HAMILTON'S Ewell Vineyards P/L v River Horizons P/L - [2012] SADC 173

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
HAMILTON'S EWELL VINEYARDS P/L & ORS v RIVER HORIZONS P/L & ORS
[2012] SADC 173
Reasons for Decision of His Honour Judge Clayton
7 December 2012
PRIVATE INTERNATIONAL LAW - SERVICE OUT OF JURISDICTION - UNDER SERVICE AND EXECUTION OF PROCESS ACTS - INITIATING PROCESS - STAY OF PROCEEDINGS - WHERE COURT OF ANOTHER STATE APPROPRIATE COURT FOR PROCEEDING
Appeal from decision of master who ordered stay of proceedings on the basis that the County Court of Victoria was the appropriate court for the proceeding.
HELD: Decision of master does not contain any error of the kind required by House v The King.
Contract related to property in the state of Victoria, the vendors, their agent and solicitors are in Victoria. The contract was entered into in Victoria having been drafted by Victorian solicitors. There are likely to be contribution proceedings between parties who are resident in Victoria. The County Court of Victoria has the most real and substantial connection with the action and can be regarded as the natural forum and is the appropriate court.
Appeal dismissed.
Service and Execution of Process Act 1992 (Cth) s 20(3); District Court Act 1991 (SA) s 43(2); District Court Civil Rules 2006 (SA) r 17, referred to.
Badcock v State of South Australia & Ors [2010] SADC 147; St George Bank Ltd v McTaggart [2003] QCA 59; Fertico v Murray River Corn [2002] SADC 89; House v The King [1936] HCA 40; Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 191 LSJS 469; Briginshaw v Briginshaw (1938) 60 CLR 336; Boart Longyear Pty Ltd v Coburn & Anor (Victorian Supreme Court, 18 June 1998, unreported), considered.

HAMILTON'S EWELL VINEYARDS P/L & ORS v RIVER HORIZONS P/L & ORS
[2012] SADC 173

This is an appeal from a decision of a Master who ordered that proceedings in this court be stayed pursuant to subs 20(3) of the Service and Execution of Process Act 1992 (Cth) on the basis that the Victorian County Court is the appropriate court to determine the matters in issue between the parties in this case.
There is an appeal as of right from the decision of the Master to a single judge.[1] The appeal is by way of rehearing, but it is not a review of the decision of the Master de novo.[2]
[1] District Court of South Australia Act 1991 s 43(2) and District Court Civil Rules r 17.
[2] Badcock v State of South Australia & Ors [2010] SADC 147 at [43] to [47].
Subsection 20(3) of the Service and Execution of Process Act 1992 (Cth) provides that a court may order that a proceeding be stayed if is satisfied that a court of another State that has jurisdiction to determine all matters issue between the parties is the appropriate court to determine those matters. Subsection (4) provides:
(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 preceding; 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. (my underlining)
In St George Bank Ltd v McTaggart [2003] QCA 59 McPherson JA said that subs 20(4) listed "a series of factors to be taken into account, which are not expressed to be exhaustive but which "include" the factors listed in paras (a)-(f.) of s 20(4)".
McPherson JA said that the expression "appropriate court" in s 20 referred to the court which had the most real and substantial connection and could therefore be regarded as the natural forum.[3]
[3] [10].
In Fertico v Murray River Corn [2002] SADC 89 Judge Kitchen said:
...the relevant considerations on a stay application additional to those in S20(4) include whether the cause of action has a connection with the State in which proceedings have been commenced and that in this sense it is relevant to consider, for example, in the case of contract, where the contract was made and where the breach took place.[4]
[4] [28].
Both parties agree that the decision involved the exercise of a discretion by the Master and that the principles described by the High Court in House v The King (1936) HCA 40 apply. In that case the High Court said:
...The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred...
Before this court can intervene the appellant must establish that some error has been made in that the Master acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or had not taken into account some material consideration. I accept the submission of Mr Douglas who represented the defendant (respondent) that the court must first find an error in the reasons of the learned Master that allows intervention and it is only then that the issues of discretion can be considered.[5]
[5] T44 l16.
The plaintiff Mark Eric Hamilton is a resident of the State of South Australia and the two corporate plaintiffs were incorporated in the State of South Australia. The directors of the first plaintiff are Mr Mark Eric Hamilton, Mr Robert Frank Hamilton, his father, and Mrs Deborah Ann Hamilton his wife. The second plaintiff is a trustee company of which the directors are Mr Mark Eric Hamilton and Mrs Hamilton.
The defendant River Horizons Pty Ltd was incorporated in the State of Victoria. The personal defendants are partners in Tisher Liner & Co, a firm of solicitors in Melbourne.
In the Statement of Claim the plaintiff seeks declarations that they are not bound by a contract relating to a property in Melbourne and associated guarantees. The vendor and the vendors selling agents are located in Victoria and the written contract states that it is governed by the laws of Victoria. The contract was entered into in Victoria having been drafted by Tisher Liner & Co. Victorian land agents acted for both parties. The guarantee with respect to the contract was stated to be governed by the laws of Victoria.
The defendants have a counterclaim for rectification of the contract and equitable relief. There is also the possibility of contribution proceedings between the defendants on the basis that the second to seventh defendants failed to protect the interests of the first defendant.
In an affidavit Mr Hamilton said that at the trial the plaintiffs propose to call various witness from South Australia including himself, his father who is 86 years of age and frail, his wife and Mr White, a solicitor practising in Adelaide.[6] Mrs Hamilton has commitments in business and personal matters in Adelaide. Mr Hamilton said that if the trial took place in Melbourne the plaintiffs and the witnesses would incur considerable extra expense and inconvenience including actual potential loss of earnings in attending at trial in Melbourne as opposed to it being in Adelaide.
[6] FDN 24.
The Master considered seriatim the criteria set out in para (a) to (f) of subs 20(4). He had regard to the places of residence of the parties and likely witnesses. He concluded that "Ultimately it will be for both parties and the trial judge to determine who will be giving evidence" and observed that if persons other than the Hamilton family give evidence the preponderance of persons will be resident in Victoria.[7] The plaintiff asserts that that observation of the Master demonstrates an error.
[7] [52] and [53].
The Master correctly observed that the place where the subject matter of the proceedings is situated is Victoria.
The Master considered the third factor, the financial circumstances of the parties so far as the court is aware of them, and concluded that the resources of the parties were evenly matched. He found there is potentially greater prejudice to the defendant in contesting the matter if it is heard in South Australia given the number of Victorian parties and witnesses compared with the number of South Australian parties and witnesses.
As to the fourth factor the Master correctly noted that there is no agreement between the parties about the court or place in which the proceedings should be instituted.
The fifth factor is a consideration of the law that would be most appropriate to apply in the proceedings. The Master noted that the guarantee is expressly governed by the law of Victoria and that the building contract was entered into in Victoria and acceptance occurred in that state.
On the appeal Mr Roberts who appeared for the plaintiff (appellant) argued that the question to be tried relates to the authority of a director to enter into a contract on behalf of a company which must be determined by the Corporations law which is a law of the Commonwealth and not the law of the State of Victoria. He said the question is whether a contract was made at all rather than the interpretation of the contract.
The final factor was whether a related or similar proceeding has been commenced. The Master observed that no related or similar proceeding had yet been commenced but acknowledged the submission of counsel for the defendants that it was inevitable that issues of contribution and apportionment will arise.[8]
[8] Reasons [60].
The Master correctly noted that subs 20(4) does not limit the factors which are to be taken into account to those set out in paras (a) to (f) but that the matters which the court can take into account include the factors listed in those paragraphs.
An additional factor which the Master considered was the fact that the defendants had provided an undertaking when an interlocutory injunction was sought. Mr Roberts argued that his client would be prejudiced by a stay because the plaintiffs would then be forced to obtain an interlocutory injunction in Victoria. The Master noted that Mr Douglas indicated that the defendants would maintain the status quo by giving a similar undertaking in Victoria.
The Master referred to the personal considerations raised by Mr Mark Hamilton who had referred to the need to be absent from his legal practice as managing partner of the firm Grope Hamilton for the duration of the trial and the fact that Mr Robert Hamilton is elderly and frail and that it is some years since he has travelled interstate. Mr Hamilton said that his wife is a shareholder and director of a group of companies which has a substantial property and investment group and that she is actively engaged in directing the affairs of the group on a daily basis as well as having the care of two University aged girls. The Master took into account that there would be financial, convenience, and health costs to the plaintiffs if the matter was heard in Victoria.
The Master concluded that the balance of convenience should be exercised in favour of the applicant for a stay.
The grounds of appeal in the Amended Notice of Appeal which is dated 11 September 2012 are extensive. They extend over more than three pages and include six separate grounds, some of which are broken into sub-grounds. Rather than attempt a summary I set out the grounds in the Amended Notice of Appeal in full:
1.   The Learned Master erred in law and/or fact determining that the first defendant had demonstrated that a court in the State of Victoria is the appropriate court to determine the matter in issue between the parties.
2.   The Learned Master erred in law in:
2.1.finding that it is a matter for both parties and the trial judge to determine who will be giving evidence (at [52]);
2.2.failing to find that, having regard to the potentially profound impact of a stay upon the plaintiffs, the onus on the defendants pursuant to s 20 of Service and Execution of Process Act, 1992 (Cth) demanded that the defendants demonstrate a clear and compelling basis for the relief sought.
3.   The Learned Master erred in finding:
3.1.That the preponderance of witnesses will be resident in Victoria rather than South Australia (at [53]), notwithstanding that:
3.1.1.the Learned Master made no findings as to which, if any, witnesses resident in Melbourne would likely give evidence (at [52] and [53]);
3.1.2.the Learned Master expressly, disavowed the need to make a finding as to which, if any, witnesses resident in Melbourne would likely give evidence (at [52]);
3.2.By taking into account that there were six partners in the second to seventh defendant’s law firm at [50] and [51], notwithstanding that:
3.2.1.there was no evidence that such persons had any relevant dealings;
3.2.2.there was no basis for a finding that all or most or any of these persons would likely give evidence;
3.3.By taking into account that there were four directors of the first defendant at [49], notwithstanding that:
3.3.1.there was no evidence that such persons had any relevant dealings;
3.3.2.there was no basis for a finding that all or most or any of these persons would likely give evidence;
3.4.That there is potentially, a greater financial prejudice to the first defendant in contesting the matter in South Australia (at [55]) in that:
3.4.1.the Learned Master took into account the position of the second to seventh defendants (at [55]), notwithstanding that these parties are abiding the event (and therefore not participating in the proceedings);
3.4.2.the Learned Master took into account the number of Victorian witnesses (at [55]), notwithstanding that he had (expressly) not made any finding as to the number of such witnesses;
4.   The Learned Master erred in taking into account that the 2010 guarantee is governed by Victorian law and the contract was entered into in Victoria (at [50] and [59]), notwithstanding that:
4.1.the Learned Master made no finding as to how any question of Victorian law would or might apply in respect of either the 2010 guarantee or the contract;
4.2.there was no basis for any such finding having regard to the matters in issue in the proceedings.
5.   The Learned Master erred in finding (implicitly) that the Plaintiffs would not sustain prejudice in terms of the maintenance of the injunction relief earlier ordered by the District Court of South Australia (at [62]), notwithstanding that:
5.1.The undertaking offered by the second to seventh defendants is terminable on 10 days notice; and
5.2.The Plaintiffs would inevitably sustain prejudice if that undertaking was terminated (by the provision of notice) and the plaintiffs would be required to seek an injunction in Victorian Courts on short notice in order to preserve the status quo.
6.   The Learned Master failed to give adequate consideration or weight to the prejudice which would be caused to the frail and infirm witness, Mr Robert Hamilton, if he was required to travel to Melbourne to give evidence.
Subsections (3) and (4) of s 20 refer to "the appropriate court". That suggests that there is only one appropriate court. Different people will have different views as to which is the appropriate court and the section requires an objective assessment by the decision maker.
The plaintiffs accepted that the County Court of Victoria has jurisdiction to determine the matters in issue between the parties.
The Master referred to St George Bank Ltd v McTaggart (referred to above).
The Master decided that he should determine the relevant criteria on the balance of probabilities.[9] For reasons which I discuss below I find the Master’s decision as to the onus of proof was correct.
[9] [47].
Mr Roberts argued that the exercise of the discretion by the Master was based on two matters. First that the preponderance of witnesses would be resident in the state of Victoria. Secondly that the guarantee and land sale contract were governed by the laws of Victoria. He submitted that the remaining considerations were on the Master's analysis neutral.
Mr Roberts argued that the Master made an error of law in that he expressly made no finding as to which or how many witnesses resident in Victoria were likely to be called at the trial and therefore failed to consider the place of residence of the parties and the witnesses as required by subs 20(4)(a).
Subsection 20(4)(a) refers to the places of residence of the parties and the witnesses "likely to be called in the proceeding". By itself the Act contemplates a lack of precision in determining who the witnesses will be. All the court hearing the application for a stay can do is to make an estimate.
As to the places of residence of the witnesses and the parties the defendant has indicated that its witnesses will include the directors of River Horizons, each of the second defendants, the staff of Castran Gilbert, the agent of River Horizons, the staff of Kay and Burton, the plaintiff's agents and the defendant's solicitors.[10] On the basis of that estimate the Master cannot be criticised for his finding that the preponderance of witnesses would be resident in the State of Victoria.
[10] Affidavit of Mr Jepson paras 3 to 5, 79, 10 to 11, 40 to 41 and 1 to 2.
Mr Roberts’ written outline argues that in para 53 of his reasons the Master expressly contemplated that no witnesses may be called by the defendant at all but "incongruously and inconsistently with the hypothesis that the defendant might call no witnesses concluded that "clearly the preponderance" the witnesses will be resident in Victoria". I do not read para 53 to have the same meaning as that suggested by Mr Roberts.
The Master did not, as counsel argued, expressly contemplate that no witnesses may be called by the defendant at all. In paras 49 and 50 the Master identified possible witnesses for the defendant. In para 51 the Master noted that it was the defendant’s case that the outcome "would involve all persons concerned in the chain of communications which form the defendants actions". In para 52 the Master said the Court should have regard to that submission in exercising its discretion. He impliedly accepted the submission. Paragraph 52 is criticised by the plaintiff (appellant); but when it is read in context there is no error.

The plaintiff argued that the Master made an error of law in connection with the "degree of exactitude of proof which is required" and failed to properly apply the decision of Olsson J in Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 191 LSJS 469. The Master did refer to Rick Cobby and other cases and determined to deal with this case on the balance of probabilities.[11]
[11] Reasons [47].
The applicant for a stay does carry the onus of proof. I reject the submission of the plaintiff that "the learned Master erred in applying the degree of exactitude of proof which is required of an applicant for stay…". The authorities establish that the standard of proof is the balance of probabilities.
The plaintiffs argument depends on Rick Cobby where Olsson J said "having regard to the potentially profound impact of a stay order upon a plaintiff, that onus demands that the applicant demonstrate a clear and compelling basis for the relief sought".[12] Mr Roberts did not suggest that Olsson J created a new standard of proof but said that his Honour was "addressing the degree of exactitude of proof by which reasonable satisfaction is attained". Mr Roberts compared the standard of proof referred to in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362-363 per Dixon J.
[12] (1997) 191 LSJS 469,474.
Mr Roberts argued that by misapprehending the onus the Master failed to require the defendant to establish the likely witnesses from Victoria with the necessary degree of precision.[13]
[13] Outline of written submissions [7.3].
If in Rick Cobby Olsson J did seek to impose a stricter test than the balance of probabilities that is inconsistent with later authority. The Master referred to Boart Longyear Pty Ltd v Coburn & Anor (Victorian Supreme Court, 18 June 1998, unreported) and the decision of Judge Kitchen in Fertico v Murray River Corn [2002] SADC 89. In my opinion the Master did not make an error of law as to the standard of proof.
In Boart Longyear Pty Ltd v Coburn & Anor O'Bryan J said with reference to the decision of Olsson J in Rick Cobby:
If, in the passage cited, His Honour intended to impose a higher standard of proof than "balance of probabilities", I respectfully disagree that a party applying under s20 for a stay order has to do more than show that on the balance of probability the Court of another State is the appropriate court for the proceeding…
However the Master did note that O'Bryan J expressly agreed with the statement of Olsson J that the issue under s 20 falls to be resolved by reference to a balancing of the specified factual considerations identified in subs (4).
In Fertico Judge Kitchen decided that the onus on an applicant for a stay pursuant to s 20 was no higher than on the balance of probabilities.
In my opinion the Masters consideration of the places of residence of the parties and of the witnesses likely to be called did not involve any error.
As I have mentioned the requirement of subs 20(4)(a) to take into account the places of residence of the parties and the witnesses "likely to be called" on its face contemplates a degree of imprecision which is inconsistent with the more stringent test suggested by Mr Roberts.
Mr Roberts argued that the Master misapprehended the significance of the 2010 guarantee and the land sale contract being governed by the laws of Victoria. His outline observes that the question is whether the plaintiffs are bound by the contract and associated guarantees rather than the operation of those instruments if they are held to be binding, with the consequence that the law applying under those instruments is irrelevant.
The Master is correct in his observation that the contracts were governed by the laws of Victoria. Whilst not conclusive that was still a relevant matter to put into the balance.
There is a possibility that the Master did misapprehend the law to be applied. However, it is not apparent from his reasons that it was ever put to the Master that the issue in the case related to the authority of Mr Hamilton to enter into a contract rather than the interpretation of the contract. The Master said that if the matter proceeds in South Australia and Victoria law applies "there would be significant difficulty in determining issues of Victorian law". That led the Master to conclude that the most natural forum for the hearing in relation to its legal aspects is the State of Victoria.[14] If the Master did misapprehend the choice of law neither the South Australian court nor the Victorian court would have any advantage in applying the principles of the corporations law.
[14] Reasons [59].
If the Master did place emphasis upon his finding that Victorian law applies that does not mean that the South Australian court was the most natural forum for the hearing. If neither court had an advantage that was one of the matters to be put into the balance.
I accept the defendants’ submission that ground 1 does not point to any error on the face of the Master's reasons and that the ground amounts to no more than a general assertion that the Master's conclusion was wrong.
As to ground 2 I accept the defendants’ submission that the grounds of appeal fail to identify a principle of law which the learned Master is said to have misapplied.
Mr Douglas argued that there is no error on the face of the Master's reasons and that the Master undertook exactly the reasoning process required by the Act. I accept that argument.
While the plaintiff has many criticisms of the Masters reasons I am not satisfied that the plaintiff has identified any error in exercising his discretion, or that he acted upon a wrong principle, or that he allowed extraneous or irrelevant matters to guide him, or that he mistook the facts, or he did not take into account some material consideration.
As I have mentioned there is no issue as to whether the Victorian County Court has jurisdiction to determine all matters in issue between the parties.
The question before the Master was whether the Victorian County Court was the appropriate court to determine the matters in issue between the parties. The authorities make it clear that the matters which "the court is to take into account" include those listed in paras (a) to (f). It is mandatory for the court to consider each of the matters specified in paras (a) to (f), but that does not exclude a consideration of other relevant matters. The ultimate question was whether the Victorian County Court was the appropriate court for the proceeding.
In my opinion the reasoning of the Master does not contain any error of the kind required by House v The King. The Master did apply his mind to each of the criteria identified in paras (a) to (f).
In my opinion the Master correctly determined that the appropriate court for the proceeding was the Victorian County Court. The contract related to property in the State of Victoria. The vendors are in Victoria. Their land agents and solicitors are in Victoria. The contract was entered into in Victoria having been drafted by Victorian solicitors. There are likely to be contribution proceedings between parties who are resident in Victoria.
The only reason for the proceedings to be conducted in the State of South Australia is to suit the convenience of the plaintiffs. Having regard to the other matters the convenience of the plaintiffs is not sufficient. The relevant factors indicate that the appropriate court is the County Court of Victoria; that being the Court which has the most real and substantial connection with the action and which can be regarded as the natural forum. The County Court of Victoria is the one which best satisfies the test described by MacPherson JA in St George Bank Ltd v McTaggart and Judge Kitchen in Fertico.
I am not satisfied that the Master made any relevant error such as to satisfy the requirements in House v The King and the discretion of this court to interfere with the judgment of the Master has not been enlivened. Additionally the ultimate decision of the Master as to what was the appropriate court was in my opinion correct.
The appeal must be dismissed.