Motor Traders Warranty Investments Pty Ltd v Fortron Automotive Treatments Pty Ltd

[1997] FCA 1496

FEDERAL COURT OF AUSTRALIA

Private International Law - proper forum for proceedings - jurisdiction clause - weight to be given to non-exclusive jurisdiction clause - whether balance of factors favours the retention of the matter in Queensland despite jurisdiction clause.

Jurisdiction - discretionary considerations indicating the matter should be transferred to the District Court of Queensland.

Oceanic Sun Line Special Shipping Company Inc. v Fay (1988) 165 CLR 197 - foll.

Akai Pty Ltd v The People's Insurance Co Ltd (1996) 141 ALR 374 - cited

MOTOR TRADERS WARRANTY INVESTMENTS PTY LTD and GREGORY CLIVE PARR, KENNETH ROSS PICKARD, JOHN CHARLES DOOLEY AND KERRY RICHARD BOUSTEAD V FORTRON AUTOMOTIVE TREATMENTS PTY LTD

QG 75  OF   1997

JUDGE:        BEAUMONT J.
PLACE:        BRISBANE
DATE:          19 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 75  of   1997

BETWEEN:

MOTOR TRADERS WARRANTY INVESTMENTS PTY LTD
FIRST APPLICANT

GREGORY CLIVE PARR, KENNETH ROSS PICKARD, JOHN CHARLES DOOLEY AND KERRY RICHARD BOUSTEAD
SECOND APPLICANTS

AND:

FORTRON AUTOMOTIVE TREATMENTS PTY LTD
RESPONDENT

JUDGE:

BEAUMONT J.

DATE OF ORDER:

19 NOVEMBER 1997

WHERE MADE:

BRISBANE

ORDERS:

1. Motion to transfer the venue of the proceedings to Western Australia refused.

1. Transfer the proceedings to the District Court of Queensland;  suspend the operation of this order up to and including 23 December 1997.

1. A Registrar of the Court to conduct a mediation conference in this matter at a date to be fixed.

1. No order for costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 75 of 1997

BETWEEN:

MOTOR TRADERS WARRANTY INVESTMENTS PTY LTD
FIRST APPLICANT

GREGORY CLIVE PARR, KENNETH ROSS PICKARD, JOHN CHARLES DOOLEY AND KERRY RICHARD BOUSTEAD
SECOND APPLICANTS

AND:

FORTRON AUTOMOTIVE TREATMENTS PTY LTD
RESPONDENT

JUDGE:	BEAUMONT J.
DATE:	19 NOVEMBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

BEAUMONT J:

Before the Court is an application made on the part of the respondent to change the venue of this matter from the Queensland District Registry of the Federal Court to the Western Australia District Registry of this Court.  Alternatively, there is a further application made on behalf of the respondent that the matter be remitted or transferred to the District Court of Western Australia at Perth.

By the applicant's statement of claim, it appears that the causes of action relied upon are first, misleading and deceptive conduct, which is alleged to have occurred in connection with a distributorship arrangement for the respondent's products in the State of Queensland. It is alleged that this conduct is contrary to the provisions of s 52 of the Trade Practices Act 1974. A further cause of action is pleaded in contract. It is said that, arising out of the distribution arrangement, the respondent was in breach of contract. In respect of both causes of action, the damages claimed are in the amount of $50,441 and are in the form of reliance damages.

On behalf of the respondent, a cross-claim has been foreshadowed by way of a claim in debt for goods sold and delivered.  The possibility of a passing-off claim has also been mentioned as the basis of a further cross-claim. 

There is in evidence before the Court an agreement containing a provision in the following terms:

“This Agreement shall be subject to and construed in accordance with the laws of Western Australia and as a contract the proper law of which is the law of Western Australia and the parties hereto agree that in the event of any dispute in connection with this Agreement, that the proper Courts of Western Australia shall have jurisdiction in respect of such dispute.”

Understandably, the respondent places substantial reliance upon this provision.  In Oceanic Sun Line Special Shipping Company Inc. v Fay (1988) 165 CLR 197 at 224, Brennan J said:

“Where the parties to a contract agree that the courts of a foreign country shall have exclusive jurisdiction to decide disputes arising under the contract or out of its performance, the courts of this country regard that agreement as a submission of such disputes to arbitration and will, in the absence of countervailing reasons, stay proceedings brought here to decide those disputes.”

(See also Akai Pty Ltd v The People's Insurance Co Ltd (1996) 141 ALR 374).

Two points should be noted here.  The first is that the provision presently relied upon is not an exclusive jurisdiction clause.  It is an agreement to submit to the jurisdiction of the courts of Western Australia, but not exclusively so.  The second matter that should be observed is that even where an exclusive jurisdiction provision is in place, it will not always be decisive in a context such as the present.  As Brennan J pointed out, such a provision will be given effect to only in the absence of countervailing reasons.

In the present case, as I have indicated in the course of argument, were it not for the presence of the jurisdiction provision in the present contract, the balance of convenience would have dictated that the venue of these proceedings be in Queensland.  The subject matter of the dispute concerns business operations to be conducted in the State of Queensland.  All of the applicants’ witnesses are resident in the State of Queensland, and the critical negotiations also took place in the State of Queensland.  Although the respondent's witnesses reside in the State of Western Australia, it may be possible, were the matter to remain in the Queensland Registry, for the evidence of the respondent's witnesses to be taken by video-conference. 

Whilst I am prepared to give the jurisdiction clause some weight in the present application, it is, for the reasons I have given, by no means decisive.  Weighing all the factors, it seems to me that the balance of factors favours the retention of this matter in the State of Queensland.

Even if I had been dealing in the present matter with an exclusive jurisdiction clause, there would have been much to be said for the same view being taken.  In short, I am of the view that the litigation has an essentially Queensland flavour to it, and that fact should be given effect to in deciding where the venue of the trial should be.

I therefore refuse the motion, insofar as it seeks to change the venue to the State of Western Australia.  However, as I have also foreshadowed in argument, given the small amount of the claim, and taking account also of the fact that the cross-claim appears to be in a similar amount, discretionary considerations indicate that unless this matter raises some particular point of legal principle of a novel kind (that is to say, were the present case a test case), ordinarily it ought to be dealt with in the District Court.  It is a matter well within the range of the jurisdiction of the District Court.  Moreover, the case, as I perceive it at the moment, does not appear to raise any particular novel or important legal question.  It will be a case which will depend upon issues of essentially a factual kind.  That being so, it is appropriate that the principal proceedings be dealt with by the District Court of Queensland.

I therefore order that the proceedings be transferred to the District Court of Queensland.  I suspend the operation of that order up to and including 23 December 1997 for the following reason.  As I previously indicated, the amount of the claim and of the foreshadowed cross-claim together barely exceeds the sum of $100,000.  Even if the matter were to be remitted to the District Court, where a lesser scale of fees would be applicable, it is apparent that, in a matter where the witnesses to be called on both sides of the record reside at the extreme edges of the continent, the costs of the resolution of the claim, and of the cross-claim, will escalate quickly to the point where they will, in all probability, exceed the amount of the claim and the cross-claim.  I have therefore suggested to the parties that a Registrar of this Court should consider conducting a mediation conference in this matter.  This suggestion is in the hope that such a conference will be the best forum for resolution if this matter proves to be one involving a doubtful claim, and perhaps a doubtful cross-claim.  That is, if there is some area of legitimate dispute as to the merits of the claim and the cross-claim, the parties should address the question of compromise.  I therefore direct that a Registrar of this Court conduct a mediation conference in this matter at a date to be fixed.

There will be no order for costs.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont

Associate:

Dated:            19 November 1997

Counsel for the Applicant:	Ms Skennar
Solicitor for the Applicant:	McCarthy Palethorpe & Blanch
Counsel for the Respondent:	Mr R Morgan
Solicitor for the Respondent:	McKays, Solicitors, as agents for Stables Scott
Date of Hearing:	19 November 1997
Date of Judgment:	19 November 1997