Great Southern Loans v Locator Group

[2005] NSWSC 438

CITATION:	Great Southern Loans & Anor v Locator Group [2005] NSWSC 438
HEARING DATE(S):	29 April 2005
JUDGMENT DATE :	13 May 2005
JURISDICTION:	Equity
JUDGMENT OF:	McDougall J at 1
DECISION:	See paras [83] and [84] of judgment

CATCHWORDS:	PRIVATE INTERNATIONAL LAW - injunctions - where first plaintiff sought to restrain proceedings commenced by defendant in Victorian Magistrates' Court - where second plaintiff sought to restrain proceedings commenced by defendant in Victorian County Court - whether first plaintiff and defendant bound by terms of licence agreement between second plaintiff and defendant - where licence agreement contained arbitration clause and exclusive jurisdiction clause - antisuit injunctions - nature of power to grant antisuit injunction - whether antisuit injunction should be granted in exercise of equitable jurisdiction - whether court clearly inappropriate forum - whether Victorian proceedings vexatious and oppressive - discretionary factors - whether existence of alternative remedy affords basis for refusing relief - whether comity affords basis for refusing relief - whether arbitration and exclusive jurisdiction clauses continue to bind parties after purported termination for breach - whether claims in Victorian proceedings fall outside scope of arbitration and exclusive jurisdiction clauses - whether s 21 of Service and Execution of Process Act prevents grant of antisuit injunction based on exclusive jurisdiction clause
LEGISLATION CITED:	Commercial Arbitration Act 1984 (Vic) Corporations Act 2001 Jurisdiction of Courts (Cross-vesting) Act 1987 Service and Execution of Process Act 1992 (Cth)
CASES CITED:	Beecham (Australia) Pty Ltd v Roque Pty Ltd (1987) 11 NSWLR 1, 6 British Airways Board v Laker Airways Ltd [1985] AC 58 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Evers v Firth (1986) 10 NSWLR 22 Heyman v Darwins Ltd [1942] AC 356, 359 Ferris v Plaister (1994) 34 NSWLR 474 Greinert v Jarrett [2004] NSWSC 209 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, 476-477 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 Rick Manietta Pty Ltd v National Mutual Life Association of Australia Ltd (8 September 1995, unreported; BC 9503951) World Firefighters Games Brisbane 2002 v World Firefighters Games Western Australia Inc (2001) 161 FLR 355, 360 [15]-366 [38].
PARTIES:	Great Southern Loans Pty Ltd (Plaintiff 1) Zcorp Pty Ltd (Plaintiff 2) Locator Group Pty Ltd (Defendant)
FILE NUMBER(S):	SC 2482/05
COUNSEL:	J A Levingston (Plaintiffs) N J Kidd (Defendant)
SOLICITORS:	Christopher Levingston & Associates (Plaintiffs) Calleas Le Brun & Burke (Defendant)

LOWER COURT JURISDICTION:

INDEX

Great Southern Loans & Anor v Locator Group [2005] NSWSC 438

2482/05

Paragraph

Preliminary issues	2
The real questions in dispute	5
Relevant contractual terms	9
Other relevant facts	13
First issue: the terms of the agency agreement	18
The power to grant antisuit (and for the following) injunctions	23
Locator’s actions justify grant of relief	35
Second issue: clause 27.1	40
Alternative remedy	42
The comity argument	50
Other issues	58
Third and fourth issues: clause 41	69
Fifth issue: discretion	82
Conclusion	83

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

13 May 2005

2482/05 GREAT SOUTHERN LOANS PTY LTD & ANOR v
LOCATOR GROUP PTY LTD

JUDGMENT

1 HIS HONOUR: The first plaintiff (Great Southern) and the second plaintiff (Zcorp) carried on business as finance brokers and mortgage originators. They are both associated with a Mr Simon Levingston. Great Southern entered into an agency agreement with the defendant (Locator) on 1 December 2001, and Zcorp entered into a licence agreement with Locator on 30 May 2002. The licence agreement included an arbitration clause (cl 27.1) and an exclusive jurisdiction clause (cl 41). Locator has commenced proceedings against Great Southern in the Magistrates’ Court of Victoria at Melbourne, and against Zcorp in the County Court of Victoria at Melbourne, claiming damages for breach of the agreements. Great Southern and Zcorp seek to restrain Locator from continuing with those proceedings, and to enforce the arbitration clause and the exclusive jurisdiction clause.

Preliminary issues

2 By their summons filed on 18 April 2005 the plaintiffs claim, relevantly, the following relief:

“1 A Declaration that the agreement between the First Plaintiff and the Defendant dated 1 December 2001 (the 1 December Agreement) was terminated on 30 May 2002;

2 A Declaration that the 1 December Agreement was replaced by the agreement between the Second Plaintiff and the Defendant dated 30 May 2002 (the 30 May agreement);

3 A Declaration that the 30 May Agreement was and is valid and enforceable;

4 A Declaration that the 30 May Agreement incorporates the standard Form of Licence dated 25 February 2002 (the Licence);

5 A Declaration that the Licence was and is valid and enforceable;

6 A Declaration that the Defendant is bound by its promises set out in paragraphs 27.1 and 41 of the Licence;

7 An Order restraining the Defendant from continuing its action against the First Plaintiff in the Magistrates Court of Victoria at Melbourne Plait no. T00583749 (the Magistrates proceedings);

8 An Order that the Defendant withdraw any application for judgment, and have any judgment obtained against the First Plaintiff in the Magistrates Proceedings set aside;

9 An Order restraining the Defendant from filing any further proceedings against the First Plaintiff in relation to or arising out of the subject matter of the 30 May Agreement, other than in the Courts sitting in Sydney, without the leave of this Court;

9 [sic] An Order restraining the Defendant from continuing its action against the Second Plaintiff in the County Court of Victoria in proceedings C1-05-01034 (the Country Court Proceedings);

10 An order that the Defendant withdraw any application for judgment, and have any judgment obtained against the Second Plaintiff in the County Court Proceedings set aside;

11 An Order restraining the Defendant from filing any further proceedings against the Second Plaintiff in relation to or arising out of the subject matter of the 30 May Agreement, other than in the Court sitting in Sydney, without the leave of this Court;

12 A Declaration that the First Plaintiff, the Second Plaintiff and the Defendant have commenced the dispute resolution process set out in the Licence, paragraph 27.1;

13 An Order restraining the Defendant from taking any further action in relation to the dispute without leave of the Court other than to refer the dispute for resolution by arbitration by a barrister in Sydney nominated by the President of the NSW Bar Association in accordance with the Licence, paragraph 27.1;

…”

3 It will be observed that, despite the multitude of claims for relief that are made, there is no prayer for a decree of specific performance of cl 27.1. Nor is there any prayer for a declaration that the agency agreement was varied by the licence agreement, or that thereby or otherwise it incorporated, or was regulated by, cls 27.1 and 41 of the licence agreement. Indeed, it is apparent from prayers 1 and 2 that the plaintiffs’ case is that the licence agreement came to an end on 30 May 2002 and that it was then replaced by the agency agreement. The “replacement” of a “terminated” agreement between two parties by an agreement made between one of those parties and another party is, on the face of things, an unpromising source in which to find a variation of the former agreement.

4 The matter came before me on 29 April 2005 for an urgent hearing of some of the claims for injunctive relief. By consent, I made an order under Pt 31 r 2 that the issues raised by prayers 7, 9 (first appearing), 9 (second appearing) and 11 of the summons be dealt with separately and before any other issue in the proceedings.

The real questions in dispute

5 The real questions relating to the preliminary issues may be stated as follows:

(1) Did the agency agreement made between Great Southern and Locator include terms to the effect of, or are they otherwise bound (in respect of that agreement) by, cls 27.1 (the arbitration clause) and 41 (the exclusive jurisdiction clause) of the licence agreement?

(2) Should this Court enforce cl 27.1 (to the extent that it forms part of any relevant contract) by the grant of injunctive relief, or should it leave the plaintiffs to their rights in the relevant court in Victoria pursuant to s 53 of the Commercial Arbitration Act 1984 (Vic) (the Commercial Arbitration Act )?

(3) Should this Court enforce cl 41 (to the extent that it forms part of any relevant contract) or should it leave the plaintiffs to their rights in the relevant Court in Victoria pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth) (the SEP Act )?

(4) Is the plaintiffs’ application, in so far as it is based on cl 41, prohibited by s 21 of the SEP Act ?

(5) If the plaintiffs make out a prima facie entitlement to injunctive relief, should it be refused on discretionary grounds?

6 There was some lack of correspondence between the parties’ approach to the issues raised by cl 41. The plaintiffs put their cases on the basis that what they were seeking was “specific performance of two contractual promises, and antisuit injunctions to restrain the defendant from continuing with Victorian proceedings which are in breach of those contractual promises” (written submissions dated 28 April 2005, para 1). As I have already noted, the prayers for relief in the summons do not seek specific performance of either cl 27.1 or cl 41. Mr J A Levingston of counsel for the plaintiffs sought to answer this point by pointing to the declarations sought (for example, in prayers 5, 6 and 12). Those declarations do not appear to be attached to any claim for substantive relief other than the injunctions that are sought, in other prayers for relief, to enforce the rights that are the subject of the declarations. Whether read by themselves or in conjunction with the prayers for injunctive relief, the prayers for declarations of right do not amount to “an application for specific performance of … contractual promises”.

7 Mr N J Kidd of counsel for Locator addressed the issues by reference to what it said were the principles relating to a stay on the ground of forum non conveniens. He submitted that “the existence of an exclusive jurisdiction clause is merely a matter to be taken into account in determining the appropriate forum for the proceeding” so that “section 21 of [the SEP Act] prohibits a Court that is not the court of issue from restraining a party from taking a step in the proceeding on the basis of the existence of the exclusive jurisdiction clause” (written submissions dated 28 April 2005, para 8).

8 The argument based on s 21 of the SEP Act cannot, on any view, apply to the prayers for relief insofar as they are based on cl 27.1 (the arbitration clause). As to that (and also, alternatively, as to the exclusive jurisdiction clause), Mr Kidd submitted that if the power existed, it should not be exercised for a number of reasons. I will return to those arguments later.

Relevant contractual terms

9 As I have said, the agency agreement between Great Southern and Locator was made on 1 December 2001. The only provision to which reference was made was cl 15. It reads as follows:

“ 15. MEANING OF WORDS.
…
We means Great Southern Loans Pty Ltd and includes its successors and assigns.
You means each of the persons names [sic] as agent and includes their executors, administrators, successors and permitted assigns.”

10 There was nothing in the agency agreement whereby the terms of any standard licence agreement were incorporated into the agency agreement.

11 The agreement between Zcorp and Locator was dated 30 May 2002. Clause 4 provided:

“ Miscellaneous
4 The Parties further agree Zcorp’s Standard Form of Licence is incorporated into this agreement (as if it is set out in full in this document) in respect of any business conducted between the Parties and where Zcorp has or continues to provide any of its financial products or services to [Locator] or its customers, or remains liable to pay commission or trailing commission to [Locator].”

12 The parties agreed that the standard form of licence agreement referred to in cl 4 included cls 27.1 and 41 as follows:

“ NEGOTIATION, MEDIATION AND ARBITRATION
27.1 Any dispute in relation to or arising out of this Licence notified in writing by one Party to another Party will be referred to the nominated representatives of Zcorp and the Introducer [ie, in this case, Locator] for resolution by negotiation, and if the matter can not [sic] be so resolved within five days of receipt of the notice, it will be referred to mediation to be conducted by a barrister in Sydney nominated by the President of the NSW Bar Association, and if the dispute is not resolved by mediation within 14 days of the reference to mediation, the dispute will be referred to arbitration by a barrister in Sydney nominated by the President of the NSW Bar Association. The arbitrator is not to be the same person as the mediator.
…
LAW & JURISDICTION
41 This Licence is governed by the law of New South Wales and the Parties submit to the exclusive jurisdiction of the Courts sitting at Sydney. A Party will not object to the exercise of jurisdiction by those courts, either for forum non conveniens or any other reason.”

Other relevant facts

13 The remaining facts, in so far as they are relevant to the preliminary issues, fall within a very narrow compass.

14 There was apparently an agreement reached in February 2003 whereby the payment terms between Locator and Zcorp, relevant to the licence agreement, were varied. Shortly thereafter, Locator began to press for payment of amounts that it said were owing (at least by Great Southern) by way of commission. It made demand under s 459E of the Corporations Act 2001. That demand was set aside by consent orders made in this Court on 29 August 2003.

15 In the meantime, by letter dated 19 April 2003, Locator purported to terminate the licence agreement by reason of alleged breaches on the part of Zcorp. Notwithstanding that purported termination, Locator issued a number of documents described as “Recipient Tax Invoice” addressed to Zcorp claiming “upfront commissions and trail payment for” the months from July 2004 to February 2005. It is said, and I think is the case, that at least some of the trailing commissions claimed (and, it may be, some of the “upfront”, or introduction, commissions) related to business introduced by Locator to Great Southern.

16 On 4 March 2005, Locator commenced proceedings against Great Southern in the Magistrates’ Court of Victoria, and against Zcorp in the County Court of Victoria. It is not clear when the complaint and particulars of claim in the former proceedings were filed, but the writ and statement of claim in the latter proceedings were filed on 21 March 2005. The “pleading” in those documents can most kindly be described as confused, but it is apparent that Locator claimed, among other things, arrears of commission that it said were payable under the two agreements.

17 Locator made three attempts to serve the initiating process in New South Wales pursuant to the SEP Act. The first two attempts were defective for a number of reasons, including that the relevant notice under s 16 of the SEP Act was not attached to, or served with, the originating process. It is agreed between the parties that the originating process was not served effectively (ie, in accordance with the relevant requirements of the SEP Act) until 21 April 2005.

First issue: the terms of the agency agreement

18 There was no evidence that Great Southern and Locator agreed expressly that the agency agreement would incorporate the terms of the standard “Zcorp” Licence Agreement, or cls 27.1 and 41 from that licence agreement (or terms to like effect), or that their legal relationship would be governed by terms to the effect of cls 21.7 and 41.

19 Further, as I have already noted, the prayers for relief do not suggest that any of these things happened; indeed, they appear to be inconsistent with any such proposition.

20 Great Southern’s case on this was that the claims for payment made by Locator included not only claims due under the licence agreement (with Zcorp) but also claims due under the agency agreement (with Great Southern). I am prepared, for present purposes, to assume that this is so. But it does not go anywhere near showing that, thereby, Great Southern and Locator must be taken to have agreed that the terms of their agreement were varied so as to include the relevant terms of the licence agreement. It is very difficult to see how payment claims made from July 2004 to February 2005 could have any bearing on the terms or construction of an agreement that, on the case of the proponent (Great Southern) came to an end in May 2002, more than two years before the first payment claim was made.

21 The terms of the Recipient Tax Invoices are a long way from showing that Locator represented to Great Southern that their relationship had been, or was taken to have been, conducted on the basis that it was governed by the terms of the licence agreement; or that Great Southern acted on any such representation (to its detriment); or that Great Southern and Locator must otherwise be taken to have conducted their legal relationship on that conventional basis.

22 I therefore conclude that the first issue must be answered adversely to Great Southern. It follows that Great Southern is not entitled to the relief claimed by it in prayers 7 and 9 (first appearing) of the summons, because that relief depends on a finding that cls 27.1 and 41 of the licence agreement regulated (or must be taken to have regulated) the legal relationship between Great Southern and Locator referable to the agency agreement.

The power to grant antisuit (and for the following) injunctions

23 The plaintiffs’ case in relation to issues 2 and 3 was based on the power of this Court to grant antisuit injunctions. Accordingly, before I turn to those issues, it is necessary to consider that power.

24 The nature and extent of the power to grant antisuit injunctions were considered by the High Court of Australia in CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345. The majority (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) dealt with the matter at 389 and following. The following points emerge:

(1) Stay orders and antisuit injunctions are not governed by the same principles. There are, however, overlaps. Thus, “in some cases, the power to grant antisuit injunctions is an aspect of the power which authorises a court to stay its own proceedings.” And, “in other cases, the power to grant antisuit injunctions should not be exercised without the court first considering whether its own proceedings should be stayed.” (At 390.)

(2) The test which governs stay of proceedings in favour of proceedings in another country is that stated in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. That test is whether “the Australian court is a clearly inappropriate forum”. (At 390-391.)

(3) The power to stay proceedings on the ground of forum non conveniens, and one aspect of the power to grant antisuit injunctions, are both related to the integrity of the court’s processes. The former “is an aspect of the inherent or implied power” of “every court … to prevent its own processes being used to bring about injustice.” The latter, counterpart, power is the “power to protect the integrity of those processes once set in motion”. (At 391.)

(4) Their Honours considered the circumstances in which an antisuit injunction might be granted. One is where it was necessary to do so to protect the integrity of the court’s processes once set in motion: for example, where proceedings had been commenced for the administration of an estate, or to wind up a company, and a person sought in foreign proceedings to obtain the sole benefit of foreign assets. Their Honours pointed out that the inherent power “is not to be restricted to defined and closed categories” but one “to be exercised when the administration of justice so demands or … when necessary for the protection of the court’s own proceedings or processes.” (At 391-392.)

(5) There is a separate basis on which an antisuit injunction could be granted. That is where “the bringing of legal proceedings involves unconscionable conduct or the unconscientious exercise of legal rights”. In some such cases, “the equitable jurisdiction to restrain unconscionable conduct may be exercised in aid of legal rights.” Thus, the court may grant an injunction “in aid of a promise not to sue in a foreign jurisdiction constituted, for example, by an agreement to submit to the exclusive jurisdiction of the courts of the forum”. (At 392.)

(6) On this latter ground, an antisuit injunction may be granted where the foreign proceedings are vexatious: for example, where complete relief is available in the local proceedings, where there is nothing to be gained from the foreign proceedings over and above what could be gained in the local proceedings, or where there is complete correspondence between the local and foreign proceedings. The power is not confined to the examples; its limits “are determined by the dictates of equity and good conscience.” (At 393-394.)

(7) “[T]he power to grant injunctions in restraint of foreign proceedings should be exercised with caution. And that is so whether the injunction is sought in the exercise of the inherent or equitable jurisdiction.” (At 396.)

(8) Where “an antisuit injunction is sought on equitable grounds, the central question is whether the court in which application is made or some other court should hear and determine the matter in issue, or, at least, that aspect of it involved in the application for injunction.” Further, where the courts concerned are an Australian court and a court of another country, “there is involved in that question the further question whether the Australian court is an appropriate forum, in the Voth sense of it not being clearly inappropriate, for the determination of that matter.” It is only if the Australian court concludes “that it is not a clearly inappropriate forum”, that it may “go on to determine whether to require the applicant to seek a stay or dismissal of the foreign proceedings or to grant an antisuit injunction.” (At 397-398.)

25 Their Honours concluded that the proceedings brought by Cigna in this Court were oppressive because their “central purpose … was to prevent the continuation of the US proceedings” where there were remedies available to CSR in the US proceedings that would not have been available to it in this Court. This conclusion was not affected because the claims for declarations may have been “a claim in respect of a matter genuinely in dispute” (at 402): it was “the … dominant purpose … to prevent the appellants from pursuing remedies available in the US proceedings but not in the NSW proceedings” which dictated that the proceedings in this Court were oppressive and should be stayed.

26 There are very significant differences between the facts in CSR and the facts in this case. CSR (including in that expression both CSR Ltd and related corporations) had commenced proceedings against Cigna (including in that expression both Cigna Insurance Australia Ltd and related corporations) in the United States District Court for the District of New Jersey. They sought declarations as to their entitlement to indemnity with respect to certain asbestos claims; and (for some only of the plaintiffs) damages both at common law and under statute, including treble damages. As the High Court pointed out, that relief would not have been available to CSR in proceedings in New South Wales.

27 Cigna commenced proceedings in this Court seeking permanent antisuit injunctions to restrain CSR from taking further steps in the US proceedings, and declarations including that they were not liable to indemnify CSR.

28 Cigna sought interlocutory antisuit injunctions and CSR sought a stay of the proceedings in this Court. The High Court concluded that the interlocutory antisuit injunctions granted at first instance (an application for leave to appeal was dismissed) should be set aside, and that the proceedings in this Court should be stayed pending the outcome of the US proceedings.

29 The majority concluded at 395 that the US proceedings were not vexatious or oppressive, so that there was no serious question to be tried on that issue. Their Honours also concluded that there was no agreement not to sue, so that the antisuit injunction could not be sustained on that basis.

30 In the present case, the antisuit injunction is not sought to protect the integrity of this Court’s processes. It is sought in the exercise of equitable jurisdiction, and in aid of what are said to be legal rights established by cls 27.1 and 41 of the licence agreement.

31 Neither Mr Levingston nor Mr Kidd put submissions on the issue identified by the High Court as arising in that circumstance, namely whether this Court is, in the Voth sense, the appropriate forum – ie, not clearly an inappropriate forum – for the resolution of the disputes between the parties. But on Zcorp’s case, that question might be thought to arise. Further, it might seem to be a question that should be answered adversely to Zcorp. That is because it is Zcorp’s case that the disputes between it and Locator should be resolved pursuant to cl 27.1: ie, by negotiation and mediation (which it says have been completed) followed by arbitration.

32 However, what the majority said on this point in CSR needs to be considered in context. That context included that Cigna’s proceedings in this Court did not seek only injunctive relief. Cigna sought also declaratory relief; the declarations sought, if granted, would have established that the Cigna companies were not liable to the CSR companies in respect of at least some of the causes of action pressed by the CSR companies in the US proceedings. Thus, in principle, one central issue - the liability of the Cigna companies to indemnify the CSR companies in respect of the asbestos claims – could have been determined in either court.

33 What the majority said in CSR at 400-401, under the rubric Nature of the test when issues are not the same, suggests that the relevance of the “clearly inappropriate forum” point is limited. Their Honours said that, where different issues were involved in the local and foreign proceedings, the question was not whether the Australian court was a clearly inappropriate forum for the litigation of the issues raised in it. The question was whether the Australian proceedings were vexatious or oppressive, in the sense explained in Voth: “namely, that they are ‘productive of serious and unjustified trouble and harassment or seriously and unfairly burdensome, prejudicial or damaging …’.” I see no reason why it could not be vexatious or oppressive, in the sense explained by the majority, to bring proceedings in breach of an agreement to submit disputes to arbitration, or in breach of an exclusive jurisdiction clause. The effect, in either case, is to subject the party having the benefit of the relevant promise to the burden, expense and inconvenience of defending proceedings that, either at all or as to jurisdiction, it had contracted to avoid.

34 Thus, I conclude, the question, whether this Court is a clearly inappropriate forum, does not arise. That is for two reasons. The first is that the issues being litigated in this Court are not the issues that Locator seeks to litigate in Victoria. The second (and this may be no more than another way of expressing the first), is that the only question for this Court is whether, having jurisdiction so to do (by virtue of cl 41), it should enforce Zcorp’s contractual rights by appropriately framed injunctive relief. That relief, if granted, acts in personam on Locator. It does not deny the jurisdiction of the County Court, but enforces the contractual obligations binding Locator not to invoke that jurisdiction. When so analysed, it is clear that there is no reason for this Court to consider whether it is a clearly inappropriate forum. Any other view would stifle, if not negate entirely, the power of a superior court to grant relief in cases such as this.

Locator’s actions justify grant of relief

35 I therefore conclude that there is no reason why this Court cannot grant Zcorp the antisuit relief sought. I think that Zcorp has made out an entitlement to this relief, both in relation to cl 27.1 and in relation to cl 41, for two reasons: first, to restrain Locator’s breach of contract; and second, and to the extent that it may be necessary so to find, because the actions of Locator, in bringing proceedings in the County Court of Victoria in breach of both cl 27.1 and cl 41, are vexatious or oppressive.

36 As to the first ground: Locator’s actions, bringing proceedings in the County Court, amount to a breach of cls 27.1 and 41. It may have some prima facie right (if the question be considered without reference to the terms of the licence agreement) to have its claim heard in the jurisdiction of its choice. I am prepared to assume that, leaving aside cls 27.1 and 41 of the licence agreement, the County Court of Victoria is either an appropriate forum or not clearly an inappropriate forum to hear Locator’s claim. (For reasons that will become clear later, I do not think it necessary to express a concluded view on this point; indeed, I think it undesirable that I should do so.) But the question cannot be considered without paying due regard to the terms of the licence agreement. Locator sought to take what, no doubt it considered, was the benefit of that agreement. I think it is unconscionable for Locator to seek to retain (and indeed, through a claim for damages, to enforce) that benefit without accepting the burden. I think that, on this ground alone, Zcorp has made out its claim for relief by way of antisuit injunction.

37 It is unclear whether it is necessary to go further, and to characterise Locator’s actions, in instituting and seeking to prosecute proceedings in the County Court of Victoria, as vexatious or oppressive. The majority in CSR at 392 suggest that it may not always be necessary to go so far: where their Honours refer to “the equitable jurisdiction to restrain unconscionable conduct” as one which “may be exercised in aid of legal rights, including by the grant of an injunction, in aid of a promise not to sue in a foreign jurisdiction constituted, for example, by an agreement to submit to the exclusive jurisdiction of the courts of the forum.” Thus it may not be necessary to consider whether Locator’s conduct is vexation or oppressive. But if it were necessary for me to consider this question, I would conclude that it should be answered in favour of Zcorp. Locator contracted to give Zcorp the benefit of those promises. Clearly, Zcorp sought to have any dispute resolved by negotiation or mediation and, failing that, by arbitration (a private and often informal method of dispute resolution) rather than litigation. Further, it sought to have any disputes resolved in the courts of its home State. The advantages, in terms of costs and convenience, are clear.

38 I think that it is vexatious and oppressive, in the relevant sense, for Locator now, in breach of contract, to seek to deprive Zcorp of those benefits. Equally, I think, it is vexatious and oppressive for Locator to submit (as it has done) that Zcorp can avail itself of alternative remedies when, as I conclude later, to require Zcorp to do so necessarily deprives it of a substantial part of the benefits for which it contracted. Locator has not offered any explanation of its decision to proceed by litigation in the County Court of Victoria, save that, it submitted, it has terminated the licence agreement because of Zcorp’s breach. For the reasons that I give below, I do not think that this is an adequate reason.

39 It may perhaps be open to conclude that Locator, in commencing its proceedings in the County Court of Victoria in breach of cls 27.1 and 41, sought to put Zcorp to the inconvenience and expense of defending them in Victoria, and thereby to maximise the prospects of a favourable settlement, dictated more by a desire to avoid those consequences than by a realistic reflection of the merits of Zcorp’s position. But it is not necessary to express a concluded view on this; it is sufficient to say that, regardless of explanation and motive, the commencement of proceedings in breach of contract is of itself, in the circumstances of this case, vexatious or oppressive in the relevant sense because, by depriving Zcorp of its contractual entitlement, it is imposing an unfairly burdensome, prejudicial or damaging obligation on Zcorp.

Second issue: clause 27.1

40 There is no doubt that this Court may enforce, by appropriate relief, an arbitration agreement. Thus, where the contract between the parties makes reference to arbitration a precondition to litigation, this Court may stay proceedings commenced in breach of the arbitration agreement. That this Court has jurisdiction to do so in the present case (as between Zcorp and Locator) is confirmed by cl 41 of the licence agreement.

41 In the present case, the parties appear to have assumed that cl 27.1 was capable of enforcement in this manner. Because no submissions were addressed to me on the point, I am prepared to proceed on this basis. However, it does not follow that this Court should exercise the power that, I am prepared to assume, it has.

Alternative remedy

42 Locator’s proceedings have been commenced in the County Court of Victoria. Section 53 of the Commercial Arbitration Act empowers that Court to stay the proceedings. It reads, relevantly:

“53 Power to stay Court proceedings
If a party to an arbitration agreement commences proceedings in a court against another party to the arbitration agreement in respect of a matter agreed to be referred to arbitration by the agreement, that other party may, subject to subsection (2), apply to that court to stay the proceedings and that court, if satisfied -
(a) that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the agreement; and
(b) that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the arbitration -
may make an order staying the proceedings … .”

43 Section 53(2) is not relevant.

44 Clause 21.7 deals with matters other than arbitration (ie, negotiation and mediation). It was agreed that the parties had engaged in negotiation and mediation. It was not agreed, and I am not otherwise able to conclude, that the negotiation and mediation were referable to, or in accordance with the terms of, cl 27.1 But I am prepared to proceed on the assumption that the preconditions to arbitration (if this is what the requirements for negotiation and mediation are) have been satisfied. That is because Zcorp is seeking an antisuit injunction restraining Locator from suing in breach of the arbitration agreement, not specific performance of the arbitration agreement itself.

45 It will be noted that s 53(1) appears to create a presumption in favour of the stay: the stay may be granted if (para (a)) “there is no sufficient reason why the matter should not be referred to arbitration … “.

46 It is open to Zcorp to make application to the County Court of Victoria for a stay under s 53 of the Commercial Arbitration Act. The question is whether Zcorp should be left to that remedy.

47 There is no doubt that the availability of an alternative and efficacious remedy may, in some circumstances, afford a discretionary basis for refusing injunctive relief. Does it in this case?

48 The majority in CSR at 396-397 dealt with an equivalent argument. The appellants had contended that there was “a general rule [that] an interlocutory antisuit injunction should not be granted unless the applicant has moved for a stay or dismissal of the foreign proceedings.” The majority concluded that there was no general rule of that kind. They said that it served no purpose where the injunction was sought to protect the integrity of the proceedings or processes of the Court; and that it did not apply “where foreign proceedings clearly constitute conduct entitling the applicant to equitable relief; for example, where the proceedings are a clear breach of contract.” Further, their Honours said, the course of requiring the applicant to seek a stay “is neither necessary nor desirable if the application can be determined without that step being taken”. In this case, it can.

49 In this case, Zcorp contracted for two specific things that, one may assume, it regarded as beneficial. The first was the dispute resolution process set out in cl 21.7. The second was the grant of exclusive jurisdiction to the courts of this State. To insist that Zcorp should seek to vindicate those rights by application in the County Court of Victoria (whether under s 53 of the Commercial Arbitration Act or otherwise) is to deprive it of some part of the benefit for which it contracted. Why should it incur the expense of moving in Victoria, when this Court has clear power to grant relief appropriate to enforce Zcorp’s contractual rights? To adapt the words of the majority in CSR referred to in the preceding paragraph, there is no purpose to be served by requiring Zcorp to take that course.

The comity argument

50 Locator submitted that this Court should be slow to grant an antisuit injunction where the effect would be to interfere in proceedings, apparently regularly commenced, in the court of another State of Australia. It relied on the words of Rogers AJA in Beecham (Australia) Pty Ltd v Roque Pty Ltd (1987) 11 NSWLR 1, 6. It appears that Rogers AJA saw the source of the court’s power to grant an antisuit injunction as resting on the same basis as its power to stay proceedings: see for example his Honour’s reference at 6 to British Airways Board v Laker Airways Ltd [1985] AC 58 and Evers v Firth (1986) 10 NSWLR 22. To that extent, his Honour’s reasons must be taken to have proceeded on an incorrect basis. However, this does not mean that I am free to disregard what his Honour said in so far as, allowing for this, it remains relevant to the present issue; nor should I disregard it simply because (as appears to be the case) it was obiter dicta.

51 Rogers AJA said at 6 that the jurisdiction to grant an antisuit injunction is undoubted “but should be exercised with great care and it is to be hoped that the occasion for its exercise will not arise, particularly in circumstances such as the present.” His Honour said further that the concept “negates the concepts which underlie the Federation of the Australian States”.

52 In the same case, Kirby P (who agreed both with the judgment of Rogers AJA and in the orders proposed by him) dealt with the same issue at 3. His Honour said that an antisuit injunction should “rarely if ever be granted to restrain a party, not otherwise controlled by statute or clear contractual obligation, from proceeding in an appropriate court of another State of Australia” (emphasis supplied). The exception that I have emphasised is crucial to the present point. I can well understand why this Court (or any other court in Australia) should be slow indeed to entertain the question, whether the court of another State is the forum conveniens. It does not follow, where this Court has jurisdiction to do so, that it should decline to enforce a contractual right of a party simply because the result of that enforcement would be to prevent the other party from commencing, or proceeding with, an action in a court in another State. Where the question is one of the enforcement of contractual promises, which the parties have agreed to submit to the exclusive jurisdiction of the courts of this State, the considerations identified by Rogers AJA do not require this Court to withhold its hand.

53 To my mind, that conclusion is consistent with the decision of the majority in Cigna, where their Honours denied the existence of a “general rule” that a party claiming an interlocutory antisuit injunction should first move for stay or dismissal of the foreign proceedings; in this case, I note in particular their Honours’ reference, at the end of 396, to the situation “where proceedings are a clear breach of contract.” (See para [48] above.)

54 The decision in Beecham was considered by Austin J in Greinert v Jarrett [2004] NSWSC 209. His Honour noted at para [40] that there was power in this Court to restrain a person within its jurisdiction from bringing or continuing an action in the Supreme Court, or District Court, of another State. However, his Honour said at para [41], the power “is to be exercised with great caution”. His Honour held that he would not grant injunctive relief. He said:

“42 It is true that in the present case, the anti-suit injunction is sought not merely on the ground that this Court would be a better forum than the District Court of South Australia, but specifically to enforce the arbitration clause. However, there is a mechanism for doing so in the District Court, and indeed, Mr Greinert has pursued that mechanism by applying in the District Court for a stay in reliance on the arbitration clause. In my opinion there is no good reason for this Court to intervene, by anti-suit injunction, when there is an adequate mechanism available for stay of proceedings and it is being employed.

43 My conclusion, therefore, consistently with the attitude to anti-suit injunctions adopted by the Court Appeal of New South Wales, is that the presence of the arbitration clause provides no basis for declining to stay the New South Wales proceeding, given that it is otherwise appropriate to do so. I shall therefore make an order in terms of paragraph 1 of the notice of motion, and hear the parties on the question of costs.“

55 The key to his Honour’s reason is to be found in the last sentence of para [42]. His Honour relied on both the existence of the adequate alternative remedy and on the fact that the plaintiff had sought to employ it. In the present case, Zcorp has not sought to employ the alternative mechanism. It seeks to enforce its contractual entitlement. I do not accept that the existence of an alternative remedy, the exercise of which would put the person claiming the benefit of the promise to additional trouble and expense, should in all cases mean that an antisuit injunction should not be granted. (Nor do I accept that, as Mr Kidd appeared to submit, this is in substance what his Honour said.) That is so particularly where (as here) the exercise of the alternative remedy would mean that the applicant for relief is put into the very situation that it had contracted to avoid. At most, the existence of the alternative remedy is a discretionary consideration. The discretion is undoubtedly one “to be exercised with great caution”. That does not mean that it is one not to be exercised at all.

56 It does not appear that his Honour was referred, on this point, to the relevant aspects of the decision in CSR, to which I have referred in paras [33], [48] and [53] above. I regard what was said on this point as indicating the approach that I should take to the question; to the extent that it may be inconsistent with what was said in Beecham, then of course any conflict is not for me to resolve.

57 Particularly where (as I conclude later in these reasons) the remedy is available also to secure to Zcorp the benefit of cl 41 (it does not appear that there was any equivalent clause in the agreement considered by Austin J), I do not regard what his Honour said as guiding the exercise of discretion in this case.

Other issues

58 Mr Kidd submitted that Locator was not bound by cls 27.1 and 41, because (he submitted) the licence agreement had been terminated. That was the only justification offered for Locator’s decision to ignore cls 27.1 and 41.

59 Mr Levingston submitted that the agreement had not come to an end; alternatively, that it was not open to Locator to submit that it had. He relied in particular on Locator’s action in sending the Recipient Tax Invoices to which I have referred earlier.

60 It is not necessary to reach a concluded view on this point. Locator’s case is that “it has lawfully terminated the Zcorp agreement … as a result of breaches of that agreement by Zcorp” (written submissions, para 31). That was not said to be the result of some statutory or express contractual entitlement but, rather, an exercise of the common law right of a party not in breach to terminate for breach on the part of the other party.

61 However, what is commonly called termination for breach is not to be equated to rescission: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, 476-477 (Dixon J); Heyman v Darwins Ltd [1942] AC 356, 359 (Lord Porter). The effect of “termination” for breach is to discharge parties from the further performance of the substantive terms of the contract. In this sense, performance (and to some extent the contract) is terminated. But termination in this sense does not absolve the parties from the performance, or observance, of contractual terms that were intended to govern their rights and liabilities after termination; and this is so regardless of the reason for termination.

62 The general rule is that terms creating primary, or substantive, contractual duties may not be enforced after termination, but that terms which are essentially procedural in nature may. Thus, in Heyman, it was held that an agreement to submit disputes to arbitrations survived termination of performance of the contract (and see for example Ferris v Plaister (1994) 34 NSWLR 474). Again, an exclusion clause (which ordinarily will not create rights or obligations) will survive termination because its very purpose is to govern the way in which liability (including for breach) is to be regulated: Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300.

63 Clause 27.1 is wide enough to encompass the present dispute. It would be an extraordinary construction of the clause to suggest that it was intended to apply to disputes that arose whilst the agreement was current (ie, whilst each party remained obliged to perform it) but not to disputes that remained unresolved at termination, or that arose out of the events leading up to termination. The words “in relation to or arising out of” may signify a broad or wide degree of connection. The precise meaning to be given to them (more accurately, the precise nature of the connection that they signify) must depend on their context. I see no reason in the context of the licence agreement to think that the parties intended the obligations set out in cl 27.1 to subsist only so long as the agreement itself subsisted. On the contrary, I think that the context provides every justification for the conclusion that the parties intended the mechanism of cl 27.1 to survive “termination” for breach.

64 For convenience, I shall now deal with this point in relation to cl 41. The same conclusion applies, indeed I think with added force, in that case. It would be a nonsense for the parties to agree that disputes arising during the currency of the agreement were governed by the laws of this State, and (subject to cl 27.1) to be adjudicated only in the courts of this State; but that disputes arising after termination could be dealt with elsewhere, by reference to another legal system.

65 I therefore conclude that the rights and obligations conferred and imposed by cls 27.1 and 41 remain enforceable.

66 Mr Kidd submitted further that Locator’s proceedings included claims that fell outside cls 27.1 and 41, namely claims for damages for alleged misleading or deceptive conduct. It is correct to say that its statement of claim in the County Court does include a claim for such relief. It does not follow that the claim is not one “in relation to or arising out of” the licence agreement. It does not follow that the dispute is one that cannot be determined by arbitration; or, if it is not, or if the parties agree to waive arbitration, that it is not one which is otherwise, by virtue of cl 41, submitted to the exclusive jurisdiction of the courts of this State.

67 Finally, Mr Kidd submitted (in relation to cl 27.1) that the relief claimed by Zcorp was too wide: “the orders sought are in any event not in a form suitable for a stay based on the arbitration clause (which would call for a temporary stay, rather than a permanent stay).” (written submissions, para 25). I do not accept this submission. Firstly, it misconceives the basis of the application: which was for an antisuit injunction. Secondly, there is no reason why the antisuit injunction, on this basis, should be temporary rather than permanent. The object of the antisuit injunction is to prevent Zcorp from being sued in a court of law when it is entitled, by virtue of cl 27.1, to have the relevant dispute decided by arbitration. There is no reason why the injunction to restrain the proceedings in the County Court of Victoria should be limited in some temporal fashion. Assuming that Locator proceeds down the path of arbitration, and assuming that the arbitrator gives an award, the award will (assuming that it stands) decide the questions in dispute finally between the parties. Their rights and obligations with respect to the dispute will be measured by reference to the award. There will be nothing left to litigate.

68 I therefore conclude that the second issue should be answered in favour of Zcorp. It follows that Zcorp is entitled to the relief claimed by it in prayers 9 (second appearing) and 11 of the summons on this ground.

Third and fourth issues: clause 41

69 As I have noted, the primary submission for Locator was based on s 21 of the SEP Act.

70 Sections 20 and 21 of the SEP Act provide as follows:

”SERVICE AND EXECUTION OF PROCESS ACT 1992
- SECT 20

Stay of proceedings

(1) This section does not apply in relation to a proceeding in which the Supreme Court of a State is the court of issue.

(2) The person served may apply to the court of issue for an order staying the proceeding.

(3) The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters.

(4) The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include:

(a) the places of residence of the parties and of the witnesses likely to be called in the proceeding; and
(b) the place where the subject matter of the proceeding is situated; and
(c) the financial circumstances of the parties, so far as the court is aware of them; and
(d) any agreement between the parties about the court or place in which the proceeding should be instituted; and
(e) the law that would be most appropriate to apply in the proceeding; and
(f) whether a related or similar proceeding has been commenced against the person served or another person;


but do not include the fact that the proceeding was commenced in the place of issue.

(5) The court's order may be made subject to such conditions as the court considers just and appropriate in order to facilitate determination of the matter in issue without delay or undue expense.

(6) The court may determine the application for an order without a hearing unless the applicant or a party objects.

(7) For the purposes of determining the application, the court may hold a hearing by video link or telephone.

(8) A person who is entitled to practise as a barrister, solicitor or both before a court in:

(a) the place of issue; or
(b) another State in which a person is participating in the hearing by video link or telephone;


has a right of audience before the court at the hearing.

(9) This section does not affect the court's power to stay a proceeding on a ground other than the ground mentioned in subsection (3).

(10) This section does not affect the operation of:

(a) the Jurisdiction of Courts (Cross-vesting) Act 1987; or
(b) a corresponding law of a State.

SERVICE AND EXECUTION OF PROCESS ACT 1992
- SECT 21
No restraint of proceedings

If an initiating process has been served under this Division, a court of a State that is not the place of issue must not restrain a party in the proceeding from taking a step in the proceeding on the ground that the place of issue is not the appropriate forum for the proceeding.”

71 Mr Kidd submitted that “in the context of [the SEP Act] it has been held that an exclusive jurisdiction clause is merely a factor to be considered in determining the question of the appropriate court.” (written submissions, para 14). He referred to the decision of McDonald J in Rick Manietta Pty Ltd v National Mutual Life Association of Australia Ltd (8 September 1995, unreported; BC 9503951). In that case, McDonald J said (BC 9503951 at 7-8):

“For the purpose of this proceeding, if one was to assume that the agreement giving rise to the counterclaim contained an exclusive jurisdiction clause by which the parties agreed that any proceedings arising out of it were to be initiated in Victoria, that would not be the final determining matter. Even if parties do enter into an exclusive jurisdiction clause by special agreement, a court is not obliged or compelled to give effect to the same when considering which is the appropriate forum for the case to be litigated before. That this is the case is provided by s 20 of the [SEP] Act.
… Accordingly, in this case, even if the counterclaim did include an exclusive jurisdiction clause … , it would not mean that Victoria, by being the State nominated in which such proceedings should be brought, would be the only State in which those proceedings could be brought. It would not follow that such proceedings could not be brought in New South Wales relying on a breach of such agreement.”

72 As is apparent, what his Honour said related to the question to be considered under s 20(3). Similarly, in considering which court is “more appropriate” for the purposes of s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987, exclusive jurisdiction clauses are not determinative, although they would ordinarily be given substantial weight: see for example World Firefighters Games Brisbane 2002 v World Firefighters Games Western Australia Inc (2001) 161 FLR 355, 360 [15]-366 [38].

73 However, Zcorp does not seek a stay under s 20 (nor could it, in this Court; and, to go back to the previous issue, nor could it in any court in respect of cl 27.1). Nor does it seek an order under s 5 of the Cross-vesting Act. It seeks an antisuit injunction to enforce its contractual right to have proceedings heard in this State and resolved according to the law of this State.

74 The question, whether one court rather than another is the appropriate forum to hear and determine a dispute, will be decided by reference to a number of factors. In an appropriate case, those factors may include an exclusive jurisdiction clause. But it does not follow from this that, whenever a party to a contract seeks to enforce an exclusive jurisdiction clause contained in it, the party is seeking relief based on “appropriate forum” grounds.

75 The decision in CSR makes it clear that an antisuit injunction may be granted on equitable grounds, including for the enforcement of a legal right not to be sued, or not to be sued except in the courts of a particular jurisdiction. The applicant for an antisuit injunction on those grounds is not asserting that the jurisdiction in which the proceedings (restraint of which is sought) are brought or threatened is not the appropriate forum (as that expression is used in s 21 of the SEP Act), but that it is entitled to be protected from suit in that jurisdiction by reason of a contractual promise enforceable in the jurisdiction in which the antisuit injunction is sought. And, as the majority in CSR made clear at 400-401, where an antisuit injunction is sought on the basis that the proceedings sought to be restrained are vexatious or oppressive, the question of appropriate (or clearly inappropriate) forum does not arise. For the reasons that I have given, I think that it is vexatious or oppressive, in the sense that those words were used by the majority in CSR, for Locator to commence proceedings in Victoria in breach of cl 41.

76 I do not think that it is a sufficient ground for the grant of an antisuit injunction, that the other court (if I may use that expression) is not the appropriate forum for resolution of the dispute. In the first category of antisuit injunctions (those based on the inherent power of the court to protect its own processes and preserve their integrity) no question of appropriate forum arises. In the second category (granted on equitable grounds, including in aid of legal rights) it is necessary – at least in some cases – for the court to whom application is made to consider whether it is not a clearly inappropriate forum. But, again, an antisuit injunction will not be granted in this category simply because the other court is not an appropriate forum; there must be something more: unconscionable conduct, the unconscientious exercise of a legal right, or the abuse of the applicant’s own legal rights.

77 For these reasons, I do not think that Zcorp’s application based on cl 41 (or, for that matter, based on cl 27.1 or on both) is to be characterised as one made on the ground that Victoria “is not the appropriate forum for the proceeding”.

78 It follows that s 21 of the SEP Act does not prevent this Court from granting the relief sought, insofar as that relief is sought to enforce the operation of cl 41 and Zcorp’s rights under it.

79 Locator submitted that s 20 of the SEP Act empowered the County Court to stay the proceedings on the basis of cl 41. For the reasons that I have given, I think that this submission should be accepted. However, as with the equivalent argument in relation to cl 27.1 based on s 53 of the Commercial Arbitration Act, I do not think that it is appropriate to refuse relief on this discretionary ground. Again, the effect of doing so would be to deprive Zcorp of a substantial portion of the benefit for which it had contracted.

80 There was no separate argument (apart from that based on s 21 of the SEP Act, with which I have dealt) relating to cl 41. To the extent that the arguments that I have dealt with in relation to cl 27.1 were relevant also to the cl 41 issue, I do not propose to repeat what I have said. Just as I concluded that those arguments did not stand in the way of the grant of relief based on cl 27.1, so I conclude that they do not stand in the way of the grant of relief based on cl 41.

81 I therefore conclude that the third and fourth issues should be answered in favour of Zcorp.

Fifth issue: discretion

82 I have already dealt with the discretionary arguments.

Conclusion

83 I conclude that Great Southern has not made out the relevant claims for relief (insofar as they are the subject of my order under Pt 31 r 2) but that Zcorp has.

84 The parties will need to consider the effect of these reasons. I therefore stand the proceedings over to a date to be arranged with my associate to enable the parties to bring in short minutes of order to give effect to these reasons and to put submissions on costs. That is to be done within 14 days from publication of these reasons.

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