Pertsch v P T John Holland Constructions Indonesia
[2001] QSC 127
•2/05/2001
SUPREME COURT OF QUEENSLAND
CITATION:Pertsch v. P.T. John Holland Constructions Indonesia [2001] QSC 127
PARTIES: NICHOLAS PERTSCH
v.
P.T. JOHN HOLLAND CONSTRUCTIONS INDONESIA (Applicant)
FILE NO/S: S189 of 2000
DIVISION: Supreme Court Trial Division
PROCEEDING: Application for a stay of proceedings
ORIGINATING COURT:
Supreme Court at Mackay
DELIVERED ON: 2 May 2001
DELIVERED AT: Townsville
HEARING DATE: 23 April 2001
JUDGE: Cullinane J
ORDER: Application dismissed with costs
CATCHWORDS: STAY OF PROCEEDINGS – FORUM NON CONVENIENS – Whether the Applicant has demonstrated that the forum chosen is a clearly inappropriate forum – Whether litigation in the forum chosen by the Plaintiff is likely to be vexatious or oppressive or amount to an abuse of process requiring a stay of proceedings to avoid any consequent injustice.
Akai Pty. Ltd. v. The People’s Insurance Company Limited
(1996) 188 CLR 418
Amin Rasheed Corporation v. Kuwait Insurance Co. (1984) AC 50
Bonython v. Commonwealth of Australia (1951) AC 201
Coupland v. Arabian Gulf Petroleum Co. [1983] 1 WLR
1136
Henry v. Henry (1995) 185 CLR 571
Masters v. Cameron (1954-55) 91 CLR 353
Oceanic Sunline Special Shipping Co. Inc. v. Fay (1988) 165
CLR 197
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Sayers v. International Drilling Co. NV [1971] 1 WLR 1176
Seereederei Baco Liner GMBH v. Owners of Ship “Al Aliyu”
(2000) FCH 656
Voth v. Manildra Flour Mills Pty. Ltd & Anor (1990) 171
CLR 538
COUNSEL: K. Holyoak SC for the applicant
D.V.C. Mc Meekin SC for the respondent
SOLICITORS: Barry & Nillson for the applicant
Macrossan & Amiet for the respondent
[1] This is an application by the Defendant seeking a stay of proceedings instituted by the Plaintiff against it in the Supreme Court of Queensland at Mackay. The Defendant claims that the Queensland Supreme Court is a forum non conveniens.
[2] The Plaintiff claims to have sustained injuries on the 24th February 2000 whilst employed as a plant maintenance manager by the Defendant at a coal mining project at Kalimantan in Indonesia. The Defendant had entered into an agreement with another company to perform works at the coal mine where the accident occurred. At the time of the accident the Defendant company was engaged in construction work in the preparation of the site for mining and associated activities.
[3] The Defendant is a company incorporated in Indonesia which has never been registered in Australia, nor has it conducted business in Australia, nor does it have, nor has it had any assets in Australia. It holds insurance in respect of this matter with an Indonesian member of an international Insurance Group.
[4] It is however a member of a group of companies known as The John Holland Group of Companies. It is owned as to 95% by a company registered in Singapore called John Holland Constructions (Singapore) Pty. Ltd., which is in turn wholly owned by a Hong Kong company named John Holland Asia Limited itself wholly owned by another Hong Kong company named John Holland Asia Holdings Limited. The shares in John Holland Asia Holdings Limited are equally owned by an Australian company John Holland Construction and Engineering Pty. Ltd. and Hume Industries (Malaysia) B.H.D., a Malaysian Company.
[5] The test to be applied on an application of this kind is that established in cases such as Oceanic Sunline Special Shipping Co. Inc. –v- Fay (1988) 165 C.L.R. 197, Voth
–v- Manildra Flour Mills Pty. Ltd & Anor. (1990) 171 C.L.R. 538 and Henry –v- Henry (1995) 185 C.L.R. 571.
[6] The Defendant/Applicant must show that the forum chosen by the Plaintiff is a clearly inappropriate forum as that test has been explained in those cases. The
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Defendant has to demonstrate that it would be oppressive or vexatious to permit the proceedings to continue in the local court in the sense in which those terms were elaborated by Deane J. in Oceanic Sunline Special Shipping Co. Inc. (supra).
[7] An application of this kind necessarily involves a balancing process with a consideration of the connections between the chosen jurisdiction and the subject matter of the action and the parties, the availability and appropriateness of an alternative forum and any advantages or disadvantages relating thereto, any legitimate juridical advantages to the Plaintiff in the chosen forum, the substantive law to be applied and questions of practical convenience concerning witnesses and the conduct of the litigation. I do not suggest that this is an exclusive list of the relevant considerations.
[8] A party who has regularly invoked the jurisdiction of the court has a prima facie right to insist upon its exercise but the significance of this factor will vary from case to case as was pointed out in Henry –v- Henry (supra).
[9] The grant of a stay is something which should be exercised only with great care and extreme caution and only in a clear case. See Oceanic Sunline Special Shipping Co. Inc. (supra) at 247 and Voth (supra) at 554.
[10] Ultimately the issue to be resolved is whether the Applicant has demonstrated that the forum chosen is a clearly inappropriate forum.
[11] I should mention that the Respondent in his affidavit expressed a lack of confidence in the legal system of Indonesia. Objection was taken to this.
[12] As the majority in the judgment in Voth (supra) pointed out at page 559:-
“There are powerful policy considerations which militate against Australian Courts sitting in judgment upon the ability or willingness of the courts of another country to accord justice to the Plaintiff in the particular case. Those policy considerations were not dissimilar to those which lie behind the principle of ‘judicial restraint or abstention’, which ordinarily precludes the courts of this country from passing upon
‘the provisions for the public order of another State’: See generally Attorney-General
(UK) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR and Amin Rasheed
Shipping corporation v Kuwait Insurance Co (1984) AC 50”.
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[13] There is no evidence before this court which would justify the making of any finding on the subject favourable to the Plaintiff and I disregard the expressions of belief and concern.
[14] The claim is advanced in both tort and contract and the Plaintiff has made it clear he intends to rely upon both. So far as tort is concerned, it was, I think it fair to say, common ground that I ought to proceed upon the basis that notwithstanding that the matter is currently before the High Court following the grant of special leave, the double actionability requirement in relation to a tort alleged to have been committed outside of Australia still applies. It was also common ground that the preponderance of authority is that in such a case the law to be applied in the litigation of a foreign tort which passes the double actionability test is the law of the forum.
[15] So far as contract is concerned, each of the parties urge upon the court different conclusions as to the proper law of the contract. Here there is no suggestion that the parties expressly or impliedly chose a governing law. It is necessary to form some impression for the purposes of this application as to what a court would be likely to conclude was the proper law of the contract. This requires a consideration of that system with which the transaction “has its closest and most real connection”. See Bonython v. Commonwealth of Australia (1951) AC 201 at 219 and also Akai Pty Limited v. The Peoples Insurance Company Limited (1996) 188 CLR at 418 where it was said at p. 437 citing the authors of Cheshire and North, Private International Law, 11th ed (1987) p.450 that the question is whether the law of a state or a territory is that in which the contract has “Its natural seat or centre of gravity".
[16] I will return to this question a little later.
[17] THE DEALINGS BETWEEN THE PARTIES.
The plaintiff is an Australian citizen who was born in Germany and came to Australia as a child. At all relevant times he has lived in Mackay. He had worked for a number of years in the mining industry and in 1995 he became aware of the possibility of a position with the Defendant in Indonesia as the result of a discussion he had with an employee of the Defendant who he met in Mackay and with whom he had previously worked. He gave this man a CV which was taken by him back to Indonesia. He was then contacted by Mr Hayford who was at the time a contracts manager for the Defendant and arrangements were made for him to be interviewed by another officer of the Defendant, one Ross Schriek who was the workshop manager. It appears Mr Schriek interviewed a number of people in Australia, one on whom was the plaintiff who he interviewed at Mackay in Mackay 1995.
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[18] The next contact which the plaintiff says that he had, with the Defendant, was with a Mr Hayford, again who telephoned him in Mackay from Jakarta and offered him a position apparently upon the recommendation of Mr Schriek. The plaintiff deposes to the fact that in that telephone conversation he accepted the position offered. He then received (by facsimile), some documents from Mr Hayford. These are FS4 and FS6 to the affidavit of Fiona Sennett filed on 19th February 2001. These arrived on 15th March 1995.
[19] The first of these is a letter which commences “Attached is your letter of appointment”. The letter then asks the plaintiff to sign the document and return a copy by facsimile. There appear to be two documents which were forwarded at the same time, one is a letter headed “Letter of Appointment” and the other is a document headed “General Conditions of Employment for Expatriate Professional Staff”. The latter is more extensive than the former. Provision is made for the applicant to sign the former and he says that he did so and forwarded the documents by fax to Indonesia. The letter of appointment contains some nine clauses dealing generally with the subject matter of the Plaintiff’s employment. The general conditions deal somewhat more extensively with these.
[20] The salary was to be paid in American dollars although the clause dealing with bonuses states for indicative purposes what the last bonus entitlement had been in Australian dollars. The Plaintiff was entitled to some 17 days leave after every two months. The Defendant at its expense would provide an economy class return air fare to Brisbane and back for each leave break.
[21] The Plaintiff was obliged to notify the financial manager of the Australian dollar figure which he wished to draw in Indonesia. Clause 8.1 deals with Workers’ Compensation in the following terms “Normal workers compensation benefits are available to expatriate employees through an Australian based policy”. Clause 9 which deals with medical care provides as follows:-
“9. MEDICAL
9.1 For the employee resident in an expatriate capacity all reasonable medical expenses incurred in Indonesia will be paid for by the Company. This benefit will also apply to any member of his family who is resident with him in Indonesia. In case of serious illness where the costs are likely to be in excess of US$5,000 per annum, the Company reserves the right to transfer the patient back to Australia for treatment under Medicare.
In the case of employees recruited from another country, the patient will be transferred back to the home country for treatment under the country’s medical system. In both instances, the Company will not accept responsibility for medical, hospital or accommodation costs in the home country.
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Expatriate employees who wish to be in a position, in such circumstances, to have private/intermediate hospital accommodation at minium cost to themselves are therefore advised to continue membership of a health insurance scheme while they are overseas. The employee is responsible for the cost of obtaining such a health insurance for himself and his family.
9.1 Health Insurance and Medicare
Where an employee elects not to take out or continue private insurance while he is overseas, the Company will assume that he is prepared to accept medical and hospital treatment of the standard that will prevail in Australia under the Medicare system without private insurance, should he be repatriated to Australia for medical reasons. You should note, however, that in addition to the normal type of insurance there are a number of insurance companies offering cover but with a claim excess per annum of as low as
$150 per year. Premiums are approximately one third of the more conventional type of health insurance. It is suggested that this type of insurance may be more suitable for you while you are posted overseas.
When filling in application forms for both Medicare and Private Health Scheme, you should give your address in Australia or if you are going to be away for a significant period, as c/- John Holland Group Pty Ltd 492 St Kilda Road, Melbourne, Victoria, 3004.
[22] It would seem that there was some alteration to the Plaintiff’s leave arrangements as a result of a move from one site to another in Indonesia. The Plaintiff, although he returned to Australia on a number of occasions, did not use all of his leave entitlements.
[23] His salary was paid in part into his bank account at the Commonwealth Bank in
Mackay where he maintained a home and where his wife lived.
[24] Work permits were organised through a member of the John Holland Group based in Melbourne which also arranged for airline tickets for the Plaintiff and other employees when travelling to Indonesia.
[25] THE CIRCUMSTANCES OF THE ACCIDENT
Some emphasis has been placed upon this by the Defendant who was inclined to contend that the litigation concerning the incident itself would have to address issues relating to special local practices. It appears to be common ground that on the mine site at the corners of some roads the practice was for the vehicles concerned to move on to the incorrect side of the road so as to better negotiate the corner. There is no
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dispute about this aspect of the matter. The Plaintiff acknowledges that he was aware of such a practice but the issues appear to be whether the Plaintiff had been made adequately aware of the practice and in particular that it applied to the corner where the accident happened or that type of corner and questions of the adequacy of information or instruction about the subject are therefore relevant. These issues would include whether there were signs on the particular corner and the adequacy of any such signs.
[26] The question, it seems to me, involves entirely an issue of fact turning upon the particular practice on the road or roads on the mine site concerned and I do not think it involves any special considerations of local usages in any wider sense such as one involving cultural considerations.
[27] So far as witnesses are concerned, the Plaintiff, it would seem, will require to call an orthopaedic surgeon who has examined the Plaintiff and who practises in Mackay and some other expert witnesses such as occupational therapists or an expert in occupational medicine who would come from North Queensland. It is suggested that another orthopaedic surgeon apart from the orthopaedic surgeon who treated may have to be called. According to the Plaintiff, a number of witnesses would have be called on the issue of liability. Two of these live in Australia, one is an Australian still working in Indonesia and one is based in Jamaica. In addition he refers to the probability of calling a witness or witnesses to give evidence about his employment opportunities and the income available to somebody with his experience in coal mining in the Central Queensland coal basin area. These would have to come from Australia.
[28] On the other hand the Defendant says that there are some witnesses resident in Indonesia who it would wish to call. One of these was the driver of the other vehicle – I should mention that the Plaintiff says in his affidavit that he makes no allegations against him acknowledging that his account of the accident is correct. The other two witnesses are a passenger in the vehicle driven by the Plaintiff who it is said would be in a position to give evidence as to the manner of driving of the Plaintiff at the relevant time and the existence of signs at the corner and conversations of some importance with the Plaintiff. Another witness who is an Indonesian and who was a project manager employed by the Defendant would be called to give evidence of instructions given to the Plaintiff about the use of the road and the rules applying to them. All of these witnesses are, if I understand things correctly, Indonesian nationals.
[29] In addition the Defendant’s finance administration manager resides in Indonesia but is, I understand, a European. He would give evidence of conversations with the Plaintiff.
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[30] The Defendant says that the first three of these witnesses would have to give evidence with the assistance of an interpreter although the Plaintiff says he knows the witnesses and that the English of two of them is adequate and that only one would be required to give evidence through an interpreter.
[31] Mr Hayford who is a potential witness in the matter now lives in Canberra.
[32] There is nothing to suggest that wherever the trial takes place, it would not be possible for appropriate arrangements to be made to facilitate the taking of evidence by use of interpreters. All of the witnesses from Australia, it is clear, would have to give evidence in an Indonesian court through an interpreter.
[33] There is some evidence that the cost of litigating the action in Australia will be cheaper than that in Indonesia.
[34] This comes from the Plaintiff’s affidavit based upon inquiries made by his solicitors of Australian solicitors practising in Indonesia and a comparison of the costs provided by his own solicitors to litigate the matter in Australia. He says that as he has been unemployed since May of 2000 he does not have the financial resources necessary to conduct litigation in Indonesia. The Plaintiff has significant assets but does not state his liabilities. There was no cross-examination of him on this subject. I accept that the evidence establishes that litigation in Indonesia is likely to be more expensive for the Applicant and that he does not have the means to fund litigation in Indonesia. His present solicitors are not prepared to act for him in relation to any such litigation and it would seem that foreign solicitors, even those based in Indonesia are not permitted to act in litigation of this kind.
[35] THE PROPER LAW OF THE CONTRACT
The substantive law to be applied is a matter of significance to the exercise of the discretion concerned here but as was pointed out in Henry v. Henry (supra) at p. 589, this is not determinative of the matter and is one of a number of relevant considerations. One of the questions relevant to this issue of the proper law of the contact is where the contact was concluded.
[36] For the Defendant it is submitted that whether the contract was orally concluded and subsequently confirmed in writing (that is, in the first of the categories referred to in Masters v Cameron (1954-55) 91 C.L.R. 353) or whether it was concluded by the forwarding of the signed document, it was concluded in Indonesia. According to the Plaintiff’s affidavit, he notified the Defendant by telephone of his acceptance of the offer which was made to him in the same telephone conversation. Alternatively it was said if it was concluded in writing by the Plaintiff’s signature of
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the letter of appointment and the notification of that fact to the Defendant it was concluded in Indonesia because the Plaintiff sent the fax to Indonesia. The Plaintiff on the other hand suggests that the contract was concluded by the forwarding by the Defendant to the Plaintiff of the letter of confirmation which was received by the Plaintiff in Australia. On this approach to things the Defendant accepted an offer made by the Plaintiff.
[37] I think that the Defendant’s analysis of the matter is the more likely one although as will be obvious it turns upon the application of somewhat formal rules established for the purposes of fixing when a contract has been completed when the parties communicate by telephone, telex, facsimile transmission or some similar means. This question alone in my view, cannot be regarded as having any great significance in determining the proper law of the contact. See Amin Rasheed Corporation v. Kuwait Insurance Co (1984) AC 50 at p.60 per Lord Diplock.
[38] The contract, on whatever view of things one takes, was concluded as a result of exchanges between the Defendant’s officers in Indonesia and the Plaintiff in Mackay.
[39] As to the other factors relevant to determining the proper law of the contract, it is of course a matter of considerable importance that the primary activities to be taken under the contract, namely the performance of services by the Plaintiff for the Defendant, were to be carried out in Indonesia. On the other hand, some of the Defendant’s obligations were to be carried out in Australia. The obligation to pay the Plaintiff’s wages was performed partly in Indonesia and partly in Australia. I have already mentioned some aspects of the contract which involved some performance in Australia or the application of Australian standards and the fact that some pre-contractual negotiations took place in Australia.
[40] It is I think obvious that the form of contract is one which would only be used for Australian employees and not for Indonesian nationals or perhaps employees from other countries. This would be a feature which distinguishes a case such as this from cases such as Sayers v. International Drilling Co NV [1971] 1 W.L.R. 1176 and Coupland v. Arabian Gulf Petroleum Co. [1983] 1 W.L.R. 1136.
[41] I think that the fact that the Plaintiff’s duties were to be carried out in Indonesia for an Indonesian company in the course of operations performed wholly in Indonesia by that company tends to the conclusion that Indonesian law is the proper law of the contract. However I do not think that the possibility that the opposite conclusion might be reached can be overlooked.
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[42] In this case the weight to be afforded the fact that the Queensland Supreme Court would have to apply the law of Indonesia to the cause of action in contract is, in my view, lessened here. Firstly, the claims in tort and contract involve the same alleged negligent conduct. The action in contract does not turn of any consideration of its terms or involve questions of construction. The action in tort would involve the application of the lex fori. (The situation bears some similarity to that in Coupland v Arabian Gulf Petroleum Co (supra). Furthermore, there is nothing to suggest that the same principles generally would not apply to the resolution of both claims. Although Indonesia is not a common law country it was not suggested that questions of negligence of the kind alleged by the Plaintiff here give rise to any different considerations under the two relevant legal systems. Subject to the next matter to be mentioned it would appear that the assessment of damages involves similar principles.
[43] JURIDICAL ADVANTAGES TO THE PLAINTIFF
Putting aside the question of the cost of litigation and the Plaintiff’s inability to meet these (which I have taken into account in what I might describe as the practical considerations relating to litigation in one place or the other), the only juridical disadvantage which the Plaintiff points to is what is said to be a reluctance on the part of the Indonesian courts to award damages for subjective elements under the relevant code. I take this to be a reference to those damages which would be assessed under the head of general damages in Australia. The Defendant submitted that the evidence on this subject was so vague that it should be disregarded. I agree that the evidence is in very general terms but the Defendant which has placed before the court fairly detailed evidence about the legal system in Indonesia has not thought fit to contradict this by evidence and I think it is a matter that ought to be taken into account.
[44] Finally, the Defendant placed substantial emphasis upon two matters concerning the enforcability of a judgment of a Queensland court in Indonesia. The effect of the evidence is that an Indonesian court will not recognise an Australian judgment and it would or may be necessary to bring a new action in the Indonesian courts. The Plaintiff acknowledged that it was no position to challenge this and I proceed upon the basis that this is so. I simply note that this is the effect of comment on the subject in Lindsay, Indonesia, Law & Society, Federation Press, 1999 at pp 292,
293. It seems the rule is a legacy of the Dutch colonial period.
[45] The second matter which is associated with this is that the Defendant says that it
“may, subject to further enquiries being finalised, be necessary to take” third party proceedings against the driver of the other vehicle concerned or his employer and the company which was at the time responsible for the roads on the mining site and with which the Defendant had entered into some arrangement as previously mentioned.
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[46] It was said that the disadvantage associated with having to litigate the action twice was so great that the risk of this occurring should be largely determinative of the matter or should alternatively be a matter of such significance as to tip the balance in the Defendant’s favour. On the other hand it is plain that so far as this aspect of the matter is concerned, if the Defendant fails in any action in Queensland it will be a matter entirely within its own hands as to whether such a course was necessary. It is difficult to see why a Defendant acting reasonably in its own interests and having fully litigated, as one would expect, the issue in a Queensland court, would then wish to again litigate the matter, presumably on the same evidence in another court. The Defendant gave an undertaking to the court that it would abide by any judgment of the Indonesian court, but when asked by the Plaintiff to give an undertaking that it would do so in relation to any judgment of the Supreme Court of Queensland the matter was left on an inconclusive basis with the Defendant’s senior counsel indicating that instructions had been sought but no resolution had been obtained prior to the judgment being reserved or since. It should be mentioned that the matter was raised very late in argument.
[47] Reference was made to the judgment of Mr Justice Brennan in Oceanic Sunline
Shipping Co v. Fay (supra) at p. 233:
“’Before identifying the issues for determination, it is convenient to mention some problems with which this appeal is not concerned. Firstly, the appeal is not concerned with the recognition or enforcement in Greece or elsewhere outside Australia of any judgment which might be entered in this action. Those are matters for the law of the place where recognition or enforcement might be sought at some later time. The Supreme Court of New South Wales has no power to compel recognition or enforcement of its judgments by the courts of another country".
[48] It would seem to me that this statement is a statement of a general principle and that being so, the difficulty which the Plaintiff might have in enforcing any action in Indonesia that he might obtain in Queensland is not something which ought to be regarded as a matter of significance here. In any case even if this is not correct, I do not regard the matter for the reasons already mentioned as one which should be given any special weight.
[49] The second matter is however in a somewhat different category. If the Defendant institutes third party proceedings in the present action against the two parties I have referred to there is nothing to preclude those persons re-litigating the matter in Indonesia. This is a possible disadvantage of signficance to the Defendant if the proceedings are to take place here.
[50] However although the Defendant’s senior counsel postulated some procedural difficulties there was nothing to suggest that the Defendant could not take proceedings in Indonesia against such parties in respect of any damage sustained by
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it as a result of the judgment of a court in Australia. This would mean that it would be unnecessary to litigate the matters twice as between the Defendant and the third parties although I accept that it would be necessary to establish the damage suffered by the Defendant as a result of the foreign judgment and this might require litigation again on that issue.
[51] The Defendant speaks of such third party proceedings only in terms of a possibility. This appears in the affidavit I have referred to which was filed in mid-February. It was not suggested that any more information had come to hand or any firm decision made at the time of the hearing in late April. As I have said, the Plaintiff says that he takes no issue with the account by the driver of the vehicle with which his vehicle came to collision and if I understand things correctly, it is the Plaintiff’s case that he came to be in a position where his vehicle should not have been (and it would follow in a position where the vehicle driven by the other driver was entitled to be) because of the inadequacy of instruction or warning to him.
[52] Nonetheless I accept that there is a possible significant disadvantage posed by the risk that if the Defendant does decide to seek contribution or an indemnity from one or the other or both possible third parties it may be involved in additional litigation to that which would be involved if the stay was granted.
[53] The matter however does not involve anything like the certainty of two lots of litigation on the same general issues as was the case in Seereederei Baco Liner GMBH v. Owners of Ship “Al Aliyu” (2000) FCH 656 which Tamberlin J thought represented a “further but not a controlling issue” on a forum non conveniens application.
[54] As senior counsel for the Defendant said in his submissions, the matter is finely balanced. There are important considerations which each party can point to and rely upon. The matter just referred to is, as I have said, a significant consideration in the Defendant’s favour.
[55] Taking these into account and applying what I think is the appropriate weight to them, I am not prepared to conclude that the Supreme Court of Queensland is a wholly inappropriate forum. This is the forum chosen by the Plaintiff and in my view this is not a case in which other considerations require the court to take the view that this is of no significance here. The Plaintiff would be faced with difficulties in litigating the matter in Indonesia associated with the costs of engaging lawyers there and travelling to Indonesia with his witnesses.
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[56] Litigation in either forum carries disadvantages to one of the parties and advantages to the other. However I am not persuaded that the litigation in the forum chosen by the Plaintiff is likely to be vexatious or oppressive or amount to an abuse of process requiring a stay of proceedings to avoid any consequent injustice. The Defendant has not satisfied me that the Supreme Court of Queensland is a clearly inappropriate forum. The application is dismissed with costs.
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