CJ:   It depends on how you characterise the allegations made against you and what your starting point is.  If you take as your starting point that there is an agreement by A not to sue B and A sues B, then the application for the injunction is in no relevant way negative.  It is simply asking for enforcement of the agreement.

MR BENNETT:   Yes, except, your Honour, it is described as an agreement not to sue.  My learned friend has dealt with that a little bit.  Your Honours have seen the document.  All it says is, “We withdraw the claims”.  It does not say, “We undertake not to sue you”.  That is said to be an implication following from those words.

BRENNAN CJ:   I am putting it on the footing that, if that were the true construction not to sue and you sued, then you are in breach.

MR BENNETT:   Yes.

BRENNAN CJ:   I mean, that is the way in which it is put.  Whether it is right or wrong is not a question we have to determine, I would have hoped.

MR BENNETT:   Your Honour also puts it as the starting point.  The starting point is we have a claim on an insurance policy.  The only importance of that letter, the only importance of that agreement - it has no other importance - is that it is a defence to a claim on the insurance policy if it is effective and if that is the way to construe it and if there is consideration and so on, but that is all it is.  It is nothing more than something which may be a defence to an action on an insurance policy.  To talk of enforcing it, in my respectful submission, is really to talk in negative terms.

One normally would enforce it by pleading it as a defence.  One may be entitled, under the cases on declarations and under the cases on injunctions, to enforce it in another way, but it is not the starting point.  When one takes the global picture of what the case is about, the case is about a claim on an insurance policy and whether or not that letter is a defence.  That is the issue between these parties, and one simply does not start with that letter as if it had some significance in its own right independently of the insurance policies to which its only raison d’etre is to operate as a defence.

BRENNAN CJ:   Is that not the foundation of the Sherman claim?

MR BENNETT:   The allegation in the Sherman claim, your Honour, is that there was a boycott organised in the United States by a number of American companies, one of which my learned friend’s first client is a subsidiary, which had the effect of causing us to sign that letter in relation to renewal of insurance.

BRENNAN CJ:   And thereby suffer damage?

MR BENNETT:   Well, the damage, your Honour, is if the letter is effective.  The leading case in relation to the use of negative proceedings of this type to found an anti‑suit injunction is The “Volvox Hollandia”, (1988) 2 Ll R 361, and that is a case where there were proceedings by shipowners in Holland to limit their liability, and proceedings in England for a declaration that they were not entitled to limit their liability, and an attempt to use those proceedings to support an anti‑suit injunction against proceedings in Holland, and the Court of Appeal very clearly took the view that that was not something which could go ahead.             At the bottom of page 366 in the first column, Lord Justice Kerr said:

However, as will be seen hereafter, I do not feel it necessary to base my decision on this unsatisfactory and unresolved procedural situation.  In my view its effect is merely that it makes it even clearer that the claims for the negative declarations in the plaintiffs’ writs served in Holland cannot properly be maintained.

That is, of course, the English writs served in Holland.  And at the end of the day, the injunction is refused.  At page 370, in the passage marked with the black line in the left‑hand column he say:

What matters for present purposes is, first, that the right to claim limitation, whether by action or defence and/or counterclaim, is a right which belongs to the shipowner alone.

That is the foreign action:

Secondly, a shipowner is not obliged to plead limitation by way of defence and/or counterclaim, but is generally entitled to bring a separate limitation action.....once he has given security.

So, once one is entitled to bring the foreign action, one cannot defeat that by the negative claim.  That is made clear on page 371 in the right‑hand column, the first bit marked with a line, where his Lordship says:

In addition, there is an important wider perspective.  Claims for declarations, and in particular negative declarations, must be viewed with great caution in all situations involving possible conflicts of jurisdiction, since they obviously lend themselves to improper attempts at forum shopping.  I have already said that in my view the present case provides a blatant example of this.

The other justices agreed.

So we would submit that this case is a particularly weak case for an anti‑suit injunction when one realises that it is merely negative relief mirroring in substance the foreign positive relief.  The only positive part, the enforcement of the agreement, is really something which arises either by way of reply under the old system of pleading or directly under the more modern system, because we say this is simply an impediment to our substantive claim and our answer to it is set out.

The fourth matter concerns the matter your Honour the Chief Justice asked me about earlier, and it is the special position of interlocutory anti‑suit injunctions based on agreements not to sue - the auxiliary jurisdiction.  We accept the distinction.  It is a distinction that is important to bear in mind between the two types of anti‑suit injunction - anti‑suit injunctions in the exclusive jurisdiction where one says, “Here is a situation of oppression and harassment and equity will intervene and stop you suing overseas”, and the auxiliary jurisdiction where one says, “Here’s a contract.  As auxiliary to enforcing it we’re going to pronounce an injunction”.  Here of course we have to deal with both because it is put on both bases in the alternative.

I am dealing now with the auxiliary jurisdiction and in particular with the effect of an interlocutory injunction.  The problem is that an interlocutory injunction where the agreement not to sue itself is the subject of the major dispute is really a means of deciding that Australia rather than the foreign jurisdiction will hear the case.  In other words, the ultimate question, the question of which jurisdiction - or both - is permitted to hear the suit, is determined by the interlocutory injunction.  The interlocutory injunction stops us proceeding in the United States, enables the Australian action to proceed, necessarily causes it to come on first because the foreign action cannot come on and therefore, even if it ultimately be held that there is no agreement not to sue, the determination of that issue takes place in Australia.  We say that the determination of that issue should take place in the United States for all the reasons concerned with multiple jurisdictions, which I will come to when I get to Voth.

But one ought not to predetermine that by saying, “We will grant an interlocutory anti‑suit injunction because there’s a prima facie case of an agreement not to sue”, and therefore reach the conclusion that whether there is an agreement not to sue or not or whether it is effective or not will be determined in the jurisdiction.  Really the proposition is as simple as that.  Pages 7 to 11 deal with that and go through it more slowly than I have done in that submission, but the central proposition is no more than I have said.  In my respectful submission, it is a classic case where one ought not.  There is an element of circularity in granting an interlocutory injunction based on an agreement not to sue which is general and which applies as much to suit in Australia as to suit in the United States.

GUMMOW J:   I am still mystified by this.  A covenant not to sue is usually taken in the realm of several sureties where there is one that is getting a release.  A release would discharge the others so you would take a covenant not to sue.  That is sort of area of discourse.

MR BENNETT:   Yes.

GUMMOW J:   But this is really a release or nothing, is it not?

MR BENNETT:   Well, we would so submit, your Honour, at the end of the day.

GUMMOW J:   It certainly does not appear crafted as a covenant not to sue which is a great exercise in art in a way.

MR BENNETT:   Well, your Honour, that has been decided against us at the prima facie level and we say, certainly at the final level, we ought to win that and even at the prima facie level it is hard to see why it is an agreement not to sue other than a release, if it is anything, but the point I am making is that even if one says prima facie it is an agreement not to sue, that should not be allowed to pre-empt the place where one determines whether there is or is not one, in the same way as an agreement not to sue cannot stop me suing for a declaration that there is no agreement not to sue or that the agreement is in someway vitiated.

It is the same logic.  It is all those examples of “This statement is untrue.  Is that true or false?”.  It is that same sort of logical paradox.  In my respectful submission, his Honour has erred in granting in the syllogism of saying, “An agreement not to sue is an agreement not to sue anywhere.  Prima facie there is such an agreement.  Therefore, on an interlocutory basis I will stop you suing in the United States and at the end of the day I will decide the final issue in this case but it will be decided here because I have decided prima facie that there is a general agreement not to sue”.  That is the problem.

Now, there is a case directly on that where precisely the result for which we contend was decided.  That is the decision of Mr Justice Ungoed‑Thomas in Settlement Corporation v Hochschild (1966) 1 Ch 10. That was almost exactly this situation. There had been a dispute in France, as it happens, although the parties seem to be scattered around the world, over a trust. There had then been a settlement. One of the terms of the settlement was that a beneficiary gave an undertaking, or a promise, not to sue the trustee. He then commenced proceedings against the trustee in France alleging, among other things, that the agreement was unenforceable and should be set aside.

There was an application in England for an anti‑suit injunction to prevent him proceeding with that.  The court refused the injunction and your Honour will see the way the argument was put by counsel for the plaintiffs - by counsel in the position of my learned friend, Mr Stitt.  If your Honours look at page 12E this argument was put, almost exactly what his Honour said in this case:

First, even if it is assumed that the 1961 agreement is ineffective by French law, it amounts merely to this, that the defendant has now found a jurisdiction under which he can successfully challenge the title of the trustees to the shares.  But the defendant has agreed, for a very substantial consideration, that he will not do precisely that which he is now attempting to do.

Hence, there should be an anti‑suit injunction.  At page 17 his Lordship in the middle of the page  at D referred to the famous passage from Doherty v Allman which was relied on by counsel for the plaintiffs which said a negative stipulation will be enforced by injunction, but he distinguishes it on this basis:

That case was not specifically at any rate directed to an interlocutory injunction but to a permanent injunction; and it is at any rate disputable how far the quoted observations apply to an interlocutory injunction.

So already there is a problem with an interlocutory injunction in this area:

Unlike the position in the case before me, in Doherty v Allman the relevant validity of the contract, the very basis of the observations in that case, was not in question -

here, of course, that is the whole issue -

but, perhaps more clearly significant, those observations were not directed to an injunction restraining proceedings in a foreign court, which, as pointed out in Cohen v Rothfield, may well have its own advantages and where the considerations mentioned in the passages quoted from that case are applicable.

He then says in the middle of the next paragraph that:

These matters involving French law, as is admitted, are matters that can be raised by way of defence in the English action; but they appear to be matters which can be more appropriately and conveniently dealt with by the French court.

And then that is discussed.  Then it is said at E on that page:

It appears that this submission of the plaintiffs could be raised by way of defence in the French court and there be the subject of judicial consideration.

In other words, it would be open to raise in the French court the argument, “You’ve agreed not to sue”, as here.  It is open to my friend to raise in the District Court in the United States the argument that we have agreed not to sue or abandon the claim or whatever it is.  His Lordship goes on:

To this, the plaintiffs rely that this was exactly what the obligation undertaken by the defendant in the compromise agreement, namely, not to take proceedings, was designed to avoid.  It is conceded for the plaintiffs, however, that the very issue of the effect of the French law of succession on the compromise could be raised by the defendant by way of defence -

et cetera, and in the result, at C on the next page, on page 19, he says:

In other words, it seems to me that the validity of the compromise agreement upon which the plaintiffs rely in this application could be made a matter for consideration by the French court in deciding whether to make an interim sequestration order.

So the fact that the validity of the agreement not to sue can be determined by the foreign court is a reason why, in this case, there was insufficient basis in the auxiliary jurisdiction on the basis of an agreement not to sue, for pronouncing the injunction.  We would submit that is a case which is precisely on point.  Indeed it is stronger than this case, because if your Honours look at the facts at paragraph B on page 12, the phrase there is:

Further, he undertook not to commence or prosecute any action where the trusts or the title of the trustees to the shares might be affected or prejudiced in any respect.

So that was a direct undertaking not to commence or prosecute any action.

GUMMOW J:   It was a properly drawn covenant.

MR BENNETT:   Yes.  So it is a much stronger case than this one and, in my respectful submission, it is a direct authority which we would respectfully submit should be followed. 

The only other case, and the one relied on by my learned friends against us, is Apple Corps Ltd v Apple Computer Inc (1992) RPC 70. In that case, the opposite result was reached, but it was reached because of ‑ ‑ ‑

GUMMOW J:   There was an expressive jurisdiction clause.

MR BENNETT:   Yes, precisely, your Honour.  That was the first difference, and the second difference was that the validity and effect of the agreement could not be decided in the foreign actions.  The foreign actions there were trademark applications and oppositions to trademarks.  That was a case where there had been a dispute between the Beatles and their successors who had the trademark Apple in relation to musical matters and Apple Computers who had it in relation to computers.  The two of them signed a settlement agreement under which they agreed to allow trademarks in their respective areas all over the world and not to challenge each other’s trademarks in those areas.  A problem arose, of course, when someone discovered that music and computers could go together and then, of course, there was an area of conflict between the two Apples and, at that point, the agreement broke down.

GUMMOW J:   The ratio seems to appear on page 77, lines 1 to 10.

MR BENNETT:   Yes, it does, your Honour.  That is the part I was about to take your Honours to.  What happened was there were foreign proceedings in relation to trademarks, and there was an anti‑suit injunction sought in relation to those, and what was ‑ at the bottom of page 76, the last two lines:

Apple seeks no injunction to restrain foreign proceedings on the issue of whether or not the agreement is valid. 

Now, that is exactly what is done against us here.  We are sought to be enjoined from having determined in New Jersey whether or not the agreement is valid:

It seeks an injunction to restrain the trade mark proceedings, and these are proceedings which cannot be brought in England.  The issue on this motion is not whether the trade mark proceedings should be tried here or in a foreign jurisdiction, but whether they should be tried at all.  The question of where the validity of the agreement should be tried would have arisen if, for example, the defendants had applied for a stay on the grounds of forum non conveniens.

et cetera.  And then Mr Justice Hoffmann then goes on to cite, with approval, Settlement Corporation v Hochschild, which he distinguishes.  So, we would submit those cases make it very clear that one simply should not use the auxiliary jurisdiction in the way it is used in this case.

The fifth matter concerns the Voth principle and, your Honours, this is one of those rare cases where one can open the judgment and point, almost to the line where, with respect, his Honour’s error occurs and where his Honour directly says the opposite to what this Court subsequently decided in Henry.  May I take your Honours to page 699 in volume 3.  At line 20 on that page, his Honour says that:

Mr Bathurst submitted that it was necessary to consider this case from the point of view of both proceedings.  In some respects that is a practical approach to the problems raised.  In some respects, however, it ignores the critical question for decision, namely whether New South Wales is clearly an inappropriate forum.....Attention is focused on that issue by the recognition in Voth that another forum may also be appropriate but, as I read that decision, the test is not to weigh the competing “appropriateness” of two fora.

So far his Honour has followed what Voth said, but his Honour then goes on and says this:

One must decide the question propounded by Voth.  The fact that proceedings may have been commenced in New Jersey before the proceedings were commenced in New South Wales does not, in my judgment, alter the test to be applied.

Now, that sentence is, in my respectful submission, the precise opposite of what your Honours said in Henry.

BRENNAN CJ:   I though Henry followed Voth. 

MR BENNETT:   It did, your Honour, it did, but Henry added this gloss to Voth¸ or this explanation of Voth, that where one has, unlike Voth, litigation in a foreign forum first commenced, then it is prima facie vexatious and oppressive to commence proceedings in Australia.  Let me take your Honours to Henry.

GAUDRON J:   It said that one or other is prima facie vexatious.

MR BENNETT:   Your Honours, I would submit it goes further than that.  If keeping that page open - I might take your Honours to Henry 70 ALJR 480, and the passage in the judgment of the majority at page 489 in the second column, under the heading “The relevance of proceedings in another jurisdiction”, where what is said is this:

There is one other matter that should be observed with respect to the decision in Gilmore, a case involving proceedings both in Australia and in New Zealand.

That was a case like this one where the trial judge, in applying Voth, took the view that it applied in the same way whether or not they were foreign proceedings.

In their separate judgments, Fogarty J, with whom Finn J agreed, and Lindenmayer J criticised the “clearly inappropriate forum test” in its application to proceedings in the Family Court.

And there is a discussion about that.  Then at the top of the next page:

There appears to be an assumption in Gilmore that the duplication of proceedings in another country is not, of itself, relevant to the question whether Australia is a clearly inappropriate forum.  Certainly, that assumption was made in the present case, the Judicial Registrar having proceeded on the basis that the proceedings in Monaco should be taken into account only if they or the proceedings in Switzerland would be affected by the Australian proceedings.

Foreign proceedings usually fall for consideration in a context in which they involve the same or related factual issues as those involved in the local proceedings, but not the same legal issue and, perhaps, not the same parties.  Even in cases of that kind, it may sometimes be appropriate to grant a temporary stay of the local proceedings to allow the factual issues to be determined in the other jurisdiction.  There are more compelling considerations in favour of a stay of the local proceedings -

GUMMOW J:   I think it is the second column, Mr Bennett,  page 490, second column letter C.  The paragraph beginning “It does not follow that”.  That is the destination that is reached - “It does not follow that”.

MR BENNETT:   Yes.

McHUGH J:   The passage you were looking for, though, is at the bottom of page 490, column 1, is it not?

MR BENNETT:   Yes, that is the passage I had in mind, your Honour, which I was leading up to.

GAUDRON J:   Yes.

MR BENNETT:   Yes:

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue.  And although there are cases in which it has been held that it is not prima face vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise -

et cetera, and then:

It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed.  However, it does follow that the fact that there are or, even, that there may simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of “seriously and unfairly burdensome, prejudicial or damaging”.....it also follows that courts should strive, to the extent that Voth permits, to avoid that situation.

Indeed, in the next section your Honours deal with the question of whether or not what had happened in Monaco amounted to the commencement of proceedings and what was said was, “Well, one looks at the substance, not the form,” and, in substance, the preliminary steps taken in the Monaco court which were necessary prerequisites to the commencement of the divorce proceedings should be treated as a prior commencement.  So, we would submit, particularly taking the passage at the bottom of the first column of page 490, that his Honour fell into the same error that the lower courts had fallen into in Gilmore v Gilmore and then Henry v Henry, which was the assumption that Voth took no regard of the fact that proceedings had been first commenced overseas.

BRENNAN CJ:   His Honour was literally correct, was he not, in saying that that did not alter the test to be applied?  The test is still that which is laid down in Voth.

MR BENNETT:   It makes a huge difference to the operation of the test, your Honour, yes.

BRENNAN CJ:   That may be so but the test remains intact.

MR BENNETT:   Yes, your Honour, literally that is so.  I accept that, your Honour, but what his Honour goes on to do ‑ ‑ ‑

GUMMOW J:   You cavil with his Honour’s sentence that the application of the Voth test is not affected by the consideration.

MR BENNETT:   Yes.  It appears on the next page, at line 37 on page 700:

However where there are two sets of proceedings on foot Voth makes it clear that even though one forum may be the more appropriate, the other forum will not thereby be clearly inappropriate and, unless it is, the proceedings will not be stayed.

There is a further discussion on page 702, lines 25 to 35, and at the bottom of page 703, lines 45 to 55.  The important point is that his Honour has made it clear that he regards the existence of the prior proceedings as being almost irrelevant on the Voth test because one is only looking at whether Australia is a clearly inappropriate forum, and one is simply not looking at the foreign jurisdiction.  What was said in Henry was that where there are proceedings already commenced overseas it is much easier to find that Australia is a clearly inappropriate forum.  We would respectfully submit that if his Honour’s decision had been given after Henry v Henry it would have been different in that respect and that, of course, is the central part of his judgment on this issue.

GAUDRON J:   Had Henry v Henry been decided when the matter was before the Court of Appeal?

MR BENNETT:   No, your Honour.

GUMMOW J:   Not before the Court of Appeal?

MR BENNETT:   I am sorry, the Court of Appeal.  I am sorry, I misheard your Honour.  Henry v Henry was handed down on 17 April this year.  His Honour’s decision was in December last year.  The Court of Appeal was 18 March this year, so it was before Henry v Henry.  The second aspect to which I wish to refer in relation to Voth is this, that in Voth itself, and, of course, in most of the family law cases, the issues of convenience of almost counting heads of witnesses, and where parties live, and where their offices are, and where they carry on business and those things, assume very great importance.

Those matter, we would submit, are of comparatively minor importance in litigation of this nature.  This is litigation involving hundreds of millions of dollars between two multi‑national companies involving aspects in various parts of the world.  My learned friend can no doubt list all the Australian aspects, and my learned friend, Mr Jackson, has listed all the American aspects, and I am not going to repeat all those.  There are many of them on both sides.  But what is important is that those aspects which concentrate on whether documents are in Sydney, or whether the author of the letter and the author of the letter addressed to him have to fly to New Jersey to give evidence or give evidence here, are really, we would submit, very, very trivial in the context of this litigation.

Each party has a preferred jurisdiction, for whatever reason.  Those reasons, in litigation of this nature, are far more likely to be reasons of substance than reasons of convenience or cost.  We would submit that it is appropriate, in litigation of this nature, to give less weight to factors of that nature.  The question of whether someone has to send a crate of documents from here to New Jersey, or send a witness over, or someone’s registered office is within a mile of the court, in my respectful submission, is substantially a very minor consideration.

Now, I have referred to some of the connections with the United States; I will not repeat those.  In relation to the Sherman Act claim, may I just say this:  a point is made in my learned friend Mr Stitt’s submissions that CSR America, unlike CSR Limited, has not pleaded the Sherman Act in the United States.  One might well think that was for the obvious reason; that it did not occur to it that whatever had been written in Australia would be applied against it, or sought to be applied against it.  But it now is sought to apply it against it.  But since it has been sought to do that, it has been subject to injunctions in the United States, so it has not been able to amend to add that claim.

It has been made very clear, however, at a number of stages in the litigation from our side of the Bar table when and if we are free to do that, that is something we would do, and that the only reason it was not done was that it was simply thought not to arise because it was not appreciated that that the letter agreement would be sought to be pleaded against us as opposed to merely against CSR.

I should conclude by just putting a few matters to your Honours in relation to CSR America itself.  Your Honours will see on the front page, the first page of our submissions, under the heading Statement of Facts we point out that CSR America was incorporated in Georgia in 1981, its principal office is in Atlanta.  It has no office, place of business or operations in Australia, and these are all findings.  It is a wholly‑owned subsidiary through an intermediate company of CSR but it is governed by a board of directors all of whom, save one, are resident in the United States.  None of its senior management are employees of CSR and it is solely responsible for paying its employees and so on, and none of its employees are also employees of CSR.

So it is an American company which is being sued in 22,000-odd actions in America and in relation to which it could, if it had been so extravagant but for the injunction in this case, have sought to join the insurers as a third party in each them.  That is clearly an inappropriate way of proceeding, but it indicates a very substantial connection with the United States.  Performance of the contract on its suers is performance in the United States.  It is not being sued by anyone in Australia.

It also seeks to complain under the Sherman Act about conduct of the holding company of my learned friend’s first client in the United States and other companies scattered around the world, but many of them in the United States.  It says that the boycott about which it complains which led to the letter which is now sought to be applied against it took place in the United States.

BRENNAN CJ:   It is one of the insured, I take it, under the policies?

MR BENNETT:   Yes, your Honour.  So our submission is that, certainly as far as it is concerned, its connections are substantively with the United States.  In so far as it is said against us, “Oh, but you’re a wholly‑owned subsidiary of an Australian company”, we simply apply the goose and gander argument and say exactly the same applies in reverse to my learned friend’s first‑named client which ‑ ‑ ‑

GUMMOW J:   Does it appear where CIGNA Corporation is incorporated in the United States?

MR BENNETT:   I think it probably does somewhere, your Honour.  I think it is Pennsylvania, but I will have to check that.

GUMMOW J:   I just could not find it.

MR BENNETT:   I have seen somewhere reference to Pennsylvania, but I say that subject to correction, your Honour.

GUMMOW J:   Thank you.

MR BENNETT:   But the very fact that the two protagonists are an Australian wholly‑owned subsidiary of an American company and an American wholly‑owned subsidiary of an Australian company rather indicates the transnational nature of this litigation.  We would submit that for all the reasons that I have given it was a case where there should have been a stay, there should not have been an anti‑suit injunction, a fortiori there should not have been an interlocutory anti‑suit injunction which predetermines the ultimate substantive question in the case by force of its operation.  May it please the Court.

BRENNAN CJ:   Thank you, Mr Bennett.  Mr Stitt.

MR STITT:   May it please your Honours.  Before I commence my submissions, could I just deal quickly with what my learned friend Mr Bennett just said about the amendment.  He said that CSR America has always made it plain that it wishes to amend.  Could I take your Honours to page 782 which is in volume 3 at line 15.  It really starts at the bottom of page 781 dealing with CSR America and then over the page:

Secondly he acknowledged that CSR America was not seeking damages under the Sherman Act -

and then he gave the reason -

because it was not a proponent for insurance in 1992.  Thus this is not a case of a United States’ company seeking to rely on the law of that country, a matter probably more relevant to the anti‑suit injunction.

That has been the position adopted throughout by CSR America.  Could I commence by stating that there are five matters which the respondents say this appeal raises.  First, whether the Amchem point is open to these appellants; second, the nature of the dispute and its proper characterisation; third, whether this Court should erect a “first filed” rule in stay applications; fourth, is there a natural plaintiff and a natural defendant giving rise to there being a sole entrant in the race to file for the purposes of a stay application, and fifth, in a claim for anti‑suit injunction, is an established equity always to be defeated by an appeal to comity. 

Could I turn first to the preliminary point that this Court should revoke the application for special leave which it granted on the ground that the Amchem point, which the appellants now say is central to the appeal, was not a point taken or argued before Mr Justice Rolfe.

GAUDRON J:   What about before the Court of Appeal which seems to have been the much more important court, from our point of view?

MR STITT:   Your Honour, it was raised but faintly before the Court of Appeal and I would like to take you to the evidence about that, briefly.

GUMMOW J:   The Court of Appeal seems to have been somewhat in haste.

MR STITT:   Can I just put the case in its context in the way in which it was conducted at first instance and then in the way in which it came before the Court of Appeal?  The position is this:  in our submission, the statement that the Amchem point is central to this appeal should be contrasted with the opening which was made by CSR’s counsel, Mr Bathurst, QC, who opened the case before Mr Justice Rolfe.  The opening is set for between pages 62 and 72 in volume 1.  There is recorded the way in which CSR proposed its case, and the way in which it put its case.  It was put in considerable detail by Mr Bathurst.

McHUGH J:   Mr Stitt, you put this very submission and referred to the very pages on the special leave case.  At page 13 of the transcript on the special leave you said:

But it was not raised as a point, your Honour, and I have read the way in which CSR and CSR America put its case and that is at page 63.

MR STITT:   Well, yes, your Honour, but ‑ ‑ ‑

McHUGH J:   Having been put, leave was granted; why should we have a hearing de novo in front of seven of us?

MR STITT:   Your Honour, the way in which this case is now structured, in our submission, throws up injustice in the way in which it was conducted, both at first instance and before the Court of Appeal, and I would like to make that point because if you come to the submissions in reply, and I want to do that in a moment, you will see the criticism that is made of Mr Justice Rolfe’s decision, where it is said that he failed to exercise his discretion properly and failed to take into account matters of comity; none of which were ever put to Mr Justice Rolfe, and none of those matters were ever raised previously, but they are raised in the reply.  Perhaps it is convenient to go to the reply and see the way in which it is put in this appeal by the appellants.

If you go to the submissions in reply, page 12, paragraphs 42 to 44 in the reply talks about the discretionary factors.  Then it quotes from a piece of evidence which is, in our submission, misstated but I will take you to that shortly and then, 43:

The litigation of the Sherman Act claim for treble damages.....The existence of that litigation and its speedy and effective disposition would obviously have been relevant to the Pennsylvania enquiry.

44.  That is the sort of factor which would doubtless bear on the United States District Court in measuring its reaction, as a matter of comity, to the United Stated proceedings being delayed, or thwarted, by an interlocutory anti‑suit injunction ‑ ‑ ‑

All of those are matters of evidence.  All of those are matters which were never raised before Mr Justice Rolfe and this aspect of the case was simply never put.  It was never put as the condition precedent upon which we should have proceeded.  If one looks at the way it was dealt with in the Court of Appeal when it came before the Court of Appeal on 11 September 1995, starting at page 629 in volume 3 - the matter came before the Court of Appeal in September 1995 on a special leave application against the anti‑suit injunction and it was argued and the learned President, Mr Justice Kirby, as he then was, debated the matter with Mr Bathurst.  At page 629 a short judgment was given by the Court of Appeal.  At line 50, the learned President said:

It would be open to the claimants or either of them to seek to return before Rolfe J either on 4 December 1995 or at some time earlier, or at some time later, motions either to extinguish the injunctions granted by his Honour or to refine and limit the terms of orders presently made.

That statement in the judgment reflects what happened.  If you go back to page 619, Mr Bathurst was there articulating the way in which the case was being put, and at line 40, Justice Kirby said:

Can you isolate in a sense a knock out point?  If you can overcome we will very largely control the extent -

Mr Bathurst said:

No I cannot see this knock out point for two reasons.  His Honour found an injunction on two bases.  Firstly, on the basis of a contract.  Secondly, it was vexatious and oppressive to grant the injunction in any event.  We say there are in effect 6 ways in which his Honour erred in the exercise of his discretion in granting an injunction.

Then over the page at 624, at line 10, again the learned President said:

You say comity is to give at least the first bite to the court that is most knowledgeable to invoke the law, that is the United States law.

Then he says:

We are going to see more of this with the growth in international trade.

And then, at line 15, he says:

But the question here is timeless.  At the moment I am inclined to think you have a couple of bows in your arrow, you can dissolve the injunction, confine the orders, seek to reagitate issues before his Honour, all of that can clear the decks and then you can find out what the issue is that is left.

So that, what was being put to my learned friend, Mr Bathurst, was that if he had this point, he could go back to Mr Justice Rolfe and he could litigate it and raise it in the ordinary way.

GUMMOW J:   But it seems to have been in his Honour’s mind at first instance, because if one goes to page 116, which is the judge’s judgment - that is the judgment of 15 August 1995 - one goes to page 116 in volume 1, lines 25 and 26 thereabouts, his Honour says:

In CSR v NZI I traced the authorities -

et cetera, and he is not going to do it again. When one goes to that case which is reported in 36 NSWLR 138, and at pages 159 to 165 there is pages of Amchem, pages of it.

MR STITT:   Yes, but if your Honour reads down to the next paragraph, line 40:

The matter has been presented to me for determination on the basis that an interlocutory injunction is being sought.  In those circumstances it seemed to be common ground that the plaintiffs must establish that there is a serious issue, or that there are serious issues, to be tried, and that the balance of convenience favours the grant of relief.

That was the common ground upon which this matter proceeded before Mr Justice Rolfe.  This point was never raised.  This point was never taken and, if your Honours go to that part of the judgment, at 141, his Honour sets out, in detail, the submissions that were made by Mr Bathurst.  There are three:

(i)  if there was an admitted contract not to sue.....

(ii)  if there is a disputed contract ‑

and, may I just pause there to say that what is submitted by Mr Bathurst, at line 20, in little paragraph (ii), about the disputed contract, is not the submission which my learned friend, Mr Jackson, put to this Court today, and then:

(iii)  other discretionary matters, which would be relevant ‑

Nowhere, in any of that, is the Amchem point taken.  Now, there is this consequence ‑ ‑ ‑

BRENNAN CJ:   What about No (iii) there:

other discretionary matters, which would be relevant, will include whether it is appropriate to take the exceptional step of restraining proceedings in a foreign court.

MR STITT:   Yes, your Honour, but it was not put on the basis that the foreign court should be approached first as a condition precedent of obtaining a stay in the local court, which is the way in which this is now being put before this Court.  That is the Amchem point which my learned friend Mr Jackson now seeks this Court to define.

Your Honours, the way in which the applicants ran the case before Mr Justice Rolfe indicates that Amchem was not a point which they sought to raise.  The evidence which was led was not directed to this point and there is Mr Lovell’s affidavit in volume 4, at 886; Mr Chesler in volume 8, 2011.  None of that evidence was directed to this at all.  There was no evidence led by the appellants as to the test to be applied by the New Jersey court in a stay motion.  There was no evidence led by the appellants of the procedures for summary dismissal in a New Jersey court and there was no evidence led as to comity as to what in truth would be the reaction of a New Jersey court to the grant of an interlocutory injunction.  Yet in their submissions in reply they identify in those paragraphs a number of matters, evidentiary in nature, which they say would be relevant to the question of comity. 

In our submission, the Court at this stage ought not to allow this matter to be raised.  When the matter came before the Court of Appeal on the second occasion, that court was entitled to refuse leave on the basis that if CSR now wished to raised the point it could do so at the final hearing, and that was, indeed, the approach of the court.  It was said to my learned friends, Mr Bathurst and Mr Kelly, that if the Amchem point wanted to be taken, wanted to be raised, they could do it at the hearing of the final injunction which was the appropriate time and place because that ‑ ‑ ‑

GUMMOW J:   That may not be right, Mr Stitt, that is the whole point.  It has been gone through several times.  This is a special sort of interlocutory injunction.  It is not an interlocutory injunction of someone committing a nuisance in the next door premises.

MR STITT:   I understand that, your Honour.  Where the issue could have been raised below and that there could have been evidence given which, by any possibility, could have prevented the point from succeeding, then this Court, in our submission, would not allow the point now to be taken.

KIRBY J:   Mr Stitt, I had forgotten that exchange in the earlier time that the matter came before the Court of Appeal, but it certainly appears that at that time, Mr Bathurst was raising the point which has now been advanced at some length before us today, and the Court then simply sent the matter back to trial in the expectation that perhaps the problem would be solved, but it was certainly being raised at that time.

MR STITT:   Yes, your Honour, and that is the very point, that they did not then seek to raise it before Mr Justice Rolfe.

McHUGH J:   But, Mr Stitt, the point you seek to make would certainly be a powerful point if there had been a final hearing of the matter but, at the moment, the matter is still interlocutory.  What are we to do?  Send it back so the trial judge can hear another application on the Amchem point to reconsider the matter, which he would be perfectly entitled to?  We have got I forget how many volumes, 13 volumes of material in front of us.  We have had a day’s argument.  Should not we deal with the matter now?

MR STITT:   Your Honour, that is not the fault of the respondents.  They were told by the Court of Appeal twice that if they wanted to take this point they could go back to Mr Justice Rolfe and take it and that it could be dealt with ‑ ‑ ‑

KIRBY J:   Would you give us the reference to the second hearing in the Court of Appeal, because that, after all, is the order from which the appeal comes?

MR STITT:   Your Honour, yes, there is.  It starts at page 248, but can I just answer Justice McHugh’s question to me.  The effect of what has happened is that this Court is being asked to decide the Amchem point without it ever being raised before the trial judge, without it ever being raised with the opportunity in the Court of Appeal and this Court is being asked to deal with it on an interlocutory basis.  In our submission, that is a very unsatisfactory way, a very unsatisfactory vehicle, to deal with a point such as this, particularly when submissions are made about evidentiary matters and ‑ ‑ ‑

McHUGH J:   It is said there is de novo.  Maybe, but you raised these points.  The Amchem point was the first point put by Mr Jackson on the special leave application and the fact that the point was not taken in the court below was just about the first point you took, but the Court has granted special leave.

GAUDRON J:   Is the position not this, the Amchem point is really only one aspect of this case in any event?  For example, if it were decided that there should have been a stay granted, then it follows, as the night follows day, regardless of Amchem, that there should not have been an anti‑suit injunction, does it not?

MR STITT:   Well, the two do not necessarily follow.

GAUDRON J:   I would have thought they did; they must or not that if it had been granted - if one came to the conclusion that a stay should have been granted by Justice Rolfe then it would follow at the very least I should think, would it not, that the anti‑suit injunction should have been dissolved?

MR STITT:   That would be the logical consequence.

GAUDRON J:   Yes, and from that, one might infer that whatever the merits of the Amchem point, there should not have been an anti‑suit injunction.

MR STITT:   But that then involves looking at the whole factual question of whether or not, on the appropriate principles, the stay should have been granted.

GAUDRON J:   They were invited to do that because there is an appeal as to that, too.

McHUGH J:   That is what S120 is about, is it not?

MR STITT:   Yes, your Honour, but this is, at this stage ‑ ‑ ‑

GUMMOW J:   You cannot complain about Henry v Henry having interceded, I think.

MR STITT:   No, your Honour, I do not complain about that.  Is that a convenient time?

BRENNAN CJ:   Yes, unless you have something that you want to complete on this aspect of your argument, Mr Stitt.  If you want to think about it overnight, we will adjourn, but if you have something you just want to finish off as part of your argument then ‑ ‑ ‑

MR STITT:   No, that is a convenient time, Chief Justice.

BRENNAN CJ:   The Court will adjourn until 10.15 am tomorrow morning.

AT 4.21 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 14 NOVEMBER 1996