Privatbrauerei Erdinger Weissrau Werner Brombach GmbH v World Brands Australia Pty Ltd - [2016] WASC 9

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PRIVATBRAUEREI ERDINGER WEISSRAU WERNER BROMBACH GMBH -v- WORLD BRANDS AUSTRALIA PTY LTD [2016] WASC 9

CORAM: ACTING MASTER GETHING

HEARD: 28 OCTOBER, 25 NOVEMBER & 4 DECEMBER 2015

DELIVERED : 15 JANUARY 2016

FILE NO/S: FRJ 4 of 2015

BETWEEN: PRIVATBRAUEREI ERDINGER WEISSRAU WERNER BROMBACH GMBH
Plaintiff
AND
WORLD BRANDS AUSTRALIA PTY LTD
Defendant

Catchwords:

Private international law - Foreign Judgments Act 1991 (Cth) - Application to set aside registered judgment on the basis that the foreign court did not have jurisdiction

Legislation:

Foreign Judgments Act 1991 (Cth), s 7

Result:

Registered foreign judgment set aside

Category: B

Representation:

Counsel:

Plaintiff: Mr O D Feinauer
Defendant: Mr M Curwood

Solicitors:

Plaintiff: Feinauer Commercial Lawyers
Defendant: Main Legal Studio

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

Allardyce Lumber Company Ltd v Quarter Enterprises Pty Ltd (No 2) [2012] NSWSC 438
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Australia and New Zealand Banking Group Ltd v Marks [2013] QSC 186
Bank Polska Kasa Opieki Spolka Akcyjna v Zbigniew Opara [2010] QSC 93
de Santis v Russo [2001] QCA 457
Esso China Inc v Mou [1999] VSC 294
La Rosa v Nudrill Pty Ltd [2013] WASCA 18
Maschmann v Wenzel [2007] NSWSC 850
Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2014] NSWCA 3; (2014) 85 NSWLR 404
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Zhu v Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530

ACTING MASTER GETHING: Privatbrauerei Erdinger Weissrau Werner Brombach GMBH (Erdinger) is a brewery based in Erding in southern Germany. In 2009 World Brands Australia Pty Ltd (World Brands), a Perth based business, commenced importing beer produced by Erdinger for distribution in Western Australia.
In May 2011 World Brands placed an order with Erdinger for a container of light and dark draft beer, along with certain accessories. The beer was delivered. World Brands says that Erdinger failed to supply it with the appropriate dispensing devices required to dispense the beer from the barrels in which it was provided. World Brands paid just under half the invoice rendered by Erdinger.
Erdinger subsequently commenced proceedings against World Brands in the District Court of Landshut in Germany (German Court) to recover the balance. It says that World Brands agreed to the German Court having jurisdiction in the contract between them. On 29 July 2014 it obtained a judgment in the German Court against World Brands (German Judgment) in the amount of the unpaid balance of the invoice, together with an amount in respect of beer barrels not returned by World Brands.
By application dated 22 June 2015, Erdinger sought orders pursuant to the Foreign Judgments Act 1991 (Cth) (FJA) to enforce the German Judgment. It is not in issue that the German Court is a court to which the FJA applies.
On 21 July 2015 the Supreme Court made orders registering the German Judgment pursuant to the FJA (Registered Judgment). The Registered Judgment was in the amount of €25,278 together with interest of €3,518.14. The court further ordered World Brands to pay Erdinger's reasonable costs of and incidental to registration fixed in the sum of $5,500. The court order also informed World Brands of its right to apply to have the Registered Judgment set aside.
By application dated 3 September 2015 World Brands applied to have the Registered Judgement set aside pursuant to Rules of the Supreme Court 1971 (WA) O 44A r 10 and FJA s 7 on the basis that the German Court did not have jurisdiction.
World Brands filed three affidavits in support of its application. Each is sworn by Paul Wormley, who is a director of World Brands. They are dated 3 September 2015, 9 October 2015 and 21 October 2015.[1]
[1] Which I will refer to as the 'First Wormley Affidavit', the 'Second Wormley Affidavit' and the 'Third Wormley Affidavit' respectively.
Erdinger relies on three affidavits. The first is that of Joseph Westermeier sworn 19 May 2015. Mr Westermeier is the managing director of Erdinger. This was the affidavit relied on in the application to register the German Judgment. Erdinger then relies on two affidavits sworn by Sean Phillip Gomes, dated 21 September 2015 and 27 October 2015.[2] Mr Gomes is a lawyer employed by Erdinger's Australian solicitors.
[2] Which I will refer to as the 'First Gomes Affidavit' and the 'Second Gomes Affidavit' respectively.
Subsequent to the hearing on 28 October 2015, Erdinger sought orders reopening the application in order to file additional affidavit material. In particular, Erdinger sought to adduce evidence of further instances in which its standard terms of trading were brought to the attention of World Brands. At a hearing on 4 December 2015, I declined to reopen the application.[3] The approach which I took in dealing with the application to reopen the application closely parallels the approach taken in a similar application by Johnson J in Allardyce Lumber Company Ltd v Quarter Enterprises Pty Ltd (No 2),[4] including references to the principles underpinning case management and the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University.[5]
[3] My reasons are set out in the transcript of this hearing.
[4] Allardyce Lumber Company Ltd v Quarter Enterprises Pty Ltd (No 2) [2012] NSWSC 438 [176] ‑ [190].
[5] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.
World Brands contends that the German Court lacked jurisdiction within the meaning of FJA s 7(2)(a)(iv). If this is the case, by FJA s 7(2)(a) the court must set aside the German Judgment.
The FJA makes judgments of courts to which the Act applies enforceable in Australia by registration, 'thereby obviating the need to bring a cumbersome common law application based on the judgment debt'.[6]
[6] Allardyce Lumber [38] (Johnson J). See generally: Davies M, Bell AS and Brereton PLG, Nygh's Conflict of Laws in Australia (LexisNexis 2010, 9th ed) [41.1].
Pursuant to FJA s 7(1), a 'party against whom a registered judgment is enforceable … may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered'. There are a number of grounds set out in FJA s 7(2) which, if established, require the court to set aside the judgment. The relevant ground for present purposes is FJA s 7(2)(a)(iv): 'Where a judgment debtor duly applies to have registration of the judgment set aside, the court … must set the registration of that judgment aside if it is satisfied … that the courts of the country of the original court had no jurisdiction in the circumstances of the case'.
FJA s 7(3) sets out certain instances in which the courts of the country of the original court are taken to have had jurisdiction. The ground in issue in the present case is FJA s 7(3)(a)(iii), which provides:
(3)For the purposes of subparagraph (2)(a)(iv) and subject to subsection (4), the courts of the country of the original court are taken to have had jurisdiction:
(a)in the case of a judgment given in an action in personam:
…
(iii)if the judgment debtor was a defendant in the original court and had agreed, in respect of the subject matter of the proceedings, before the proceedings commenced, to submit to the jurisdiction of that court or of the courts of the country of that court.
The present claim is in contract, and is thus an in personam claim.[7] Section 7(4) is not relevant in the present application.
[7] Zhu v Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530 [124] (Gleeson CJ, Gummow, Kirby, Callinan & Heydon JJ); Allardyce Lumber [93].
A party moving to set aside registration of a judgment under FJA s 7 bears the onus of proof on that application, to be satisfied on the balance of probabilities.[8] Once this onus is satisfied, the court does not have a discretion to decline to set aside the judgment.[9]
[8] Allardyce Lumber [67] (Johnson J); Maschmann v Wenzel [2007] NSWSC 850 [18] (Associate Justice Harrison); Esso China Inc v Mou [1999] VSC 294 [16] ‑ [17] (Balmford J).
[9] Bank Polska Kasa Opieki Spolka Akcyjna v Zbigniew Opara [2010] QSC 93 [48] ‑ [50] (McMurdo J).
The question under FJA s 7(2)(a)(iv) is not whether the German Court had jurisdiction according to its domestic law. Rather, it is whether the German Court had jurisdiction according to the law of the place of registration, being Western Australia.[10] In de Santis v Russo McPherson JA (Thomas and Cullinane JJA agreeing) described the approach in the following terms:[11]
The first question to be considered on the appeal is whether, within the meaning of s 7(2)(a)(iv) of the Foreign Judgments Act, the Court of Appeals in Rome had jurisdiction in the circumstances of this case. There is, I consider, no doubt that the question falls to be determined according to the jurisdictional rules of this Court and not of the Court of Appeals at Rome. That is the principle that prevails at common law: see Henry v Geoprosco International Ltd[1976] QB 726, 745, 746‑747; and Von Wyl v Engeler[1998] 3 NZLR 416, 421. The same rule has been applied to the exception for fraud corresponding to s 7(2)(a)(iv) of the Act that appears in the Administration of Justice Act 1920 (Imperial). See Owens Bank Ltd v Bracco[1992] 2 AC 443, 464, where it was said that Parliament 'is to be taken to have intended that such questions be decided by reference to the common law ...'. In fact the categories of cases in which a registered judgment may be set aside under s 7(2)(a), although not identical, bear a close resemblance to those identified by Buckley LJ in Emanuel v Symon[1908] 1 KB 302, 309, as those in which the courts would at common law enforce a foreign judgment. Finally, it can hardly have been intended that questions of jurisdiction under s 7(2)(a)(iv) should be determined according to the jurisdictional rules of the original court, about which this Court can know nothing at all unless it is assisted by expert evidence on the foreign law.
[10] Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2014] NSWCA 3; (2014) 85 NSWLR 404 [53] (Bathhurst CJ, Gleeson JA & Sackville AJA agreeing); de Santis v Russo [2001] QCA 457 [9] (McPherson JA, Thomas & Cullinane JJA agreeing); Australia and New Zealand Banking Group Ltd v Marks [2013] QSC 186 [25] (Mullins J).
[11] de Santis v Russo [9].
The German Court accepted that it had jurisdiction on the basis that cl 17 of Erdinger's General Business Terms and Conditions (Erdinger's General Conditions) applied.[12] That clause provides:[13]
If the customer is a merchant, business person, a public legal entity or a specific public fund, the jurisdiction for all disputes between the customer and ERDGINER WEISSBRAU is Erding. The same applies if the customer has no general legal jurisdiction in Germany or if his/her domicile or registered office or usual place of business has been moved abroad or such is unknown at the time of filing a claim.
[12] First Gomes Affidavit, pages 20 ‑ 22.
[13] First Gomes Affidavit, page 13.
The issue for determination is whether cl 17 of Erdinger's General Conditions was a term of the contract between Erdinger and World Brands. If it was, the German Court would have jurisdiction for the purposes of the FJA pursuant to s 7(3)(a)(iii).
On the basis of the evidence and submissions before me, Erdinger's General Conditions could form part of the contract by two means:
•By being part of the documentation forming the contract pursuant to which the 2011 purchases were made.
•By being incorporated into the trading relationship between Erdinger and World Brands by a course of dealing which predated the 2011 purchases.

2011 Purchases - documentation

In Australian common law, the general rule is that the actual terms of a contract are those that the parties objectively intend to include in it.[14] In the words of the High Court: 'What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe'.[15]
[14] See generally: Seddon N, Bigwood R & Ellinghaus M, Cheshire & Fifoot Law of Contract in Australia (LexisNexisButterworths 2012, 10th Australian edition) [10.17].
[15] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ).
It is not in issue that:
(a)around February 2011, World Brands ordered a shipment of light and dark draft beer from Erdinger, along with certain accessories to go with the beer;
(b)Erdinger (through one Kathrin Frey) confirmed the order in an email to World Brands (to Mr Wormley) dated 11 April 2011, attaching a confirmation dated 28 February 2011;[16]
(c)by email dated 12 May 2011 from World Brands (from one Meredith Caporn) to Erdinger (Ms Frey), World Brands amended its order;[17]
(d)Erdinger issued a second order confirmation, dated 5 May 2011;[18]
(e)Erdinger also issued two delivery notes dated 23 May 2011, one for the beer and one for the accessories;[19]
(f)Erdinger issued an invoice dated 23 May 2011 for the orders in (e) in an amount of €13,086.00;[20]
(g)the beer and accessories were received by World Brands; and
(h)World Brands paid the amount of €3,000 on 13 December 2011 and a similar amount on 20 January 2012, leaving €7,086 outstanding on the invoice.
[16] Third Wormley Affidavit, annexure WBA 2, pages 4 ‑ 5; Second Gomes Affidavit, annexure SPG‑4, pages 11 ‑ 13.
[17] First Gomes Affidavit, annexure SPG ‑1, page 14.
[18] Third Wormley Affidavit, annexure WBA 2, page 7.
[19] First Gomes Affidavit, annexure SPG‑1, pages 15 ‑ 16.
[20] First Gomes Affidavit, annexure SPG‑1, page 18.
World Brands says that Erdinger failed to supply it with the appropriate dispensing devices required to dispense the beer from the barrels in which it was provided.[21] It was for this reason it declined to pay the balance of the invoice.
[21] Second Wormley Affidavit, annexure PW‑1, pages 5 ‑ 21.
Erdinger's case is that the May 2011 purchases were made on the basis of its price list for 2011 which was set out in a letter dated 1 March 2011 from Erdinger to World Brands, addressed to Mr Wormley (2011 Price List).[22] At the end of the 2011 Price List there is a note to the effect that the 'General Business Terms and Conditions' of Erdinger dated 1 February 2007 applied 'in all other respects'. This position was accepted by the German Court.[23] In Australian common law, terms may be incorporated into a contract by reference to another document.[24]
[22] First Gomes Affidavit, pages 9 ‑ 13.
[23] First Gomes Affidavit, pages 20 ‑ 21.
[24] See generally: Seddon N, Bigwood R & Ellinghaus M, Cheshire & Fifoot Law of Contract in Australia (LexisNexisButterworths 2012, 10th Australian edition) [10.27].
Mr Wormley's evidence is that the 2011 Price List was never delivered to, or received by him or World Brands.[25] There is no evidence in the affidavits filed on behalf of Erdinger to contradict Mr Wormley's evidence, for example, an email or facsimile transmission slip. The judgment of the German Court simply contains the conclusion that the terms as set out in the 2011 Price List, incorporating Erdinger's General Conditions, formed part of the contract between Erdinger and World Brands, and does not refer to any evidence of communication of the terms.
[25] Second Wormley Affidavit, par 3.
There is no other reference to Erdinger's General Conditions in the confirmation notes, delivery notes or invoices documenting the May 2011 purchases. The confirmation notes dated 28 February and 5 May 2011 each contain the text: 'We thank you very much for your order and confirm the preparation of the goods according to our terms of payment and delivery'. Each document contains some instructions as to delivery, and concludes with the text: 'terms of payment 60 days net after date of invoice'. This is inconsistent with Erdinger's General Conditions, which in cl 5 provides that: 'Deliveries and services shall be for payment upon receipt, without deduction'.
On the evidence before me, I am satisfied on the balance of probabilities that the 2011 Price List was never received by World Brands. Looking at what each party by words and conduct would have led a reasonable person in the position of the other party to believe, I am satisfied that the parties objectively did not intend Erdinger's General Conditions to be incorporated by reference into the contract between them.

Incorporation through a course of dealing

Erdinger's alternate submission was that its General Business Conditions were incorporated into the trading relationship between it and World Brands by a prior course of dealing.
In Australian common law, a term may be incorporated into a contract based on the prior dealings of the parties.[26] The principles as to when this will be taken to have occurred were the subject of detailed consideration by the Court of Appeal in La Rosa v Nudrill Pty Ltd.[27] After reviewing the authorities in some detail, McLure P stated:[28]
A review of all the cases reveals that there is no single test for the incorporation of a term into a contract based on prior dealings … The question is whether an express term is incorporated into a contract as a result of an inference arising from the prior conduct of the parties as a whole.
Buss JA stated the test in similar terms:[29]
It will be a question of fact and degree whether, in a particular case, the parties, by their conduct, have incorporated a term into their contract by a previous course of dealings. Each case turns on its own facts and circumstances. Factors of relevance in determining whether the alleged term was incorporated include the number of prior dealings, how recent they were, and the consistency in the prior dealings and the dealing in question (for example, the similarity between the subject matter of the dealings and the manner in which the dealings were entered into or concluded). This is not, of course, an exhaustive statement of relevant factors.
The factors which I have identified are relevant to what each party was reasonably entitled to conclude from the actions or conduct of the other. The requisite frequency will vary depending on the facts and circumstances of the particular case.
[26] See generally: Seddon N, Bigwood R & Ellinghaus M, Cheshire & Fifoot Law of Contract in Australia (LexisNexisButterworths 2012, 10th Australian edition) [10.29].
[27] La Rosa v Nudrill Pty Ltd [2013] WASCA 18.
[28] La Rosa [43] (McLure P, Murphy JA agreeing).
[29] La Rosa [68] ‑ [69] (Buss JA).
In his first affidavit, Mr Gomes annexes a copy of a letter dated 1 September 2009 from Erdinger to World Brands containing Erdinger's 'Prices and conditions 2009' (2009 Price List). As with the 2011 Price List, at the conclusion of the document is a note to the effect that the 'General Business Terms and Conditions' of Erdinger dated 1 February 2007 'apply in all other respects'.[30] Mr Gomes does not provide any further evidence to the effect that the 2009 Price List was received by World Brands. Nor does Mr Westermeier.
[30] First Gomes Affidavit, pages 25 ‑ 26.
Mr Wormley does not give any evidence as to whether or not he received a copy of the 2009 Price List. His evidence is that at no point throughout his dealings with Erdinger did he accept, sign or agree to sign an account application of Erdinger, any terms and conditions of Erdinger, or any agreement which required World Brands to submit to the exclusive jurisdiction of the German Court.[31]
[31] First Wormley Affidavit, par 6.
Erdinger did not lead any other evidence of instances in which World Brands received either Erdinger's General Conditions or the 2009 or 2011 Price Lists containing the cross reference to Erdinger's General Conditions. There is thus no evidence to the effect that World Brands has ever received a copy of Erdinger's General Conditions.

To the contrary, Mr Wormley refers to three instances of correspondence with Erdinger which are to the effect that there was no agreement between Erdinger and World Brands. The first is an email dated 23 November 2009 received from Oliver Helbig, a sales representative of Erdinger.[32] In this email, Mr Helbig states, among other things:
Agreement: I understand & hear your need to have a signed agreement that suits both parties. I will look into the matter and accept that at this stage until we draw a contract no party is tied to its terms.
Mr Wormley's evidence is that no agreement was made between the parties subsequent to this email.[33]
[32] Second Wormley Affidavit, annexure PW‑2, page 22.
[33] Second Wormley Affidavit, par 7.
The second piece of correspondence is an email dated 18 June 2010 from Mr Wormley to Mr Helbig.[34] In this email, Mr Wormley states:
We need to have an agreed T & C agreement in place, as the amount of business I have just lost over this is unfathomable.
Mr Wormley goes on to state that Erdinger did not respond in relation to his request for a terms and conditions agreement, nor bring any alleged terms and conditions of Erdinger to his attention.[35]
[34] Second Wormley Affidavit, annexure PW‑3, page 23.
[35] Second Wormley Affidavit, par 8.
The third piece of correspondence is an e-mail from Mr Wormley to Mr Helbig dated 10 February 2011.[36] In the email, Mr Wormley stated:
I am still waiting to hear what you are doing with the Beach Avenue Wholesalers (BAW) in Vic and why he continues to sell stock to the Nationals in our state of WA. Though we still have no agreement or contract in place it makes a mockery of why I continue to promote Erdinger in the On‑Premise when he takes all the benefit via the two major national accounts in retail. This goes against anything I would agree to.
Mr Wormley states that he did not receive a response to this email from Erdinger or any of its employees, agents or representatives.[37]
[36] Second Wormley Affidavit, annexure PW‑4, page 26.
[37] Second Wormley Affidavit, par 9.
On the evidence before me, I am satisfied on the balance of probabilities that Erdinger's General Conditions were not incorporated into the contractual relationship between Erdinger and World through a prior course of dealing. There is simply insufficient evidence to give rise to any inference that the parties objectively intended the relationship between them to be governed by Erdinger's General Conditions, and cogent evidence to the contrary.
There being no other basis asserted by Erdinger pursuant to which the German Court has jurisdiction, I am satisfied on the balance of probabilities that the German Court has no jurisdiction in the circumstances of the case for the purposes of FJA s 7(2)(a)(iv). I must therefore set aside the Registered Judgment.
I will hear from counsel as to costs.