Micon Mining and Construction Products GmbH & Co KG v Macmahon Mining Services Pty Ltd

[2022] WASCA 56

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   MICON MINING AND CONSTRUCTION PRODUCTS GMBH & CO KG -v- MACMAHON MINING SERVICES PTY LTD [2022] WASCA 56

CORAM:   BUSS P

BEECH JA

VAUGHAN JA

HEARD:   16 DECEMBER 2021

DELIVERED          :   2 JUNE 2022

FILE NO/S:   CACV 124 of 2020

BETWEEN:   MICON MINING AND CONSTRUCTION PRODUCTS GMBH & CO KG

Appellant

AND

MACMAHON MINING SERVICES PTY LTD

Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   MASTER SANDERSON

Citation: MACMAHON MINING SERVICES PTY LTD -v- MICON MINING AND CONSTRUCTION PRODUCTS GMBH & CO KG [2020] WASC 411

File Number            :   CIV 1259 of 2019

Catchwords:

Practice and procedure - Leave to issue writ and service of writ outside Australia - Application to set aside leave granted ex parte - Whether primary court erred in refusing application - Evidential standard of proof to demonstrate a 'good arguable case' - Proper test for determining questions of jurisdiction at interlocutory stage - Rules of the Supreme Court 1971 (WA) O 10

Practice and procedure - Leave to issue writ and service of writ outside Australia - Whether applicant must establish that all claims fall within a jurisdictional gateway - Turns on own facts

Contract - Formation of contract - Whether contract governed by law of Western Australia - Turns on own facts

Contract - Claim in tort for negligence - Whether respondent brought a claim in tort for negligence - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 10
Sale of Goods (Vienna Convention) Act 1986 (WA)

Result:

Appeal allowed

Category:    A

Representation:

Counsel:

Appellant	:	D J Pratt
Respondent	:	P Ward

Solicitors:

Appellant	:	Jackson McDonald
Respondent	:	Johnson Winter & Slattery - Perth

Case(s) referred to in decision(s):

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552

Akai Pty Ltd v People's Insurance Co Ltd [1996] HCA 39; (1996) 188 CLR 418

Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 3] [2010] WASC 141

Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196

Bombardier Inc v AVWest Aircraft Pty Ltd [2020] WASCA 2

Brownlie v Four Seasons Holdings Inc [2017] UKSC 80; [2018] 1 WLR 192

Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547

Crawley Investments Pty Ltd v Elman [2014] WASC 233

Donoghue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749

EF Hutton & Co v Mofarrij [1989] 2 All ER 633

Goldberg v Western Continental Corp Ltd (in liq) (Unreported, FCSCWA, SCL 8644; Del 18 December 1990)

Goldman Sachs International v Novo Banco SA [2018] UKSC 34; [2018] 4 All ER 1026

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503

Kaefer Aislamentios SA de CV v AMS Drilling Mexico SA de CV & Ors [2019] EWCA Civ 10; [2019] 3 All ER 979

Kent v Lechmere Financial Corporation & Ors [2002] WASC 75

Koranna Nominees Pty Ltd v Roberts (Unreported, FCSCWA, SCL 4289; Del 15 October 1981)

Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310

Madden International Ltd v Lew Footwear Holdings Pty Ltd [2015] VSCA 90; (2015) 50 VR 22

Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353

Mendelson-Zeller v T & C Providores Pty Ltd [1981] 1 NSWLR 366

Owners of the Ship, Shin Kobe Maru v Empire Shipping Co Inc [1994] HCA 54; (1994) 181 CLR 404

Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438

Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488

TRW Ltd v Panasonic Industry Europe GMBH [2021] EWCA Civ 1558

Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869

Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538

JUDGMENT OF THE COURT:

Overview

1. The appellant, a limited partnership registered in the Federal Republic of Germany, appeals against a decision of the master[1] to dismiss an application to set aside the issue of a writ and the service of the writ outside Australia.

   [1] Macmahon Mining Services Pty Ltd v Micon Mining and Construction Products GmbH & Co KG [2020] WASC 411 (Primary reasons).

2. There are numerous grounds of appeal. There is, however, only one point of principle of general significance that is raised by the appeal. The appeal raises the question of what is required to demonstrate a 'good arguable case' in satisfying one or more of the jurisdictional conditions under O 10 r 1(1) or r 2 of the Rules of the Supreme Court 1971 (WA) (RSC), ie the evidential standard of proof that a plaintiff must establish to found jurisdiction when seeking to serve outside Australia.

3. The appellant invites this court to apply the approach accepted in a series of recent cases in the United Kingdom.  The respondent says that those cases are inconsistent with the approach taken by the High Court of Australia in Agar v Hyde[2] and that the proper course is for this court to follow the approach in Agar v Hyde.  In the alternative the respondent says that the application for leave to appeal and the appeal must be dismissed even if the approach in the United Kingdom line of authority is applied.

   [2] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552.

4. The approach of the High Court in Agar v Hyde related to rules of court that are materially different from O 10 RSC. The United Kingdom line of authority is based on rules of court that are not relevantly distinguishable from O 10 RSC. For the reasons that follow the approach in the United Kingdom authorities should be applied to O 10 RSC. There was not, so understood, a good arguable case for the jurisdictional condition that the respondent relied on in obtaining leave to issue the writ and serve the writ outside Australia. The master was in error in refusing the application to set aside the issue and service of the writ. The appeal should be allowed.

Background facts

1. There was a substantial amount of affidavit evidence before the master.[3]  What follows is taken from the affidavit evidence.  It should, however, be recognised that the parties are in dispute about many fundamental matters.  For example, while it appears to be uncontentious that the respondent was supplied with a quantity of 'raise drilling rods', the parties are in dispute about the identity of the respondent's counterparty to the contract to supply the raise drilling rods.  So too the parties are in dispute as to where, how and when the supply contract was formed.  Those disputes are at the heart of the appeal.

   [3] Relevantly: (1) Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019); (2) Affidavit of M R Shah affirmed 11 February 2020; (3) Affidavit of A D Bereyne sworn 18 May 2020; and (4) Affidavit of W J Coulthard affirmed 18 June 2020.

2. What now follows is drawn from unchallenged and uncontentious affidavit evidence together with matters arising from the contemporaneous documents.

The dealings between the parties

1. The respondent is a wholly owned subsidiary of Macmahon Holdings Ltd.  Its registered office is in Western Australia.  Macmahon Holdings Ltd provides mining services throughout Australia and South-East Asia.

2. The appellant is a limited partnership registered in Germany.[4]  It is part of the 'Micon group'.[5]  According to the parties' respective solicitors, the appellant specialises in the production of drilling and raise bore equipment.[6]  Another member of the Micon group, and a related company to the appellant, is Micon Drilling GmbH (Micon Drilling).  Micon Drilling is described as a German company that specialises in the sale and rental of drilling equipment.[7] 

   [4] See Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-1' GAB 298.

   [5] A phrase used by counsel for the respondent: Appeal ts 64 - 65, 67.

   [6] Affidavit of A D Bereyne sworn 18 May 2020 par 5 GAB 291; Affidavit of W J Coulthard affirmed 18 June 2020 par 5 GAB 617.

   [7] Affidavit of A D Bereyne sworn 18 May 2020 par 6 GAB 291.

3. In early September 2010 Russell Wood, an employee of Macmahon Holdings Ltd, sent an email to Kai Schwarzburg seeking pricing in relation to 400 drilling rods (rods with a diameter of 14.5 inches and nominally 2 metres in length).[8]  In numerous emails Mr Schwarzburg is described as the managing director of Micon Drilling.[9]  He is also described as the managing director of Micon Drilling in a certified translation of an excerpt from a commercial register maintained by the relevant authority in the Federal Republic of Germany.[10]  While Mr Schwarzburg also holds a power of attorney for the appellant,[11] none of the numerous emails he sent described him as the managing director of the appellant.

   [8] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-5' GAB 66.

   [9] For example, see the emails dated 13 September 2010, 7 December 2010, 9 December 2010, 9 February 2011, 26 April 2011, 18 June 2011, 16 September 2011, 20 September 2011, 14 October 2011, 26 October 2011, 1 November 2011, 4 January 2012, 13 January 2012, 14 January 2012, 17 January 2012.  See: Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachments 'SB-6', 'SB-8', 'SB-10', 'SB-14', 'SB-23', 'SB-24' GAB 67, 74 - 75, 81, 87, 199 - 201; Affidavit of A D Bereyne sworn 18 May 2020 attachments 'ADB-3', 'ADB-4', 'ADB-6', 'ADB-7', 'ADB-11', 'ABD-13', 'ADB-14' GAB 310, 317, 321 - 323, 331, 333, 336, 350, 366, 370 - 372; Affidavit of W J Coulthard affirmed 18 June 2020 attachment 'WJC-7' GAB 654 - 655.

   [10] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-2' GAB 303.

   [11] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-1' GAB 298.

4. Mr Schwarzburg responded with a preliminary quotation on 13 September 2010.  The preliminary quotation was attached to an email in which Mr Schwarzburg described himself as the managing director of Micon Drilling.[12]  The quotation was on a letterhead naming Micon Drilling and was signed on behalf of Micon Drilling.[13]  The quotation stated that it was provided 'on the basis of our general terms and conditions of sale',[14] these also being attached to the covering email.  The terms were provided in a one-page document naming Micon Drilling which had the heading 'General Conditions of Business'.[15]

   [12] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-6' GAB 67.

   [13] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-7' GAB 70.

   [14] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-7' GAB 70.

   [15] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-7' GAB 73.

5. Among other things the General Conditions of Business specified that:

   9.  Place of Delivery and Legal Domicile: Place of delivery and legal domicile, and court for proceedings concerning cheques and bills of exchange for both parties is Celle.  We are also entitled to sue the buyer at any other justifiable court location.

   10.  Other points: (a) The laws applying to the business and any other legal relations between the buyers and us are those of the Federal Republic of Germany, although any trade terms used herein shall be interpreted in accordance with 'Incoterms'.  Except as noted above, standard international sales law shall not apply.

6. Further email correspondence ensued.  This included the submission of an 8 February 2011 Micon Drilling quotation with its General Conditions of Business, sent under cover of a 9 February 2011 email.[16]  Insofar as the email correspondence over this period potentially identified the respondent's counterparty the email signature block always designated Micon Drilling.[17]  An in-person meeting between representatives of the parties was held in Germany on 23 April 2011.[18]  That was followed by a further quotation dated 26 April 2011 - again on Micon Drilling letterhead[19] - sent under the cover of an email from Mr Schwarzburg as managing director of Micon Drilling.[20]

   [16] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-3' GAB 312 - 316.

   [17] For example, see the emails dated 7 December 2010, 9 December 2010 and 9 February 2011.  See: Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachments 'SB-8', 'SB-10' GAB 74 - 75, 81; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-3' GAB 310 - 311.

   [18] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) par 13 GAB 34.

   [19] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-15' GAB 88; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-4' GAB 318.

   [20] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-14' GAB 87; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-4' GAB 317.

7. There were limited communications between May and September 2011.  However, when emailing, Mr Schwarzburg continued to identify himself as the managing director of Micon Drilling.[21]

   [21] See eg Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-23' GAB 199.

8. On 14 September 2011 Mr Wood informed Mr Schwarzburg that the respondent had approval for the new rig that the parties had 'been discussing over the last couple of years'.  Mr Wood sought a proposal for the supply of 400 drilling rods with a 15 inch diameter.  He asked Mr Schwarzburg to 'confirm your best offer of both price and delivery with full material specifications'.[22]  Mr Schwarzburg acknowledged the email on 16 September and sent a quotation on 20 September 2011.  Both emails were sent by Mr Schwarzburg as managing director of Micon Drilling.[23]

   [22] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-24' GAB 201 ‑ 202; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-5' GAB 320.

   [23] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-24' GAB 200 ‑ 201; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-6' GAB 321 - 323.

9. The 20 September 2011 quotation was sent on Micon Drilling letterhead, was signed on behalf of Micon Drilling, and attached Micon Drilling's General Conditions of Business.[24]

   [24] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-25' GAB 203, 207; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-6' GAB 325, 329.

10. Further email communication ensued between the parties in an attempt to clarify technical specifications and commercial matters.  In terms of identifying the respondent's counterparty, the email signature block ordinarily designated Micon Drilling and never designated the appellant in terms - although, as mentioned below at [17.2], there was a reference to 'Micon GmbH & Co KG' in a 25 November 2011 email.[25]  Two other exceptions are emails of 7 December 2011[26] and 9 January 2012[27] which omitted a signature block altogether.  Specific mention should also be made of a letter dated 25 November 2011.[28]  On Micon Drilling letterhead there was a statement of manufacturing capacity to produce 400 drilling rods with 15 inch diameter.  Micon Drilling also listed its 'technical requirements/specs for the raw material'.[29]

    [25] For example, see the emails dated 14 October 2011, 26 October 2011, 1 November 2011, 22 November 2011, 25 November 2011, 4 January 2012, 13 January 2012.  See: Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachments 'SB-17', 'SB-19' GAB 93, 133; Affidavit of A D Bereyne sworn 18 May 2020 attachments 'ADB-7', 'ADB-11', 'ADB-13' GAB 331, 333, 336, 350, 366; Affidavit of W J Coulthard affirmed 18 June 2020 attachments 'WJC-8', 'WJC-9' GAB 660, 697.

    [26] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-9' GAB 340 - 342.

    [27] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-11' GAB 349.

    [28] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-18' GAB 129 ‑ 131.

    [29] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-18' GAB 130.

11. However, the parties' communications also apparently made some reference to the appellant.  In particular:

    1.A 22 November 2011 email attached engineering drawings which referred to 'Micon GmbH & Co KG' (potentially an abbreviation of the appellant's name) and other technical data headed by the appellant's name in full.[30]

    2.A 25 November 2011 email and attachments also contained references to 'Micon GmbH & Co KG' and the appellant's name (the appellant's name appearing on numerous engineering drawings).[31]

    3.A 9 December 2011 email attached an engineering drawing which referred to 'Micon GmbH & Co KG'.[32]

    [30] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-17' GAB 95 - 97, 99, 120 - 122, 124 - 128; Affidavit of W J Coulthard affirmed 18 June 2020 attachment 'WJC-8' GAB 662 - 664, 666, 687 - 689, 691 - 695.

    [31] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-19' GAB 133, 135 - 137, 139 - 142, 144; Affidavit of W J Coulthard affirmed 18 June 2020 attachment 'WJC-9' GAB 697, 699 - 701, 703 - 706, 708.

    [32] Affidavit of S L Brinkman affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-8' GAB 78.

12. There is no legal entity with the name 'Micon GmbH & Co KG' registered in Germany.[33]

    [33] Affidavit of W J Coulthard affirmed 18 June 2020 par 12 GAB 618.

13. By 4 January 2012 the respondent was proposing a payment schedule.  However, rather than identifying the proposed counterparty with specificity, Mr Wood referred to 'Micon' (which could be either the appellant or Micon Drilling).[34]

The contract

[34] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-10' GAB 344.

1. On 17 January 2012, Mr Schwarzburg emailed Mr Wood.[35]  He did so referring to himself as managing director of Micon Drilling and again mentioning Micon Drilling (rather than the appellant) in the email's signature block.  The email stated:

   [W]e would appreciate if you could give us an indication nearby if we can consider getting this order?  The steel producer is pushing me because they hold their raw material prices only valid until today (maybe tomorrow).  They have to put this in the system before Friday …[36]

   [35] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-14' GAB 369 - 370.

   [36] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-14' GAB 369 - 370.

2. Mr Wood replied on 18 January 2012:

   I am pleased to advise you that we have decided to purchase the raise drill rods from Micon.  Thank you to you and your team for all of the effort and information that you have provided and in developing what we believe will be a superior product for these new generation raise drill rods.  We look forward to working with you and your team.

   I have prepared the attached Letter of Intent so that you can in turn lock in the supply of steel that you need to do by the 19th January as advised.  I will have our purchasing man (Terry, who is on leave for another two days) prepare an official order for you on his return.  In the meantime please proceed.[37]

   [37] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-14' GAB 369.

3. The letter of intent was not attached to the email.  Mr Wood explained that he would have to send it separately as he was working on his iPad.[38]  Accordingly, later on 18 January 2012 Mr Wood sent Mr Schwarzburg a Dropbox link to the letter of intent.[39]  The letter of intent was dated 16 January 2012 and was addressed to the managing director of the appellant rather than Micon Drilling.[40]  It stated:

   Letter of Intent 15'' diameter Raise Drilling rods

   Please accept this Letter of Intent for the purchase of raise drilling rods.  The drilling rods are to be supplied in accordance with the specification in your proposal which has been developed over the last few months.  In summary …

   [The letter of intent then sets out various specifications, the price per rod and the terms of payment.]

   The official Macmahon order will be created and emailed to you within the next 10 days but in the meantime please proceed on the basis of this letter to procure the required material.

   [38] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-14' GAB 369.

   [39] Affidavit of A D Bereyne sworn 18 May 2020 attachments 'ADB-15', 'ADB-16', 'ADB-17' GAB 373, 374, 379.

   [40] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-20' GAB 145 - 146; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-18' GAB 380 - 381.

1. Mr Schwarzburg responded to Mr Wood, by email, on 19 January 2012.  As will be seen, the email assumes considerable importance in the appeal.  The respondent contends that a contract was formed between it and the appellant on receipt of the email.  Mr Schwarzburg thanked Mr Wood for the order and said '[t]his is enough for us to proceed at this stage'.[41]

   [41] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-19' GAB 382.

2. The 19 January 2012 email omitted any signature block on behalf of Mr Schwarzburg.

3. On 24 January 2012 a Macmahon Holdings Ltd purchasing manager issued a purchase order for the raise drilling rods.  The purchase order, sent to Mr Schwarzburg by email,[42] was in two parts:

   [42] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-20' GAB 387.

   1.The respondent's purchase order No 10085 dated 24 January 2012.[43]  This:

   (a)was addressed to Micon Drilling;

   (b)provided for delivery to the respondent at an address in South Australia; and

   (c)stated that the price to be paid was 'ex works'.

   2.A letter dated 19 January 2012 addressed to the appellant (rather than Micon Drilling).[44]  This, like the letter of intent, dealt with specifications, pricing and payment terms but commenced as follows:

   Purchase Order for 15'' diameter Raise Drilling rods

   This letter details the terms and conditions agreed to between Macmahon Mining Services Pty Ltd (MMS) and Micon Mining and Constrruction [sic] (Micon) for the supply of raise drilling rods.

   [43] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-21' GAB 147; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-20' GAB 388.

   [44] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-21' GAB 148; Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-20' GAB 389.

4. There were a number of differences between the earlier letter of intent and the letter of 24 January 2012.  These comprised:[45]

   1.The letter of 24 January 2012 provided for an order quantity of 430; the letter of intent stated that the order quantity would be a minimum of 400 pieces.

   2.While both letters provided that Micon was to provide all drawings and engineering calculations, the 24 January 2012 letter specified that these were to include stretch and twist calculations for each 250 metres of rod string.

   3.The letter of 24 January 2012 provided that the rods were to be 'kemplated, threads clipped fitted with thread protection caps for pins and boxes'.  The letter of intent stated only that the rods were to be 'fitted with thread protection caps'.

   4.The letter of 24 January 2012 required that the rods be engraved with a unique serial number.  There was no such requirement in the letter of intent.

   5.The letter of 24 January 2012 specified that the price per rod was 'ex works Nienhagen'.  There was no such stipulation in the letter of intent.

   6.The same payment schedule appears in the letter of 24 January 2012 and the letter of intent.  However, the letter of 24 January 2012 contains additional terms as follows:

   The following terms of payment have been agreed to and reflect Micon's payments for the steel supply and manufacturing costs.  Evidence of such payment is to be provided and an invoice presented to [the respondent] for each of the milestone events below.  Full title for material or finished rods will pass to [the respondent] commensurate with cumulative proportion of payment that has been made to Micon.  Rods are to be shipped as they are completed in suitable quantities and the corresponding invoice presented when the rods have been shipped.  (emphasis added)

   [45] Compare: (1) Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-18' GAB 380 - 381; and (2) Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-20' GAB 389 - 390.

5. On 27 January 2012, a Corinna Bossin replied to the purchase order on behalf of Micon Drilling.  However, in doing so her email signature block mentioned Micon Drilling and the appellant together with some other entities.[46]  Ms Bossin's email attached:

   1.An 'order acknowledgement' dated 26 January 2012 on the letterhead of Micon Drilling which acknowledged the order on the basis of Micon Drilling's General Conditions of Business (attached in terms of a three-page formal set of 'General Terms and Conditions of Business' - these being in different terms to the General Conditions of Business referred to in [9] - [11] above).  Among other things, the conditions attached to the order acknowledgment stated that the contract was 'subject to German Substantive Law excluding UN-Purchasing Law' (art 1(6)).  The order acknowledgment was signed by Mr Schwarzburg immediately below a reference to Micon Drilling.[47]

   2.A prepayment invoice issued by Micon Drilling to the respondent.  As with the order acknowledgment, the invoice was signed by Mr Schwarzburg immediately below a reference to Micon Drilling.[48]

   [46] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-21' GAB 391.

   [47] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-21' GAB 393 - 397.

   [48] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-21' GAB 392.

6. On 30 January 2012, Mr Wood acknowledged the prepayment invoice and passed it through to the respondent's accounts department for payment.[49]  Payment was made on 4 April 2012.[50]

Post-contract events

[49] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-22' GAB 398.

[50] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-25' GAB 428.

1. Between January 2012 and July 2013 Micon Drilling issued a number of invoices to the respondent for the raise drilling rods.  The invoices totalled slightly less than €5.14 million.[51]  Payment was made.[52]  The drilling rods were shipped from Germany to Port Adelaide, South Australia at the respondent's cost between February and July 2013.[53]

   [51] Affidavit of A D Bereyne sworn 18 May 2020 attachment 'ADB-23'.

   [52] Affidavit of A D Bereyne sworn 18 May 2020 attachments 'ADB-25', 'ADB-26'.

   [53] Affidavit of A D Bereyne sworn 18 May 2020 pars 36 - 38 GAB 296 - 297.

2. The respondent says that it began to use the drilling rods at the Olympic Dam mine in South Australia.[54]  However, on the respondent's case, the drilling rods failed.  Some 121 rods are said to be unrecoverable in a mining shaft. [55]  The respondent says that it has suffered losses in terms of the value of the unrecoverable drilling rods, the cost to commission replacement drilling rods and lost productivity.[56] The respondent claims to have a good cause of action against the appellant either 'in negligence or breach of contract or for a breach of the term implied by s 14 of the Sale of Goods Act 1895 (WA) in that the rods were not reasonably fit for their purpose'.[57]

Procedural history of the litigation

[54] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) par 25 GAB 35.

[55] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) pars 25 - 26 GAB 35.

[56] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) par 27 GAB 35.

[57] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) par 29 GAB 36.

1. It is necessary to outline the procedural history of the proceedings before the master.

2. On 5 February 2019 the respondent sought leave to issue a writ against the appellant and to serve the appellant in Germany.  The application, in the form of an ex parte originating motion, was supported by an affidavit of Sarah Brinkmann affirmed 5 February 2019.  The application specified as to grounds that the respondent sought the leave of the court to:

   (a)issue a writ of summons against [the appellant], pursuant to Order 5 rule 9 of the Rules; and

   (b)serve the writ on [the appellant] in Germany, pursuant to Order 10 rules 1(1)(e)(iii) and 2 of the Rules.[58]

   [58] Respondent's ex parte originating motion dated 5 February 2019 (in CIV/1205/2019) par 11 BAB 21.

3. Order 10 r 1(1)(e) RSC is reproduced below (see [64]). For now it is enough to identify that O 10 r 1(1)(e)(iii) RSC is concerned with certain contractual claims where a contract by its terms or implications is governed by the law of Western Australia. Order 10 r 2 RSC is concerned with contractual claims where a contract contains a term to the effect that the Supreme Court of Western Australia has jurisdiction to hear and determine any action in respect of the contract. While, as has been seen, the application mentioned O 10 r 2 RSC, this jurisdictional condition was not relied on before the master or on appeal. Nor is there any evidentiary support for the contention that the asserted supply contract contained a term which might have satisfied the condition in O 10 r 2 RSC. Accordingly, O 10 r 2 RSC may be put aside.

4. The intended writ contained an indorsement of claim as follows:[59]

   The plaintiff's claims [sic]:

   1.Pursuant to a contract for the supply of raise drilling rods by [the appellant] to [the respondent] made on or about 19 January 2012 (Contract), damages for [the appellant's] breach of that contract.

   2.Alternatively to 1, damages for [the appellant's] breach of its duty of care in relation to its performance of the Contract.

   3.Alternatively to 1, damages for [the appellant's] breach of the condition implied in the Contract by section 14 of the Sale of Goods Act 1895 (WA).

   4.Interest at the rate of 6% per annum pursuant to section 32 of the Supreme Court Act 1935 (WA), as amended.

   5.Costs.

   6.Further or other relief.

   [59] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) attachment 'SB-1' GAB 40.

5. Ms Brinkmann's affidavit asserted that O 10 r 1(1)(e)(iii) RSC applied, making this an appropriate matter in respect of which the court should exercise its discretion to grant leave to issue a writ and serve it on the appellant in Germany.[60]

   [60] Affidavit of S L Brinkmann affirmed 5 February 2019 (in CIV/1205/2019) par 30(a) GAB 36.

6. On 12 February 2019 the master made orders granting the respondent leave to issue the proposed writ and serve it on the appellant in Germany.[61] The order did not specify the rule that the master relied on in granting leave to serve the writ outside Australia. However, given the terms of the respondent's ex parte originating motion and Ms Brinkmann's affidavit, the order could only have been grounded on O 10 r 1(1)(e)(iii) RSC. Nothing in the master's subsequent primary reasons suggests to the contrary. Indeed, the master expressly recognised that leave was sought pursuant to O 10 r 1(1)(e)(iii) RSC.[62]

   [61] BAB 18.

   [62] Primary reasons [2].

7. The writ was filed on 12 February 2019.[63] The writ as filed contained an indorsement in the terms reproduced at [34] above.[64]  However, the writ was not served immediately.  On 24 December 2019 the respondent filed a statement of claim.[65]  On 11 February 2020 an order was made extending the validity of the writ until 12 May 2020.[66]  On 28 February 2020 a copy of the writ was served on the appellant in Germany.[67]  There were issues with the service copy of the writ necessitating fresh service.  In the meantime, on 30 March 2020 the appellant filed a conditional appearance.[68]  An order was made extending the time for the appellant to bring any application to set aside service of the writ.[69] On 20 May 2020 the appellant applied pursuant to O 12 r 6(2) RSC to set aside service of the writ.[70]

   [63] BAB 23 - 29.

   [64] BAB 26 - 27.

   [65] BAB 30 - 41.

   [66] BAB 15.

   [67] Primary reasons [4].

   [68] BAB 45 - 46.

   [69] BAB 16 - 17.

   [70] BAB 95 - 97.

8. The grounds given for the appellant's application to set aside service of the writ were:

   1.The respondent contracted with Micon Drilling rather than the appellant.

   2.If, which was denied, the respondent contracted with the appellant, then:

   (a)the claims made against the appellant did not fall within O 10 r 1(1)(e)(iii) RSC; further or alternatively

   (b)service should be set aside on discretionary grounds.

The master's decision

1. The master recounted the procedural history in terms that are uncontroversial.[71]  He then referred to relevant legal principles including this court's recent decision in Bombardier Inc v AVWest Aircraft Pty Ltd.[72] The master specifically referred to the requirement that, in order to determine whether a case falls within one of the jurisdictional conditions in O 10 r 1(1) RSC, the applicant for leave must demonstrate that there is a 'good arguable case' that the matter falls within the relevant jurisdictional condition.[73]

   [71] Primary reasons [1] - [4].

   [72] Bombardier Inc v AVWest Aircraft Pty Ltd [2020] WASCA 2 (Bombardier).

   [73] Primary reasons [5(b)].  See Bombardier [16].

2. The master reproduced key aspects of the appellant's submissions in support of the application.[74]

   [74] Primary reasons [10].

3. The master apprehended that the appellant had approached the application on the basis that, in addition to a contractual claim, the respondent was making a claim in tort.  The master rejected that characterisation, finding that the claim was solely contractual and not tortious.  In this respect the master accepted counsel for the respondent's explanation that the reference in the writ to 'duty of care' (see [34] above) was concerned with an implied obligation to exercise reasonable care in the performance of the respondent's contractual obligation.[75]  This part of the master's reasons is challenged by ground 1.

   [75] Primary reasons [11].

4. The master then turned to the appellant's argument that the respondent contracted with the company related to the appellant - Micon Drilling - rather than the appellant.  He outlined the evidence as to the proper contracting party by reference to counsel for the respondent's written submissions.[76]  There is no challenge on appeal to the master's adoption of that recitation of the evidence.  Based on that evidence the master held:

   1.It was 'arguable' that the appellant was the proper contracting party (this finding being, in the master's view, sufficient for the proper determination of the application).[77]

   2.It was 'arguable' that the contract was formed in Western Australia.[78]

   3.It was 'arguable' that the proper law of the contract was the law of Western Australia.[79]

   [76] Primary reasons [13].

   [77] Primary reasons [14].

   [78] Primary reasons [15].

   [79] Primary reasons [16] - [18].

5. The master also found that it was 'clear' that summary judgment could not be entered in the appellant's favour on the basis that the contract incorporated Micon Drilling's General Terms and Conditions of Business.[80]  This aspect of the master's decision is not challenged in the appeal.

   [80] Primary reasons [14].

6. On the basis of these findings the master dismissed the appellant's application.

The grounds of appeal

1. There are nine grounds of appeal.

2. Grounds 1 - 3 concern the alleged claim in tort for negligence.  By ground 1 the appellant alleges that the master erred in fact in finding that the respondent had not brought a claim in tort for negligence.  Grounds 2 and 3 are premised on this court upholding ground 1 insofar as the appellant alleges that:

   1.The master erred in law in failing to find that the respondent was required to obtain leave to serve outside Australia in relation to each cause of action relied on (ground 2).

   2.The master made a mixed error of fact and law in failing to find that the respondent had not obtained leave to serve the writ outside Australia insofar as it related to the claim in tort for negligence (ground 3).

3. Grounds 4 - 8 are concerned with the claim in contract.  In substance the appellant alleges that:

   1.The master erred in law in holding that it was sufficient to sustain a grant of leave to serve outside Australia for the respondent to establish an 'arguable case' (as opposed to a 'good arguable case') that the matter fell within one of the jurisdictional categories in O 10 r 1(1) RSC (ground 4).

   2.The master erred in law in failing to find that the respondent was confined to the grounds on which it had sought leave to serve the writ outside Australia (ie O 10 r 1(1)(e)(iii) or O 10 r 2 RSC) and was not entitled to rely on a contention that the contract was made within Western Australia (ie O 10 r 1(1)(e)(i) RSC) (ground 6).

   3.The master made a mixed error of fact and law in finding that it was arguable that the appellant had contracted with the respondent and should have found that the respondent had not established a good arguable case that it had contracted with the respondent (ground 5).

   4.The master erred in fact and law in finding that the contract was arguably formed in Western Australia and failing to find that the respondent had not established a good arguable case that the contract was made within the jurisdiction (ground 7).  In this respect the appellant alleges specific factual errors in finding that:

   (a)the email of 19 January 2012 (see [23] - [24] above) was the final act of contract formation (ground 7(a)); and

   (b)the email of 19 January 2012 was received at the respondent's head office in Western Australia (ground 7(b)).

   5.The master erred in law in failing to find that the respondent had not established a good arguable case for the purpose of O 10 r 1(1)(e)(iii) RSC that the contract was by implication governed by the law of Western Australia (ground 8).

4. We have re-ordered grounds 4 - 8 to follow a more logical sequence.

5. Ground 9 is consequential on grounds 4 - 8.  The appellant alleges that by reason of grounds 4 - 8 the master erred in law in failing to find that leave to serve the writ outside Australia should be set aside insofar as it related to the claim in contract.  It adds nothing to grounds 4 - 8 and may be put aside.

6. The dismissal of the appellant's application was an interlocutory order.  Accordingly, as the appellant acknowledged,[81] it requires leave to appeal. Whether there ought to be leave to appeal is bound up with the merits of the appeal. For that reason it is convenient to examine the merits of the grounds before returning to the question of leave to appeal. Before examining the individual merits of the grounds of appeal it is necessary to refer to the relevant legal principles concerning an application for leave to serve a writ outside the jurisdiction pursuant to O 10 RSC.

   [81] WAB 1.  See also appellant's submissions par 83 WAB 24.

Legal principles on issue and service of a writ on a defendant outside Australia

The jurisdiction of the Supreme Court of Western Australia

1. The Supreme Court of Western Australia ordinarily has jurisdiction in a personal action if the defendant is personally served with the court's writ (or other originating process) within the court's territorial jurisdiction.[82]  Conversely, under the general law the Supreme Court has no jurisdiction and no power over persons outside the territorial limits of the State of Western Australia.[83]

   [82] John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 [13] - [14].

   [83] Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310, 322 - 324.

2. However, the Supreme Court may also take jurisdiction where authorised by statute or rules of the court.  This is the Supreme Court's so-called 'long-arm' jurisdiction.[84]  A person outside the territorial jurisdiction of the court may be subject to the jurisdiction of the court to the extent (but only to the extent) that statute or rules made under statute permit.[85] Relevantly, with leave of the court, O 5 r 9 RSC and O 10 rr 1(1) and 2 RSC permit the issue and service of a writ on a person outside Australia.

   [84] John Pfeiffer Pty Ltd v Rogerson [13].

   [85] Donoghue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749 [21].

3. So understood, O 5 r 9 RSC and O 10 RSC are not mere procedural provisions. Instead they are provisions that confer jurisdiction on the court. The rules conferring the court's long-arm jurisdiction ought not to be read down by making implications or imposing limitations which are not found in the express words. However, it ought also to be appreciated that the rules emerged in a particular historical context and have long been applied having regard to that context and the circumstance that, by O 5 r 9 RSC and O 10 RSC, the court has decided to supervise the extension of its jurisdiction so as to ensure that only in appropriate cases will a writ be served on a defendant outside Australia.

Order 5 r 9 and O 10 RSC

1. Leeming JA, writing extra-judicially, identifies that the Australian colonies adopted different models concerning extraterritorial service - models based either on the practice of common law courts or the Chancery practice.[86]  The Western Australian rules derive from the Chancery practice.[87] The RSC require leave for issue of a writ for service outside of Australia (O 5 r 9 RSC) and, ordinarily, leave to serve a defendant outside Australia with the writ (O 10 r 1A(2) RSC).

   [86] M Leeming Authority to Decide: The Law of Jurisdiction in Australia (Second Edition) (2020) pp 190 - 191.

   [87] Crawley Investments Pty Ltd v Elman [2014] WASC 233 [45(1)].

2. Order 5 r 9 RSC states:

   A writ for service outside Australia shall not be issued without the leave of the Court.

3. Order 10 r 1A(2) RSC states:

   A writ served on a person outside Australia, except a writ served on a person in New Zealand under the Trans‑Tasman Proceedings Act 2010 (Cth), has no effect unless:

   (a)the Court, under this Order, granted leave to serve the person; and

   (b)the person was served:

   (i)under rules 9 to 11; or

   (ii)under Order 11A and the convention referred to in that Order.

4. Order 10 r 1(1) RSC confers a power on the court that arises on stated conditions; the court may grant leave… if the case falls within one of the paragraphs.

5. Order 10 r 1(1) RSC sets out a list of circumstances - commonly referred to as jurisdictional conditions or gateways - in which, subject to a grant of leave, service out of Australia is permissible. Mostly those circumstances are based on some aspect of the subject-matter of the action - either that the claim is of a particular character or that the claim concerns a particular type of thing.

6. While naturally all relate in some manner to the action, the nature of the stipulated state of affairs or condition, and the nature of its connection to the action, vary across the different paragraphs of O10 r 1(1) RSC. Without being comprehensive, the following examples illustrate the point. Paragraph (a) requires identification of the subject matter of the action so far as it concerns the party to be served and whether that subject matter is property of the kind described in either (i) or (ii). Under par (c), the focus is on the domicile or ordinary residence of the person to be served; the action must seek relief against a person domiciled or ordinarily resident in Western Australia. Paragraph (d) has several limbs, the first of which depends upon the domicile at the time of death of the person the administration of whose personal estate the action is brought.

7. With both O 10 r 1(1) and r 2 RSC the court must be satisfied of the existence of some jurisdictional fact to the requisite standard. At issue in this appeal is the nature of that standard and what is required to satisfy the standard. The parties had competing positions as to what was required for the purpose of determining whether the court's power is enlivened.

8. In the case of both O 10 r 1(1) and r 2 RSC the court may grant leave to serve the person outside Australia with the writ. Accordingly, if the court is satisfied that the action falls within one or more of the jurisdictional gateways in O 10 r 1(1) or r 2 RSC, the court exercises a discretion in deciding whether to grant leave to serve the defendant outside Australia. This appeal is only concerned with the necessity to establish a jurisdictional condition. No issue arises as to discretion. Thus, while it is appropriate to mention some of the matters relevant to the exercise of the court's discretion under O 10 RSC, those principles need not be developed in these reasons.

9. A central question in this appeal is the threshold of satisfaction to be met in determining whether the case falls within the relevant category.  As will be seen, many courts, including this court in Bombardier, have stated the threshold as the demonstration of a good arguable case. It should be borne in mind that no such phrase appears in O 10 r 1 RSC. Each paragraph is expressed in terms that a stipulated state of affairs or condition is - in other words that the stipulated state of affairs or condition exists. One reading, perhaps the natural reading, is that the court's power under O 10 r 1 RSC arises if it concludes that the stipulated state of affairs or conditions exists. As will be seen, another approach, adopted in many cases, is to read r 1 and r 4 together and to import the language of r 4, requiring that 'it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction under this Order' as reflecting the threshold of satisfaction.

10. In identifying the appropriate threshold for establishing that a case is within a category in O 10 r 1(1) RSC, consideration should be given to all of the categories in O 10 RSC; attention should not be limited to those concerning contract or tort, with which the present case is concerned. This was the approach adopted by Lord Goff in SeaconsarFar East Ltd v Bank Markazi Jomhouri Islami Iran.[88]

    [88] Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438 (Seaconsar), 449.

11. This appeal is concerned with the jurisdictional conditions provided in O 10 r 1(1)(e) RSC. The rule states:

    The Court may grant leave to serve a person outside Australia with a writ, or notice of a writ, that begins an action if:

    …

    (e)the action is one brought to enforce, rescind, dissolve, annul, or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being in either case a contract:

    (i)made within the jurisdiction; or

    (ii)made by or through an agent trading or residing within the jurisdiction on behalf of a principal trading or residing out of the jurisdiction; or

    (iii)which by its terms or implications is governed by the law of Western Australia;

12. The text of O 10 r 1(1)(e) RSC directs attention to the contract in respect of which a plaintiff is bringing an action: is the action properly characterised as one to enforce the contract or so on or to recover damages or other relief for breach of the contract?  Three different kinds of contract are nominated in sub-pars (i), (ii) and (iii).  But, in each case, it is necessary to identify the contract in respect of which the action is intended to be brought (on the ex parte application for leave) or has been brought (on a subsequent inter partes application to set aside the issue and service of the writ outside Australia).  The contract so identified must be made within Western Australia (sub-par (i)) or be made by or through an agent within Western Australia on behalf of a principal outside Western Australia (sub-par (ii)) or be governed by the law of Western Australia (sub-par (iii)).

13. Order 10 r 4 RSC provides for an application for leave to serve a person outside Australia with a writ:

    (1)An application for a grant of leave under rule 1 or 2 must be supported by an affidavit that states:

    (a)that in the deponent's belief, the plaintiff has a good cause of action; and

    (b)where, outside Australia, the person to be served is or probably may be.

    (2)No such leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction under this Order.  (emphasis added)

14. Order 10 r 1(1) and r 2 RSC must be read with O 10 r 4 RSC and O 5 r 9 RSC must be read with O 10 RSC. Putting aside the exception in O 10 r 1A(2) RSC, the court would not grant leave to issue a writ for service outside Australia unless the court would also grant leave to serve the writ outside Australia. O 10 r 1(1) and r 2 RSC set out relevant conditions or gateways, one of which must be satisfied (leaving for now the standard of satisfaction) before the discretion to grant leave under O 10 RSC is enlivened. Moreover, the discretion is not at large. In terms of O 10 r 4(2) RSC leave will not be granted unless it sufficiently appears that the case is a proper one for service out of the jurisdiction under O 10 RSC.

15. A defendant served outside Australia with a writ may apply, before entering an appearance, to set aside the writ or service of the writ and to discharge the order that granted leave to serve the writ on the defendant outside Australia (O 12 r 7 RSC). Alternatively, the defendant may enter a conditional appearance denying the jurisdiction of the court and apply to have the question raised by the conditional appearance decided (O 12 r 6 RSC).

16. The RSC are silent on the grounds that may be advanced on an application under O 12 r 6 RSC or O 12 r 7 RSC to set aside a writ or service of a writ that was served on a defendant outside Australia.

17. Among other things, on such a contested inter partes application the defendant served outside Australia may, by seeking to discharge the order under O 10 RSC, put in issue whether there ought to have been an order for leave to serve the writ outside Australia. Accordingly, the grounds may include that the court has no jurisdiction to determine the action. The court will then be called on to determine whether or not the jurisdictional gateways relied on by the plaintiff for leave to issue and serve the writ can be sustained having regard to the whole of the materials and argument on the inter partes application.

Leave under O 5 r 9 and O 10 RSC

1. In addition to the formalities prescribed by O 10 r 4(1) RSC, two requirements must be met before the court will grant leave to serve a writ on a person outside Australia. First, the plaintiff's case must satisfy one or more of the jurisdictional gateways in O 10 r 1(1) or r 2 RSC. Second, the court must be persuaded to exercise its discretion in favour of the grant of leave - it must be 'sufficiently' apparent that the case is a 'proper one' for service out of the jurisdiction. For example, the court should be satisfied that the proceedings will not be stayed on inappropriate forum grounds or otherwise be liable to summary dismissal. The latter discretionary matter involves consideration of the plaintiff's prospects of success on the merits of its claim. In terms of both jurisdiction and discretion the court should not grant leave unless it is positively persuaded that it should do so.[89]

   [89] Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538, 564;

2. It is common to make the application for leave to issue the writ (under O 5 r 9 RSC) and the application for leave to serve the writ outside Australia (under O 10 RSC) at the same time. That course is permitted.[90]  The application for leave is made ex parte.  Accordingly, the order granting leave may be discharged if the applicant has not made a full and frank disclosure of the material facts.

   [90] Koranna Nominees Pty Ltd v Roberts (Unreported, FCSCWA, SCL 4289; Del 15 October 1981), 2 - 3 (Smith J).

3. It is well established that:

   1.The supporting affidavit should not be formal or perfunctory; it should depose to facts and not to unsupported conclusions.[91]

   2.The supporting affidavit must show both:[92]

   (a)the facts which bring the case within O 10 r 1(1) or r 2 RSC - ie the facts establishing the jurisdictional gateway relied on by the plaintiff; and

   (b)any additional facts which are relevant to the exercise of the court's discretion.  For example, the affidavit should address the merits of the claim and why the Supreme Court is contended to be an appropriate forum.

   [91] Kent v Lechmere Financial Corporation & Ors [2002] WASC 75 [5].

   [92] Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869 (Korner), 882.

4. There is authority that the supporting affidavit must identify each sub-par of O 10 r 1(1) or r 2 RSC which is relied upon, thereby making certain the grounds for the application.[93] The requirement may be traced back to the RSC. Before a 2012 amendment, O 10 r 4(1) RSC provided that the supporting affidavit must state the grounds on which the application is made. That specific requirement is omitted from the present version of O 10 r 4(1) RSC. It was, however, surplusage insofar as O 59 r 3 RSC - inserted in 1996 - required that all applications made in chambers state the orders that the applicant seeks and the grounds for the application. Accordingly, while there is no longer a requirement that the sub-par of O 10 r 1(1) or r 2 RSC relied on must be identified in the supporting affidavit, it must be specified in the ex parte originating motion by which the plaintiff applies for leave to serve the writ outside of Australia.

   [93] Goldberg v Western Continental Corp Ltd (in liq) (Unreported, FCSCWA, SCL 8644; Del 18 December 1990), 2 (referring to EF Hutton & Co v Mofarrij [1989] 2 All ER 633, 637).

5. The requirement in [74] above is important.  The plaintiff is confined to the grounds relied on in its ex parte application when a subsequent contested inter partes application is made by the defendant to set aside the issue and service of the writ.[94]  The plaintiff is required to sustain the issue and service of the writ on the ground or grounds relied on in the ex parte application upon which the order for leave was made.

   [94] Koranna Nominees Pty Ltd v Roberts (5) (Burt CJ) (referred to with apparent approval in Goldberg v Western Continental Corp Ltd (in liq) (4)).

6. The applicant for leave must establish that all of the claims in the proceedings fall within O 10 r 1(1) or r 2 RSC.[95] The plaintiff will not be allowed to proceed with causes of action for which service outside Australia cannot be sustained under O 10 RSC. Nor can there be leave to amend a writ which has been served outside Australia to add a cause of action which does not qualify under O 10 RSC.[96]

   [95] Kent v Lechmere Financial Corporation & Ors [7].

   [96] EF Hutton & Co v Mofarrij (636).

7. The plaintiff bears the onus of proof in establishing the jurisdictional gateway - both on the initial ex parte application for leave and subsequently on any inter partes hearing to set aside the writ and service of the writ outside of Australia.[97]  It is, however, possible that the onus in respect of the exercise of the court's discretion moves from the applicant for leave (on the ex parte application) to the applicant to set aside the writ and service of the writ outside of Australia (on the inter partes application).[98]  However, the point was left undecided in Bombardier.[99]  It is not necessary to determine the point in this appeal.

Jurisdictional facts under O 10 r 1(1) RSC

[97] Crawley Investments Pty Ltd v Elman [45(7)]. See also Bombardier [70] - [71].

[98] Crawley Investments Pty Ltd v Elman [45(7)].

[99] Bombardier [135].

1. For the reasons in [51] ‑ [53] above, being within the category in the relevant paragraph of O 10 r 1 RSC is the foundation of the court's jurisdiction. Thus, being within a category may be characterised as a jurisdictional fact. The English equivalent of O 10 r (1)(1)(e)(i) RSC was so described by Lord Sumption JSC in Brownlie v Four Seasons Holdings Inc.[100]

   [100] Brownlie v Four Seasons Holdings Inc [2017] UKSC 80; [2018] 1 WLR 192 (Brownlie) [4].

2. Attention must be given to the nature and content of the requisite jurisdictional fact for each head of jurisdiction.  A distinction has been recognised between two classes of jurisdictional fact.  One is where the jurisdictional fact is objective in character and requires the court to be satisfied of the existence of the fact.  In some other cases, whether the condition is satisfied involves attention only to what is claimed by the plaintiff.

3. The distinction has been recognised in many cases, including by the High Court of Australia in Owners of the Ship, Shin Kobe Maru v Empire Shipping Co Inc[101] and by Lord Sumption JSC in Brownlie.

   [101] Owners of the Ship, Shin Kobe Maru v Empire Shipping Co Inc [1994] HCA 54; (1994) 181 CLR 404.

4. In the context of a maritime action in rem, in Owners of the Ship, Shin Kobe Maru v Empire Shipping Co Inc,[102] a unanimous High Court observed that where jurisdiction depends on particular facts, or a particular state of affairs, a challenge to jurisdiction can only be resisted by establishing the facts on which it depends, and these must be established on the balance of probabilities in light of all the evidence advanced in the proceedings concerning jurisdiction.

   [102] Owners of Shin Kobe Maru v Empire Shipping Co Inc (426).

5. In that case, the claim was said to be a proprietary maritime claim, which was defined in s 4(2) of the relevant enactment, as follows:

   A reference in this Act to a proprietary maritime claim is a reference to:

   (a)a claim relating to:

   (i)possession of a ship;

   (ii)title to, or ownership of, a ship or a share in a ship;

   (iii)a mortgage of a ship or of a share in a ship; or

   (iv)a mortgage of a ship's freight;

   (b)a claim between co‑owners of a ship relating to the possession, ownership, operation or earnings of the ship;

   (c)a claim for the satisfaction or enforcement of a judgment given by a court (including a court of a foreign country) against a ship or other property in a proceeding in rem in the nature of a proceeding in Admiralty; or

   (c)a claim for interest in respect of a claim referred to in paragraph (a), (b), or (c).

6. The court observed that jurisdiction was asserted on two bases.  It then said as follows, reflecting the distinction to which we have referred:[103]

   In this case, Empire asserts jurisdiction on two bases.  So far as jurisdiction is asserted by reason of s 4(2)(a), it does not depend on any factual precondition but, rather, on the claim having the legal character required by that paragraph, namely, 'a claim relating to … possession of [or] … title to, or ownership of, a ship'.  The position is somewhat different with s 4(2)(b) in that ownership is a question of mixed fact and law and there may well be cases where facts must be established before a claim can be characterised, in terms of that paragraph, as 'a claim between co‑owners'.  However, the issue in this case, so far as s 4(2)(b) is concerned, seems not to be whether Empire has established facts proving co‑ownership, but whether the facts give rise to a relationship which is recognised in law as co‑ownership.  These issues were not fully developed in argument and, as earlier indicated, it is not necessary to determine whether s 4(2)(b) applies in this case.  That being so, it is convenient to consider this aspect of YSL's argument solely by reference to s 4(2)(a).

   [103] Owners of Shin Kobe Maru v Empire Shipping Co Inc (426 - 427).

7. In Brownlie, Lord Sumption JSC (with whom Lord Hughes JSC agreed) also recognised the distinction to which we have referred.  In that case the plaintiff, Lady Brownlie, relied on two heads of jurisdiction.  The first was under CPR pt 6 Practice Direction 6B, par 3.1(6); 'a claim is made in respect of a contract where the contract - (a) was made within the jurisdiction ...'.  The second was under par 3.1(9); 'a claim is made in tort where damage was sustained … within the jurisdiction'.  Lord Sumption said as follows:

   Some of the jurisdictional gateways in Practice Direction 6B merely require that the claim should be of a particular character.  For example, it is a claim for an injunction regulating conduct within the jurisdiction.  Others, including gateways 6(a) and 9(a) on which Lady Brownlie relies, depend on the court being satisfied of some jurisdictional fact.  The relevant contract must, for example, have been made or breached in England or relevant damage sustained there.[104]

   [104] Brownlie [4].

8. In so holding in Brownlie, Lord Sumption's approach was consistent with earlier decisions of the House of Lords concerning provisions expressed in slightly different terms to which we now turn.

The requirement of a 'good arguable case'

1. Both before the master[105] and on appeal[106] the parties accepted that the respondent had to demonstrate that there was a 'good arguable case' that the matter fell within one of the jurisdictional gateways.  There was, however, substantial debate on appeal as to what was meant by a good arguable case.

   [105] Primary reasons [5].

   [106] Appellant's submissions par 22(a) WAB 10; Appeal ts 2, 45, 51 - 52.

1. The touchstone of a 'good arguable case' appears to have been first suggested in argument in Vitkovice Horni a Hutni Tezirstvo v Korner.[107]  Three aspects of the decision are relevant for present purposes.

   [107] Korner (875).

2. First, the House of Lords held that the measure of proof that a case falls within a head of jurisdiction is satisfaction of the requirement of the English predecessor of O 10 r 4(2) RSC that it 'sufficiently appear that the case is a proper one for service out of the jurisdiction'.[108] In so holding, Lord Radcliffe recognised that r 4 was expressed in the form of a prohibition, but, reading r 1 and r 4 together, concluded that r 4 provides the measure of proof that a case falls within a jurisdictional head.

   [108] Vitkovice Horni v Korner (878), Lord Simonds, Lord Normand agreeing, (883) Lord Radcliffe, Lord Tucker agreeing.

3. Second, Lord Simonds, with whom Lord Normand agreed, accepted counsel's suggestion that what was required by a plaintiff was to demonstrate a good arguable case.  Lord Radcliffe, with whom Lord Tucker agreed, expressed the test as whether, on consideration of all the material, there remained a strong argument that the qualifying conditions were satisfied.  Their Lordships emphasised that such a conclusion does not require or involve the level of proof that must be attained at trial.

4. Third, Lord Radcliffe, with whom Lord Tucker agreed, considered that establishment of a good arguable case of breach of contract within the jurisdiction involves establishing a good arguable case that a contract exists and that it was breached.[109]

   [109] Vitkovice Horni v Korner (883 ‑ 884).

5. A 1990 decision of the predecessor to this court expressed a preference for Lord Radcliffe's 'strong argument' test over the 'good arguable case' formulation.[110]

   [110] Goldberg v Western Continental Corp Ltd (in liq) (8).

6. In Seaconsar, however, Lord Goff of Chieveley (the other members of the House of Lords agreeing) observed that Lord Simonds's formulation of 'good arguable case' had been applied in innumerable cases since Korner and suggested that Lord Radcliffe's 'strong argument' formulation meant the same thing.[111]  His Lordship held that the 'good arguable case' test established in Korner was applicable to the question of jurisdiction under the equivalent of O 10 r 1(1) RSC.[112]  Thus, under the English equivalent of sub-par (e)(i), it is not enough for a plaintiff merely to demonstrate that if the contract existed it was made within the jurisdiction; rather, the plaintiff must show a good arguable case that there was a contract and that such contract was made within the jurisdiction.[113]

   [111] Seaconsar (453).

   [112] Seaconsar (454), (456 - 457).

   [113] Seaconsar (454 ‑ 455).

7. Returning to Western Australia, in Bombardier,[114] there was no dispute that, in order to decide whether a case fell within one of the jurisdictional gateways, the plaintiff must demonstrate that there is a good arguable case that the matter so falls.  Observing that this was consistent with the basis on which Edelman J proceeded in Crawley Investments Pty Ltd v Elman,[115] the court applied the good arguable case test in determining whether the appellant in that case had demonstrated that its claim fell within the relevant head of jurisdiction.[116]

   [114] Bombardier Inc [16].

   [115] Crawley Investments Pty Ltd v Elman [2014] WASC 233 [45(3)].

   [116] Bombardier Inc [16], [75], [82], [98], [113], [117], [125].

8. It is inappropriate to re-visit the 'good arguable case' formulation in circumstances in which this court was not invited to do so.  Instead, the live issue on appeal was the correct approach to determining the existence and content of a 'good arguable case'.  The parties had very different conceptions of the evidential standard inherent in a 'good arguable case'.

9. The appellant contended that:

   1.It is necessary to distinguish between two elements of an application for leave to serve out, namely:[117]

   (a)the plaintiff establishing a good arguable case for the satisfaction of a jurisdictional condition or gateway; and

   (b)the plaintiff establishing that the case is otherwise a proper one for the exercise of the court's discretion.

   2.In assessing whether the plaintiff has established a good arguable case the court should apply the approach accepted in a series of recent cases in the United Kingdom[118] - Brownlie, Goldman Sachs International v Novo Banco SA[119] and Kaefer Aislamentios SA de CV v AMS Drilling Mexico SA de CV & Ors.[120]

   3.Questions as to whether the proceedings would be liable to summary dismissal only arise after the relevant jurisdictional gateway has been established to the good arguable case standard.  If the defendant then contends that the action is liable to summary dismissal the plaintiff need only show that there is a triable issue on the merits.[121]

   [117] Appellant's submissions pars 22 - 23 WAB 10.

   [118] Appellant's submissions pars 24 - 25 WAB 10 - 11.

   [119] Goldman Sachs International v Novo Banco SA [2018] UKSC 34; [2018] 4 All ER 1026 (Goldman Sachs).

   [120] Kaefer Aislamentios SA de CV v AMS Drilling Mexico SA de CV & Ors [2019] EWCA Civ 10; [2019] 3 All ER 979 (Kaefer).

   [121] Appellant's submissions par 26 WAB 11.

10. In oral submissions counsel for the appellant argued that there was but one test that applied to both the ex parte application for leave and any inter partes contested application that followed service outside Australia.  This was to show a 'good arguable case'.  However, as explained in the recent United Kingdom authorities, what was required to satisfy the test may vary, depending on the stage at which the question fell for determination.  Counsel eschewed any suggestion that there might be a final determination or something akin to a trial on the merits.  What was involved was a determination for the purpose of jurisdiction rather than the merits.  Nevertheless, in the appellant's submission, the court had to be 'positively persuaded' that facts existed which enabled the court to take jurisdiction - albeit that in reaching that state of satisfaction the court will have regard to the limitations of the interlocutory determination at which jurisdiction is being contested.  Counsel for the appellant contended that the court was required, to the extent possible, to form a provisional view as to who had the better of the arguments on the facts going to jurisdiction.[122]

    [122] Appeal ts 2 - 4, 14.

11. The respondent contended that this court should follow the approach in Agar v Hyde - said to be that it is sufficient that the plaintiff alleges a cause of action which, according to the pleaded allegations, is one that may be served outside Australia and it is impermissible to make an assessment of the strength of the pleaded cause of action in deciding whether the rules permit service outside of Australia. According to the respondent, it was sufficient that it claimed there was a breach of a contract and the contract was of the requisite kind prescribed by O 10 r 1(1)(e) RSC.[123]

    [123] Respondent's submissions pars 15, 15B - 15F, 21, 21G WAB 50 - 53, 55, 58.

12. Counsel for the respondent emphasised that the jurisdictional gateway was not whether there was, in fact, a contract of the requisite kind. Rather, the qualifying condition in O 10 r 1(1)(e) RSC is concerned with whether an action has been brought to enforce such a contract or to recover damages for breach of such a contract.[124]

    [124] Appeal ts 46.

13. In oral submissions, at least initially, counsel for the respondent continued with the contention that jurisdiction depended on whether the action, as pleaded, was one to enforce a contract of the requisite kind.[125] Eventually, however, counsel acknowledged that the O 10 RSC authorities - including Bombardier - addressed themselves to whether there was a good arguable case in fact for jurisdiction rather than merely as claimed in a pleading.[126]  The respondent said that in any case it was not appropriate to enter into a contested merits hearing about the existence of the jurisdictional fact.[127]  Counsel for the respondent said that the principle he was contending for was that jurisdiction to determine a claim turned on whether a genuine claim of the requisite kind was being made; not whether that claim was more likely than not to be made out depending on an assessment of the competing evidence.[128]  It was enough if the claim giving jurisdiction was not 'colourable', ie there was a claim of a kind which would found jurisdiction having a plausible basis on the evidence before the court.  Such a claim was contended to be sufficient to meet the good arguable case threshold.[129]

    [125] Appeal ts 46, 49 - 50.

    [126] Appeal ts 48, 51 - 52, 57.

    [127] Appeal ts 50.

    [128] Appeal ts 51.

    [129] Appeal ts 51 - 52.  See also Appeal ts 53, 55 - 57, 59, 60, 63, 72, 75.

14. The respondent said that, so far as the evidence might be tested on a contested application to set aside service, such testing did not extend to expressing an opinion on the merits.  All that was to be determined was whether there was a plausible contention that there was a claim of a type which would allow the court to take jurisdiction.  It was sufficient if there was a plausible albeit disputed basis for the jurisdictional gateway relied on.[130]

    [130] Appeal ts 52, 75.

15. In the context of the present case, counsel for the respondent submitted that it would suffice if the respondent adduced evidence which, if accepted at trial, would establish the existence of a contract between the appellant and the respondent of the requisite kind.  According to the respondent, it was not for the court to examine the relative merits of the different contracts being contended for (ie whether the contract was between the respondent and the appellant, as was the respondent's case, or the respondent and Micon Drilling, as was the appellant's case).[131]  Indeed, insofar as there was a conflict of evidence as to whether such a contract existed, it was said that a plausible case would have been shown.[132]

    [131] Appeal ts 59.

    [132] Appeal ts 57.

Consideration of what is meant by a 'good arguable case'

1. The appellant is correct to differentiate between the standard of proof that applies to satisfaction of: (1) the jurisdictional gateway; and (2) whether the case is a proper one for service out of the jurisdiction. Both limbs must be met to justify an order for leave to serve out of the jurisdiction pursuant to O 10 RSC. But the good arguable case standard only applies to satisfaction of the jurisdictional gateway. By contrast, to the extent that the 'proper one for service out' element invites attention to the merits of the claim, it is sufficient that the claim is arguable in the sense that summary judgment against it would be inappropriate.

2. A difficulty that has arisen in the authorities - one that is found in the present appeal - is that sometimes a fact integral to satisfaction of the jurisdictional condition relied on by the plaintiff will also be in issue at trial. For example, as to O 10 r 1(1)(e)(iii) RSC, to establish that there is a good arguable case that an action is to recover damages for breach in respect a contract which by its terms or implications is governed by Western Australian law, there must be a good arguable case that the parties entered into a contract. The existence of the contract has to be sufficiently proved.[133]  But whether the parties entered into a contract may be the very thing in issue at a future trial on the merits of the claim.

   [133] Seaconsar (453 - 454), (454 - 455).

3. In such a case, when determining the question of jurisdiction, the court must be careful not to express a view on the ultimate merits.  And consideration must be given to the evidential standard that must be satisfied if the jurisdictional condition is to be found to be established.

4. The problem does not always arise. For example, let it be assumed that the plaintiff is relying on O 10 r 1(1)(c) RSC. The plaintiff must only establish a good arguable case that the defendant is domiciled or ordinarily resident in Western Australia. A separate question arises as to the merits of the claim - one that is relevant to the discretionary aspect of the court's decision on whether to grant leave to serve the writ outside Australia. The two enquiries can be neatly broken-up as there is no overlap between the jurisdictional issue and the substantive merits of the claim.

5. The difficulty we have adverted to partly informs and explains the adoption of the 'good arguable case' standard for satisfaction of the jurisdictional gateway.  The evidential standard must be less than the balance of probabilities as prevails at trial.  But the traditional caution accorded to service out of the jurisdiction necessitates that the court be satisfied of the jurisdictional fact relied on to some standard - one encapsulated in the phrase 'good arguable case'.

6. Different considerations arise when the court is satisfied that a jurisdictional gateway is met, such that jurisdiction may be assumed and exercised, and the issue is one of discretion.  Then, as to prospects, it is difficult to see why a plaintiff who must serve a writ outside Australia should be required to demonstrate a higher apparent chance of success than a plaintiff who can effect service on the defendant within Western Australia.[134]  Thus in Seaconsar the House of Lords held that it was not necessary to show a good arguable case as to the merits of the case.[135]

   [134] Crawley Investments Pty Ltd v Elman [45(5)]. See also: Seaconsar (455); Agar v Hyde [58] - [60].

   [135] Seaconsar (454 - 457).

7. The differing evidential standards, and their respective rationales, are material in assessing the parties' competing positions as outlined in [95] - [101] above.  Bearing that in mind, it is convenient to now consider the authorities referred to by counsel for the parties.

Agar v Hyde: the Australian authority relied on by the respondent

1. Agar v Hyde was an appeal from the Court of Appeal of New South Wales. The relevant rules as to service outside the jurisdiction were different from O 10 RSC. The plurality (Gaudron, McHugh, Gummow & Hayne JJ) identified that in New South Wales there had historically been different provision for service outside the jurisdiction in equity and common law.[136]  The plurality went on to say that the rules then in force in New South Wales followed the common law practice - a regime which '[stood] in sharp contrast to the provisions practised in the equity jurisdiction of the [New South Wales] Supreme Court'.[137]  This was critical to the result of the appeal.  Their Honours stated that it was important to pay close attention to the terms of the relevant rules and observed that '[l]earning that has developed in connection with … other rules cannot automatically be applied' to the New South Wales rules as then in force.[138]

   [136] Agar v Hyde [44] - [45].

   [137] Agar v Hyde [46].

   [138] Agar v Hyde [39].

2. Four features of the relevant rules were mentioned. First, originating process could be served outside Australia without prior leave of the court in various described circumstances (a regime quite unlike that provided for in the Chancery practice model found in O 10 RSC). Second, if the defendant did not enter an appearance, the plaintiff must obtain leave of the court to proceed. Third, a prescribed notice had to accompany the originating process. Among other things, the notice informed the defendant that the court may set aside service where it was not authorised by the rules (ie it was not one of the circumstances where service was permitted) or the court was an inappropriate forum. Fourth, the rules made provision for the court to set aside the originating process or service of the originating process.[139]

   [139] Agar v Hyde [40] - [41].

3. The plurality observed that the New South Wales rules under consideration marked a departure from the models based on the former Chancery practice.  In particular, the rules did not require leave to serve out of the jurisdiction.  Nor did the rules require that the party seeking to serve out of the jurisdiction demonstrate a prima facie entitlement to the relief sought in the originating process.[140]

   [140] Agar v Hyde [47].

4. In this court the respondent relied on the following passage from the plurality's reasons:[141]

   In deciding whether [the relevant rule] applied, and thus permitted service outside Australia of the originating process in these two actions, attention must be directed to the way in which the claims made by the respondents are framed.  The paragraphs speak of 'proceedings [which] are founded on' a specified matter such as a cause of action arising in the State or a tort committed in the State.  That focuses attention upon the nature of the claim which is made.  That is, is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations, is a cause of action arising in the State?

   The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff's claim.  The Court of Appeal was wrong to make such an assessment in deciding whether the Rules permitted service out. … The application of these paragraphs of [the rule] depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial.  Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs of [the rule], service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.

   Often enough, the statement of claim will reveal all that it is necessary to know to assess whether a plaintiff's claim is of the requisite kind. [142]  (original emphasis italicised; underlined emphasis added)

   [141] Respondent's submissions par 15B WAB 51 - 52; Appeal ts 46.

   [142] Agar v Hyde [50] - [52]. See also [54].

5. The respondent contended that this was a statement of general principle that did not turn specifically on the construction of the relevant rules.[143] We reject that submission. It is inconsistent with the reasons of the plurality read as a whole. Their Honours made it plain that the rules under consideration departed from the Chancery practice. It was said that close attention had to be paid to the rules and the ways in which they differed from rules that apply and had been considered in other places. Developed understanding in connection with other models permitting service out of the jurisdiction was not to be applied automatically. So read, in the passage reproduced at [112] above the plurality was describing the operation and effect of the New South Wales rules properly construed. It is not a statement of general principle that applies to O 10 RSC.

   [143] Respondent's submissions par 15C WAB 52.

6. Similarly, so far as the respondent relied on the Victorian decision of Madden International Ltd v Lew Footwear Holdings Pty Ltd,[144] we view the Court of Appeal in Victoria in that decision as having adopted the approach in Agar v Hyde because of the similarity between the relevant Victorian rules for service out of the jurisdiction and the rules under consideration in Agar v Hyde.[145]  Indeed Mandie JA (Beach JA and John Dixon AJA agreeing) unequivocally grounded this aspect of Madden International Ltd in the proper construction of the Victorian rules.[146]

   [144] Madden International Ltd v Lew Footwear Holdings Pty Ltd [2015] VSCA 90; (2015) 50 VR 22.

   [145] Madden International Ltd v Lew Footwear Holdings Pty Ltd [18] - [25].

   [146] Madden International Ltd v Lew Footwear Holdings Pty Ltd [18] - [19]. See also [24] ('the language of the rule does not permit the court to engage in any assessment of the merits of the dispute').

7. The respondent also relied on what was said by the plurality in Agar v Hyde as to whether a claim had insufficient prospects of success:[147]

   [T]he same test should be applied in deciding whether originating process served outside Australia makes claims which have such poor prospects of success that the proceeding should not go to trial as is applied in an application for summary judgment by a defendant served locally.[148]

   [147] Respondent's submissions par 15B WAB 51 - 52.

   [148] Agar v Hyde [60].

1. The Vienna Convention does not contain a direct analogue to a first category Masters v Cameron contract.  However, in dealing with formation of a contract, pt II of the Convention has a number of articles dealing with offers (art 14 and art 15), revocation and rejection of offers (art 16 and art 17) and acceptance of offers (art 18 - art 22).  In terms of offers, a proposal for concluding a contract addressed to a specific person constitutes an offer if it is 'sufficiently definite' and indicates the intention of the offeror to be bound in case of acceptance - a proposal being sufficiently definite if it indicates the goods and fixes or makes provision for determining the quantity and the price of the goods (art 14(1)).  An offer becomes effective when it reaches the offeree (art 15(1)).

2. As to acceptance, art 19 provides:

   (1)A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.

   (2)However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect.  If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.

   (3)Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

3. An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror (art 18(2)).

Submissions

1. The appellant argued that when the facts as set out at [7] - [29] above are considered as a whole:[205]

   1.In terms of a classic offer and acceptance analysis, the better view was that:

   (a)The letter of intent dated 16 January 2012 (see [22] above) was not intended to constitute an offer capable of acceptance or else was superseded by the purchase order dated 24 January 2012 (see [25] above) as directed to Micon Drilling.

   (b)Micon Drilling's order acknowledgment dated 26 January 2012 (see [27] above) with attached General Conditions of Business constituted a rejection of the respondent's offer by the purchase order and the making of a counter-offer.

   (c)The respondent accepted Micon Drilling's offer by Mr Wood's email of 30 January 2012 (see [28] above), which was received in Germany, or alternatively by its subsequent conduct in making payment of the prepayment invoice.

   2.If, rather than adopting an offer and acceptance analysis, regard was had to the course of dealings between the parties as a whole, it remained the case that the contract was with Micon Drilling and was subject to Micon Drilling's General Conditions of Business.

   [205] Appellant's submissions pars 54 - 55 WAB 18; Appeal ts 31.

2. Counsel for the appellant emphasised that, in forming a view as to which party had the better of the argument, it was important that the parties accepted that there was a contract wholly in writing - accordingly the court was in a position to reliably form a view on the available material (the relevant documents being in evidence before the court).[206]

   [206] Appeal ts 31.

3. The respondent submitted that, in terms of the explication in Brownlie, it had supplied a plausible evidential basis: the respondent relied on the exchange of correspondence that it said constituted an offer and acceptance giving rise to a contract between the parties (being, on its case, a contract formed within Western Australia and governed by Western Australian law).[207]

   [207] Appeal ts 51 - 52, 60, 72, 75; Respondent's submissions par 21A(a) WAB 56.

4. The respondent did not put its case in terms of the first limb of the Brownlie explication.  In that respect, as we have endeavoured to explain, the establishment of a plausible evidential basis for the jurisdictional condition involves engaging in a comparative exercise to determine whether the plaintiff has the better argument on the available material.  The respondent disclaimed any analysis of the relative merits of the contracts that the parties were contending for.  Counsel for the respondent referred to having a plausible but 'contested' or 'disputed' basis falling within the third limb of Lord Sumption JSC's explication.[208]

   [208] Appeal ts 51 - 52.

5. Consistent with that approach, the respondent contended that the real issue was whether the master could reliably have formed a view on the critical questions of contract formation and the proper law of the contract without hearing from any witnesses.[209]  The respondent said that this was a case where the court could not come to a reliable assessment.[210]  Accordingly, the court ought not go so far as to test the relative merits of the competing cases on contractual formation as had been contended for by the appellant and the respondent.[211]  The respondent said that evidence of antecedent conduct, prevailing circumstances and post-contractual conduct may be admissible at trial to determine whether, and between whom, a contact was formed.[212]  The respondent contended that the evidence of the parties' dealings was incomplete and this was a case where the master could not reliably take a view as to who had the better of the argument.[213]  The respondent criticised the appellant as, in substance, inviting the court to make a final judgment on affidavit evidence without trial in circumstances where the facts could not be reliably ascertained.[214]

   [209] Respondent's submissions par 21B WAB 56 - 57.

   [210] Appeal ts 53.

   [211] Appeal ts 59.

   [212] Respondent's submissions par 21C WAB 57.

   [213] Respondent's submissions pars 21D - 21E WAB 57.

   [214] Respondent's submissions pars 23 - 25 WAB 58 - 59.  See also par 33 WAB 61.

6. The respondent identified three respects in which the evidence of the parties' dealings was incomplete (there being no evidence as to these matters):[215]

   1.There are references in the correspondence to the parties arranging a teleconference in November 2011 as part of the technical discussions as to the drilling rods to be manufactured for the respondent.

   2.There is reference to an animation being under construction.

   3.There are references in the correspondence to further telephone discussions between the parties in mid-January 2012.

Disposition

[215] Respondent's submissions par 21D WAB 57.  The respondent referred to materials in the affidavit of A D Bereyne sworn 18 May 2020, namely, attachments 'ADB-7', 'ADB-10', 'ABD-11', 'ABD-12', ABD-13', 'ADB-14' GAB 331‑332, 346, 353, 357, 365, 369-370.

1. When the correspondence is considered in context there is nothing to suggest that there is significant additional evidence that would mean that no reliable assessment can be made as to which party has the better argument on the questions of contract formation and proper law.  It should be remembered that, on the respondent's own case, the supply contract was written.  The relevant documents as relied on for the respondent's pleaded case are before the court.  Indeed, even so far as the respondent pleaded that the parties engaged in correspondence and negotiations in agreeing the specifications and requirements of the drilling rods, the particulars of the negotiations are all of written communications.[216]

   [216] Respondent's statement of claim dated 24 December 2019 par 6 BAB 31 - 32.

2. The 1 November 2012 email exchange that proposes a teleconference to deal with technical aspects of the drilling rod design (see [179.1] above) is not even referred to in the respondent's particularisation of the alleged specifications and requirements.  Anything that was discussed can be taken to have been subsumed in the subsequent contractual correspondence.  The reference to an animation (see [179.2] above) was a requirement imposed by the respondent to assist with its marketing proposals.  There is nothing to suggest it may affect questions of contract formation or the proper law of the contract.  The emails containing the January 2012 references to telephone calls (see [179.3] above) are also not relied on in the respondent's particularisation of the alleged specifications and requirements.  Nor, in context, is there anything to suggest that the conversations were to address matters that were material to the issues concerning the jurisdictional conditions: an email of 10 January 2012 foreshadowed a conversation to discuss steel prices and an email of 13 January 2012 referred to a chat about technical aspects of the drilling rods.  An email exchange over 17 and 18 January 2012 simply referenced the last telephone conversation without suggesting that anything of consequence was discussed which did not find its way into the 16 January 2012 letter of intent.

3. When due consideration is given to the nature of the respondent's pleaded case, and the evidence before the court, we are satisfied that the present case is one which realistically does not require any further investigation for the purpose of reliably assessing which party has the better argument on contract formation.  The same can be said for the question of the proper law of the contract, as is the subject-matter of ground 8.  The areas of incomplete evidence that the respondent identified as precluding the formation of a reliable assessment are, properly understood in the context of the respondent's case, the available material and the jurisdictional issues for determination, inconsequential in assessing which party has the better argument.

4. We turn then to the assessment of which party has the better argument on contract formation.

5. Counsel for the respondent stressed that the letter of intent dated 16 January 2012, as was said to have been accepted by Mr Schwarzburg in his email of 19 January 2012, was addressed to the appellant[217] - more specifically it was addressed to the 'managing director' of the appellant.  To that counsel added that the contract, at its heart, was one for the custom engineering of the drilling rods.  On the respondent's case that design work was performed by the appellant.[218]

   [217] Appeal ts 72.

   [218] Appeal ts 77.

6. It is undeniable that the respondent's letter of intent was addressed to the appellant.  However, the preceding exchanges by way of contractual negotiation were in the name of Micon Drilling.  This included the quotations of 13 September 2010, 9 February 2011, 26 April 2011 and 20 September 2011.  The associated correspondence was also sent on behalf of Micon Drilling.  True it is that some of the accompanying materials mentioned the appellant; for example, the engineering drawings.  But it is one thing to use such engineering drawings to designate the necessary technical specifications for the drilling rods to be manufactured; it is another to say that such materials identify the party who is undertaking an obligation to supply the drilling rods.  The use of engineering drawings prepared by the appellant by way of specification does not mean that the drilling rods were being ordered from the appellant.

7. Nevertheless, had the parties' exchanges ended with the email of 19 January 2012, the reference to the appellant in the letter of intent would have been persuasive in terms of identifying the respondent's contractual counterparty.  This is subject to two provisos.  First, the letter of intent contemplated the subsequent preparation of an 'official' order.  Second, the letter of intent provided as to quantity that the order would be for 'a minimum of 400 pieces' - thereby establishing a minimum quantity but not an actual (or maximum) quantity of drilling rods that were to be supplied.  In the first respect there is an unresolved issue as to whether the letter of intent is sufficiently definite and indicates the respondent's intention to be bound in case of acceptance.  In the second respect there is a further issue as to whether the letter of intent is sufficiently definite.  Prima facie the letter of intent does not satisfy art 14(1)'s criteria of fixing or making provision for determining the quantity of the goods to be supplied.

8. It is not necessary to determine the unresolved issues in relation to the letter of intent.  The parties' exchanges did not end with the email of 19 January 2012.  Instead, as was foreshadowed by the respondent's 17 January 2012 email provided by way of precursor to the letter of intent, the respondent issued the purchase order on 24 January 2012.  It was integral to the respondent's contract formation analysis that the purchase order simply restated an immediately binding contract (formed by the letter of intent and the 19 January 2012 email) in terms that were fuller or more precise but not different in effect.  That cannot be accepted.  There were significant differences between the respondent's letter of intent and the respondent's letter of 24 January 2012 as accompanied the purchase order (see [26] above).

9. Two of the changes each constitute a material alteration which is incompatible with the purchase order of 24 January 2012 being the fuller or more precise restatement of a first category Masters v Cameron contract. First, the letter of 24 January 2012 provided for the supply of a definite number of drilling rods (430) rather than a minimum quantity of 400 drilling rods. Second, there was the change in the terms of payment and the passing of title as reproduced at [26.6] above. In both respects these were new terms which could not be imposed unilaterally. The material alterations have the consequence that the purchase order is properly characterised as a fresh offer to purchase rather than a fuller or more precise restatement of a first category Masters v Cameron contract.  It was an offer which exhibited some ambiguity as to the respondent's intended counterparty.  The formal purchase order was addressed to Micon Drilling but the accompanying letter, which was referred to in the order, was addressed to the appellant.  Moreover, the letter described itself as detailing the terms agreed between the respondent and the appellant.

10. The respondent's offer the subject of the purchase order was purportedly accepted by Micon Drilling's order acknowledgement dated 26 January 2012 (the order acknowledgment accompanying Ms Bossin's email of 27 January 2012 and being sent with Micon Drilling's prepayment invoice dated 27 January 2012).  The order acknowledgment was unequivocally sent on behalf of Micon Drilling rather than the appellant.  But, in 'acknowledging' the order, Micon Drilling did so on the basis of its attached General Terms and Conditions of Business.  Those General Terms and Conditions of Business were a comprehensive set of terms and conditions which, in part, covered matters which had not previously been addressed (eg governing law, force majeure, compensation claims and guarantee and warranty claims).  Accordingly, in terms of art 19(1) of the Vienna Convention, the order acknowledgement was not an acceptance; it was instead a rejection of the offer and a counter-offer.

11. In identifying the formation and terms of the parties' contract, Micon Drilling's offer to the respondent (in the form of the order acknowledgement) was the last substantial exchange between the parties.  There are two possible points at which the offer was accepted.  The first is Mr Woods' email of 30 January 2012.  Alternatively, there was acceptance by the payment of Micon Drilling's prepayment invoice.  It is not necessary to determine when the acceptance occurred.  In either case the acceptance was of Micon Drilling's offer and resulted in a contract between the respondent and Micon Drilling on the terms and conditions comprised in the respondent's purchase order of 24 January 2012 and the General Terms and Conditions of Business attached to Micon Drilling's order acknowledgement of 26 January 2012.

12. The respondent's case for satisfaction of the jurisdictional gateway depended, among other things, on it establishing a good arguable case that a first category Masters v Cameron contract was formed when the respondent received Mr Schwarzburg's email dated 19 January 2012. The appellant contested that analysis and presented an alternative case as to contract formation - one which had Micon Drilling as the respondent's contractual counterparty. For the reasons previously given the court is in a position to form a reliable assessment on which party has the better argument for contractual formation even taking into account the limitations which an interlocutory hearing imposes on such a determination. Accordingly, in establishing a plausible evidential basis for jurisdiction, the respondent had to show that it had the better argument on the available material. The respondent has not satisfied that evidential standard. To the contrary, as explained at [183] - [190] above, the documentary evidence reveals the appellant as having the better of the argument on the material available.

13. The master should have found that the respondent had not established a good arguable case that it had contracted with the appellant.  Ground 5 must be upheld.

14. Ground 7 was made out if ground 5 was upheld in accordance with the appellant's analysis - which, as has been seen, provided for the formation of the contract in the Federal Republic of Germany.  Separately, in contending that the respondent had not established a good arguable case that the contract was made within Western Australia, the appellant contended that the master erred in concluding that Mr Schwarzburg's email of 19 January 2012 (see [23] above) was received at the respondent's head office in Western Australia.  The appellant relied on art 10(1), art 23 and art 24 of the Vienna Convention[219] and an absence of direct evidence that the email was received at the respondent's head office in Perth.[220]

    [219] Appellant's submissions par 65 - 67 WAB 20 - 21.

    [220] Appellant's submissions par 68 WAB 21.

15. It is appropriate, for the sake of completeness, to consider this aspect of ground 7 on the basis that, consistently with the respondent's contended for contractual analysis, Mr Schwarzburg's email of 19 January 2012 was the relevant putative acceptance of an offer leading to a first category Masters v Cameron contract.  It was in that context that the master held it was arguable that the contract was formed in Western Australia.[221]

    [221] Primary reasons [15].

16. The appellant's argument based on the Vienna Convention may be put aside.  It is enough to consider the appellant's second argument.  In this respect the master concluded that a contract is made at the place where the communication of acceptance is received.[222]  The master went on the state:

    As is evident from the time zone notations on Mr Schwarzburg's email acceptance which record the time zone as '+0800' the plaintiff received that communication of acceptance at its head office in Western Australia.  It is then arguable the contract was formed in Western Australia.[223]

    [222] Primary reasons [15].

    [223] Primary reasons [15].

17. The email being referred to was Mr Schwarzburg's email of 19 January 2012 as sent to Mr Woods.  Various emails sent by Mr Woods noted his office address as being a location in South Australia.  However, as is apparent from the passage reproduced in [195] above, the master did not find that the email was read and received at Mr Woods' South Australian office address.  Rather, because the email had the notation '+0800' the master inferred that the email was read and received in Western Australia.

18. The notation appears in the 'sent' details of the email.  The full reference is as follows:

1. There is no evidence as to what is signified by the '+0800' notation.  Plainly it may refer to a time zone that is 8 hours plus Greenwich Mean Time - such as is ordinarily the case in Western Australia.  But the notation appears in the sent details of the email; it does not denote at what time or where the email was received.  It may just signify that the email was sent at a time that equated to 12:56:01 am on 19 January 2012 in a time zone applying 8 hours plus GMT.

1. On the available material no reliable assessment can be made as to which party has the better argument as to where the email was received.  It would suffice if the respondent presented a plausible albeit contested evidential basis.  We are, however, unable to accept that the respondent has met this threshold.  There is, on the face of the email, no evidence as to what time or where the email was read and received.  At the most, on the face of the email, it establishes the time at which the email was sent.  The notation is an insufficient basis to conclude that the respondent has established a good arguable case that the contract was made in Western Australia (assuming, contrary to our earlier conclusion on ground 5, there was a good arguable case that there was a first category Masters v Cameron contract based on the 19 January 2012 email having accepted an offer as constituted by the letter of intent).

2. Ground 7 succeeds.

Ground 8: Whether good arguable case that contract was governed by the law of Western Australia

1. Ground 8 necessarily succeeds given our conclusions in relation to ground 5.  In particular, in assessing the parties' competing cases as to formation of the contract, we have concluded that the appellant has the better argument on the available material.  It follows that the respondent is unable to establish a good arguable case that the contract was governed by the law of Western Australia.  The circumstance that the better view is that the supply contract incorporates Micon Drilling's General Terms and Conditions of Business precludes satisfaction that there is a good arguable case that the contract by its terms or implications is governed by the law of Western Australia.  The General Terms and Conditions of Business provide for the application of the law of the Federal Republic of Germany (see [27.1] above).

2. While, for this reason, ground 8 must succeed in any event, as with ground 7 it is appropriate to consider ground 8 on the basis of the respondent's contended for contractual analysis.  It was on this basis that the master held it to be arguable that the proper law of the contract was the law of Western Australia.[224]  The respondent's suggested contract includes the terms incorporated by the purchase order and the letter dated 19 January 2012.  Accordingly, one of the contractual terms was that the price per drilling rod was to be 'ex works' from the supplier's premises at Nienhagen in Germany.

Submissions

[224] Primary reasons [16] - [18].

1. The appellant submitted that the respondent had not established a good arguable case that the contract was by implication governed by the law of Western Australia.  It relied in particular on:

   1.The evidence not supporting a finding that the contract was made in Western Australia.

   2.The currency of payment, ie Euros rather than Australian dollars.

   3.The place of payment, ie the Federal Republic of Germany.

   4.Delivery occurring 'ex works' in Germany - meaning that the appellant's (or, on the appellant's case, Micon Drilling's) obligations in relation to the manufacture and delivery of the goods were to be completed in Germany.

2. The appellant acknowledged that the fact that the language of the contract was English rather than German pointed to Australia as the system of law with which the contract had its closest and most real connection.  However, it was suggested that this was neutral as between Western Australia and South Australia - that being where the respondent's critical employees were located and where, on one view, the contract may have been formed.

3. So far as the master had relied on the respondent being resident in Western Australia,[225] the appellant pointed out that it and Micon Drilling were resident in the Federal Republic of Germany.  Thus, on the appellant's case, this was a neutral factor.  The master also suggested that the contract did not contain many of the types of provisions which might be found in a German contract.[226]  In response the appellant said there was no evidence as to what terms and conditions one would expect to find in a contract governed by German law.  That submission must be accepted.  To the extent that the master relied on the subject matter of the contract as being for the engineering, manufacture and supply of drilling rods for use in Australia[227] the appellant said there was no evidence that the rod specifications had any uniquely Australian characteristics.  It was suggested, in any event, that there was no reason why the contract should be governed by the law of the place whether the goods were to be used rather than the place where they were manufactured and sold.

   [225] Primary reasons [16].

   [226] Primary reasons [16].

   [227] Primary reasons [16].

4. The respondent's submissions in answer to ground 8 were brief.  Ground 8 was not addressed by counsel for the respondent in oral submissions.  In written submissions, apart from responding to whether significance attached to the specification that the price per rod was 'ex works',[228] the respondent relied on its submissions in answer to grounds 4, 5 and 7.[229]  Presumably the contention is that the appellant was seeking a finding based on the documents, and inferences therefrom, without trial in circumstances where the pertinent facts could not be reliably assessed - a contention already rejected in the context of ground 5 (see [178] - [182] above).  Otherwise the respondent sought to answer ground 8 by submitting that the appellant did not contend that the respondent's assertion that the contract was governed by the laws of Western Australia is unarguable as a matter of law.[230]

Disposition

[228] Respondent's submissions par 38 WAB 62.

[229] Respondent's submissions par 37 WAB 62.

[230] Respondent's submissions par 37 WAB 62.

1. The question is not whether the respondent's position is unarguable as a matter of law but rather whether the master erred in failing to find that the respondent had not established a good arguable case that the contract was by implication governed by the law of Western Australia.

2. Under the general law, the proper law of a contract is the system of law by reference to which the contract was made or that with which it has its closest and most real connection.  However, if it is apparent from the terms of the contract that the parties intended a particular system of law to apply, their intention will prevail.[231]  Where, properly construed, the contract does not specify a choice of governing law, the court adopts a multifactorial approach in determining the system of law by which the contract was made or with which it has its closest and most real connection.

   [231] Akai Pty Ltd v People's Insurance Co Ltd [1996] HCA 39; (1996) 188 CLR 418, 440 - 442.

3. The relevant factors include:[232]

   1.The nature and subject matter of the contract.

   2.The place where the contract was made.

   3.The place of residence or business of the parties.

   4.The place of performance of the contract.

   5.The language of the contract.

   6.The place and currency of payment.

   [232] Akai Pty Ltd v People's Insurance Co Ltd (437); Mendelson-Zeller v T & C Providores Pty Ltd [1981] 1 NSWLR 366, 368 - 369; Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488 [72]; Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 3] [2010] WASC 141 [207].

4. However, in modern times the place where the contract is made is commonly afforded little weight where the contract is concluded by electronic means rather than face to face.[233]

   [233] Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 [81].

5. The contract was one to manufacture and supply drilling rods.  It is unclear where the contract was made.  For the reasons given in relation to ground 7 the respondent has not established a good arguable case that the contract was made in Western Australia.  In any case, as the contract was concluded by electronic means, little weight should be given to this factor.  The parties reside in the Federal Republic of Germany and Western Australia - although the respondent also has a relevant place of business in South Australia.  The contract was in English.  While this factor provides some support for the respondent's position, we give it little weight.  The parties' prior communications were in English and it is apparent that English was a convenient language for the parties to communicate in.  The contract required payment in Euros and, as payment was to be made to the supplier, it may be inferred that the payment was to be made to the supplier in the Federal Republic of Germany.  We would, however, place relatively little weight on the place of payment given that the amounts involved meant it was likely that payment would be effected by electronic means.

6. The factors mentioned in [211] above point in different directions when assessing the better argument as to the proper law of the contract.  No one of those factors is determinative or even persuasive.  By contrast, given the nature and subject matter of the contract, the place at which the supplier is to perform its obligations under the contract is of critical importance in evaluating the factors which go to determine the proper law of the contract.

7. The respondent submitted that the significance of the price being expressed to be 'ex works' was a matter for trial.[234]  In context the only construction of that phrase that is reasonably open is that the price contemplated delivery at the supplier's premises in Nienhagen, Germany, ie the supply contract was a contract ex works.  The respondent did not suggest any alternate construction.  That the contract was an ex works contract providing for delivery at the supplier's premises is consistent with other indicators in the purchase order - the rods were to be packed in containers supplied by the purchaser and were to be suitable for international shipping.  Accordingly, the contract was one for the goods to be delivered at the supplier's premises; transport and export thereafter was a matter for the respondent purchaser.

   [234] Respondent's submissions par 38 WAB 62.

8. When this is appreciated, the contract has a much closer and more real connection with the Federal Republic of Germany than Western Australia.  The obligations of the supplier to manufacture and supply the drilling rods were all to be performed in Germany insofar as the supplier's obligations were complete on delivery at the supplier's premises in Nienhagen.  Payment was to be made in Germany.  The currency of the contract was the currency of Germany.  The goods to be supplied to the respondent were German manufactured goods.  By contrast, in support of the respondent's position, the only countervailing factors are the language of the contract and the respondent's place of residence - both being matters of relatively little weight.

9. The respondent did not a establish a plausible evidential basis for the contention that the proper law of the contract was the law of Western Australia.  To the contrary, in circumstances where the court is in a position to form a reliable assessment, the better argument on the available material is that the contract is governed by the law of the Federal Republic of Germany.  The master should have found that the respondent had not established a good arguable case that the contract by its terms or implications was governed by the law of Western Australia.  Ground 8 must be upheld.

Grounds 1 - 3: The alleged claim in negligence

1. The master found that the respondent was not bringing a claim in tort for negligence.[235]  The appellant said that, on a fair reading of the writ and the statement of claim, there was such a claim.  Moreover, no leave to serve outside Australia having been sought or obtained in respect of such a cause of action, the writ and service of the writ should be set aside so far as it related to the tortious claim.[236]

   [235] Primary reasons [11].

   [236] Appellant's submissions pars 19 - 21 WAB 9 - 10.

2. The respondent said that, to the extent there was ambiguity on the face of the writ as to whether it was claiming for a breach of a contractual or tortious duty of care, any doubt was extinguished by its counsel's assurance before the master that the claim was purely contractual.[237]  It was, however, accepted that if the writ included a tort claim, the tort claim could not survive.[238]

   [237] Respondent's submissions par 10 WAB 49.

   [238] Appeal ts 81.

3. The causes of action pursued by the writ should be identified by an objective assessment of the indorsement to the writ rather than counsel's assurance. The terms of the indorsement are reproduced at [34] above. There is no ambiguity as to the causes of action raised by the writ. There are claims for (1) damages for breach of contract; (2) damages for breach of a 'duty of care' in relation to the performance of the contract; and (3) damages for breach of an implied condition in terms of s 14 of the Sales of Goods Act (ie an implied condition as to fitness or quality).  A reference to a breach of a duty of care conventionally denotes a claim in negligence.  That is the only reading that is open on the indorsement.  The claim for damages for breach of a duty of care is in the alternative to the claim for damages for breach of contract.  A claim for damages for breach of a contractual duty to exercise reasonable skill, care and diligence is within the rubric of a claim for damages for breach of contract.  The claim for damages for breach of a duty of care must be something else.  It can only be a reference to a claim in tort for negligence.  This is borne out by the statement of claim which, in terms, advances a claim in tort for negligence.[239]

   [239] Respondent's statement of claim dated 24 December 2019 pars 17, 18, 20(c) BAB 38 - 39.

4. Ground 1 has been made out. It follows that, as counsel for respondent conceded, the writ cannot survive so far as it relates to the claim in tort for negligence. This is for the reasons expounded in grounds 2 and 3, which must also be upheld given the principles referred to at [75] - [76] above.

Conclusion and proposed orders

1. It will be recalled that the question of leave to appeal was stood over.  The respondent opposed leave to appeal saying, among other things, that the master's decision was not plainly wrong and the appellant's substantive rights were not adversely affected.

2. The appellant's success on grounds 1 - 3 might not, standing alone, justify leave to appeal.  So far as the appellant could simply apply to strike-out the offending paragraphs of the statement of claim that aspect of the decision would not, if left unreversed, cause substantive injustice.  However, the appellant's success on the appeal is not limited to grounds 1 - 3.  The question of leave must be considered having regard to the circumstance that we would also uphold grounds 4, 5, 7 and 8.

3. The master was, in our respectful view, in error in dismissing the appellant's application to set aside the issue of the writ and the service of the writ outside Australia. For the reasons set out above the respondent has not established a good arguable case for the jurisdictional gateway in O 10 r 1(1)(e)(iii) RSC. It is not in the interests of justice that the erroneous decision below should go unreversed by this court. The consequence of refusing leave to appeal would be that the primary court would proceed to determine the dispute despite an absence of jurisdiction. There should be leave to appeal and the appeal should be allowed.

4. We would make orders that:

   1.The appellant has leave to appeal against the orders (Orders) of the Supreme Court of Western Australia made 30 November 2020 in action CIV/1259/2019.

   2.The appeal is allowed.

   3.The Orders are set aside and in substitution thereof there are orders that:

   (a)Paragraphs 1 and 2 of the orders of the Supreme Court of Western Australia made 12 February 2019 in action CIV/1205/2019 are set aside.

   (b)The service on the defendant of the writ of summons in action CIV/1259/2019 is set aside.

   (c)Action CIV/1259/2019 is dismissed.

5. The parties should be heard on the costs of the appeal and the primary proceedings.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AT

Associate to the Honourable Justice Vaughan

2 JUNE 2022

Bombardier [14], [17].