International Finance Corporation v Macpherson Consulting Group Pty Ltd
[2016] WASC 28
•2 FEBRUARY 2016
INTERNATIONAL FINANCE CORPORATION -v- MACPHERSON CONSULTING GROUP PTY LTD [2016] WASC 28
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 28 | |
| 02/02/2016 | |||
| Case No: | CIV:1211/2015 | 18 NOVEMBER 2015 | |
| Coram: | MASTER SANDERSON | 18/11/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | INTERNATIONAL FINANCE CORPORATION MACPHERSON CONSULTING GROUP PTY LTD PETER THOMSON JOHN KRAUSE RICHARD SPRING |
Catchwords: | Practice and procedure Application by defendants to stay action because Supreme Court of Western Australia a 'clearly inappropriate forum' Turns on own facts |
Legislation: | Nil |
Case References: | Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MACPHERSON CONSULTING GROUP PTY LTD
First Defendant
PETER THOMSON
Second Defendant
JOHN KRAUSE
Third Defendant
RICHARD SPRING
Fourth Defendant
Catchwords:
Practice and procedure - Application by defendants to stay action because Supreme Court of Western Australia a 'clearly inappropriate forum' - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Ms P A Saraceni
First Defendant : Mr M A K Richards
Second Defendant : Mr M A K Richards
Third Defendant : Mr M A K Richards
Fourth Defendant : Mr M A K Richards
Solicitors:
Plaintiff : Clifford Chance
First Defendant : Rowe Bristol Lawyers
Second Defendant : Rowe Bristol Lawyers
Third Defendant : Rowe Bristol Lawyers
Fourth Defendant : Rowe Bristol Lawyers
Case(s) referred to in judgment(s):
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
1 MASTER SANDERSON: By an application filed 16 October 2015, the defendants sought to have the plaintiff's action against them permanently stayed. After hearing argument I dismissed the application. I indicated that I would publish reasons for my decision. These are those reasons.
2 The relevant facts are as follows. The plaintiff's claim principally relates to a loan which was allegedly made by the plaintiff to a company Ausmoz Farm Holdings Limitada (Ausmoz) on or about 5 September 2000. The loan was guaranteed by a number of parties including the defendants. The guarantee was also signed on 5 September 2000. The loan agreement and the guarantee were both executed in Harare in the Republic of Zimbabwe. Following the execution of the loan agreement and the guarantee the plaintiff disbursed funds to a bank account in Mozambique which is controlled by Ausmoz.
3 The plaintiff alleges that Ausmoz breached the terms of the loan agreement and as a result the defendants in these proceedings are liable for the debts of Ausmoz pursuant to the guarantee. In or about 14 December 2012, the plaintiff and the defendants agreed to compromise their claims against each other and entered into a settlement agreement. The settlement agreement was executed in Harare. The plaintiff alleges the guarantors have breached the terms of the settlement agreement.
4 The plaintiff is an international finance institution which has an office in Sydney. It does not have an office or representative in Western Australia. All of the documents entered into between the plaintiff and the defendants were entered into through employees or agents of the plaintiff located at its offices in Maputo Republic of Mozambique, Harare or Johannesburg in the Republic of South Africa.
5 The first defendant is a company duly incorporated in Australia and registered in the state of New South Wales. The first defendant's offices, its business premises, its employees and clients are all located in Africa. It does not own any real property in Australia and its only assets in Australia are in three bank accounts which are used to pay the first defendant's expenses. In support of the application the first defendant relied on an affidavit of Andrew Stuart Macpherson sworn 8 July 2015. Mr Macpherson says the Australian resident director of the first defendant Alexandra Macpherson does not play any active role in the business operations of the first defendant.
6 Mr Macpherson also says the first defendant was incorporated in Australia primarily for the purpose of avoiding the possibility that the Zimbabwean government may affectively seize control of the company pursuant to indigenisation (black empowerment) policies.
7 The second defendant is an Australian citizen and a permanent resident of Mozambique. He is the resident director and chairman of Ausmoz and is responsible for the day to day operations of Ausmoz in Mozambique. He has no assets in Australia.
8 The third defendant is an Australian citizen and resides permanently in Perth Western Australia. He says he is impecunious and unlikely to be able to pay any judgment against him.
9 The fourth defendant is a citizen of Australia and resides in Perth. He too says he has modest assets and would be unable to pay any judgment ordered against him. His liability is limited pursuant to the settlement agreement, although it is unclear on the evidence just what that limit might be.
10 For the sake of completeness I should also say something about both Ausmoz and Mr Andrew Macpherson, although neither is a party to these proceedings. Ausmoz is a company incorporated pursuant to the laws of the Republic of Mozambique. It conducts farming operations in Mozambique and all of its assets are located in Mozambique. It is the principal debtor pursuant to the loan agreement. Mr Andrew Macpherson is a resident of Zimbabwe. He is the managing director of the first defendant and of Ausmoz. It is he who conducted most of the negotiations with the plaintiff in respect of the loan agreement and the settlement agreement. He is a party to the guarantee and the settlement agreement. He is also the second defendant in proceedings commenced by the plaintiff in 2013 in the High Court of Zimbabwe. Those proceedings are being actively defended on grounds including that the conduct of plaintiff has rendered the loan agreement, the guarantee and the settlement agreement unenforceable. It is conceded he owns, in conjunction with his wife, significant assets in Australia.
11 The loan agreement was executed in Harare and contained a jurisdiction clause (s 7.04) in the following terms:
At the option of IFC this Agreement may be enforced in the courts of the Republic of Mozambique or in any court having jurisdiction.
12 The guarantee was also executed in Harare and contained a jurisdiction clause (s 3.03) to the following effect:
The Guarantee Agreement shall be deemed to be a contractual obligation under, and shall be governed by and construed and interpreted in accordance with, the laws of the State of New York in the United States of America.
13 The settlement agreement was executed in Harare and does not contain any express jurisdictional clause. Both parties' solicitors have been advised that the courts of the Republic of Mozambique would have the requisite jurisdiction to hear any dispute by their respective counsel in the Republic of Mozambique. The defendants have also been advised by their counsel in Zimbabwe that the courts of Zimbabwe have the resident jurisdiction to hear the dispute and to summon all of the parties.
14 There was no real dispute between the parties as to the applicable law. Both parties relied on the High Court decisions of Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 and Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197. Based upon these and other cases, the parties accepted the 'clearly inappropriate forum' test. That test does not require the defendants to show just that the courts of Mozambique and Zimbabwe are alternative forums nor that these courts are more appropriate than the Supreme Court of Western Australia. What the defendants needed to show was that the Supreme Court of Western Australia was clearly inappropriate to decide the issues between the parties.
15 In written submissions lodged on behalf of the defendants, counsel referred to Nygh's Conflict of Laws in Australia (9th ed) [8.19] referring to four factors relevant in considering whether or not the forum is clearly inappropriate. They are:
(1) any significant and substantial connection between the forum, the subject matter of the action and the parties, such as the domiciles of the parties, their places of business and place where the relevant transaction occurred or the subject matter is situated;
(2) any legitimate or substantial juridical advantage to the plaintiff such as assets within the jurisdiction against which any judgment could be enforced;
(3) whether the law of the forum will supply the substantive law to be applied to the resolution of the subject case or whether the matter is governed by a foreign law; and
(4) the fact that parallel or related proceedings are on foot in a foreign jurisdiction.
16 It is clear immediately there is no reason why the plaintiff should not proceed in this court against the third and fourth defendants. They are residents of Western Australia and any judgment which is obtained against them can be enforced in this jurisdiction. The fact they may not have assets to satisfy any judgment is of no consequence. There is no jurisdiction clause in the settlement agreement. So far as the application concerns the third and fourth defendant it was doomed to fail.
17 In support of their application the defendants made a number of points. First, none of the relevant events took place in Western Australia. Second, the plaintiff, the first defendant, the second defendant, Ausmoz, and Mr Macpherson have no connection with Western Australia at all. Third, neither the first nor the second defendant has assets in Western Australia to satisfy any judgment. Fourth, the applicable law in respect of the guarantee is the law of the State of New York United States of America and the applicable law in respect of the settlement agreement appears to be the law of the Republic of Zimbabwe on the basis that was the jurisdiction where the settlement agreement was executed. Fifth, there are parallel proceedings on foot in Zimbabwe which relate largely to the same set of facts and in which damages are claimed against Mr Macpherson.
18 While accepting these matters, it was the plaintiff's position none of them rendered the Supreme Court of Western Australia a clearly inappropriate forum. Further, the plaintiff maintained this court provides greater access to justice and has an independent, mature, and well respected judicial system. That it was said provided the best prospect of a just outcome between the parties.
19 In my view, there was no doubt the Supreme Court of Western Australia was not a clearly inappropriate forum. The issues to be determined are relatively straight forward. Even assuming the proper law of the settlement agreement was the law of Zimbabwe there should be no difficulty in the courts of this state applying that law. It is the case that a number of witnesses will be located overseas, but in this day and age with instantaneous communication that hardly provides a difficulty. It would seem all of the major players are Australian citizens and would be familiar with the laws and the practices in this jurisdiction. In those circumstances it is difficult to argue the plaintiff has selected a clearly inappropriate forum.
20 For these reasons I dismissed the defendants' application. The defendants should pay the costs of the application including the reserve costs.
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