Showtime Touring Group v Mosely Touring Inc - [2010] NSWSC 974

NEW SOUTH WALES SUPREME COURT

CITATION:
Showtime Touring Group v Mosely Touring Inc [2010] NSWSC 974

JURISDICTION:
Common Law Division

FILE NUMBER(S):
2009/297756

HEARING DATE(S):
18 May 2010

JUDGMENT DATE:
3 September 2010

PARTIES:
Showtime Touring Group Pty Limited (Plaintiff)
Mosely Touring Inc. (1st Defendant)
Timothy Mosely (2nd Defendant)

JUDGMENT OF:
Hislop J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable

COUNSEL:
D.E. Baran (Plaintiff)
R. Lancaster SC/C. Arnott (Defendants)

SOLICITORS:
Stephen Smart & Associates (Plaintiff)
Simpsons (Defendants)

CATCHWORDS:

LEGISLATION CITED:
Uniform Civil Procedure Act 2005

CASES CITED:
Castagna v Conceria Pell Mec Spa (unreported, NSWCA, 15 March 1996)
Howship Holdings Pty Limited v Leslie (1996) 41 NSWLR 542
Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114
Building Insurers' Guarantee Corporation v Eddie [2008] NSWSC 195
Voth v Manildra Flour Mills Pty Limited [1990] HCA 55; (1990) 171 CLR 538
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Oivaylle Pty Limited v Flottweg GMBH & Co KGAA (No 4) (2009) 255 ALR 632
Reese Bros Plastics Limited v Hamon-Sobelco Australia Pty Limited (1988) 5 BPR 11,106
Egis Consulting Australia Pty Limited v First Dynasty Mines Limited [2001] WASC 22
Stanley Kerr Holdings Pty Limited v Gibor Textile Enterprises Limited (1978) 2 NSWLR 372
Liftronic Pty Limited v Montgomery Elevator Company (1996) ATPR 41-458
Bank of Amercia v Bank of New York [1994] NSWCA 17

TEXTS CITED:

DECISION:
1. Set aside the service of the statement of claim on the first and second defendants.
2. The plaintiff pay the defendants' costs of the application.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
HISLOP J
Friday 3 September 2010
2009/297756 SHOWTIME TOURING GROUP PTY LIMITED v MOSELY TOURING INC & ANOR

JUDGMENT
Introduction

The plaintiff, a company registered in Queensland, Australia, by statement of claim filed in this court on 30 July 2009 brought proceedings against the first and second defendants for damages for breach of contract.
The statement of claim alleged, inter alia:
(a)The first defendant was incorporated in Florida, USA. The second defendant was a performance artist. The first defendant hired out the second defendant’s services to promoters throughout the world.
(b)In or about May 2008 the plaintiff entered into an agreement, partly oral and partly in writing (including a written agreement dated 12 May 2008 executed by the plaintiff on 23 May 2008), with the first and second defendants to procure the second defendant’s services to perform at live concerts throughout Australia and New Zealand in July 2008. The second defendant’s performance fee, being $US1 million, was to be paid in instalments of $200,000 on 27 May 2008, $300,000 on 9 June 2008 and $500,000 by no later than 25 June 2008. Payments pursuant to that agreement were made as follows: $100,000 on 5 June 2008, $100,000 on 10 June 2008, $80,000 on 11 June 2008, $120,000 on 12 June 2008.
(c)It was an implied term of the agreement that the first and second defendants would do all things necessary to assist with the publicity of the tour including, but not limited to, providing audio drops, video drops, audio interviews, video interviews, and other statements to the media confirming the Australian and New Zealand tour.
(d)The plaintiff repeatedly requested audio drops and video drops from the defendants during the period May to 20 June 2008 but they were not forthcoming.
(e)On or about early June 2008 the plaintiff was contacted by the second defendant’s manager and also a person who was an officer of the first defendant, namely Frederick Frazier II, also known as “Rick”, the manager of the second defendant who represented to the plaintiff that the booked tour dates pursuant to the May agreement were no longer suitable and sought the plaintiff’s agreement to enter into a new arrangement or agreement to cancel the July 2008 dates as per the May agreement and move the tour back into August 2008.
(f)As a result of the conversations between representatives of the plaintiff and Rick, for and on behalf of the first defendant and also representing the second defendant, the parties entered into a new agreement which was partly oral and partly written. So far as the agreement was oral, the plaintiff relied upon conversations between its officers and employees and those persons acting on behalf of the first defendant, namely Rick, as well as conversations with the second defendant’s wife who held herself out to be a person involved in the management of the second defendant.
(g)It was agreed orally and in writing that the second defendant would perform in Australia on 15, 17, 20 and 22 August and in New Zealand on 23 August 2008.
(h)On 7 July 2008 the first and second defendants emailed audio drops to the plaintiff. On 8 July 2008 the first and second defendants emailed a press release to the plaintiff announcing new dates for the tour of Australia.
(i)In performance of the second agreement the plaintiff caused the first defendant to be paid the sum of $100,000 on or about 20 June 2008. It was further agreed both orally and in writing that the balance of the $US500,000 was to be paid on or about 15 July 2008.
(j)On or about 8 July 2008 the first and second defendants’ lawyers emailed a new contract to the plaintiff which was executed and sent back on Friday 11 July 2008 to the first and second defendants’ lawyers by facsimile transmission.
(k)In breach of the June agreement entered into between the plaintiff and the defendants, the first and second defendants failed to procure the appearance of the second defendant as scheduled and caused him to perform at the Coke Live Festival in Krakow, Poland on 23 August 2008. As a result of the breach by the first and second defendants of the second agreement with the plaintiff, the plaintiff has sustained substantial losses and damage.
The plaintiff sought to serve the statement of claim, together with the notice required by r 11.3 Uniform Civil Procedure Act 2005 (“UCPR”) on the first and second defendants in the United States.
The defendants did not submit to this Court’s jurisdiction. Instead, by notice of motion filed on 20 November 2009, pursuant to r 12.11 UCPR, they sought the following orders:
“1.A declaration that the originating process has not been duly served on the first or second defendant, pursuant to Rule 12.11(1)(c) of the Uniform Civil Procedure Rules 2005 (UCPR).
2.In the alternative, an order setting aside service of the Statement of Claim on the first defendant, pursuant to Rule 12.11(1)(b) of the UCPR.
3.In the alternative, an order setting aside the Statement of Claim, pursuant to Rule 12.11(1)(a) of the UCPR.
4.A declaration that the Court has no jurisdiction over the first or second defendant in respect of the subject-matter of the proceedings, pursuant to Rule 12.11(1)(g) of the UCPR.
5.In the alternative, that the court decline to exercise jurisdiction in the proceedings, pursuant to Rule 12.11(1)(h) of the UCPR.
6.In the alternative, an order that the proceedings be permanently stayed, in the Court’s inherent jurisdiction.
7.Such further or other relief as the Court considers appropriate.”
The plaintiff opposed the application.
Service of the statement of claim
The UCPR provides:
(a)          “Originating process must be served on each defendant.” (r 6.2(3))
(b)          “Except as otherwise provided by these rules:
(a)any originating process…in proceedings in the Supreme Court…must be personally served…” (r 10.20(2))
(c)“Personal service of a document on a person is effected by leaving a copy of the document with the person or, if the person does not accept the copy, by putting the copy down in the person’s presence and telling the person the nature of the document.” (r 10.21(1))
(d)“(1) If a document that is required or permitted to be served on a person in connection with any proceedings:
(a)         cannot practicably be served on the person, or
(b)cannot practicably be served on the person in the manner provided by law,
the court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person concerned.
(2) An order under this rule may direct that the document be taken to have been served on the person concerned on the happening of a specified event or on the expiry of a specified time.
(3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.
(4) Service in accordance with this rule is taken to constitute personal service.” (r 10.14)
(e)“Originating process may be served outside Australia in the circumstances referred to in Schedule 6.” (r 11.2(1))
(f)“A document to be served outside Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected.” (r 11.6)
It follows that service of the statement of claim (being the originating process) outside Australia may be effected on an individual personally or in accordance with the law of the country in which service was effected.
The first defendant accepted service had been validly effected upon it in the United States.
The second defendant, who was a resident of Florida, USA, contended he had not been served with the statement of claim and, on the evidence, the contrary was not arguable.
The only evidence as to service on the second defendant was contained in the affidavit of Andres Botero who deposed:
“On 10/27/2009 at 5.00 PM, I non-served the within NOTICE TO DEFENDANT AND STATEMENT OF CLAIM on TIMOTHY MOSELY at…MIAMI, FL 33156 for the reason(s) indicated below:
Comments/Prev. Attempts: THE ADDRESS PROVIDED IS NOT A VALID ADDRESS FOR TIMOTHY MOSELY. A SKIP TRACE REVEALED THE CORRECT ADDRESS FOR SERVICE IS…FLORIDA, 33156. ON 9/09/2009 THE SERVER SPOKE THROUGH THE FRONT GATE CALLBOX TO MR. MOSELEY’S WIFE WHO STATED SHE WOULD CONTACT TIMOTHY MOSELY TO HAVE HIM MEET THE SERVER TO ACCEPT THESE DOCUMENTS. MR. MOSELEY CONTACTED THE SERVER WITH A BLOCKED TELEPHONE NUMBER AND STATED THAT HE WOULD CALL BACK WITH A DATE AND TIME TO ACCEPT SERVICE. MR. MOSELY NEVER RETURNED A CALL TO THE SERVER TO ACCEPT SERVICE OF THESE DOCUMENTS. THE SERVER ATTEMPTED TO SERVE THESE DOCUMENTS ON THE FOLLOWING DATES AND TIMES: 9/09/2009 AT 11:50 AM, 9/16/2009 AT 7:05PM, 9/22/2009 AT 5:05PM, 10/01/2009 AT 11:12AM, 10/03/2009 AT 7:45AM, 10/07/2009 AT 9:20PM, 10/09/2009 AT 6:45AM, 10/12/2009 AT 3:10PM, 10/15/2009 AT 4:47PM, 10/17/2009 AT 10:14AM AND 8:25PM, 10/19/2009 AT 11:55AM, 10/24/2009 AT 10:20AM, AND 10/26/2009 AT 9:55PM. ON 10/27/2009, SERVICE OF PROCESS WAS DISCONTINUED AT THE REQUEST OF THE CLIENT.”
Counsel for the plaintiff submitted the statement of claim and notice had been properly served on the second defendant. The submission was put on three bases, two of which were interlinked. The first basis was as follows:
“Mr Mosely and Mosely Touring Incorporated we say as a matter of rational inference obviously are interconnected and the guiding mind is Mr Mosely.
Mosely Touring Incorporated, it is no longer an issue, has been served. The proceedings as a matter of inference must have come to the attention of Mr Mosely. Mr Mosely and Mosely Touring Incorporated have retained solicitors, junior and senior counsel. Obviously that is a result of the contents and other documents that have been served in the statement of claim. So in our submission it is incorrect to advance a submission that Mr Mosely has not been served. It would defy belief that the statement of claim has not come to his attention, and there are a number of cases in which Howship has been applied on appeal which I am happy to get the references for your Honour, but it is good law, we say, and in our submission this is one of those cases where a defendant is hiding behind what is effectively a corporate vehicle, which is his corporate vehicle. So we say he has been served.
HIS HONOUR: You say he has been personally served?
BARAN: No. We say the attempt to serve him was unsuccessful but we would ask your Honour to infer, because of the fact that the first defendant received the statement of claim and has retained solicitors and counsel, that the document must have come to the attention of Mr Mosely.”
In Castagna v Conceria Pell Mec Spa (unreported, NSWCA, 15 March 1996) Handley JA (with whom the other members of the court agreed), in dealing with a predecessor of UCPR 11.4, said, in respect of a defendant resident out of the jurisdiction:
“In my opinion the structure of Pt10 and in particular the relationship of r2 with r1A make proper service on an absent defendant an essential issue in any application for leave to proceed.”
Similarly, proper service is an essential issue in considering this application.
In Howship Holdings Pty Limited v Leslie (1996) 41 NSWLR 542 at 544 Young J (as his Honour then was) said:
“Section 459G [of the Corporations Law] itself does not deal with what is service. The ordinary meaning of ‘service’ is personal service, and personal service merely means that the document in question must come to the notice of the person for whom it is intended. The means by which that person obtains the document are usually immaterial. This is clear in cases that have been considered good law over the centuries, including Hope v Hope (1854) 4 De GM & G 328 at 341-345; 43 ER 534 at 539-540; R v Heron; Ex parte Mulder (1884) 10 VLR 314 at 315; Pino v Prosser [1967] VR 835 at 838. Some of those cases were complicated by the requirement in the former statutes that a person serving initiating process had to endorse the initiating process, but the principle is clear from them.”
Howship was concerned with a provision of the Corporations Law. Unlike UCPR 10.21(1) it did not define how personal service was to be effected. It has no direct application in this case.
The second basis advanced by plaintiff’s counsel was in the following terms:
“It would be an appropriate order to make under rule 10.14 that your Honour accept that service is deemed to have taken place, because of the very reason we are here before your Honour now. There is no question, as I understand it, that those retaining my learned friends are Mr Mosely and Mosely Touring Incorporated. That, in my submission, must be the finding.”
It has been held that substituted service under the predecessor of Pt 10 r 14 may be effected on a person resident outside the jurisdiction – Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 per Austin J.
In Building Insurers’ Guarantee Corporation v Eddie [2008] NSWSC 195 Rein AJ held that an order may be made pursuant to UCPR 10.14(3) in respect of an individual outside the jurisdiction.
The third basis, advanced in written submissions, was that any failure to properly serve the statement of claim on the second defendant constituted an irregularity which the second defendant had waived by making this application. Reliance was placed on UCPR 10.19. This submission was misconceived as the second defendant’s application was made pursuant to UCPR 12.11 and such an application does not constitute submission to the jurisdiction of the court (UCPR 12.11(4)).
I make the following findings. The statement of claim was not personally served on the second defendant insofar as it was not served in the manner required by UCPR 10.21(1). There was no evidence the statement of claim was served on the second defendant in accordance with any law of the United States. No order pursuant to UCPR 10.14(1) was sought. However, the evidence in this case establishes, on the balance of probabilities, that steps had been taken for the purpose of bringing the statement of claim and the r 11.3 notice to the notice of the second defendant, the documents had come to his notice and that it is appropriate to make an order under r 10.14(3) which, by operation of sub-r (4), is taken to constitute personal service. I direct that the documents be taken to have been served on the second defendant on 26 October 2009.
I find the defendants have been properly served with the statement of claim and r 11.3 notice provided that the relevant circumstances referred to in Sch 6 are established.
Schedule 6
Schedule 6 relevantly provides:
“Originating process may be served outside Australia in relation to the following circumstances:
(a)if the proceedings are founded on a cause of action arising in New South Wales,
(b)if the proceedings are founded on a breach in New South Wales of a contract (wherever made), whether or not the breach is preceded or accompanied by a breach (wherever occurring) that renders impossible the performance of any part of the contract which ought to be performed in New South Wales,
(c)if the subject-matter of the proceedings is a contract and the contract:
(i) is made in New South Wales, or
…
(iii) is governed by the law of New South Wales, or
(iv)is one a breach of which was committed in New South Wales.
…”
Rule 11.7 UCPR states:
“(1) The Supreme Court may make an order of a kind referred to in rule 12.11 (Setting aside originating process etc) on application by a defendant on whom originating process is served outside Australia.
(2) Without limiting subrule (1), the Supreme Court may make an order under this rule:
(a)on the ground that the service of the originating process is not authorised by these rules, or
(b)on the ground that the court is an inappropriate forum for the trial of the proceedings.”
Rule 12.11 states:
“(1) In any proceedings, the court may make any of the following orders on the application of a defendant:
(a) an order setting aside the originating process,
(b)an order setting aside the service of the originating process on the defendant,
(c)an order declaring that the originating process has not been duly served on the defendant,
…
(g)an order declaring that the court has no jurisdiction over the defendant in respect of the subject-matter of the proceedings,
(h)an order declining to exercise jurisdiction in the proceedings,
(i)an order granting such other relief as the court thinks appropriate.
(2) Such an order may not be made unless notice of motion to apply for the order is filed by the defendant within the time limited for the defendant to enter an appearance in the proceedings.
…
(4) The making of an application for an order under subrule (1) does not constitute submission to the jurisdiction of the court.”
The defendants sought an order, inter alia, setting aside service of the originating process on the grounds that none of the circumstances referred to in Sch 6 were present with the result that UCPR 11.2(1) was not enlivened.
The onus of establishing that the cause of action falls within one of the circumstances in Sch 6 rests with the plaintiff – Voth v Manildra Flour Mills Pty Limited [1990] HCA 55; (1990) 171 CLR 538 at 564.
In considering the predecessor of Sch 6 the High Court held in Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [50]-[52]:
“[50] In deciding whether Pt 10 r 1A 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?
[51] 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 application of these paragraphs of r 1A 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 Pt 10 r 1A, service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.
[52] 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. But that may not always be so. For example, the place of making of a contract, or the place of breach of a contract, may not appear from the pleading and some evidence may be required to establish that a relevant paragraph of Pt 10 r 1A is engaged.”

It is necessary to consider the allegations made by the plaintiff in its statement of claim and the affidavit evidence that was adduced by the parties. In the latter context, I reject the tender of para 65 of Mr Kailahi’s affidavit and exhibit BS 33 which were provisionally admitted. In my opinion, they lack relevance.
The plaintiff, in its statement of claim, pleads “a written agreement dated 12 May 2008” and a “new contract”. The plaintiff’s director, Mr Kailahi, exhibited each document to his affidavit.
The May agreement was headed with the first defendant’s name and was addressed to the plaintiff. It was dated “As of May 12, 2008”. It commenced:
“This shall constitute the agreement between Mosely Touring, LLC (“Producer”) furnishing the services of Timothy Mosely professionally known as “Timbaland” (“Artist”), on the one hand, and Showtime Touring Group Pty Limited (“Purchaser”), on the other hand, with respect to Artist’s live personal performance on the following terms.”
Thereafter followed the places and dates of engagement, provision for the payment of the agreed fee and the terms of the agreement. The document concluded:
“[7] The validity, construction and effect of this agreement shall be governed by the laws of the State of New York…
It is understood that Purchaser and Producer intend to enter into a more formal agreement on the material terms contained herein, but until Purchaser and Producer do so, this agreement shall remain fully binding and represents the entire agreement of the parties and may not be modified except by writing signed by both parties…accepted and agreed to: Showtime Touring Group Pty Limited.”
Then followed the signature of Mr Kailahi.
Mr Kailahi, in his affidavit, stated that on 23 May 2008 Louise Ferretti, the defendants’ lawyer, forwarded the May agreement to him by email; he executed it on that day, scanned it and emailed it back to her. Mr Kailahi in his affidavit accepted that the May agreement was later abandoned. The defendants accepted the May agreement had been terminated.
The new contract was headed with the first defendant’s name. It was addressed to the plaintiff. It was dated “As of July 7, 2008”. It commenced:
“Reference is made to the agreement between Mosely Touring, LLC (“company”), and Showtime Touring Group Pty Limited (“you”) dated as of May 12, 2008 (“the Agreement”) with respect to the proposed performances to be performed by Timothy Mosely p/k/a Timbaland at various venues in Australia and New Zealand. Unless otherwise defined herein capitalised terms shall have the meanings ascribed to them in the Upstream Agreement…In consideration of the promises and mutual convenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the terms of the Agreement as follows:
1.Notwithstanding anything to contrary contained in the Agreement, Company acknowledges and agrees that, at your request and as an accommodation to you:
(a)Paragraph 1 of the Agreement is hereby deemed deleted and the following Paragraph 1 is deemed substituted in its place instead.”
Thereafter follow the places and dates of engagement. Certain paragraphs of the May agreement are deemed deleted and substituted by other provisions. In particular, paragraph 7 is deemed deleted and a new paragraph 7 is deemed substituted in its place. It provides, relevantly:
“…The validity, construction and effect of this Agreement shall be governed by the laws of the State of New York and any action or suit pertaining to, or arising out of, this agreement shall be determined by a court or tribunal in the State of New York, County of New York…”
The document then concludes:
“Except as otherwise modified herein, the Agreement is hereby ratified and affirmed and remains in full force and effect…Accepted and agreed Showtime Touring Group Pty Limited.”
Mr Kailahi, in his affidavit, stated that the new contract was received by him on 9 July 2008 and sent back to the defendants’ lawyers by facsimile on 11 July 2008. He said he was operating under the new contract. In his statement of claim he asserted the document was executed by him.
The new contract was forwarded to Mr Kailahi by Ms Ferretti with a covering letter which stated:
“Attached please find a draft in the above referenced amendment. Please call me upon your review of same.
As I am simultaneously forwarding a copy of this document to our client and his other representatives for review, I must reserve their right to comment and the right to make any modifications they may deem necessary.”
The defendant adduced affidavit evidence from Ms Ferretti who stated:
“11. Beginning in or about July 2008, I prepared a draft of an amendment to the May Agreement in relation to the proposed Australian tour of Timbaland. I sent the draft amendment to the May Agreement to Mr Kailahi of Showtime from my New York office by email dated 9 July 2008. I made it clear in my email to Mr Kailahi that
The proposal forwarded with the email was in draft only and was an amendment to the May Agreement.
As of 9 July 2008, the Timbaland parties were still to provide comments relating to the draft amendment and it was not a final agreement; and
Comments were sought from Showtime.
12. As of 17 July 2008 there were unresolved terms, the draft amendment to the May Agreement was not finalised and the amendment had not been executed by Showtime.”
The defendants contended that no final agreement had been reached in relation to the second agreement. The plaintiff relied upon evidence which indicated that steps were taken by the parties consistent with the existence of the second agreement, including the provision of audio and video drops by the defendants and the payment by the plaintiff of an additional $100,000. It is unnecessary to resolve this issue for the purpose of determining the Sch 6 issues.
It is to be noted the second defendant is not nominated as a party in the May agreement or the new contract. However, it is unnecessary for the purposes of Sch 6 to determine if the second defendant was a party to either agreement, the statement of claim being framed so as to include him as a party.
The plaintiff relies upon the circumstances in Sch 6(a), (b) and (c)(i), (ii) and (iv) as enlivening UCPR Sch 6. These circumstances and their application in this case are discussed hereunder.
Was the contract made in New South Wales? – Sch 6 cl (c)(i)
The May agreement was made when the agreement signed in New South Wales was emailed back to the defendants’ lawyers in New York. The contract was made in New York where the email was received – Olivaylle Pty Limited v Flottweg GMBH & Co KGAA (No 4) (2009) 255 ALR 632 at 642.
The plaintiff’s evidence is that the second agreement was made by sending a fax accepting the defendants’ offer to the defendants’ lawyer in New York. If there was an agreement distinct from the May agreement, it was made in New York where the fax was received – Reese Bros Plastics Limited v Hamon-Sobelco Australia Pty Limited (1988) 5 BPR 11,106, Egis Consulting Australia Pty Limited v First Dynasty Mines Limited [2001] WASC 22.
Thus the agreement sued upon, whether it be regarded as a separate agreement or a variation of the May agreement was made in New York not New South Wales. Schedule 6 cl (c)(i) has no application.
Was the contract governed by the law of New South Wales - Sch 6, cl (c)(iii)?
The May agreement contained an express written term that the agreement was governed by the law of New York. The new contract, the breach of which the plaintiff relied upon, affirmed, inter alia, the term that the agreement was governed by the law of New York.
The contract was governed by the law of New York, not New South Wales. Schedule 6 cl (c)(iii) has no application.
Did breach of the agreement occur in New South Wales? – Sch 6 cl (b) and (c)(iv)
If repudiation takes place by letter or telephone the breach occurs at the place from which the message was sent – Stanley Kerr Holdings Pty Limited v Gibor Textile Enterprises Limited (1978) 2 NSWLR 372. Where the breach consists of non feasance, the place of breach is where the obligation in question was due to be performed – Liftronic Pty Limited v Montgomery Elevator Company (1996) ATPR 41-458 at 41-587-41-588.
The breach alleged in the statement of claim was that the defendants “failed to procure the appearance of [the second defendant] on the scheduled August 2008 dates and caused him to perform at the Coke Live Festival in Krakow, Poland…”
There was no allegation in the statement of claim as to where the failure to procure the second defendant’s attendance occurred. The necessary acts to procure the second defendant’s attendance would have involved, inter alia, scheduling, making travel arrangements and management decisions. This would have occurred most likely in the United States. It was not alleged the failure occurred in New South Wales. The alleged breach of agreement did not occur in New South Wales. Schedule 6 cl (b) and (c)(iv) has no application.
Were the proceedings founded on a cause of action arising in New South Wales – Sch 6 cl(a)
The cause of action in contract arises upon breach of the contract. As previously observed, that breach (and the resultant cause of action) did not arise in New South Wales. Schedule 6 cl (a) has no application.
Conclusions
The provisions of Sch 6(a), (b) and (c) have no application. UCPR 11.2 does not entitle the plaintiff to serve the statement of claim outside Australia on either defendant.
This conclusion renders it unnecessary to determine the alternative bases relied upon by the defendants, namely that this Court should decline to exercise jurisdiction on the grounds it is an inappropriate forum or that the plaintiff’s claim was not reasonably arguable, matters upon which the defendants bore the onus of proof.
In the event the matter should go further, I record my impression (Bank of America v Bank of New York [1994] NSWCA 17) that, having examined the material in evidence and having taken account of the competing written and oral submissions, I am of the view that the proceedings should not be stayed on forum non conveniens (ie, “clearly inappropriate forum”) grounds – Voth at 565.
I also note that, in my opinion, triable issues exist between the parties such as would make it inappropriate to dismiss the proceedings summarily.
Orders
I make the following orders:
1.Set aside the service of the statement of claim on the first and second defendants.
2. The plaintiff pay the defendants’ costs of the application.
**********

LAST UPDATED:
3 September 2010