Land Operations Pty Ltd v M & W Equipment Pty Ltd - [2016] SASC 2

Supreme Court of South Australia
(Civil: Application)
LAND OPERATIONS PTY LTD v M & W EQUIPMENT PTY LTD
[2016] SASC 2
Reasons for Ruling of The Honourable Justice Blue (ex tempore)
18 December 2015
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION - WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE
Application by the defendants for transfer of proceedings under section 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) to the Supreme Court of New South Wales.
The plaintiffs sue the defendants for breach of contract, misleading conduct and negligence in relation to the sale and delivery of a crusher and screening plant.
The plaintiffs are based in Port Victoria, South Australia and the defendants in Wagga Wagga, New South Wales. The applicant defendants submit that the alleged contracts were formed in New South Wales; their performance and breach (which is denied) occurred in New South Wales; the contracts incorporated their standard terms and conditions that contained a jurisdiction clause providing for proceedings to be brought in New South Wales; and they would suffer prejudice in their business if the action proceeded in South Australia.
The respondent plaintiffs submit that the alleged misleading conduct occurred and the contracts were made during communications between the two jurisdictions; there is no relevant difference between the substantive and procedural law to be applied in South Australia or New South Wales; and the jurisdiction clause if incorporated into the contracts is non-exclusive. The respondents submit that the proceedings bear greater connection to South Australia in that the goods were supplied and broke down and are stored in South Australia and the preponderance of witnesses are in South Australia.
Held:
1. It cannot be determined at this point whether the defendants’ standard terms and conditions formed part of the contract. The jurisdiction clause at clause 13 on its proper construction is non-exclusive (at [15]-[24]).
2. In the circumstances, the jurisdiction clause should be given very little weight (at [27]-[30]).
3. The proceedings have a greater connection to South Australia than New South Wales (at [34]-[35]).
4. The incremental detriment that would be suffered by the applicants if the application were denied would be marginal and is outweighed by the overall greater connection to South Australia (at [39]-[41]).
5. Application dismissed (at [42]).
Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA); Sale of Goods Act 1895 (SA); Sale of Goods Act 1923 (NSW), referred to.
Air Attention WA Pty Ltd v Seeley International Pty Ltd (1996) (unreported, Supreme Court of Western Australia, Walsh J, 3 September 1996); Australian Rail Track Corporation Ltd v Mineral Commodities Ltd [2006] SASC 27; River Gum Homes Pty Ltd v Meridian Pty Ltd [2010] QCA 293; Ross Mollison Group Pty Ltd v Really Useful Co (Australia) Pty Ltd [2000] VSC 256, discussed.

LAND OPERATIONS PTY LTD v M & W EQUIPMENT PTY LTD
[2016] SASC 2
Civil:
BLUE J:

This is an application for transfer of proceedings under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA).
The plaintiffs M & W Equipment Pty Ltd and M & W Mining Pty Ltd sue the first defendant Land Operations Pty Ltd for breach of contract. They also sue the first defendant and the second and third defendants, Jay and Lee Nason, for misleading conduct and the first defendant for negligence.
It is alleged that a contract was entered into on or just after 10 October 2012 by virtue of a conversation between Mark Absalom and Jay Nason following Mr Nason having sent a quote on 10 October 2012 for the supply and delivery of a screen.
On 12 October 2012, an invoice was sent by email from the first defendant to the second plaintiff for the screen and included on the back of that invoice were standard terms and conditions of sale which included clause 13 to which I will return.
There is a dispute between the parties whether the contract had already been formed before 12 October 2012 – in which case the terms and conditions on the invoice would be irrelevant – or whether the contract was not formed until the sending of that email on 12 October – in which case there is a dispute whether the terms and conditions became incorporated as terms of the contract by virtue of that email given that no specific attention was drawn to the terms and conditions by the first defendant to the second plaintiff. That question will be important in the proceedings, because the terms and conditions include clause 9 which purports to exclude liability for various matters and to limit the amount of damages that can be awarded in cases where liability is not excluded.
On this application, I am not in a position to decide that question. It is likely that it will depend on the precise evidence given by Mark Absalom and Jay Nason at trial about that conversation. In those circumstances, I proceed on the basis that it could be decided either way and there is no weighting in favour of either party as to which way it would be decided ultimately at trial.
The second contract was a contract for the sale of a crusher. On the plaintiffs’ case, it was entered into as a result of a telephone conversation between the same two persons following the emailing of a quotation on 22 October 2012. After that conversation, an invoice was emailed on 2 November 2012 that contained the same standard terms and conditions on the back.
In respect of this contract, the defendants contend that the position is stronger than in respect of the first contract because the terms and conditions had previously been emailed on 12 October. I do not consider that that makes any material difference. Given that no particular attention was drawn by the first defendant to the first plaintiff to the terms and conditions or to clause 13 thereof, it does not seem to me that the issue will turn on that. Again it is likely that it will turn on the precise evidence that is given by the parties about what happened during that telephone conversation.
The first defendant places some reliance on the fact that the first email sent on 10 October contains a standard sign-off below the heading on the right-hand side ‘Bost Group’ which refers to its website and on its website are some standard terms and conditions. I do not think that any weight should be given to that because no attention was drawn to the existence of the website or the fact that it has terms and conditions on it. I do not think that that has any capability of resulting in the terms and conditions that were attached to the invoice becoming terms and conditions of the contract. I add that those terms and conditions are quite different in any event.
I proceed on the basis that at this point it is finely balanced which party’s submissions will prevail as to whether the terms and conditions on the back of the invoices are in fact terms and conditions of the contracts.
Relevant considerations
The parties agree that the approach that should be taken to the transfer application was that laid down by the High Court in BHP Billiton Ltd v Schulz.[1] The common law forum non conveniens test is inapplicable and it is a question of in which direction the interests of justice point. That will almost always involve a weighing process because different considerations will point in different directions, and the ultimate test as formulated by the High Court is whether it is more appropriate that the action proceed in one court as against the other. The factors are not constrained in that there is not a discrete list of relevant considerations. What are relevant considerations will vary from case to case but commonly certain types of considerations will arise and they were identified by Debelle J in Australian Rail Track Corp Ltd v Mineral Commodities Ltd.[2]
[1] [2004] HCA 61, (2004) 221 CLR 400.
[2] [2006] SASC 27 at [21].
The first two considerations identified were application of substantive law and procedural law in that either the substantive law or the procedural law might favour one party or the other if there are differences. Here there are no relevant differences. The substantive law is the same, namely contract law. It is true that the Sale of Goods legislation technically is different but that legislation codifies the pre-existing common law and is in substance largely uniform between the different States. There is no relevant distinction drawn by the parties between the South Australian Sale of Goods Act and the New South Wales Sale of Goods Act. I conclude that there are no differences in substantive law and that factor can be ignored. The other causes of action are for misleading conduct, which again is uniform, and negligence. Likewise it is not suggested that there are any procedural law differences that would give rise to a forensic advantage or detriment. I can put those factors aside.
The next factors identified by Debelle J were substantial connections with the forum, balance of convenience to parties and witnesses, and convenience to the court system. I will come back to those and address them together.
An additional factor should be added, as suggested by the defendants, which is the bargain made by the parties. I turn to that and the argument that here the parties have made a bargain as to the jurisdiction in which disputes between them should proceed.
Bargain by the parties
My analysis has to be constrained by the fact that I cannot make a definitive finding whether the terms on the back of the invoices are terms of the contracts. If they are not, then those terms are to be ignored and there is no weight to be given to the factor of the bargain of the parties. All I can do is proceed on the basis that they may or may not form part of the terms of the contract.
If they are terms of the contract, it is of critical importance whether they provide for exclusive or non-exclusive jurisdiction. If it is exclusive jurisdiction, there are several cases in which courts have found that that was the factor that tipped the balance. In the Queensland Court of Appeal decision in River Gum Homes Pty Ltd v Meridian Pty Ltd,[3] the Court of Appeal said:
an exclusive jurisdiction clause remains a relevant consideration, on the basis that the “interests of justice” require that due acknowledgement be accorded to such a clause as representing the bargain between the parties and that proper regard be given to the need to hold parties to their bargain. Nevertheless … The weight to be given to such clauses will vary depending on the other surrounding and countervailing circumstances.[4]
[3] [2010] QCA 293.
[4] At [17] per de Jersey CJ (with whom Muir JA and Philippides J agreed) quoting from World Firefighters Games Brisbane v World Firefighters Games Western Australia Inc [2001] QSC 164 at [38] per Philippides J.
I turn to construe that clause. Clause 13 is headed ‘Law and Jurisdiction’ and provides:
These terms are governed by and will be construed in accordance with the laws of New South Wales. The parties agree to submit to the jurisdiction of the courts of that State.
I have no doubt that that clause should be construed as non-exclusive insofar as it refers to the jurisdiction of the courts of New South Wales for the following reasons.
First, the part of the clause that deals with the proper law is addressing the proper law of the contract. It does not purport to address and would make little or no sense in addressing the law to be applied to representations made prior to the contract or to any duty of care that might apply either to such representations or to the conduct of the parties. The fact that the laws of New South Wales part of the clause addresses only contract and not other causes of action is part of the context of the clause in ascertaining its ambit.
Secondly and taking that into account, the submission by the parties to the jurisdiction of the courts of New South Wales is confined to a cause of action in contract and does not apply, for example, to misleading conduct that precedes the contract.
Thirdly, the clause does not expressly provide that the parties are only to sue each other in the courts of New South Wales and so the question is whether it is a necessary implication.
These are standard terms and conditions. They were not specifically negotiated between the parties and no attention was drawn by the vendor to the purchaser to the terms and conditions and that is relevant to construing clause 13.
Considering it commercially, the vendor of equipment that might be sold and delivered to other States has a natural interest in requiring the other party to agree that it will submit to the jurisdiction of the courts in its State. So here it is the party who has drawn the terms and conditions, namely the first defendant, who has an interest in providing that, if it wants to sue the purchaser, then the purchaser agrees to submit to being sued in New South Wales. While obviously the clause operates mutually, that is provides that the vendor also agrees to be sued in New South Wales, in a commercial sense that would be in the vendor’s interests in any event.
The objective purpose of the clause is to require the purchaser to submit to being sued in New South Wales. If it had been the parties’ intent that this was an exclusive clause, I would expect it to have addressed that fact and to have provided, in effect, that the vendor could not be sued in any other courts.
I therefore construe the clause as meaning that, if either party chooses to sue in New South Wales, the other party will submit to that jurisdiction but it says nothing about what happens if either party chooses to sue in some other forum.
The question then arises as to what weight should be given to the clause given that on its proper construction it is non-exclusive.
The parties have referred to various decisions. The plaintiffs refer to one decision in Victoria, Ross Mollison Group Pty Ltd v Really Useful Company Aust. Pty Ltd,[5] in which virtually no weight was given to such a clause. The defendants refer to Air Attention WA Pty Ltd v Seeley International Pty Ltd, an unreported decision of Walsh J in the Supreme Court of Western Australia in 1996, in which substantial weight was given to that clause.
[5] [2000] VSC 256.
I consider that very little weight should be given to clause 13 in an objective sense because, objectively construed, it does not purport to require either party to sue in the courts of New South Wales but merely requires a defendant to submit to the jurisdiction if a defendant is sued.
Insofar as the objective effect of the contract is concerned, I, with respect, take a different view to Walsh J about the weight that should be given to such a clause. I note that Walsh J had already reached the conclusion that the clause in that case was exclusive and it seems to me that affected his reasoning as to why it should be given weight if it was non-exclusive. His Honour did say that he would have come to the same position but he said that that is because that clause evidences the basic intent of the contracting parties that their obligations were to be determined in accordance with the laws of South Australia. If His Honour was referring there to the substantive law – that is the proper law – then that is an irrelevant consideration if there was no difference between the substantive laws. If His Honour is referring to the clause insofar as it addressed jurisdiction, it is not correct to say that it was the basic intent of the contracting parties that the matter would be dealt with in the courts of Western Australia because, on the construction that it was non-exclusive, that simply was not their objective intent.
If there were evidence that it were the subjective intention of the parties that any disputes would be determined in New South Wales, I think that would be a factor to which I could have regard. It is not a factor that would be relevant to the construction because it is clear law that that is to be determined objectively and whatever the parties thought or even said to each other will not impact that, but I am not dealing with that question now. I am dealing with the question of the interests of justice and which is the more appropriate court. If, for example, there were a discussion between the parties which had non-contractual force in which they agreed that any action should be brought in New South Wales, I think that would be a relevant factor. However, here there is no suggestion of such a discussion. It is not even apparent that on the first defendant’s side its officers or employees were aware of this clause. There is certainly no suggestion that they informed the plaintiffs of the existence or effect of the clause. It cannot be said that it was the subjective intent of the parties.
I consider that I should give very little weight to that clause. It is not to be wholly ignored but in the circumstances of the construction I have given it, coupled with the fact that I cannot say at this point whether the terms and conditions are even terms and conditions of the contract, it is a factor that will weigh little in the overall scales.
Connections with the States
I turn to the other factors identified by Debelle J as to the connections with the States, the connections of the parties and so on.
The dealings between the parties took place here remotely, that is there were no meetings in person. One side was in New South Wales, the other was in South Australia. The dealings were all by email and telephone. Therefore the position is neutral.
The parties have argued about where the tort occurred, if there was one; where the contract was breached, if it was; where the contract was made. For the purpose of the question of transfer, the position is neutral that the parties have chosen to deal with each other, each knowing that the other was in another State. So that factor is also neutral and can be put to one side.
It is significant that the machine was to be delivered by the vendor to the purchaser in South Australia, that the machine is in South Australia now and has been since it was delivered and that its alleged non-performance or inability to perform has occurred in South Australia and that the vendor always knew that that would be the case. That gives the case a greater connection to South Australia than New South Wales, given that otherwise the dealings between the parties were, as I have said, equally divided between the two States.
Consequentially there is likely to be a predominance of evidence connected with South Australia in the sense of persons wanting to inspect the machine for the purpose of giving evidence, both experts and lay witnesses, possibly the Court viewing the machine – although I give that very little weight – and the fact that it may be expected that there will be witnesses who are located in South Australia giving evidence about the performance of the machine. In that sense, there is a greater connection with South Australia.
Effect on the parties
I turn to the question of the effect on the parties of the matter proceeding in South Australia as opposed to New South Wales.
It can be expected that parties will always prefer that the matter proceed in their own home State, there will always be an advantage to them in doing that and so in one sense it is again a neutral factor in that the plaintiffs will be disadvantaged if the matter proceeds in New South Wales and the defendants will be disadvantaged if it proceeds in South Australia.

The question then is as to anything more specific. There is in Jay Nason’s second affidavit a statement about his role and the role of Lee Nason. His role essentially is that he is in charge of sales and he says that he is based in Wagga but travels to other areas of New South Wales including Sydney for the purpose of meeting with clients and prospective clients. He says that Lee Nason is the operations manager responsible, amongst other things, for running the workshop and also project manager. He says that no one else can perform Lee’s role and no one else can perform Jay’s role. He then says that if the matter proceeds in South Australia, they both will be required to spend a significant time there and that would be detrimental and would result in financial write-offs.
As I observed when I ruled that these paragraphs were admissible, they are of limited weight because there are few primary facts in the affidavit about the extent of detriment. I am called on to make my own assessment of that detriment. The vast majority of that detriment will be suffered whether the trial proceeds in Sydney or Adelaide. Either way, they will both need to be away from Wagga for the period of the trial and I will assume that that will take a week. They will be devoted during the day to the events of the trial and they will not be able to work on either sales or project management or running the workshop. They will both be physically absent from the operations in Wagga. There may be some marginal advantage in being in Sydney but I consider that to be very small.
Conclusion
I do not think that overall this outweighs the greater connection with South Australia.
Ultimately it is an evaluative exercise of weighing all of the factors in the scales and giving appropriate weight to all of them and seeing where the interests of justice lie overall or which is most the appropriate court. In doing that, I conclude that South Australia is the more appropriate court and it is in the interests of justice that the action stay in South Australia.
For those reasons, I dismiss the application.