Voth v Manildra Flour Mills Pty Limited

[1990] HCATrans 78

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl03 of 1989

B e t w e e n -

DONALD VOTH

Appellant

and

MANILDRA FLOUR MILLS PTY LIMITED

First Respondent

and

HONAN INVESTMENTS PTY LIMITED

Second Respondent

Voth(2)

MASON CJ

BRENNAN J

DEANE J

DAWSON J

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 10 APRIL 1990, AT 10.08 AM

Copyright in the High Court of Australia

ClTl/1/HS 1 10/4/90

MR R.B.S. MACFARLANf QC:  May it please the Court, I appear

· with my earned friend, MR A.J. SULLIVAN, for the

appellant. (instructed by Mallesons Stephen Jacques)

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR B.R. McCLINTOCK, for the

respondents. (instructed by Baker & McKenzie)

MASON CJ:	Yes, Mr Macfarlan.
MR MACFARLAN:	May I hand to Your Honours the appellant's outline of submissions.
MASON CJ:	Thank you.
MR MACFARLAN:	Your ·Honours, this is an appeal from a majority

'	decision of the New South Wales Court of Appeal.
The New South Wales Court of Appeal refused to allow
an appeal from Mr Justice Clarke who declined to set aside service of process on the appellant outside the
jurisdiction and, in fact, in the United States, and
Mr Justice Clarke had also refused a stay of proceedings
which had been based on the so-called forum non
conveniens ground. Your Honours, the appellant is a
resident of the United States. He carries on business
in Kansas City as a member of the firm of Deloitte
Haskins and Sells, which is a firm separate from the to be some connection between the two firms.

The appellant's firm is in Kansas City which is

a city which, in fact, straddles two States,

Missouri and Kansas, and the appellant's office is,

in fact, in Missouri. As I will mention shortly, the

office of the company related to the respondents is

situated in that part of Kansas City which is in

Kansas, but there has been no suggestion, at least

thus far in the litigation, that anything turns on

any difference between the laws of the two different

States.	The respondents, Your Honours, are
here.

incorporated in New South Wales and carry on business (Continued on page 3)

ClTl/2/HS	2	10/4/90
Voth(2)

MR MACFARLAN (contirruing):  They are part of a group known

as the Manildra grou~, which engages in the

manufacture and sale of starch and _starch relat~ proch.Icts.

The first respondent is the principal operating

company of the group and the second respondent

is the holding company. There is a part of the

group which operates in the United States in the

form of company called Manildra Milling Corporation,

and that is a wholly owned subsidiary of the

second respondent. Starch and starch related

Manildra group to the Manildra Milling	products are sold by the Australian part of the then on-sold, no doubt to customers in the
United States. The purchase price is left
outstanding on the part of Manildra Milling,
and there are thus debts which arise in favour
of the Australian companies and interest is
charged in favour of the Australian companies.
As well there was in the relevant period at least
one advance by the first respondent to the
American company, upon which advance interest
accrued. Although the sales by the Australian
companies appear not to have been confined to
sales by the first respondent, or,for that matter, the second respondent, but to have been affected
by various Australian members of the Manildra group,
interest appears to have been wholly payable to
the first respondent, the operating company,
presumably on the basis that the first respondent
pay the other Australian companies on behalf of
the American company and thus obtain the effective benefit of the debt owing by the American company.

MASON CJ: Were there sales by the second respondent? It

was a.holding company, was it not?

MR MACFARLAN:  Yes, Your Honour, it is not, I think, clear

on the pleadings. The pleading, I think, goes no

further than referring to sales by members of the

Manildra group, without being more specific than that. (Continued on page 4)

CIT2/l/CM	3
Voth(2)

MR MACFARLAN (continuing): Your Honours, the appellant was, in the

relevant period, the auditor and an accountant for

Manildra Milling Corporation, the American company,

and he was thus a client of that corporation, but there is no allegation and has been no suggestion

that either of the respondents or,in fact,any of
the Australian companies are or have been a client

of the appellant or his firm. The United States

Internal Revenue Code, at least during the relevant

period, was alleged to impose a liability upon the

operating company, the first respondent to whom

interest was owed for income taxation in respect of

interest owed to it and that Code, it was further

alleged, imposed a liability or responsibility upon

Manildra Milling, the company owing the interest, to deduct the appropriate amount of tax from the interest,

• thus to withhold it from the first respondent and pay it to the United States revenue authorities, and as it

transpired that was omitted to be done during the

relevant period; no tax was withheld and so the

respondents allege, the respondents and the United

States subsidiary were unaware of the obligation to

withhold the tax and pay it to the United States

authorities.

It was also alleged that under Australian

revenue laws, if tax had been withheld in accordance

with the United States subsidiary's obligation under

United States laws, interests received by the

Australian company, the first respondent, would have

been exempt income. Now, the substance of the

respondent's allegation in the proceedings - and I

emphasize that it is the substance because the pleadings

are in somewhat wider terms to which I will have to come in

due course - the substance of the respondent's allegation

i.s that the appellant was negligent in not advising

Manildra Milling Corporation, the American company,

of its obligation to withhold tax.

(Continued on page 5)

ClT3/l/FK	4
Voth(2)

MR MACFARLAN (continuing): And it is alleged that as a result

of that the two respondents suffered damage and it

is alleged that the appellant owed to them a duty

in tort to avoid the economic loss which it is

alleged that they subsequently suffered. There is no
suggestion, I repeat, of any contractual obligation

as between the appellant and the respondent.

The nature of the loss alleged by the respondents

is two-fold. Firstly, it is said that the respondents

became responsible for, and did, in fact, pay.

penalty interest to the United States authorities, and

it has been conrrnon ground that that was a head of

damage which was suffered in the United States.

MASON CJ:  Who had to pay that, the first respondent, the

operating company?

MR MACFARLAN: Well, Your Honour, the payment was in fact made,

according to the allegations as we understand it,

by Manildra Milling which certainly had an obligation

under the United States laws to make the payment.

The allegation is that that payment was reimbursed

by the Australian company, the first respondent,

the operating company, so ultimately it came home

to the first respondent.

DEANE J: 

And the interest?

MR MACFARLAN: 

Yes, Your Honour, there was a penalty imposed

by the United States authorities for the omission
to pay at the correct time.

MASON CJ: On whom was that imposed, the first respondent or the

second respondent?

MR MACFARLAN:  I am not sure I can be more precise, Your Honour,

than I have been. The allegations indicate that there

were obligations on both the first-respondent and the

United States subsidiary and that the United States

subsidiary paid. Whether there was an assessment or

other claim by the United States authorities directed

to one rather than the other, I cannot indicate and

I think the evidence does not indicate that.

(Continued on page 6)

ClT4/l/LW	5	10/4/90
Voth(2)

MR MACFARLAN (continuing):  So there was a penalty charge,

Your Honour, for late payment and also there was interest payable on that penalty.

DEANE J: If the case were, ultimately, to be a border-line

one, whatever be the right test, that may be

critical, may it not, whether the Australian

company in Australia was subjected to a liability

to pay money to America by reason of your

client's alleged negligence or whether the

liability was only that of the American company

which, under group arrangements, could look

to one of the Australian companies for

reimbursement.

MR MACFARLAN:	Yes, would Your Honour just pardon me a moment. Yes, well, Your Honour, we would
accept it may be important. The evidence,
as far as it goes, was that the United States
company made the payment to the United States
authorities and we would submit that in
the absence of any other evidence, one would
infer that 5t was the United States company's obligation and an inference would be raised
by the fact of payment and it would be for
the respondents to point to something which dispelled that inference. Well, could I just
say about that, that that head of damage,
we assert, was suffered in the United States
because that was where the payment had to be
made. The other head of damage is one which
has been treated as having been suffered in
Australia and it is, in essence, that there
was an overpayment of Australian income tax,
which is alleged to be irrecoverable, the
overpayment occurring because income that could have been exempt, if the right things had been
done, was not treated as exempt but as assessable
income.
TOOHEY J: And that overpayment was made by which of the

respondents?

MR MACFARLAN:  It is alleged to have been made, I think, by

both of the companies, Your Honours, but certainly

by - - -

MASON CJ: It would be the-first respondent.

MR MACFARLAN:  The first respondent.

ClT5/l/JL	6	10/4/90
Voth(2)

MR MACFARLAN:  The particulars are set out in the statement

of claim. The relevant parties are to be found

on pages 13 and 14 of the appeal book. There may

be some overlap in the damages claim as was pointed

out by His Honour the Chief Justice in the court

below, but on page 13 of the appeal book, line 10,

there is an allegation that:

non-recoverable Australian income tax -

was -

paid on exempt income -

and at lines 13 to 15 it said	there was interest
incurred in respect of that.	Also in respect of
the second plaintiff, on page	14 of the appeal book,
at line 3, again an assertion	that:

non-recoverable Australian income tax -

was paid -

by members of the Group other than the first

plaintiff -

so it said -

as they were not able to take advantage of

exempt income.

There is a somewhat more detailed exposition

of the position on pages 29 to 30 in an affidavit

sworn by a Mr Williams; that deals with the taxation

position. As Your Honours will see from pages 13

and 14, the other aspect of the claim to loss iG

Australia is that the respondents were unable to

take advantage of carry-forward tax losses. The

benefit of those losses were said to have been

lost by reason of the appellant's negligence.

Precisely how that came about is not to be found in

arrangements would have been made within the group the evidence but it is asserted, in substance, that	to ensure that the exempt income was received by
an appropriate company within the group such as to
enable advantage to be taken of carry-forward
losses.

(Continued on page 8)

ClT6/l/DR	7	10/4/90
Voth(2)

MASON CJ:  I do not want to get into any lengthy discussion

about this, but how is it that MMC, the holding

company, is making a claim in respect of the sum

of $196,000-odd, that appears to have been an

overpayment made by subsidiary companies?

TOOHEl J:	MMC is the American company, is it not?
MR MACFARLAN:	That is so. I think His Honour the

Chief JU$tice may have been referring to other members

of the Manildra group in Australia, rather than

MMC.

TOOHEY J: Yes.

MR MACFARLAN: Well, Your Honour, we take it that the basis

for that is a suggestion that, although initial

payments may have been made by other Australian
members of the group in some fashion,the ultimate

responsibility fell upon the holding company, the

second respondent, because it reimbursed those

other members of the group, but we are only

drawing inferences, to some extent, from the

pleadings.

DEANE J: Does it appear where the debts giving rise to the

liability to pay interest arose? That is the

advances and the liability to pay for purchases.

MR MACFARLAN:  Well we do not know the details, Your Honour,

of the sales from the Australian companies to the

American one, in the sense of details of where the contracts were concluded or where the purchase

price was payable and precisely upon what terms.

All we know from the peadings and the evidence is

that such sales did occur and debts, in respect

of the purchase price, did arise.

(Continued on page 9)

CIT7/l/CM	8
Voth(2)

MR MACFARLAN (continuing): The closest one comes, Your Honour,

is in the affidavit to which I have referred at 28

of the appeal book, lines 5 to 12.	I think the
words in line 7 or 8:

sold goods to MMC on credit -

really are the most precise statement, if they be

that at all, of the arrangements. Your Honour~ the

problem was discovered, so the respondents allege, in

1984 and the - - -

MASON CJ:	Mr Macfarlan, I was going to ask you, is
Chief Justice Gleeson's surrmary of the evidence an accurate surrmary?
MR MACFARLAN:	I do not think there is any part of it with which

we join issue, Your Honour.

MASON CJ: Is it a sufficient statement of the factual basis

from your point of view?

MR MACFARLAN:	Yes, it is, Your Honour.
MASON CJ:	Well, perhaps we could content ourselves with that.

MR MACFARLAN: Yes, indeed. So, Your Honours, if I just mention

that the losses, then, are said to have arisen in the

1976 to 1983 period, so the way the matter came before

this Court was that the respondents connnenced

proceedings in New South Wales, they obtained leave

on an ex parte basis to serve outside the jurisdiction,

application was made to set aside that order and

application was made for a stay. Both of those orders

were refused at first instance and by a majority in
the Court of Appeal.

Your Honours, I need then to very briefly indicate to Your Honours what were the reasons given in the

Court of Appeal for refusing the relief that was sought

and I can do so by referring to one or two short

passages in what are fairly lengthy judgments.

(Continued on page 10)

ClT8/l/FK	9
Voth(2)
MR MACFARLAN (continuing):	I can do so by referring to one or

two short passages in what are fairly lengthy

judgments. In the judgment of the Chief Justice in

the court below at page 85 of the appeal book, having

discussed the authorities His Honour said at line 18:

The approa~h of the majority in OCEANIC

SUN LINE would, in my view, result in the

present case in a refusal of a stay of
proceedings on the general basis of

forum non conveniens.

If I could just interpolate numbers as I go through,

Your Honours. Firstly:

The plaintiffs are local residents.
The case does not involve would could

properly be described as "forum shopping".

Secondly:

The facts of the case have a significant

connection with the local jurisdiction.

There are two subparts of that:

Part of the damages were incurred here.

And:

It is at least strongly arguable that the

causes of action arose in New South Wales

and that the tort complained of -

"torts", I think that should be -

were committed in this jurisdiction.

Thirdly:

It is, also, strongly arguable that the

substantive law of tort relevant to the

resolution of the disputes will be the

law of New South Wales. On any view of the

matter the revenue law of Australia will be

of particular importance in this case. The

dispute is trans-national in character, and -

what seems to be fourthly -

it is inappropriate to describe the State

of Missouri as "the natural forum" for

the resolution of the dispute.

ClT9/l/HS	10	10/4/90
Voth(2)

Now, it is not entirely clear, Your Honours,

but it would seem that His Honour applied the views

expressed by Justice Deane in this Court in the

OCEANIC case, although, in terms His Honour simply

says that the approach of the majority leads

to the view he expresses.

(Continued on page 12)

ClT9/2/HS	11	10/4/90
Voth(2)

MR MACFARLAN (continuing): The other member of the majority

was Mr Justice McHugh and at page 111 of the

appeal book his judgment appears. At the foot of

the page he says:

the basic principles applicable in this case

are those expounded by the High Court in

MARITIME INSURANCE ..... That is to say, as

Deane J pointed out in FAY -

that is the OCEANIC case -

" ... the power of a court whose jurisdiction

has been regularly invoked to dismiss or stay

proceedings on the ground that they should

have been brought in some tribunal in another

country is limited to the case where the court

is persuaded that it is such an unsuitable or

inappropriate forum for their determination

that their continuance would work a serious

injustice in that it would be oppressive and

vexatious to the defendant. On that traditional

approach, the clear inappropriateness of the

local forum may justify dismissal or a stay.

The mere fact that some foreign tribunal would

represent a "more appropriate" forum will not."

And then His Honour says:

Here the plaintiff companies are -

and if I can interpolate numbers again, firstly:

residents of New South Wales.-

secondly:

They have regularly invoked the jurisdication of

the Sµpreme Court -

thirdly:

It is strongly arguable that both the cause of

action as well as part of the plaintiffs' damage

arose in New South Wales -

and, fourthly:

The events which gave rise to the action certainly

have a substantial connection with New South Wales -

fifthly:

The learned judge at first instance regarded the

instutition of the proceedings in this State as

giving the plaintiffs two legitimate personal or

judicial advantages which they would not have if the

action was heard in the State of Missouri.

ClTl0/1/LW 12 10/4/90

Voth(2)

I will just interpolate there. One was that there

is an ability in. New South Wales courts to make
an award of costs. whereas there was not a relevant

power of the court to do so according to the

evidence.

(Continued on page 14)

ClTl0/2/LW	13	10/4/90
Voth(2)

MR MACFARLAN (continuing): And the other one related to

an award of interest which was perhaps available

here at the discretion of the court, but not in

the United States and sixthly, neither the State

of Missouri nor the State of New South Wales is

the exclusive natural forum. The dissenting

member of the court was the president,

Mr Justice Kirby, and the essence of his views

may be found at 105 of the appeal book at line 7,
he says:

Whatever the reason, it looks distinctly odd for the respondents, who had no

contractual relationship with the appellant,

and who were not his clients, to bring an

action in this State in respect of

activities or omissions, all of which

relevantly occurred in Missouri.

And again, if I could interpolate numbers: firstly,

the appellant's office is in Missouri; secondly,

his clients are in Missouri or nearby States;

thirdly,his allegedly negligent advice was given
there; fourthly,his accounting and auditing

activities took place there; fifthly, it is there

that it is alleged he ought to have discovered or

initiated the steps to discover the potential

liabilities of the respondents and there entitlements

and duties under the United States and Australian

revenue laws; sixthly, it is there that the

liability to pay the United States revenue authorities
was discovered; seventhly, it is there that the
belated payment of tax was made and eighthly, it

is there that the overwhelming bulk of the evidence

in any trial of the action would be found and

ninthly, it is there that the standards that could

be expected of the appellant and the reasonable

scope of his duty to third parties, who are not his

clients, would be established by evidence of local

practice, professional rules and peer group

expectations.	He refers to the proposition that
it would be easier to prove Australian tax law

in America than to prove the Missouri evidence in

Australia and at line 9, he says:

I consider that it would border on a scandal

to the administration of justice in this

State and an offence to the dignity of

our Court to permit the respondents' action

to continue here upon such flimsy bases

as the respondents can demonstrate.

So with those preliminary submissions, Your Honours,

we can come to the first principal submission, that

is, that the decision in OCEANIC SUNLINE V FAY,

165 CLR 197, should be reconsidered and to support that

submission I need to briefly indicate what were the

CITll/1/CM	14
Voth(2)

views that were expressed in OCEANIC, if I

could go to that decision again. It contains

lengthy judgments and I will attempt to keep my

Justice Brennan at 234 of that report at about	references brief. Firstly to the judgment of
point 5, His Honour sets out a portion of the
speech of Lord Goff in SPILIADA, which is the
1987 House of Lords decision, which we seek adopted by Your Honours. Justice Brennan said:

The basic principle which implements the new policy was stated by Lord Goff in

Chieveley in SPILIADA in these terms:

A stay will only be granted on the ground

of forum non conveniens where the court is

satisfied that there is some other available

forum, having competent jurisdiction, which

is the appropriate forum for the trial of the

action, i.e. in which the case may be tried

more suitably for the interests of all the

parties and the end of justice.

(Continued on page 16)

MR MACFARLAN, QC

CITll/2/CM	15	10/4/90
Voth(2)

MR MACFARLAN (continuing): So, it is a test which requires the

applicant for a stay to show that there is another

more appropriate forum and if he does that he

should obtain his stay. Justice Brennan then said,

at page 239, it is about six lines from the bottom:

leads me to hold that the true principle

is, as Lord Simon of Glaisdale put it in

his dissenting speech in -

THE "ATLANTIC STAR" -

"[A] plaintiff who founds jurisdiction

will not be denied a hearing unless he

is misusing the forensic process so as

to perpetrate injustice." The formulation

by Scott L.J. is, and should remain> the law of this country and "oppressive" and

"vexatious" should be understood according

to their ordinary meaning.

And His Honour, therefore, adhered to the

approach in the early High Court decision in

MARITIME as reflected in English decisions of that

time. Justice Deane, at page 242, said this -

and I have not said it in so many words but, of

course, Your Honours Justice Brennan, Justice Deane
and Justice Gaurdon comprised the majority in
OCEANIC and Justice Wilson and Your Honour

Justice Toohey dissented. At page 242, at about

point 3, Justice Deane said this:

The general (or traditional) approach

which emerges from MARITIME INSURANCE CO.

is that the power of a court whose jurisdiction

has been regularly invoked -

and if I could note the reference to "regularly
invoked" because I will make reference to that in
context of a later submission -

to dismiss or stay proceedings on the ground

that they should have been brought in some
tribunal in another country is limited to the

case where the court is persuaded that it is
such an unsuitable or inappropriate forum for

their determination that their continuance

would work a serious injustice in that it would
be oppressive and vexatious to the defendant.

On that traditional approach, the clear

inappropriateness of the local forum may

justify dismissal or a stay. The mere fact

that some foreign tribunal would represent

a "more appropriate" forum will not.

ClT12/l/DR	16	10/4/90
Voth(2)

Your Honours, of course that test is rather closer to SPILIADA than the MARITIME test but, as

His Honour the President in the court below said,

there is a clear bias in the test towards the

plaintiff who commences in the local forum because

it is necessary for the applicant for the stay to

show a clear inappropriateness of the forum

whereas the somewhat more relaxed test that

· Lord Goff would adhere to is that it would be

sufficient for the applicant for the stay to show

that there was a more appropriate forura elsewhere

without showing that the forum chosen was a clearly

inappropriate one.

BRENNAN J:  Mr Macfarlan, it may be important for us to see

where the weight of opinion lies in relation to SPILIADA or the traditional formulation in this case. You put the proposition that that passage

from Justice Deane is closer to SPILIADA, do you

wish to develop that?

(Continued on page 18)

ClT12/2/DR	17	10/4/90
Voth(2)

MR MACFARLAN:  I had not intended to suggest,

Your Honour, that it is closer to SPILlADA

than MARITIME, but rather that it falls somewhere

in between, but I do so on the basis,

Your Honour, that the statement by His Honour

Justice Deane appears to look to an objective

consideration of the inappropriateness of the

forum that has been chosen and does not focus on the conduct of the plaintiff and we would suggest that tmder the MARITIME test, one is rather

looking to see whether the plaintiff's conduct

in commencing proceedings in the jurisdiction

can be characterized as an abuse of process. But

the emphasis with His Honour Justice Deane's test,

we would respectfully submit, is rather towards

an objective assessment of the appropriateness, or

inappropriateness, of the forum.

BRENNAN J: No doub-t Justice Deane_can speak for himself on

that passage, but I read that passage as describing

His Honour's appreciation of what the traditional

approach was, rather than His Honour's appreciation

of what the test ought to be.

MR MACFARLAN:  Yes·, well, Your Honours, we would respectfully

submit that there is some departure from the

traditional test and His Honour, ro put it bluntly,

was updating the test, to some extent, and developing

the law in the way that the common law has done for

many years and the sentence which commences, "On that

traditional approach the clear inappropriateness of the

local forum may justify dismissal or a stay.", we

suggest has revealed something about the traditional
test which, perhaps, was not apparent from the

19th century cases, or those of the very early

20th century.

Then, if I could move to 248 in the judgment of

Justice Deane, at about point 4, His Honour says:

That onus will ordinarily be discharged by

a defendant who applies promptly for a stay

or dismissal if he persuades the local court

that, having regard to the circumstances of

the particular case and the availability of

the foreign tribunal, it is a clearly

inappropriate forum fori the determination of
the dispute between the parties.

And further down the same page, at about point 7 or

'J?Oint 8:

C1Tl3/l/JL	18
Voth(2)

Under it, the applicable test pursuant to

traditional principles can, in the ordinary

case, properly be seen as an "inappropriate

forum" test. It cannot, however, properly be seen as a "more appropriate forum" test since the mere fact that a tribunal in some

other cotmtry would be a more appropriate

forum for the particular proceeding does

not necessarily mean that the local court

is a clearly inappropriate one.

And then, if I could go to Your Honour

Justice Gaudron's judgment, at 265, and at about

point 3, Your Honour says:

However, I do not think that possibility

should be extended, whether by adoption of the

doctrine as enunciated in SPILIADA or by

reformulation of existing principle. The

primary obligation of the courts of this

country is to the laws of this country. That

obligation, in my view, requires that any

new principle or any reformulation of existing

principle should be confined to cases where

the rights and liabilities of parties to the

litigation must, by reason of applicable choice

of law rules, be determined by the application

of the substantive law of a foreign legal

system, the forum law merely providing the

procedural framework for the action.

(Continued on page 20)

C1Tl3/2/JL	19	10/4/90
Voth(2)

MR MACFARLAN (continuing):  We would take it from that,

Your Honours, that Your Honour Justice Gaudron would

apply the MARITIME test without any reformulation in

a circumstance wnere Your Honour was of the view that

the substantive law was that of the forum, but then

Your Honour goes on further down the page, at about

point 8, to say this at the beginning of the new

paragraph:

Where the rights and liabilities of

parties fall entirely for determination by

the application of foreign substantive law

the selected forum will on occasions be an

inappropriate forum in the sense explained in

the judgment of Deane J. in this case.

And the last three lines:

It seems to me that there is likely to be

little, if any, practical difference in

cases falling entirely for determination by

the application of foreign substantive law

whether the question of stay is determined on

the basis of the selected forum being an

inappropriate forum in the sense explained by

Deane J., or whether it is determined on the

basis that there is another available, and

more appropriate, forum as allowed in SPILIADA.

For present purposes it is sufficient if, subject

to one matter hereafter to be mentioned, I state

my preference for the inappropriate forum test as

stated by Deane J. That test is consonant with

established principle, and gives the

approach enunciated in ST. PIERRE an operation

attuned to modern circumstances.

And the qualification, as we understood it, relates to

the application of the foreign substantive. law and

Her Honour's view is that it is sufficient:

if it is fairly arguable that the substantive

law of the forum is applicable.

If that be the case, then, as we understand it,

Her Honour would apply the MARITIME test. I~ on the
other. view, it were clear that foreign substantive law
were applicable, Her Honour Justice Gaudron's view

is that·the test formulated by Justice Deane would

be applicable. We would emphasize the somewhat tentative

expression of preference for the formulation of

Justice Deane over that of Lord Goff in the circumstance

where foreign substantive law is applicable.

Your Honours, Justice Wilson and Justice Toohey,

at 212 point 2, adopted the approach of Lord Goff
in the SPILIADA case, and they say at the beginning

of a new paragraph:

ClT14/l/FK	20
Voth(2)

We agree with Lord Goff's approach

in SPILIADA.

And they give reasons for that to which I will

return_ and upon which we rely. Your Honours,

we submit that the circumstances are such that

Your Honours would be prepared to reconsider the

views expressed in OCEANIC and FAY.	We point to
. these circumstances.

The decision was arrived at by a bare majority

of a five Justice Court. There were distinct

differences in approach within the three members of

the majority and we would say, with respect, that

at best one could find a prevailing view which

reflected the views of two Justices, rather than the

views which were shared by all three Justices in the

majority.

(Continued on page 22)

C1Tl4/2/FK	21
Voth(2)
MR MACFARLAN (continuing):	We submit that, in those

circumstances, the law on this topic in Australia

is left in a state of some uncertainty and should

be considered afresh by the Court. We appreciate

that the circumstances in which the Court will

reconsider a previous decision of this Court are
rare and we nevertheless say that the circumstances

are present here and in JOHN V THE FEDERAL

COMMISSIONER OF TAXATION the Court identified

certain circumstances which were considered to justify
a reconsideration of a previous decision and, we

would submit, they are supportive of the submission

we make. I refer Your Honours to that decision,

166 CLR 417, at page 438 in the joint judgment of

five Justices.

MASON CJ:	Mr.Macfarlan, I think it would be more convenient
if we heard what you have to say in reply to

Mr Jackson on this matter.

MR MACFARLAN:  If Your Honour pleases. I can move then,

Your Honours, to the next substantive submission we

make, namely that the SPILIADA approach should be

adopted on stay applications and to support that

submission it is necessary to take Your Honours

briefly to SPILIADA and indicate what the views were
that were expressed. That is to be found in

(1987) AC 460, and at page 476 in the speech of

Lord Goff he says this at letter C; the principle

which was quoted by Justice Brennan in OCEANIC: The basic principle ..... that there is

some other available forum, having

competent jurisdiction, which is the

appropriate forum.

Then His Lordship goes on to say at line D:

As Lord Kinnear's formulation of the

principle indicates, in general the burden

of proof rests on the defendant to persuade

the court to exercise its discretion to

grant a stay ..... if the court is satisfied
that there is another available forum

which is prima facie the appropriate forum

for the trial of the action, the burden
will then shift to the plaintiff to show

that there are special circumstances by
reason of which justice requires that

the trial should nevertheless take
place in this country.

(c) The question being whether there is

some other forum which is the appropriate

forum for the trial of the action, it is

pertinent to ask whether the fact that

the plaintiff has, ex hypothesi, founded

jurisdiction as of right in accordance

ClT15/l/HS	22	10/4/90
Voth(2)

with the law of this country, of itself

gives the plaintiff an advantage in

the sense that the English court will

not lightly disturb jursdiction so

established.

Then at page 477, about letter Eon the page:

In my opinion, the burden resting on

the defendant is not iust to show that

England is not the natural or appropriate

forum for th~ trial, but to establish

that there is another available forum

which is clearly or distinctly more

appropriate than the English forum. In

this way, proper regard is paid to the

fact that jurisdiction has been founded

in England as of right.

(Continued on page 24)

ClT15/2/HS	23	10/4/90
Voth(2)

MR MACFARLAN (continuing): And then at 478A:

So it is for connecting factors in this sense

that the court nrust first look; and these will

include not only factors affecting convenience or

expense (such as availability of witnesses), but

also other factors such as the law governing the

relevant transaction -

and at letter C, in the margin:

If however the court concludes at that stage that there is some other available forum which

prima facie is clearly more appropriate for the

trial of the action, it will ordinarily grant a

stay unless there are circumstances by reason of

which justice requires that a stay should

nevertheless not be granted.

And between D and E, His Lordship refers to one such

factor, as he says:

One such factor can be the fact, if established objectively by cogent evidence, that the plaintiff will not obtain justice in the foreign jurisdiction -

and he refers to THE ABIDIN DAVER. So those are the

essence of Lord Goff's views and, Your Honours, to

support an adoption of SPILIADA we have to persuade

Your Honours that the approach in the early High

Court decision in MARITIME INSURANCE is no longer appropriate to be followed and we put these submissions in support of that proposition.

Firstly, Your Honours, that decision in MARITIME

was based on English authority and principally

the decision in LOGAN V BANK OF SCOTLAND, which has

now been rejected in England. In the MARITIME case

the High Court accepted without question and without

independent consideration the views that had been

expressed in the English authorities and that appears

in the judgment of the Chief Justice in that case

at 198, at about point 5, but I will not read that

unless Your Honours wish, but the Chief Justice

referred to what Sir Gorell Barnes had said in

LOGAN V BANK OF SCOTLAND and made a reference to

EGBERT V SHORT. So there is no independent reasoning

in the case and when one finds that the foundation

for the High Court decision has since disappeared in

the sense that the English decisions relied upon are

no longer the law in England, we would submit that the
need to assess the merits of the actual decision in

MARITIME is stark.

ClT16/l/LW	24	10/4/90
Voth(2)

Your Honours will recail that the process by which those authorities have been rejected in

England has been by means of a number of decisions

of the House of Lords, culminating in SPILIADA, but the process started with THE ATLANTIC STAR,

· (1974) AC 436, to which I will not go,but if I could

remind Your Honours that Lord Wilberforce in that

case said that there must be some flexibility

introduced into the forum non conveniens principle

and he did that at 468 B to H, and then came

MACSHANNON V ROCK.WEAR GLASS,. (1978) AC 795. Again I will

not go to bhat but there Lord Diplock enunciated two

tests which were subsequently applied in Australia.

The first was there must be found to be a forum which was substantially more convenient for the determination

of the litigation and, secondly, the grant of a stay

must not prevent the plaintiff obtaining any

legitimate personal or juridical advantage.

(Continued on page 26)

ClT16/2/LW	25	10/4/90
Voth(2)

MR MACFARLAN (continuing):  Now that approach was described in

the subsequent decision in SPILIADA as being just

a step·in the process of formulation of the rules

in this area and in SPILIADA itself in 1987 the
principles were enunciated in the way that I have

indicated. So by those steps the early English decisions in LOGAN and ST, PIERRE and the like were discarded and it is appropriate to describe

the principle adopted in MARITIME, in our

submission, as one that has been undermined by

subsequent legal development and we borrow that

phrase from something His Honour the Chief Justice

said extrajujudicially :tn~an article which is entitled

"The Use and Abuse of Precedent", which is to

be found in the Bar Revue. It is in fact in a

volume which we have handed Your Honours' tipstaves,

collecting a number of articles and authorities

not readily available and we would submit that

adhere,ace to the MARITIME decision would, in light
of the collapse of its foundation, if I could use
that expression, be an unwarranted adherence to

precedent.

BRENNAN J: Are you speaking of any collapse of the foundation

other than the English collapse?

MR MACFARLAN:  No, I am not, Your Honour, I am putting it on

the basis that there was not any independent

consideration of the position by the High Court,

which simply adopted the English principles, and

those principles have now been rejected in England.

So the answer to Your Honour's question is yes, I think.

BRENNAN J:	I know there are some references to that in the Australian cases in Sir Harry Gibbs' s judgment,
for example. Are there any other considerations
given to the proposition in the Australian cases,
apart from the judgment of Sir Harry Gibbs?

MR MACFARLAN: Yes. Your Honour is referring to COPE ALLMAN,

I think.

BRENNAN J: Yes.

MR MACFARLAN:	We are not aware of any other Australian decision which followed MARITIME. As has been
indicated at a couple of points,which I will
indic:2.te in a momt:>nt_,  there have been a number
of cases in Australia which have applied the English authority commencing with THE ATLANTIC STAR
and from about the middle 70s  the approach in
Australia appears to have involved an acceptance of such approach as was then current in England, whether it would be THE ATLANTIC.STAR or
MacSHANNON V ROCKWEAR, and those cases are referred
to by His Honour the President Mr Justice Kirby

CIT17/l/CM	26	10/4/90
Voth(2)

in the appeal book at 96 point l.There is an

unreported Court of Appeal decision in New

South Wales. But perhaps more importantly

in the judgment of Justice.s::Wilso.n and Toohey

in OCEANIC, Their Honours refer. to the various

ways in which the English authority has been followed in Australia. At 212 of OCEANIC, at

about point 1, top of the page, they say that:

such decisions as there have been in the

courts in Australia since THE "ATLANTIC STAR"

was decided in 1973 appear to have followed

the English development:

And they refer to a West Australian case; another

case in the Federal Law Reports; New South Wales

Supreme Court; Northern Territory case and an

unreported New South Wales Court of Appeal decision

and in addition to that are the cases referred to

or one of them referred to by Mr Justice Kirby,

the decision of Mr Justice Yeldham in GARSEABO

NOMINEES V TAUB, (1979) 1 NSWLR 663, which as

Mr Justice Kirby indicates, is a case which was

followed in New South Wales and adopted the

MacSHANNON approach. So that draws attention to

the second of the submissions we make about

MARITIME, namely that it received very little

attention in Australia and lower courts in recent

years were following the more modern English

authority.

(Continued on page 28)

CIT17/2/CM	27
Voth(2)

MR MACFARLAN (continuing): Thirdly, about the MARITIME

decision, Your Honours, we would say it reflected

what is now outmoded parochialism and paternalism

and we adopt some of the comments of His Honour
the President below in this respect. His Honour

spoke of the principles having behind them:

the expression of ..... a confident feeling

of superiority in the quality of British

justice -

and -

also a somewhat chauvinistic belief that

British subjects ..... should not be sent off to the uncertainties of a foreign

court.

BRENNAN J: Are there any occasions when British subjects, or

British residents, have been sent off to the

uncertainties of foreign courts under the SPILIADA

test?

MR MACFARLAN: Well, I am not sure that we would accept that

if they went elsewhere they went to uncertainties

of foreign courts, Your Honour, but -

BRENNAN J: Well, had they been sent off to the certainties

of foreign courts?

MR MACFARLAN:  Yes . I could not answer that question offhand,

Your Honour .

BRENNAN J: It is rather an important one, is it not, in the

sense that if, whatever the formulation be, the

reality is that England has never sent off anybody

from their own shores; it says something about

the true content of the proposition expressed in

SPILIADA.

MR MACFARLAN: It may say something, Your Honour, about the

readiness of the courts to abandon the old test

and to apply the new but that may just reflect an

ingrained sense of acceptance of the old test. We

can certainly check that, Your Honour. There have

been a number of decisions, reported English

decisions concerning the SPILIADA test, or

applying the SPILIADA test, and I am not whether

any have resulted in the situation Your Honour

identified.

BRENNAN J:	Yes.
MR MACFARLAN:	We would submit that the test reflects the values of a bygone era and, again, we borrow that
language from something said by His Honour the Chief Justice in the article I mentioned, not with

ClT18/l/DR	28	10/4/90
Voth(2)

reference to this problem but with reference to

the question of precedent generally.

GAUDRON J: Those phrases have a nice ring to them,

Mr Macfarlan, but there is this problem, is there

not, it is not the value of a bygone age that

courts are supposed to exercise their jurisdiction?

That has been dealt with in fairly recent times in

relation to criminal prosecutions. There may be

slightly different considerations but it is not

the value of a bygone age that courts can deny

justice on idiosyncratic bases.

MR MACFARLAN: Well, we certainly accept that, Your Honour,

but it is not such a case here, we would submit.

We are not talking about depriving a plaintiff of

a forum for the fair and just determination of his

claim. There is, of course, a qualification to

the application of the principle where there ±s some

suggestion of corruptness or other unfairness in

the alternative legal system that is being looked

at but, leaving that possibility aside, in

assuming that one is dealing with a possible

alternative jurisdiction which is one which has

the respect of courts of this jurisdiction,

then it is simply a matter of choosing, in our

submission, how the ends of justice are best

satisfied in allocating the litigation to one forum

or another. There would be no question, in our

submission, of denying the plaintiff a right of

access to the courts.

(Continued on page 30)

ClT18/2/DR	29	10/4/90
Voth(2)

MR MACFARLAN (continuing):  We would submit, in the modern world,

one really has to understand the principle that

Your Honour adverted to as applying to the court

system generally, and one cannot say that a plaintiff

necessarily has a right to be heard in a particular

place. It can perhaps be said that he has a right

to be heard and this Court should not deny him that

right, ·and as long as he is heard somewhere · in a

system that is fair and just, then we would say

that is sufficient.

GUADRON J:	Yes, I understand.
MR MACFARLAN:	I will come to that in a little more detail

if I may.

DEANE J: Does that not really raise an underlying ryroblem

of theory here and that is if the jurisdi~tion

has been regularly invoked, is it implicit in

the SPILIADA doctrine where they still use the

phrase "forum non conveniens", that because there

is a clearly more appropriate forum somewhere

else, the English forum is inappropriate. I mean, it is one thing to say a court can properly refuse

to exercise jurisdiction because it is an

inappropriate tribunal; it is another thing for

a court to say, "Even though this is an appropriate

tribunal we will not exercise our jun.isdiction

because marginally there is a more appropriate

tribunal somewhere else", which is, in some parts

of America, the approach that seems to have been
adopted.

MR MACFARLAN: Yes, well, Your Honour, we would not accept

the use of the word "marginally" in that context

because Lord Goff would require there to be a

clear difference - - -

DEANE J: No, I was not suggesting SPILIADA; I said, in some

of the American decisions that seem to have been -

MR MACFARLAN: Yes, well, under the test which we ask

Your Honours to adopt there would have to be a

clear different shown - - -

DEANE J: But what is the theory of it, is the theory of

it that a court refuses to exercise jurisdiction

even though it considers that it is an

appropriate tribunal or is the theory that if

it clearly and distinctly emerges that another
tribunal is more appropriate the corollary of

that is that the court is "forum non conveniens"?

MR MACFARLAN: Well, we think, Your Honour, ib would be the

latter, but we would suggest it does not necessarily follow that a characterization of a foreign tribunal

C2Tl9/1/JL	30	10/4/90
Voth(2)

as a more appropriate one indicates that the

local one is inappropriate, it is just less

appropriate.

DEANE J:  But I think you are missing the point of my question

and that is, "Is your submission that what the

Court is concerned with is simply the assessment

of the more appropriateness of some foreign

tribunal, or is it that that is relevant to a

determination of the question whether the Court

is, itself, an inappropriate tribunal"?

MR MACFARLAN:  It is a question, we would submit, of assessing

whether the foreign tribunal is the more

appropriate forum.

DEANE J:	So the Court does not have to-~ - -
MR MACFARLAN:	It does not necessarily have to - - -
DEANE J:	- :-::.,.-::., ever face the question whether it is in truth forum non conveniens?
MR MACFARLAN:	No, with respect, because the ultimate question

for the Court must be the administration of

justice and there are a number of factors which

point in the same direction, we would submit, but

if the administration of justice indicates that

litigation should occur elsewhere then there should

not be any inhibition on the court making orders

which would ensure that occurred.

(Continued on page 32)

ClT19/2/JL	31	10/4/90
Voth(2)

DEANE J: Well, it would be much easier to accept the

SPILIADA approach if, at the base of it, there was

a forum non conveniens doctrine, that is, if

the party seeking the stay was saying to the court exercising jurisdiction, "You are an inappropriate

tribunal". It is not quite so easy conceptually to

accept the approach that it is not forum non conveniens

at all, and all you have to say to the court is,

"Your jurisdiction has been invoked the matter is

before you. You are an appropriate tribunal but

there is a more appropriate tribunal, or a distinctly

more appropriate tribunal somewhere else." It
may be that nothing turns on it, it is just that it is

a little bit easier to accept SPILIADA if it is seen

as having t~at implicit step - - -

MR MACFARLAN: Well, in a very broad sense, of course, the

SPILIADA test does mean the local forum is an

inappropriate forum, but only in the sense that it is less appropriate than another one, but we think

that the SPILIADA test does not necessarily mean that
the forum is inappropriate in the sense that

Your Honour used that expression in OCEANIC.

My learned junior informs me - this is to respond

to a question of Justice Brennan's - that one example

of a British crown colony, at least sending a local

subject away to a foreign court is the decision in

the WAYLINK, (1988) 1 Lloyd's Rep 475.

BRENNAN J: And where was it sent from and to?

MR MACFARLAN:	From Gibralter, Your Honour, to Germany.
BRENNAN J: Thank you.	In developing the SPILIADA test, do you

propose to give us any indicia which might be invoked

to consider relative appropriateness?

MR MACFARLAN: Yes, I do, Your Honour. I cannot say that I

intend to indicate exhaustively what they are and nor, I would think, would anyone wish me to but when	one comes to apply the SPILIADA test to the facts of	this case one can see very well, in our submission,
what some of those indicia are, or should be.

DAWSON J: And, is the corollar_y of aP.propriateness,

inappropriateness? Obviousry not the corollary

MR MACFARLAN: 

In a very broad sense, Your Honour, but in the

sense that where there is something that is more
appropriate one can always say that the thing one

has is inappropriate, and only in that sense.

DAWSON J: Can they? 

That is something that, it seems to me,

Justice Deane was denying, of course.

C1T20/l/FK 32

Voth(2)
MR MACFARLAN: Well, we accept that it doesnot mean

inappropriate in the sense that His Honour used

that expression in OCEANIC, or perhaps in the normal

sense. It would be only in a very broad

and very loose sense that one could say that there

was a more appropriate forum elsewhere necessarily

involved a finding that the local forum was inappropriate.

We would not put it in those terms.	We do not
contend for that.

DAWSON J:  But if inappropriateness is not the opposite

of appropriateness, I would like to know what makes

a court clearly inappropriate.

(Continued on page 34)

ClTZ0/2/FK	33	MR MACFARLAN, QC 10/4/90
Voth(Z)

MR MACFARLAN:  Yes. Uitimately, Your Honour, it turns on the

way in which the litigation may be most efficiently

and fairly disposed of between the parties and

bearing in mind the interests of other litigants

and the public, that is how best may the ends of justice be achieved. If a case is going to take twice as long if litigated in the local forum and

be twice as expensive because witnesses have to

come from the other·side of the world, there is a

good prima facie case, we would suggest, for regarding

the alternative forum as a more appropriate one, but I hope, as my submissions develop, I will be able to indicate to Your Honour the particular indicia,

certainly in the context of this case, which we regard

as determinative.

Of course, the question, "Which substantive

law applies?", is one factor that we would put as

very significant.

DEANE J:	. Of course, in that same area there is the problem
of SPILIADA's clearly or distinctly more appropriate.
What do you see that as meaning, that it is much
more appropriate, or that no matter how narrow the
margin it can be clearly or distinctly seen that it
is 51 per cent more appropriate? It seems to have
been understood in the latter sense in England.

MR MACFARLAN:	Yes. There may be some analogy to the type of approach a court takes where serious allegations
are made in a civil case that the court is hesitant to accept them unless it has a firm feeling of persuasion or it feels they are clearly correct, or
some such formulation, and Lord Goff ascribes the
need for that feeling of clear distinction to a recognition of some fact that the plaintiff has
started there. It is perhaps not much more than a
question of onus of proof. There may be a little more
in it in the sense that the Court is making a decision of some weight in that it is forcing a party to
bring an action he started to a halt and to go
elsewhere, so one can understand the Court would
not do that lightly.
DAWSON J:	I rather anticipate that you are going to say - perhaps

I should not put it that way, I should wait to hear

what you say - but you are going to say that you,
as it were, list the factors in favour and the factors

against, as you did in the judgments, you weight

each factor appropriately and then see where the

balance lies.

MR MACFARLAN:  Yes. That would be so. Some factors would

have more weight than others, of course.

DAWSON J:  In terms clearly inappropriate, that does not seem

to me to be what Justice Deane had in mind and that

it is -not a question of weight like that at all.

ClT21/1/HS	34	10/4/90
Voth(2)

MR MACFARLAN:  Yes. Well, His Honour the Chief Justice in

the court below apparently applied Justice Deane's

test and he did so, it seems, by identifying factors
and listing them and seemingly coming to a view

about where the balance lay and we would think that

would be the way in which the test would have to be

applied. We would suggest it would be difficult to

do otherwise than to identify those factors favouring
the conclusion that the forum was inappropriate and

those which favoured a contrary conclusion.

BRENNAN ,J:	Mr Macfarlan, could I ask that at some convenient time you might draw upon the catholic familiarity of your
junior with these cases and tell me whether, under the SPILIADA principle, any case has ever been sent to the courts of Africa, Asia or the Pacific?

(Continued on page 36)

ClT21/2/HS	35	10/4/90
Voth(2)

MR MACFARLAN: Well, we w.il-1 see what we can do, Your Honour,

BRENNAN J: Thank you.

MR MACFARLAN:  If I could just add another reference to the

submission I made concerning MARITIME that it reflects

an outmoded parochialism. In OCEANIC Justices Wilson

and Toohey cited Lord Diplock in the AMIN decision

mere he had spoken of judicial chauvanism having been

replaced by judicial comity ·and Their Honours

referred to changes in international conn:nunications

and international relations, and we would rely

upon what those Justices said in OCEANIC at page 210,

at about point 5.

And the next and final submission we v:ould put concerning

MARITIME is that adherence to it without some modification or clarification, we would submit with

respect, was supported only one Justice in OCEANIC,

that is, Justice Brennan, and we would submit that

that in some way reflects the views of four of the

members of the Court,that it was no longer appropriate

to apply MARITIME at least in the precise terms it

was expressed at the time.

So we move from that consideration of MARITIME

to the matters we put positively in favour of the

adoption of the SPILIADA test and, firstly, we say

about that that the SPILIADA test reflects the

modern respect for other court systems. Secondly,

we say it reflects the growing burden which is

placed upon this and other court systems and it does

that by focusing on the efficient disposal of litigation.

That is, there is a public interest element which is

reflected in the SPILIADA test, in our submission, and Justice Deane in the OCEANIC decision referred to the fact that in the United States there appeared

to be a growing recognition of public interest

factors such as the burden on courts and, therefore,

the need to focus on the efficient disposal of litigation.

Justice Deane did that at 253 point 7 of OCEAf..TIC.

Of course, that does not mean that a court should be prepared to send its litigation elsewhere in the

hope that someone else will be able to deal with it
when they cannot, but it reflects the fact that

litigation may be more quickly and more cheaply

determined in one forum rather than another and this

court system can advance the interests of all court

systems by applying a principle which militates in

favour of litigation being determined in the place where

it can be most efficiently disposed of. And to some

extent there is a reflection of that policy in the legislative steps in the cross-vesting legislation within Australia; in a different context but it is

some reflection of the same.

ClT22/l/LW	36	10/4/90
Voth(2)

DAWSON J:  But what do you mean by more'efficiently disposed or?

I mean you start to have to make value judgments,

do you not? For instance, in tort, the law of

Saudi Arabia is an eye for an eye and a tooth for a

tooth, What do you do with that? It is probably a

very efficient system.

MR MACFARLAN:  Assuming, Your Honour, the Court here took the

view that the Saudi Arabian system was not an unjust

or an unfair system, if it took that view, then the

questionable alternative forum would not arise.

(Continued on page 38)

ClT22/2/LW 37 10/4/90

Voth(2)
MR MACFARLAN.(continuing): But if it took the view that

it was prima facie a just system, then it would not - - -

DAWSON J: Would that process require the evaluation

of the laws of the other country?

MR MACFARLAN: Well, Your Honour, we suggest that courts would

assume, as a matter of comity, that court systems

in other countries are fair and just, in the absence

of the plaintiff - a local plaintiff - who is

to not attempt to decide whether the Saudi Arabian
attempting resist the stay anplication,
suggesting otherwise, and there was some
recognition in Lord Goff's speech in SPILIADA,
of course, that there may be circumstances in
which it might be suggested to the court that
there was some injustice in a foreign system.

system, or American system, or Australian system

is a better one likely to produce the same result

or different results, be-cause that would be an

impossible task, in our submission, and involve,
very much, a subjective judgment. The sort of

thing it can do, in our submission, is say that

it would be much easier for a court in Saudi Arabia,

or whatever the alternative forum was, to decide

a question of Saudi Arabian law than it would be

for this Court to do so and that would be one

example of a factor of relevance to the
appropriateness of the forum and the efficiency
of the disposal of litigation. It places a burden
on the local court to be involved in the determination
of questions of foreign law and as I will seek to
illustrate in this case, where the question of
foreign law is a question of great controversy, under
apparently all systems of law, it is really
unpallatable for this Court to be involved in
deciding that question and I am referring to the

principles relating to recovery of economic loss

and that the prospect of courts in this

jurisdiction having to decide what American law

would say about the existence of a duty of the

respondents to the appellant would be quite

unpallatable, in our submission.

DAWSON J:	So that when you speak of efficiency, you are
essentially speaking about physical matters such as expense; speed of determination and so on?

MR MACFARLAN: Yes, Your Honour.

DAWSON J: Yes.

BRENNAN J:  So that the more appropriate form in a case such

as the present might be Fiji?

C1T23/l/JL	38	10/4/90
Voth(2)

MR MACFARLAN:  We would not think so, Your Honour.

BRENNAN J: Well, it is half-way.

MR MACFARLAN:  It is half-way, but the cost of travelling is

one mere drop in the ocean of factors to consider
in the question of appropriateness, Your Honour,

and the idea of a Fijian court having to decide

American law and, perhaps also, Australian law

on these topics would be not one which they would

probably approach with enthusiasm. But, no doubt,

the cost of two half airfares half-way, or a
quarter the way round the world would add up to
very much the same, in terms of total cost and,

of course, all the parties would be in hotels

in Fiji rather than one set of parties being out

of their home jurisdiction and being acconnnodated

in hotel accommodation.

BRENNAN J: So, we start to look at the question of comparative

cost?

MR MACFARLAN: That is certainly one factor,in our submission.

BRENNAN J: Favouring one party or the other, so that the

defendants can stay at home or the plaintiffs

can stay at home?

(Continued on page 40)

ClT23/2/JL	39	10/4/90
Voth(2)

MR MACFARLAN:  The question is really, in our submission,

the overall cost to the parties and one has to

consider the possibility that litigation in one
forum or the other may impact more on one than

the other, one cannot ignore that possibility, but

one has to take an overall view to see where the

litigation can be dealt with most fairly and

most efficiently weighing the different factors.

BRENNAN J:  My difficulty with the argument which perhaps

is manifest in what I have already written is

that to give any content to the notion of

comparative appropriateness involves the Court in

making evaluations on subjects which it is not

suited to making evaluations upon. Perhaps you
could identify with more precision what is meant

by "comparative appropriateness".

MR MACFARLAN: Yes, well, Your Honour did give an example

in the OCEANIC decision concerning the question of

whether - the question that arose in OCEANIC	as
to what was incorporated in the contract and,
Your Honour - this is at page 240 of the report -

said, "Well, the Greek court might not reach the

same view about the matter". With the greatest

respect, we would suggest that that is not a

matter appropriate for this Court to consider.

It is not obliged to, in effect, second-guess

the foreign court and decide whether the foreign

court would reach the same decision as this Court.

The only thing it has to do is not be persuaded

that it is an unfair or unJust alternative court

system.

BRENNAN J: Well, that was a good example, I think, because

the problem that arises there is whether by an

order sending people off which says that it is

fairer or j~ster that you should litigate somewhere

else, what you in fact say is that a cause of

action which is vested in·you under our law,

you may not litigate because it cannot be litigated

elsewhere,·; or it may not be able to be litigated
elsewhere.	I have difficulty in giving a notion of

justice, according to law, to a comparative

consideration when the laws are different. How

does one determine what is just in those circumstances

when the result might determine upon the difference

in laws?

MR MACFARLAN:  Your Honour, the same problem arises under the

MARITIME test, as I will seek to show, that is,

that there is a weighing of factors which has to be

undertaken and, in fact, the Chief Justice in

MARITIME, himself, weighed the various factors and came to the view that they did not reach the level of inappropriateness or vexation that was postulated

ClT24/l/DR	40	10/4/90
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as necessary in that case but one cannot avoid this

question of weighing and nor can one avoid the

reality that, in some circumstances, plaintiffs

will have to go to other jurisdictions. We submit

that the Court cannot do more than refrain from

sending plaintiffs elsewhere if it has been positively

satisfied by the plaintiff that there is going to be

some unfairness to him - perhaps a bit like a

deportation order that the accused will be deported but

if he can show that he is going to be dealt with

unfairly, or unjustly, then the Court may have to

reconsider the position. But the Court in the

modern world, in our submission, starts off with

the assumption that other systems are fair and just

and that our system does not have any necessary

superiority.

(Continued on page 42)

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MR MACFARLAN (continuing): And the third matter we put

in support of the adoption of the SPILIADA test

is that there is a growing adherence to it

throughout the world and we have two separate

documents that we have prepared that we seek

to hand up, which just make a note of the position

in other countries. Without reading those, could

I just indicate in very briefest of terms what they indicate. The first one concerns the

United States and as indicated in the second
paragraph of that top document that in the

United States as a result of the PIPER decision

there is a very:

broad flexible discretion -

and the court has been very reluctant to pin itself

down to any precise rules. Further down the front
page of that submission it said:

There is ordinarily a strong presumption in favour of the plaintiff's choice of forum, which may be overcome only when the private

and public interest factors clearly point

towards trial in the alternative forum.

Justice Kirby in the court below sought to explain that in a way which we respectfully adopt, namely that all the court was saying in PIPER was that

where the plaintiff was a local resident, it was

likely that one had at least one strong factor

in favour of that forum, because one could infer

that it was physically convenient for the plaintiff

to litigate there. So one could tick off the

first factor, but they were not really saying anything
more than that. In Canada, which is dealt with

on the next page in the BONAVENTURE SYSTEMS case

which preceded SPILIADA, as indicated in the second

paragraph, Lord Diplock in ROCKWARE was applied

and in the ANTARES case which is referred to about

point 4 on that second page, a principle was

applied which is revealed in the last four or five

lines on page 2:

overriding consideration ..... mus:t!, however,

be the existence of some other forum more

convenient and appropriate -

And the third page refers to British Crown Colonies

Gibraltar and Hong Kong have followed the

SPILIADA test. New Zealand High Court appears not

yet to have considered the matter, but the Court

of Appeal has followed SPILIADA and we have not

found any relevant case in Ireland.

MASON CJ: What does that mean, Mr Macfarlan? The High Court

of New Zealand has not yet considered SPILIADA?

CIT25/l/CM	42
Voth(2)
1:1R. MACFARLAN:	Yes, I think that is a mistake, Your Honour. Your Honours will have to approach that with a
grain of salt, but Your Honours have reference to the actual decision.

MASON CJ: Perhaps the author was looking to the day when

this Court would be exercising ultimate appellate

jurisdiction in New Zealand.

1:1R. MACFARLAN:	No, I am sure Your Honours have enough to do. The next note which is attached to the back deals
with the civil law position.  Your Honours may
recall that Mr Justice Gleeson in the court below
said there was not any principle of forum non conveniens in civil law jurisdictions. Well,
that, with respect to him, is correct in terms, but it is not the complete story, as we seek to
indicate there, because the position is that there
are detailed legislative rules assigning actions
in particular ways and the principal rule is that
the case is to be brought in the defendant's
domicile and there are various exceptions to that
rule and as we have indicated there.is a
particular Dutch rule, for example, which does in
a statutory form appear to adopt something
approaching a SPILIADA test, though only in a
very broad sense.

(Continued on page 44)

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MR MACFARLAN (continuing):  There is an article, Your Honours,

which is at the back of the volume of cases and

articles which we have handed up, which is called

the Forum (Non) Conveniens in English and Dutch

Law and Under Some International Convent ions. It is

from the International and Comparative Law Quarterly

and it provides support for some of the propositions
in that note about civil law but I regret it does
not cover the entirety of what is asserted in the

note about the civil law, but I think it sufficiently

supports what is in the article.

As was put by Your Honour Justice Deane in

OCEANIC, there is an argument that international

comity would require this Court to decline to hear

cases in circumstances where foreign courts would
decline to hear cases, and His Honour appeared to

give some credence to that argument. The fourth

matter that we would put in support of the adoption

of the SPILIADA test is that the MARITIME test was

biased in favour of the plaintiff's interests, the

plaintiff as distinct from the defendant, and we

would submit that the SPILIADA test gives a fair

recognition to the interests of both the plaintiff

and defendant and that there should not be any

necessary preference for the interests of the plaintiff.

There were two parties to the action and we would submit that the emphasis on the plaintiff's interests

is unwarranted. Fifthly, and this is related to that

point, there is a bias inherent in the MARITIME test

in favour of local residents and we would submit

that it is inappropriate in this age to give

preferential treatment to local residents.

DAWSON J:  That seems to be inconsistent with the American

idea that he starts ahead of scratch because it is

his home.

MR MACFARLAN:  That is a point at which we would depart from

one view of the American authorities, Your Honour.

To the extent that one can properly explain the

American authorities as simply saying that because

the plaintiff is a resident one has one factor already

in favour of an appropriate forum to put in the

melting pot, then we would have no quarrel, but if

it goes further than that and says some actual

preference should be given to local residents, we

would submit that is not an appropriate approach and
we submit that a preference to local residents is

inconsistent with the aim of the system to dispense

justice impartially and it is inconsistent with

aspirations that have been held to provide a venue

or forum in Australia for the resolution of

international disputes.

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His Honour the Chief Justice, in BREAVINGT0N

V G0DLEMAN, a recent decision, referred in another

context to the fact that a traveller really should not be surprised if the his rights and obligations are determined by the local law of the places where

he travels, and His Honour mentioned that at page 372

of 80 ALR 362. We say that the corollary of that

is - and applying it here - that a traveller would

not be surprised that not only would his rights and

obligations be determined by the law of the place

where he goes, but also that he would have to commence

proceedings there if he wanted to sue someone who

resided there in respect of some transaction that

occurred whilst he was present.

·(Continued on page 46)

ClT26/2/HS	45	10/4/90
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MR MACFARLAN (continuing): And it would not surprise him

that he could not go back to his home jurisdiction,

commence proceedings there and seek to bring the foreigner back to his home. And we would remind Your Honours that we think all of the older cases were cases

of service within the jurisdiction rather than ones
in respect of which leave was granted to serve

outside. Although it does not necessarily follow,

one can say that it will probably be the case that

the defendant will in such a situation be a resident.

He may, of course, be within the jurisdiction for some

temporary purpose rather than residence but, more

probably, if he is served within the jurisdiction,

he will be a resident there.

So it is hardly surprising in those circumstances

that the older cases speak in terms of foreigners

forum shopping because the occasion for consideration of

local residents forum shopping has not really arisen

because not only is the plaintiff a resident in the

jurisdiction but the defendant is usually a resident

also.

Now, Your Honour Justice Deane in OCEANIC

suggested that the broader doctrine was likely to bring

with it the notion that locals were· entitled to

greater deference. Your Honour referred to the

American position and we would respectfully submit

that it is not inherent in the SPILIADA approach that preference should be given to locals and if

some undue preference is given in the United States
to locals then that is a part of the American law

which is inappropriate to adopt here.

Mr Justice Kirby in the court below said, and

we would adopt what he said in this respect, that

courts should be neutral in applying the law as

between residents and non residents.

Now the sixth matter that we would put in support

of the adoption of the SPILIADA approach is this,

which has already been touched on in the course of

discussion but we would say that that approach does

not involve any comparison of the advantages to the

parties of litigation in one jurisdiction or another

in the sense that Lord Diplock spoke of personal

or juridical advantages in the MacSHANNON case.

It would be virtually impossible for the Court - and

not only impossible but undesirable for the Court -

in our submission, to attempt to put itself in the

shoes of a plaintiff or a defendant and to assess

the desirability of litigation in one forum rather

than the other. For example, if we ask rhetorically would it be to the advantage of the respondents here

or to their disadvantage that one cannot obtain an

order for costs in the United States in circumstances

ClT27/l/LW	46	10/4/90
Voth(2)

of this type of litigation, it would be an advantage,

of course, if the respondents were to loose in

litigation in America, that they would not have to

pay Mr Voth's costs but, on the other hand, it would

be a disadvantage if they were successful. And,

as Lord Templeman said in SPILIADA, each party

is likely to be influenced by considerations which

may well not be apparent to the court, or indeed

relevant, and could I just go to what Lord Templeman

said in that respect in SPILIADA MARITIME CORPORATION V

CANSULEX LTD, (1987) AC 460, at page 465, at about

point 4 on the page, His Lordship said:

(Continued on page 48)

ClT27/2/LW	47	10/4/90
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MR MACFARLAN (continuing):

Any dispute over the appropriate forum is

complicated by the fact that each party is

seeking an advantage and may be influenced by

considerations which are not apparent to the

judge or considerations which are not relevant

for his purpose.

And he goes on to give an example, and then says:

There may be other matters which naturally
and inevitably help to produce in a good
many cases conflicting evidence and optimistic
and gloomy assessments of expense, delay and

inconvenience. Domicile and residence and

place of incident are not always decisive.

And Lord Goff said something along similar lines

at 482 in the same case, where he said at letter D

citing Lord Justice Oliver in the SPILIADA case:

an advantage to the plaintiff will ordinarily give rise to a comparable disadvantage to the

defendant; and simply to give the plaintiff

his advantage at the expense of the defendant

is not consistent with the objective approach.

And, at letter F, Lord Goff says:

I do not think that the court should be deterred from granting a stay ..... or from exercising its discretion against granting leave ..... sirnply because the plaintiff will

be deprived of such an advantage, provided

that the court is satisfied that substantial

justice will be done in the available

appropriate forum.

Then His Lordship instances the question of

discovery and refers to the different procedures in

theUnited States and in England concerning discovery,

and then says that, in effect, one really cannot decide

whether one is better than the other and the court

cannot be expected to undertake that task. All one can expect the court to do is reach a general level

of satisfaction that the other system is one that

approaches the administration of justice in a fair

and just manner. If I could add to that that

Your Honour Justice Deane in OCEANIC appeared to

agree with Lord Goff's approach on this question of
advantage and it was a question of advantage which was

one of the questions focused on by Lord Diplock

in MacSHANNON, and that is a matter that has receded

into the background, at least in England.

ClT28/l/FK	48
Voth(2)

Lord Wilberforce also said something of

assistance in this respect in the AMIN RASHEED

decision in (1984) AC 50, at 72D·	His Lordship
said that:

It is not appropriate, in my opinion,
to embark upon a comparison of the
procedures, or methods, or reputation or

standing of the courts of one country as

compared with those of another.

So, we 'WOuld subnit, Your Honours, that the SPILIADA test does not involve a comparison of systems in

the sense that Your Honour Justice Brennan referred
to in the OCEANIC decision at page 238 where

Your Honour said, and with the greatest respect we would agree, that one cannot compare justice

according to different laws, but we say that is not

what the test involves. What the test involves is

appropriate forum and it is inappropriate,in our	an attempt to objectively determine what is the
submission,to describe the principle - or the
rationale of the principle - in these circumstances,
one designed to prevent forum shopping. That rather
tends to focus on the question of the plaintiff's motive in commencing proceedings in one jurisdiction which, as Lord Templeman particularly identified, is an almost unfathomable thing and something the

ourt would not wish to fathom.

(Continued on page 50)

C1T28/2/FK	49
Voth(2)
MR MACFARLAN (continuing): What	will be a more fruitful

exercise is for the Court to undertake an
objective consideration of appropriateness,
without attempting to discern the plaintiff's

reasons.

The seventh matter we would put in support

of the adoption of the SPILIADA test is that the

test does not involve exercise of a discretion to decline jurisdiction. Nor, we would submit, does

it conflict with any right to be heard and, to some

extent, I have already referred to some matters that

we put in support of this. But, the first of the
matters in support of this proposition is that most

of the modern cases, if not all of them,

concern situations in which process has been served

outside the jurisdiction, pursuant to a favourable

exercise of discretion by the local court. So,

they are not situations, we would submit, in which

the plaintiff can properly be said to have a right
to be heard, he has to seek the indulgence of the
local court to be heard and it is not appropriate to

describe the grant of a stay in such a situation

as a declining of jurisdiction which has been conferred

upon the plaintiff as of right.

Now, the second point we would make about that

is that if it is not a case in which leave to serve
outside has_been granted, it follows, of course, that
the defendant will be served within the jurisdiction,
but it probably followsfrom that thatthedefendant is

resident within the jurisdiction. So, if the

defendant is resident within the jurisdiction the

prospects of he asserting that there is a more

appropriate forum elsewhere are, one would think,

extremely low because one has a plaintiff who is

either a resident in the jurisdiction or he has come

to the defendant's residence to sue the defendant,

so it is an unlikely situation for the - - -

BRENNAN J: That is not a valid proposition, is it1 I mean,

jurisdiction depends upon service within the

jurisdiction, it does not follow that the person

served is resident.

MR MACFARLAN:  No,< ,it does not necessarily follow, Your Honour,

we certainly accept that, I put it in terms of

probability.

BRENNAN J:  How does the SPILIADA doctrine work when the

defendant is served within the jurisdiction, but

is not resident there?

MR MACFARLAN: Well, it can work in that situation, Your Honour,

and that is a situation in which it could well be

applied.

C1T29/l/JL	so	10/4/90
Voth(2)

BRENNAN J: Is	that a case of declining jurisdiction?
MR MACFARLAN:	We would submit not for the reason that I

sought to identify earlie~ that it is not a

case of denying the plaintiff a right of access

to courts which dispense justice, it may be a

matter of denying him access to the local court,

but in the modern age where the alternative forum

is a court system for which this Court has respect,

then one cannot realistically say he is being

denied a right to be heard, or being denied justice.

The third point we make about this is that such

a .. discretion, as there is, is not an untrannnelled

one, it is one which is to be exercised according to

legal principle and we will refer. more specifically

in a few moments to the question of certainty which

was a matter that Your Honour Justice Brennan focussed

on in the OCEANIC decision, but just in this context

we would say_ it is not the exercise of an.
untranmelled discretion to decline jurisdiction, it is

the exercise of a discretion founded on legal principle,

for good and proper reason, to require the plaintiff

to go to another jurisdiction where he is able to sue

and which has a system which will afford him justice.

(Continued on page 52)

C1T29/2/JL	51	10/4/90
Voth(2)

'

DEANE	J:	But it must be a refusal to	exercise jurisdiction
because, for legal reasons,	the exercise of the

jurisdiction would be wrong.	Would you agree with
that?

MR MACFARLAN:  We would not put it in quite the same way,

Your Honour. We would put it in this sense that

it is a refusal to exercise jurisdiction where the

court considers that the ends of justice would not

be achieved by the exercise of that jurisdiction.

DEANE J: That is all good argument but if the onus is on

the defendant to establish facts that would warrant

a stay, as a matter of legal principle, the question

must be;has it been shown that the exercise of

jurisdiction would be wrong in these circumstances?

MR'MACFARLAN:· Yes.

DEANE J:	I am not suggesting it puts you out of court or
anything else.
MR MACFARLAN:	No, well, I would accept that as far as it

went, Your Honour, and when one went on to say

why it was wrong, one would - - -

DEANE J: Well, that is the debate we are engaged in and that

is: -on what basis does the law decide whether it

would be wrong to exercise jurisdiction in this

category of case if the objection or the application

for a stay is made?

MR MACFARLAN: Well, putting it on its broadest level, the

reason why the court would consider it wrong would

be that the ends of justice would not be best

achieved by exercising the jurisdiction. In a

particular case one has to descend, of course, to
greater particularity but that is the ultimate

principle underlying - - -

DEANE J: Well, except, can that be so? I mean, if you talk

about the ends of justice, you have gone into a

different realm to the administration of justice.

Most of the things that SPILIADA says you should

take account of do not seem to have much to do with
the ends of justice as distinct with the best way

of reaching whatever the ends of justice may be.

MR MACFARLAN: Well, Your Honour, we use the expression,

"ends of justice" as incorporating a reference to

the administration of justice because we would
suggest that one cannot consider the ends without

considering the means.

DEANE J: The relevance of this is that, on one approach,

if you just have a bare balancing thing - and I

ClT30/l/DR	52	10/4/90
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·appreciate that SPILIADA does not say that - it

pretty much comes down to what the trial judge
wants to do. Gn the other hand, if you approach it

from the basis that jurisdiction must be exercised,

would be wrong, it does not matter greatly what	unless it be shown that the exercise of jurisdiction
words you put it in - whether it is a SPILIADA
formula of clearly and distinctly a more
appropriate forum somewhere else or in the words
I used in the judgment·in OCEANIC, clearly
inappropriate - you are in the same area of discourse
and that is why I keep bringing you back to what is
the ultimate question. Is it that this forum is
inappropriate in these circumstances or it would be
wrong to exercise jurisdiction. But, some way or
other, the test must focus on the forum declining to·exercise the jurisdiction which it possesses.
Now, I do not know if I am making what is worrying
me clear, but - - -

(Continued on page 54)

ClT30/2/DR	53	10/4/90
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MR MACFARLAN: Well,could I say two things, Your Honour, in

response to that. One is that - it has just gone

out of my mind. I will perhaps come back to that,

but the other thing, Your Honour, is that very

few of these cases are ones in which there is a

right to be heard in the sense that the jurisdiction

is invoked as of right and we may be open to

correction, but we do not think any of the modern

cases are of such a character, so, to some extent,

it is somewhat of a barren question, with

greatest respect. I do not seek to belittle it

by saying that but it is a question of somewhat

limited relevance. The next point we would put

about this discretion to decline is one which I

have enunciated already and we will just state,

that is,that the ultimate responsibility of the

Court is to the ends of justice and if that

involves declining jurisdiction in a particular

case, well so be it. And then the fifth point is
one I have also stated already, namely that here

it is not a matter of depriving the plaintiff of

jurisdiction because,ex hypothesi,there are two

jurisdictions to which it may have recourse, and

in that respect we contrast the situation in .the

decision of this Court in QUEENSLAND ELECTRICITY

COMMISSION,_ 72 ALR, page I. I need not go

to that but Your Honours will recall that

Justice Deane dissented in that case and drew attention to the fact that if the applicant was

denied recourse to the arbitration commission

then he had no other place to go.

Now I move to the question of certainty

which is the eighth of these submissions we would

make in support of adoption of SPILIADA.

Justice Brennan and also Justice Deane in OCEANIC

drew attention to the question of certainty and

to what extent that was inherent in the SPILIADA

approach. We would make these comments about that

proposition; firstly, we would submit that the

principle is no less certain than many others with

which the Court has to grapple from time to time,

such as neglisence and proximity.	They are
principles - - -

MASON CJ: Well that is a very debatable propostion and if

debated we will be here for the next three months.

MR MACFARLAN-: Well I ·will state it, rather than debate it, Your Honour.

MASCli CJ: Yes. Give \1S ano~r analogy, wi.11 you.

MR M'ACFARLAN: · All· I wanted to say· about 'that was that as tl16se principles

will be elucidated by the course of authority as. p_art_icular

cases arise for decision, so also with· tli.e SPILIADA. principle,

any 1.mcertainty which may be ir,h.eretit in it w-i.11 be

ci.ssipated by the cou:irse of decisions which arise from

time to ti.me. And that reminded :ne ·of the ·

CIT31/l/CM	54
Voth(2)

other point that I wanted to say in response

to Justice Deane's question before, namely that

there will always be cases on the borderline,

wherever the line is drawn, in our submission,
whether it be the SPILIADA line or the MARITIME line,

and that point is pertinent to the certainty

question because it is apparent '"'and perhaps I

can illustrate this by going to Your Honour

Justice Deane's judgment in OCEANIC at 242 - that

there is considerable room for difference in

application of the MARITIME test and considerable

lattitude.

(Continued on page 56)

CIT31/2/CM	55
Voth(2)
MR MACFARLAN (continuing):	At page 242, Your Honour referred

to Lord Justice Bowen in McHENRY V LEWIS and

where His Lordship said - this is at about point 9:

most unwise ..... to lay down any

definition of what is vexatious or

oppressive, or to draw a circle, so

to speak, round this Court unnecessarily,

and to say that it will not move outside it.

Then there is a reference to LOGAN, Sir Gorell Barnes,

at the top of the next page - I am sorry, at the

bottom of page 242, the reference to the difficulties

which arise in the exercise of the power and at

page 246 point 4 in OCEANIC reference is made to

the Chief Justice in MARITIME. Justice Deane said:

examination of the judgment in MARITIME

discloses that Griffith CJ disposed of

the case on the basis that the question

whether an order for a stay should be

made involved a comparison of the

prejudice or loss of advantage to the
plaintiff which would be involved in

the grant of a stay and the prejudice
to the defendants which would flow from

a continuance of the action in the

Supreme Court of Victoria.

So when one has that in mind it is clear, 1n our

submission, that the MARITIME test is no palliative

for any problems of uncertainty that might arise in

relation to the SPILIADA test, and at page 247 point 2

Your Honour Justice Deane referred to the question -

this is about 10 lines down - of whether one should

read a requirement of moral delinquency into that

test and again it shows there is room for different

views about what the MARITIME test means. Finally,

in respect of uncertainty, Your Honours, any - - -

BRENNAN J:  Whatever it does mean, it does mean injustice to

a party litigant which would be affected by allowing

the Court, which admittedly has jurisdiction,to

exercise it. Now, you go well beyond that, do you not?

MR MACFARLAN:  Yes. We look in a broader sense at the question

of justice to each party and it takes account of the

interests of other litigants and the system of justice

generally.

BRENNAN J:  But if there be no injustice to a defendant in

prosecuting the action which has been instituted,

what are the justifications for "the Court refusing

to exercise the iurisdiction which has been invoked

in terms of any legal principle? I appreciate that

you can put it in terms of more appropriate, and so

ClT32/l/HS	56	10/4/90
Voth(2)

·forth, but if there be no injustice in the exercise

of a jurisdiction, why should the Court not

exercise it?

MR MACFARLAN: 

Because we submit, Your Honour, the Court's

ultimate responsibility must be to the proper
administration of this system of justice and if,

looking broadly at the question of litigation of a

particular proceeding in the forum,it finds that the

administration of justice is not achieved by the

litigation here, then it is able to grant a stay, and

rather than focusing particularly on one or other of the parties, or assuming that one person has a right

to be there, it gives a greater credence to the

interests of both parties and to the interests of

other litigants and to the public.

BRENNAN J: 

Yes.

DEANE J: 

Is not what you need.to say really that if there be

a clearly and distinctly more appropriate forum,it

is injustice to require a defendant to answer a claim
in a forum other than that?

MR MACFARLAN: 

We certainly can put it in that way, Your Honour.

DEANE J: 

But eventually is not that the way the question must

be approached, and I am not suggesting it carries with

it an adverse answer to your submission, but you must

come back to why should the court stay the

proceedings? Whether-you use the word "wrong" or

''injustice", you must get into that area.

(Continued on page 58)

ClT32/2/HS	57	MR MACFARLAN, QC	10/4/90
Voth(2)

MR MACFARLAN: That formulation, Your Honour, perhaps does not

take account of the broader considerations of

public interest, an interest of other litigants.

That may be the reason that we would not proffer that

at the forefront of our submissions.

DEANE:J; Yes, I see the force in that.

DAWSON J:  But mere inconvenience does not ever amount to injustic

does it? I mean, you talk about justice in two senses :

one, justice in resolving the dispute; that has got

nothing to do with inconveniencing, being there for

that purpose.

MR MACFARLAN:	Your Honour, the word "inconvenience" is one which we would not proffer as reflecting any relevant
part of this principle and Lord Goff was at pains in
SPILIADA to say that it is really a question of
appropriateness rather than inconvenience. The question of inconvenience, we would suggest, conjures
up something which probably the Court should not be takir}g
into consideration.
DAWSON J:	I am really just trying to draw a distinction

between two things: the justice in being made to go

there is one thing and the justice involved in the
determination of the dispute is another. Really they

are two different things, are there not?

MR MACFARLAN:	Yes, I think that what Your Honour says is really reflecting an approach we take~ that it- is not
for the Court to assess whether the actual decision
likely to be made elsewhere would be one that would
accord with the decision that would be made here and in that sense the Court cannot form a view about
the justice that would be afforded elsewhere. found elsewhere and the likelihood of a proper hearing

DAWSON J: That is really a matter of convenience although you

quote convenience with justice in certain circumstances.

MR MACFARLAN: Well, it is perhaps a matter of degree but

inconvenience becomes a matter of injustice once it

becomes severe, we submit. Mere inconvience at a

low level is perhaps a matter of irrelevance to the
Court but when it is a matter of litigation, in a

forum where the litigation would be substantially more

expensive, for example, then inconvenience can become

injustice, in our submission.

BRENNAN J: Then leaving aside the interests of litigants

other than the immediate parties - and I understand

what you say about that - do you perceive any

difference between ST PIERRE and SPILIADA?

ClT33/l/LW	58	10/4/90
Voth(2)

MR MA.CF.ARLAN:  Well, we do, Your Honour. The words

"oppressiveness" and "vexation" are words perhaps

which are amenable to a number of different meanings

and one can have a very broad sense and a very narrow

sense. As His Honour Justice Deane suggested in

OCEANIC it may be that the MARITIME test has involved

in it some question of moral delinquency on the part

of the plaintiff. Also, it may be thought that what

the MARITIME test is really adverting to is some

abus.e of process by the Court and when one speaks in
those terms one is at some distance, we would submit,

from a principle that looks to the appropriateness of

the different forums, unless one is using those

words of opP,ressiveness and such like in a very broad

and,perhaps, non-traditional sense.

So, finally, in respect of uncertainty, we say if

there is some perceived uncertainty, it is in any

event outweighed by the other factors we are seeking

And the ninth matter concerning acceptance of	to put forward in support of acceptance of SPILIADA. of whether Australian conditions are relevantly
different from English conditions because Justice Gaudron in OCEANIC adverted to this question.

(Continued on page 60)

C1T33/2/LW	59	10/4/90
Voth(2)

MR MACFARLAN (continuing):  She suggested that care should

· be exercised because England was part of the

Common Market and we do not gainsay that in any

fashion, but nevertheless, we do say that when one

does look carefully at the question one finds

that the English rules on forum non conveniens have

not been influenced by England's status as a member

of the European Economic Community. The change that

has occurred in England as a result of that membership

circumstances in which service may be affected outside	is as to the jurisdictional rules where the
the jurisdiction have changed. There is no discernible
influence on the forum non conveniens rules and, in
fact, in a number of the important cases on that
principle in England they have not been concerned with Common Market residence. For example, the
AMIN RASHEED decision, (1984) AC, the ABIDIN DAVER,
(1984) AC and also SPILIADA itself was not concerned with a Common Market resident, and we would say that
Australia has similar interests to England in
promoting international commerce and in promoting the
local resolution of international disputes.

And, finally, Your Honours, concerning the

adoption of SPILIADA is the question of the relevant

substantive law. Your Honour Justice Gaudron in

OCEANIC indicated that a different test should apply

where the substantive law which was applicable was

foreign rather than the local law. We would, with

respect, differ from that approach and support the
approach of Lord Goff that the identify of the

substantive law is one of the factors to be taken into account. Lord Goff refers to that at 478 point 1, and

we add these comments.

One can see that it would be prima facie desirable that questions arising under our substantive

laws be determined by our courts. One obvious reason

is that it is easier for our courts to determine those

questions because of their familiarity with them, but

we would submit that one has to accept the reality

that in the modern world courts do have to determine

foreign law questions, and have to determine them

from time to time. There is no particular prejudice,
we would submit, to the Australian system of law if

a foreign court decides a question of Australian law.

It will not, for example, be authority-binding on
Australian courts, and it is possible that the foreign
court may derive some benefit from consideration of

Australian law, but we would suggest there is no

positive disadvantage to the Australian system to have

foreign courts deciding questions under our law.

It may be less desirable, but one really cannot put it

higher than that, and we would submit that there is

no reason for Australian courts to jealously guard

Australian law so that no other court system can,

in effect get its hands on it.

C1T34/l/FK	60
Voth(2)

GAUDRON J: It puts it around the wrong way, really,

though, does it not?

MR MACFARLAN:  I am sorry, Your Honour?

GAUDRON J: It puts it around the other way. It is a question

of whether Australian courts should step back, knowing

that the question of the application of their own law

is involved.

MR MACFARLAN:  Yes. Well, we certainly accept it is a factor,

Your Honour, but we have difficulty in seeing that there is actually any prejudice to the Australian system to permit a foreign court to decide a question of Australian law. It does not detract from Australian law. It is not a binding authority, and

as we said, it just may be that foreign courts will

derive some benefit from the principles as they have

then developed here.

(Continued on page 62)

C1T34/2/FK	61
Voth(2)

MR MACFARLAN (continuing): So, those are the reasons, we would

submit, that the SPILIADA test should be adopted

in Australia. We can turn, then, to the next

principal submission, that is that, at least, in
respect of the appellant's application to set aside
service, the principles enunciated in SPILIADA,

in respect of that topic, should be adopted and

applied in Australia.

GAUDRON J:  I have some difficulty, Mr MacFarlan, in what is

unexpressed~ but maybe, in your submissions, that you

could have a different test on stay from on

applications to set aside service. They have,

precisely, the same effect, do they not, if

successful?

MR MACFARLAN:  Yes, We would not promote the possibility of

different tests, in fact, we would strongly

urge the Court to adopt the same test, but if

the Court were against us on the, earlier

submission and it were found that the MARITIME

test was still applicable, we would say the

jua:i£ic.ations which must have led the Court to

that view· are simply inapplicable to the question

of service outside the jurisdiction because - - -

GAUDRON J: That is the first step?

MR MACFARLAN:  Yes.

GAUDRON J: And then the second step is setting aside the

service?

MR MACFARLAN:  Yes.

GAUDRON J: You seem to think that - - -

MR MACFARLAN:  We certainly say that,Your Honour - - -

GAUDRON J: That setting aside service is really the same as

the discretion with respect to service?

MR MACFARLAN: We equate the two, we do, Your Honour, yes,

because, as in this case, leave to serve outside

is granted ex parte and we would submit. that

there would be a gross unfairness to a defendant

if the plaintiff improved his position by obtaining
an ex parte order. When the matter comes before
the Court on the return date and the defendant

applies for leave to set aside the ex parte order

then, in all fairness, we would submit, that a

court should consider the question afresh and not

regard the plaintiff as having derived some

advantage through the absence of the defendant on

the initial application.

ClT35/l/JL	62	10/4/90
Voth(2)

MR MACFARLAN (continuing): And that seems to underlie

the approach of the courts to date, although save

for one recent unreported decision in Western

Australia, the matter does not seem to have been

specifically adverted to, but it is a point which

is of general application well beyond the

principles concerning forum non conveniens and stay

outside the jurisdiction. In the case of the

grant of an ex parte injunction, it is of course

of great importance to know whether, on the return
date when the court has to consider the question in
the presence of both parties, the plaintiff has

derived some advantage because he has an order

which may be framed in terms of "a restraint

until further order", whether the real onus is

on the defendant to say why - that order should

be discharged, or whether tha plaintiff should

bear the· onus. We would submit clearly the latter.

The test enunciated in SPILIADA is to be found at

480 of the report and is stated by Lord Goff to

be the obverse of the test concerning the grant

of a stay. At 480, at about point 7, His Lordship

corrnnences to consider it there. I will not read
that passage, but His Lordship surrnnarizes it on

481, just under letter D:

The effect is, not merely that the burden

of proof rests on the plaintiff to

persuade the court that England is the

appropriate forum for the trial of the

action, but that he has to show that this

is clearly so. In other words, the burden

is, quite simply, the obverse of that

applicable where a stay is sought of

proceedings started in this country as of right.

(Continued on page 64)

CIT36/l/CM	63
Voth(2)

MR MACFARLAN (continuing): So, the plaintiff who wants leave -

or to maintain an order for leave - we would submit,

has to persuade the court that local forum is

the most appropriate one and this was a case as

were, we think, all the others, in which the plaintiff

had first obtained an ex parte order for leave.

The position, so far as OCEANIC is concerned on this

question, is this, that Justices Wilson and Toohey
accepted the SPILIADA test in relation to service

outside the jurisdiction. That is to be seen at

page 213, point 3, of the judgment.

Justice Brennan, we think, tlid not make any

express reference to this point although he did

refer to the jurisdiction being regularly invoked,

at page 241; point 2. Justice Deane, at page 257,

point 1, said that Your Honour did not find a

need to determine this question in OCEANIC and - - -

DEANE J: In OCEANIC, the only question that was argued was

whether there should be a stay. The question
whether the order for service should be set aside

was, apparently, adverted to before the trial

judge but was not relied on in any of the subsequent

courts and the Court dealt with the matter on the

basis on which it was argued.

MR MACFARLAN: Yes, Your Honour, well, it is certainly

reflected by the judgments and, for that reason,

Justice Gaudron does not deal with that question

but we remind Your Honours that it was, in £act,

a case of service outside the jurisdiction.

DEANE J: Well, that was relevant in OCEANIC on the issue

that was argued in that it was a relevant fact in
the process for determining whether there should be

a stay but there was no question ever, in OCEANIC,

about whether the order allowing service should have

been set aside.

(Continued on page 65)

ClT37/l/DR	64	10/4/90
Voth(2)

MR MACFARLAN: · We would,submit, with respect,

therefore that Your Honours are untrammelled

by any authority - silly binding authority of

OCEANIC and, in fact, Your Honours are not bound

by any authority on this question, we would submit,

because MARITIME was a case that was concerned

with service within the jurisdiction - serivce on

a resident;:  LOGAN V BANK OF SCOTLAND was concerned,

again, in the case of one defendant service within
the jurisdiction and in the case of the other

defendant, who was an individual officer of the

defendant bank, with an appearance without objection

to jurisdiction and just to give Your Honours the

reference, that appears at 145 point 9 of- the report of

LOGAN and in ST PIERRE, the position was simiiar,

that the defendants had their head offices in London

so they were served in London in respect of

proceedings concerning Chilean transactions so,

there is no binding, or any authority, we would

submit, which would -

GAUDRON J: But if the test is a more appropriate forum, really,

the question of where service was is neither here nor

there. That may suggest, I mean in a sense that may

suggest - I really cannot comprehend that you could

have a different test as to stay and setting aside

service in these cases- but, I mean, it could be just as inappropriate even though all parties were present within the jurisdiction, served within the jurisdiction,

so far as it is relevant and resident within the

jurisdiction, if it is simply a question of more

convenient.

MR MACFARLAN: Yes. It is an argument for adoption of the

approach for which we contend on the stay application,

because we respectfully agree with Your Honour, that

it is difficult to contemplate that there will be

different tests because they are closely related

questions.

(Continued on page 66)

ClT38/l/JL	65	10/4/90
Voth(2)

MR MACFARLAN (continuing):  But it is important to bear in

mind, in our submission, that on the service

outside the jurisdiction question one is not

constrained by any principle that the plaintiff

has a right to be heard within the jurisdiction.

On the contrary, he has to approach the Court for

its indulgence, so if that were the basis upon

which one adhered to MA.J.~ITIME on the question of

stay, it is a basis that is inapplicable when

one comes to service outside. We would submit

it would be quite inappropriate to apply an

oppressiveness test to the question of service

outside the jurisdiction where the plaintiff does

seek an indulgence and especially :ts that ·so--

bearing in mind the very wide nature of the rules permitting service outside the jurisdiction. One of the ones with which this case was concerned,

that is damage, is an illustration of that, that is,

the Court has jurisdiotion to grant leave

whenever some damage has been caused within the

jurisdiction. It does not matter how much damage

or what the other connections or lack of connections

with the jurisdiction are.

In the court below the Chief Justice said

there was no material difference between the

principles relating to the inherent jurisdiction

to stay and the statutory jurisdiction to serve

outside, certainly as applied to this particular

case and in the sense that I have already mentioned,

we would agree with that, but only if one accepts

that SPILIADA is applicable to a stay.

Mr Justice McHugh in the court below referred to

the jurisdiction as having been regularly invoked

and,in our submissio~ he should have had regard

to the fact that service was effected outside the

jurisdiction and it was only in that sense that it

was regularly invoked. His use of that expression

rather implied that he was approaching the matter on

the basis that there was some jurisdiction which

accrued to the plaintiff as of right. (Continued on page 67)

CIT39/l/CM	66
Voth(2)

MR MACFARLAN (continuing):  I mentioned the question of

·advantage to the plaintiff by reason of having

obtained an ex parte order. Examples of cases in

which applications to set aside service outside nave
been approached on the basis that the plaintiff

effectively bears the onus: the GEORGE MONRO case,

(1944) KB 432, and THE HAGEN, (1908) P 189. I

need not go to those cases at the moment but

THE HAGEN is a case which is copied in the volume of materials which we have handed to Your Honours.

The unreported decision I mentioned was that in FRECKMANN V PENGONDAR - - -

TOOHEY J:  Mr MacFarlan, I am almost certain that has been

reported.

MR MACFARLAN:  I thank Your Honour. We did have a look but,

obviously, insufficiently. We have copied that,

Your Honour, and that is in the volume of materials.

It is a decision of 14 November 1988. The Chief Justice,

in that case, at page 26, said that on an application

to set aside service the plaintiff should bear the

onus of showing good reason why jurisdiction should

be invoked and the Chief Justice said that all the

English cases proceeded on that basis.

What the authorities do say, Your Honours -

perhaps if I just give Your Honours the reference to

that page; it is not particularly easy to find

because it is a computer print out of the case. The

volume of materials have numbers in the top right-hand
corner and the passage in the judgment of

Mr Justice Malcolm is at the foot of page 160 of the volume of materials.

(Continued on page 68)

ClT40/l/JH	67	MR MACFARLAN, QC 10/4/90
Voth( 2)

MR MACF ARLAN · (~t~ :: nie=--laet" paragraph, there is:·"a reference to

Justice-'.Beane. · The authorities .concerning service outside the jurisdiction do establish two important principles.

One is that the discretion ought to be exercised with

considerable caution, and, perhaps without going to

and where. In MACKENDER V FOLDIA, which is referred	these cases, if I could just mention what is said
to in our outline submissions, Lord Justice Diplock,
as he then was, at 599 point 6, said that
jurisdiction should be exercised with caution.
In the GEORGE MONRO case, at 437 point 8,
Lord Justice Scott said that it should only be
exercised if it was clearly within the letter and
spirit. In the same case at 441, Lord Justice du Parcq
referred to the gravity of the jurisdiction and that
it ought to be exercised exceedingly carefully, that is
at point 3 and point 8, and in THE HAGEN, at page 201 point 6 of the report, it was said it was a very serious
question, whether one should put a foreigner to the
inconvenience and expense or annoyance of coming to
the local jurisdiction.
The other principle established by the authorities in respect of service outside the jurisdiction is that
the question of forum conveniens, in a broad sense,
is relevant to the exercise of such discretion. So,
even well before the days of SPILIADA the courts were
applying in this context an approach which is analogous to an appropriate forum approach, which is
different from the LOGAN, ST PIERRE oppressiveness
question, and the authorities which I refer to there
are these. Firstly, ROSLOR V HILBORY, which is
referred to in the outline in (1925) Ch 250 at
259 point 2, Sir Frederick Pollock took into account
the question of convenience.

(Continued on page 69)

ClT41/l/FK	68
Voth(2)

MR MACFARLAN (continuing): Page 259 point 2:

The jurisdiction is discretionary, and

there is no question that in deciding

whether or not it will exercise its

discretion, the Court pays attention to a

great number of matters, in particular

it would pay attention to what is the
forum ,conveniens.- · It would have regard to

what is the substance of the matter that

has to be decided. If regard is to be
had to the forum conveniens- I can imagine

no forum1less convenient than the Court of

this country -

and so forth. And in the MAHARANEE OF BARODA V
WILDENSTEIN, (1972) 2 QB 283, Lord Justice Davies -

Edmund Davies, at 294D refersto the "forum

conveniens" factor as being, "generally" one "of

decisive importance. We refer to two factors and we refer to them together as ones likely to be of

"decisive importance" at letter Don 294 and,

finally, on this point, there is an article which is

amongst the photocopied materials_.. in 105 LQR 364,

which deals with the OCEANIC decision which refers

to a number of other authorities on the question of

service outside and the way in which the courts have

taken into account "forum conveniens" and puts the

proposition that the relevance of forum conveniens

on that question, can be seen from those authorities

which date back to 1892, and that is to be seen at

page 365.point 2 of that article.

(Continued on page 70)

C1T42/l/JL	69	10/4/90
Voth(2)

MR MACFARLAN (continuing): Finally, on the question of

service outside the jurisdiction, we submit that

there does not seem to be any support at all for

the view that the ST PIERRE principle is applicable

except sub silentio, Mr Justice Gibbs, as he then

was, in COPE ALLMAN (AUSTRALIA) LTD V CELERMAJER,

· (1968) 11 FLR 488. That was a case of service

outside the jurisdiction and His Honour assumed the
relevance of the ST PIERRE or MARITIME principle

without focusing on the question of whether it

should, in fact, be so applied.

And a further article which further asserts the·

absence of authority in this area is one which is

also in the photocopied materials by Mr Adrian

Briggs which is in 1989 Lloyd's Maritime and

Connnercial Law Quarterly. That is in the material

at the rear of the bundle that was handed up. And

the particular passage in Mr Briggs's article

is at 222, at the top of the page, first line through

to about point 4, where he puts in forceful terms

the view that SPILIADA is applicable in this area.

Your Honours, the next substantive submission

which I would be - - -

MASON CJ:  But before you come to that, Mr Macfarlan, can I ask you

how long the balance of your argument is going to take?

MR MACFARLAN:  Your Honours, I would have to be at least an hour, -

I think.

MASON CJ: And Mr Jackson, how long is your argument going to take?

MR JACKSON:  Your Honours, I would expect to take about an hour

and a half.

MASON CJ:	We will adjourn until 2 o'clock.
AT 12.52 PM LUNCHEON ADJOURNMENT

ClT43/l/LW	70	10/4/90
Voth(2)

UPON RESUMING AT 2.01 PM:

MASON CJ: Yes, Mr Macfarlan.

MR MACFARLAN:  Thank you, Your Honours. May I deal with one

or two matters that were raised before lunch? In

answer to Justice Brennan's question concerning

· instances of stays being granted and plaintiffs

being sent to other jurisdictions, we can give two

instances: HOMES V HOMES, (1989) 3 All ER 786. It was a case in which a stay was granted in England
which had the effect of sending the plaintiff to

New York, and a decision in SAIPEM, (1988) 2 Lloyds Rep 361, in which the alternative forum was Holland and a

stay was granted.

BRENNAN J:  I would say that the WAYLINK does not seem to

fit into these categories. The plaintiff company

there was a Liberian corporation, I think, and it

was - in fact, .the Gibralter corporation was the

defendant which had already commenced proceedings

in Germany.

MR MACF ARLAN:	I ,;..ould have to have another look at that, . Your Honour. matter is that what I said with reference to a question that was raised	The second
at the outset concerning obligatioris on Manildra companies

as to tax may nave been a little hasty. As it

appears from the evidence, we think that the only

obligation was on the United States subsidiary,

MMC. At page 3 of the appeal book, line 21 of the

statement of claim, that obligation on MMC is

alleged, and appeal book page 30, line 17, the

fact that MMC did, in fact, pay the United States
authorities- is referred to, and at appeal book 64,
line 23, the concession that that damage,

constituted by payment of tax in the United States

was damage suffered in America was referred to.

That was a concession that was made and is noted in

one of the judgments.

(Continued on page 72)

ClT44/l/FK	71
Voth(2)
MR MACFARLAN (continuing):	So, on that concession, at least

part of the damage was suffered in America and part was allegedly suffered in Australia; and the third point relating to matters dealt with before lunch,

in answer to another question of Justiee Brennan concerning

the question 0£ whether the courts are accustomed to dealing with

the sort of question raised by the appropriate forum

test, we would refer, by way of analogy, to the sort

of question courts are required to determine on

interlocutory injunction applications as to balance

of convenience.

If I could then return to where I was, which was

the commencement of the further principal submission,

that application of the clearly inappropriate forum	·
test, as enunciated by Justice Deane, would entitle
the appellant to succeed in these proceedings, and we start that submission by putting the proposition
that the relevant substantive law in respect of this
litigation would be that of Missouri.	When we say

relevant substantive law, we mean it perhaps in a

limited or qualified sense in this way: if the tort

is, as we say it is, a foreign tort, and to leave

it in that state of imprecision at the moment, then

the rules in PHILLIPS V EYRE would apply according

to traditional authority and, as those rules have

been explained in recent times by the High Court in

BREAVINGTON V GODLEMAN, the second of those rules

would require, for the plaintiff to succeed ·
in New South Wales, it to show that there would be

a civil liability in Missouri.

So, in that sense, American law would arise for

consideration in litigation in New South Wales of

these proceedings and, in that sense, we say

the relevant substantive law would be that of Missouri.

The view I have mentioned as to PHILLIPS V EYRE

is one which appears to have been adopted by the

majority of Justices in BREAVINGTON. The view of

the Chief Justice was perhaps a little different in
that he gave some support for the view that there

as the proper substantive . law as distinct from	should be a recognition of the lex loci delicti
being relevant only in the sense referred to in
PHILLIPS V EYRE.

(Continued on page 73)

ClT45/l/HS	72	10/4/90
Voth(2)

MR MACFARLAN (continuing):  But we do not conceive that

any particular point of importance turns on

that in this case because the same point can be

made an.rt· that is that it would be highly

undesirable and a factor very much going against

litigation in New South Wales if United States

law had to be determined in the course of this

litigation and I will ·elaborate the reasons for

that in a few moment~ But before coming to that

could I seek to demonstrate that this is in fact

a tort which was conrrnitted outside the jurisdiction

and therefore one that would attract the rules in

PHILLIPS V EYRE. Of course, if it was a tort

conrrnitted within New South Wales, then there would

be no question of the relevance of any United

States laws. The test, we submit, for determining

whether the rules in PHILLIPS V EYRE apply, and it

is in reality a foreign tort, is whether the act,

which is the subject of the plaintiff's complaint,

occurred outside the jurisdiction. That is the act,

the subject of the complaint, as distinct from

the damage which flowed from it.

A possible alternative view which finds some

support in the cases but, we would submit, not

the proponderance of support, is that the test is

where, in substance, was the tort conrrnitted, with a
perhaps overwhelming emphasis on the place where

the tortious act was conrrnitted as distinct from

where the damage was suffered. Mr Justice Gleeson,

in the court below placed considerable emphasis on

the question of where the tort was conrrnitted and

for that reason and because that matter loomed

large in the judgments in OCEANIC, particularly

in that of Justice Gaudron, we wish to refer to

the authorities which are relevant to that question.

Those authorities are listed in the outlined

submissions we handed up this morning on page 2. The first to which we wish to go is GEORGE MONRO V AMERICAN CYANAMID, (1944) KB 342. That was a case

in which goods were purchased in New York but

damage was suffered in England as a result of use

of the goods.

(Continued on page 74)

CIT46/l/CM 73

Voth(2)
DEANE J: Mr Macfarlan, what approach do you say an appellate

court should take on this question? I notice on

the page of Lord Templeman's judgment that you

referred us to, His Lordship, in SPILIADA, said:

An appeal should be rare and the appellate

court should be slow to interfere.

Would you accept that?

MR MACFARLAN:	Yes, we would, Your Honour, because - - -
DEANE J:	When you come to the ..... On principle it is
different, of course, but whatever principle.

MR MACFARLAN:  Yes. The normal rules as to appeals from decisions

exercising discretion, we would submit, would apply.

They would not apply in this case because the

principles have not yet been enunciated in a certain

fashion.

DEANE J:  But assume for the sake of the question that, as you

are conceding for the sake of the argument, you have

failed on the attack of the Court of Appeal's judgment

on principle and we have now come to applying

principlesto the facts. If you have not made good your

attack on principle, why should this Court get involved

in this question?

MR MACFARLAN: Well, there are, perhaps, two real reasons,

Your Honour. One is that the trial judge, through

no fault of his own, proceeded on a misconceived

basis on any view of it.

DEANE J:	But we are now dealing with the Court of Appeal's decision.
MR MACFARLAN:	But, Your Honours_ would, in our submission,

where that had occurred through the trial judge. give primacy to the exercises Of discretion only

DEANE J:  Why is that so? The Court of Appeal

has performed the trial judge's function?

MR MACFARLAN:  Yes. Well, Your Honours, perhaps if I put the

second point, that is, that there are errors of

principle, even accepting that Your Honours'

enunciation of the principle is that to be applied

which vitiate the conclusion of the Court of Appeal.

DEANE J: Well, I do not think the Chief Justice saw himself

as applying any one of the majority in OCEANIC as

distinct from a sort of an amalgam of all three.

But if we do come down to the question whether we prefer

the majority view or the dissenting view of the President

and think, well, there is force in both views, why

ClT47/l/LW	74	MR Mf\CFARLAN, QC	10/4/90
Voth(Z)

should we not follow Lord Templeman's suggestion that these are the very sort of matters in which appeals are undesirable and appellate courts

should not intervene?

MR MACFARLAN:  Your Honours can still have that principle in

mind but Your Honours will discern some errors in

the Court of Appeal's approach, even accepting

that they have purported to apply the correct test

and I can give a number of examples.

DEANE J:	I can follow that and I can also follow, if we were
to be carried along with the learned President's
enthusiastic view, it would not be simply a matter
of choosing between two open views.  It was more on the

.. assumption that it ended up as that ..... asking the question?

MR MACFARLAN: Well, it would be a factor of little weight,

in our submission, in a circumstance where the

trial judge's conclusion was vitiated by an

incorrect approach. The matter is here on appeal and

one is not looking to see whether the trial judge

should be interfered with and if it is a mere balance,

a question of slight preference from one view over the
other and no error in approach at all is discerned in

the majority decisions in the Court of Appeal, then

certainly we would accept as a factor, but,

Your Honour, we would submit that it should not be

elevated beyond that.

The GEORGE MONRO decision was a case of purchase

of goods in New York where damage was suffered in

England.	At page 439, Lord Justice Goddard, at point 9,
says:

The right to bring the action "depends on the

happening of damage to the plaintiff". Here

the alleged tort which was committed was a

wrongful act or default. It was the sale of
what was said to be a dangerous article without

warning as to its nature. That act was committed
in America, not in this country.	I think, as

Lord Justice du Parcq said in the course of

the argument, that all that this rule is aiming

at is the case where a foreigner comes to this

country and commits a tort in this country -

and he gives an example. The point is put, perhaps rather

more clearly, with great respec4 to the Lord Justice

in Lord Justice du Parcq's judgment at page 441 point 1,

first line. Re says:

The principle of the rule-~s plain. Looking at

the substance of the matter without regard to

any technical consideration, the question is: Where was though damage may be of the gist of the action.
the wrongful act, from which the dam3.ge flows, in fact done?

ClT47/2/LW	75	10/4/90
Voth(2)

MR MACFARLAN· (continuing):  As I will indicate, that is a

decision that has been followed subsequently. The

next one is CORDOVA V VICTOR BROTHERS, (1966) 1 WLR 793.

That was a case of purchase of goods in the

United States. A clean bill of lading was issued

when it should not have been and it was issued in

the United States but damage was suffered in

England and at page 799A, Mr Justice Winn said:

If the reality of the matter be, as it quite

clearly is here, that the wrongful act

being committed outside the jurisdiction it

merely produced results within the

jurisdiction, then I think that is outside

the terms of Order 11, rule l(h) -

and he refers to GEORGE MONRO and accepts

Lord Justice Du Parcq's proposition. At page 800G,

he refers to:

the substantial wrongdoing here was

committed in Boston.

And, at page 801E, he refers to the main matter as

being the:

substance of the wrongdoing occurred in

the United States of America.

Then came the Privy Council decision in

DISTILLERS V THOMPSON, (1971) AC 458. That was a

case of a drug which was sold in England to an

Australian company, thalidimide, and the plaintiff's

mother, while pregnant, purchased the drug in New

South Wales. Their Lordships, at page 466C, referred

to three possible theories about the question of

whether a cause of action had arisen in the

jurisdiction. Firstly:

the "cause of action" must be the whole

cause of action, so that every part of it,

within the jurisdiction. every ingredient of it, must have occurred

Secondly:

that it is necessary and sufficient that the

last ingredient of the cause of action

..... has occurred within the jurisdiction.

And, thirdly:

that the act on the part of the defendant

which gives the plaintiff his cause of

complaint must have occurred within the

jurisdiction.

ClT48/l/JH	76	MR MACFARLAN, QC 10/4/90
Voth( 2)

An·d, at page 468F, having rejected the first two

theories, just above F, they refer to what theory

number (iii) is. They say:

That is the rule laid down in

JACKSON V SPITTALL ..... which is an

authoritative case, and the rule is

inherently reasonable, as the defendant is

called upon to answer for his wrong in the
courts of the country where he did the

wrong. The rule does not, however, provide

a simple answer for all cases -

and matters are referred to there. And then, at B,

on the next page, Their Lordships say:

The problem is a difficult one and there

is no need to express any opinion on it in

the present case.

That was so because there was a failure to warn in occurred within New South Wales but we say that

Their Lordships gave some credence to the third of the tests although they did not finally have to

make a firm decision.

(Continued on page 77)

ClT48/2/JH	77
Voth(2)
MR MACFARLAN (continuing):	The next case is DIAMOND V BANK

OF LONDON, (1979) 1 QB 333. That was a case in which

there was a bank credit reference and Your Honours

will see at 333E that the reference was

provided to a bank in London by American brokers, and

the credit reference was the subject of complaint

as a misrepresentation. So the act, we would say,

straddled the two jurisdictions. It was dispatched

from America and received in the United Kingdom.

It occurred both by telexes and phone calls which

were received within England.	The Master of the Rolls,
at 346B, said that a fraudulent

misrepresentation is made where it is received and

acted upon, and at 346G, he said, "the same

applies to a negligent misrepresentation."

Lord Justice Stephenson at 349G, says:

In other cases of negligence the plaintiff has to suffer damage from the negligent act or omission for it to be actionable. In

deceit, as in slander, the false representation

or (in most cases) the defamatory publication

has to cause damage to be actionable, but no

damage to the plaintiff is necessary for the

tort to be committed.

So, His Lordship appears to draw a distinction between

the completion of the act, the cause of the complaint,

and some acting upon it, on the one side, and damage

on the other, and one should bear in mind, with

respect, that that was a case in which the representation·

was conveyed across the boundaries and was not, we

would suggest, complete until it was received in

England.

The next case is CASTREE V SQUIBB, (1980) 2All ER 589.

That was a case of a machine manufactured in Germany

but purchased in England, which caused personal

injuries in England, and Lord Justice Ackner, with whom

the other two members of the court, namely

Lord Justice Oliver and Lord Justice Buckley, agreed,
applied Lord Justice du Parcq's judgment in MONRO.	One
can see that at 592, at a. There ae is quoting from
Lord Justice du Parcq in MONRO, and just above b:

Returning to this case and bearing in

mind that the application to sue the appellants

in this country is based on the allegation that

the plaintiff could successfully sue the

appellants, one then asks oneself the question

which was posed by du Parcq LJ, and the

answer to that question seems to me to be

clearly this: that which gave, or gives, the

plaintiff her cause of complaint is not the mere

manufacture of the defective machinery, which of

ClT49/l/FK	78
Voth(2)

course took place in Germany; the mere

manufacture of the defective machinery is not

in my judgment even the beginning of tort.

And at C:

The substantial wrongdoing in this case

alleged to have been committed by the

appellants is putting on the English market

a defective machine with no warning as to

its defects.

(Continued on page 80)

ClT49/2/FK	79
Voth(2)

MR MACF.ARLAN (continuing): So, again, this focus on the

act, as distinct from the damage. And the

next decision is one that was given some
emphasis by Mr Justice Gleeson in the court

below CORDOBA SHIPPING V NATIONAL STATE BANK,

(1984) 2 Lloyds Rep 91 . Your Honour,

in the bundle of materials that we have handed

up - it is the fourth, it has a tab No 20 - and

that was a case, again, of a bank credit reference,

which was despatched from overseas to London. So,

it bore a very distinct analogy with DIAMOND's case,

and one can see that that fact was so at 92 point 9,

in the left hand column, the bank sent a telex to

Bulk in London and that was the subject matter of complaint. Lord Justice Ackner at 92 point 9, in

the right hand column, applied the decision in DIAMOND:

tort of negligent misrepresentation is

committed where the representation is

received and acted upon. And, Your Honours, we point to the fact that

Lord Justice Ackner had not long before decided

the CASTREE V SQUIBB case, in which he had drawn

the very clear distinction between where the

act occurred and where the damage occurred and,

Lord Justice Ackner in the CORDOBA decision obviously

did not see any inconsistency between DIAMOND's
case and CASTREE V SQUIBB and, in the absence of

would suggest that he saw the decisions in

any express suggestion in CORDOBA by Lord Justice

CORDOBA and D1.AMOND as consistent with CASTREE V SQUIBB

and the earlier cases which put distinct and express

emphasis on the place that the act occurred as

distinct from the damage. That is important because

Mr Justice Gleeson, in the court below, in a

passage to which I will come in a moment seemed to

treat CORDOBA as being authority for the proposition

that one looks to see where the damage occurred and

because some of the damage, so Mr Justice Gleeson

concluded, occurred in New South Wales, so he

concluded that the tort was committed within

New South Wales and then that, in turn, was a powerful

factor, so it appears, in his judgment, in forming

the conclusion that New South Wales was not an

inappropriate forum.

BRENNAN J: Is it possible to apply the cases that deal with

the location of a tort which is committed by

the doing of an act to a tort which consists of

an omission?

ClTS0/1/JL	80	10/4/90
Voth(2)

MR MACFARLAN: Yes, well, the DISTILLER's case was one such,

Your Honour, as was the CASTREE case, and the court seemed to assume that the same principles

apply and we would, respectfully, agree with that.

Your Honours, the next decision is METALL V

DONALDSON LUFKIN, (1989) 3 WLR 563.

(Continued on page 82)

ClTS0/2/JL	81	10/4/90
Voth(2)

MR :MACFARLAN (continuing): This was a case which arose

after the amendment of the jurisdictional rules,

as a result of England's membership of the

European Economic Community, so it was not a

case in which this question was looked at for

the purpose of seeing whether it was a case in

which service could be effected outside the

jurisdiction. There was not, under the changed

rules, any doubt that that was so. The reason it

was looked at was the same reason as it needs

to be looked at here, that is, was it a, in effect,

foreign tort for the purpose of the PHILLIPS V EYRE

rules, and Their Lordships treated the matter as

if the same rules applied to that question as to
the jurisdictional question that had been dealt

with in the previous cases. It was a complicated

factual situation, Your Honours, but in essence

what happened was that there was an English

subsidiary of American companies which carried

a party to fraudulent trading by an employee of

on business as a broker on the London Metal

the plaintiff and the plaintiff sought to attribute

responsibility to the holding company of the broker,

the holding company being American, by saying that
there was a conspiracy to which the American

company had been a party.

And Their Lordships at 588B · - there is

quite an extensive examination of the cases, I

should say, at 586 to 587, but at Bon 588,

they say that:

points thus emerge fairly clearly from those

cases. First, in deciding whether an alleged

tort has been committed in this country or

in some other country, our courts will

look back over the series of events

constituting it and ask themselves "Where

in substance did this cause of action arise?"

Secondly, in answering this question, the

courts will apply exclusively English law. And what they found in that case can be seen from

592G.	They refer to repudiations and then say: There then followed further breaches when
A.M.L. in London took the action threatened
in New York. These breaches took place in
London, and the judge was, in our view, right
to treat these as the most significant breaches:

And then at 59~

CIT51/l/CM	82
Voth(2)

But if, as we have concluded, the question is where as a matter of substance the torts were

committed, the matter must be looked at more

broadly, taking account of the breaches

(particularly the effective breaches) induced

and the resulting damage. On this approach

we conclude that as a matter of substance

the torts were committed in London.

Your Honours, the breaches taken account of

were presumably the most significant ones referred

to on the previous page at H. It is of some

relevance that Their Lordships referred to"taking

account of the resulting damage"and in that respect·

we would say Their Lordships'decision goes further

than the earlier authorities which focussed almost

exclusively, if not wholly exclusively, on where
the act, the cause of complaint, occurred. In

Australia the MONRO and CORDOVA focus on the act rather than the damage has been adopted and, if

TERMINAL~(l972) VR 626. 1hat was a decision of	I could mention a case of BUTTIGEIG V UNIVERSAL of a vessel in New York, as a result of which a
stevedore was injured in Melbourne and 629 .
is in fact one of the copied materials, Your Honours.
It is the third of the tabs, which bears a
number 19. At 629 of the report at about point 7,
Mr Justice Crockett says this, line 39, the
plaintiff says:

(Continued on page 84)

CITSl/2/CM	83
Voth(2)
MR MACFARLAN (continuing):

The plaintiff says now, and indeed may

persist in saying at the trial, that

the applicant should have sent a warning

to Victoria; but such an argument strikes

my mind as artificial. I must look at the

substance of the wrong conduct alleged to

be a tort:  CORDOVA and MONRO -

and he there concluded that the tort was committed

in America. That is of additional relevance,

Your Honours, that passage, because there is an

appellant should have advised the respondents directly and, for reasons I will give in a moment, we say that
allegation in the statement of claim here that not
only should the plaintiff appellant have advised the

the substance of the claim is really that there is a

complaint as to the former and it is very artificial

to say that there should have been direct communication

and we would be relying on what Mr Justice Crockett

said there that one really has to look at the substance

of it and see what the substance of the allegation is.

There have been some other authorities in

Australia, which I will merely mention, if I may,

which take a similar approach. There is another Victorian decision which follows MONRO, a case of

LEWIS CONSTRUCTIONS V TICHAUER, ( 1966) VR 34 1,

and a New South Wales decision in HALL V ELECTRICITY

AUTHORITY, 31 ALR 557. That statement from

MONRO of Lord Jlstice de Parcq was also referred to

with apparent approval by Mr Justice McTiernanin KOOP

V BEBB in 84 CLR 629, in a passage at page 648.

Your Honours, what all that amounts to is this,

in our submission, that the better view is that one is

required to look to the act which is the subject of

complaint, not to the place where the damage, or part

of it, was suffered, because the place at which

the damage, or part of it, was suffered, may well be

an entirely fortuitous event, and that proposition

is supported - - -

GAUDRON J: Except.is that not a bit strange'in economic tor ts? If

there is a duty of care it is by reason of

the close foreseeability of the damage in fact suffered. torts involving an infringement of the personal

integrity, but otherwise with economic torts.

MR MACFARLAN:  Yes. Well, perhaps I could answer Your Honour's

question by adverting to the facts here. Here the

appellant was giving advice in Missouri to his

Kansas City client and true, if the allegations of

the respondents are to be accepted, he must have had

ClT52/l/HS	84	10/4/90
Voth(2)

some foresight that the advice might be acted on

elsewhere. Nevertheless, the real act that gives the

cause of complaint is the giving of advice in Kansas

City and the omission to give it to the client in

Kansas City and, we would submit, on a common sense

approach, one would describe that tort as, in substance,

being committed in the United States, even though the

consequences allegedly flow to this country.

There is really no distinction in principle between

the economic loss type of duty and any other negligence

case. So that the principle for which we contend is

supported, we submit, by the MONRO case, CORDOVA,

CASTREE, the Australian decisions and also DISTILLERS

and the DIAMOND and CORDOVA decisions are not

inconsistent· for reasons that I have given. The

possible alternative, I have suggested, is that it

is a broader test and requires one to look at the

substance of the tort, but even if one adopts that

approach the authorities show that the overwhelming

emphasis must be on the act rather than the
consequential damage.

Now, we say that His Honour Mr Justice Gleeson

did not correctly apply these authorities and he appeared to regard the relevant test as the last ingredient type of test, and he appeared to regard

that as established by DIAMOND and CORDOVA.

(Continued on page 86)

ClT52/2/HS	85	10/4/90
Voth(2)

MR MACFARLAN (continuing):  Could we refer to the appeal

book at page 73. He says at line 10, having

referred to DISTILLERS:

In England the Court of Appeal has held

that where fraudulent or negligent

misstatements originate outside England

and are received and acted upon in

England, and damage is suffered in England, then a cause of action based upon that

chain of events is one which arose within

England and the relevant tort is

committed there.

He refers to DIAMOND and CORDOBA, and at page 72 point 4,

at about line 8, he said this:

It is important to note Their Lordships -

this is in DISTILLERS

did not propound this as a separate theory -

that is, where, in substance, did the··tort take place -

but rather, put it forward as a reason

in principle for rejecting the second theory.

Then, at page 72 point 5, the next sentence, he says:

The third theory, which Their Lordships

accepted and applied, was that the cause of

action aros~ within the jurisdiction if the

act on the part of the defendant which

gives the plaintiff his cause of action has

occurred within the jurisdiction.

Now, it is not entirely clear, Your Honours, but we

would submit the inference that one derives from

that is that His Honour did not have regard to the

MONRO test, which has been accepted in the subsequent

authorities, that one looks to breach rather than

damage. Rather, His Honour, focused on the question

of damage and reached the view that the tort was

committed in New South Wales because some of the

damage was suffered here.

We then wish to support the proposition that on

the facts here that the allegedly tortLous acts

which give the cause of complaint were committed in

Missouri and we put these matters in support of that.

The auditing and accounting work was done in
Kansas City; it was done and omitted to be done.

The appellant's duty would have been discharged by

giving the relevant advice to the United States

subsidiary but, we would suggest, probably not vice versa.

ClT53/l/JH	86	MR MACFARLAN, QC 10/4/90
Voth( 2)

Th·e appellant's client was the United States

subsidiary. If the appellant had gone directly to

the holding company and the Australian operating

company and told them something, it could not have
claimed that to be a discharge of its duty and,
we would submit, it is quite artificial to say that

the accountant should have made direct contact with the Australian companies. If there is any merit in the plaintiff respondent's claim, then it must be in

the complaint that there was a failure to advise
the American subsidiary with consequential damage to
the Australian companies. That that is the real

thrust of the respondents' case, we would suggest,

can be seen at page 30 of the appeal book, in the

affidavit of Mr Williams, who is a director of the

respondent companies. He describes what the

plaintiff's case is ari.<;i, having referred to what

happened between 1976 and 1983, at the top of the

page, at line 5, he says:

The interest income was taken into account

as part of the First Plaintiff's

Australian taxable income. It is the

Plaintiffs' case that withholding tax was

not paid because the members of the DHS

partnership including the Defendant

negligently failed to give proper advice to

MMC -

and we emphasize that, that is the American company -

in the preparation of the accounts of MMC

upon which accounts the Plaintiffs relied

in the conduct of their businesses, which

the defendant well knew.

That is the common sense approach to the case, if

there is really a case, and he does refer, in the

next paragraph to:

negligent in numerous respects,

particulars of which are contained in the

Statement of Claim.

(Continued on page 88)

ClT53/2/JH	87	MR MACFARLAN, QC 10/4/90
Voth( 2)

MR MACFARLAN (continuing): The statement of claims does allege

in terms a failure to communicate directly with the

Australian companies but we would submit that that is merely the pleader's flourish and does not reflect the real substance of the case. So, moving on to a

different aspect of the reasons why New South Wales is a clearly inappropriate forum. Your Honours, we would

say that if United States substantive law is applicable

in the sense I have mentioned, then one has the spectre

of New South Wales courts attempting to decide very

controversial and difficult questions which arise under

American law, as to the scope of duties to prevent

economic loss, and we would submit the prospect
is. undesirable of New South Wales authorities intruding

into what may be fresh ground, with the possibility ·

of appeals to the Court of Appeal, or perhaps even to

• this Court, about what United States law has to say about

duties to avoid economic loss, and, of course, there

has been a considerable divergence of views between
different jurisdictions as to the scope of that duty.

I will not go to these cases, but I will remind

Your Honours of the Australian cases of

HAWKINS V CLAYTON and SAN SEBASTIAN. Recently in

England the House of Lords have handed down a

decision in CAPARA V DICKMAN, which involves a

relatively restrictive approach to this question.

We have given the reference to that in our outline submission. And, in the United States, a relatively

restrictive approach appears to continue to

prevail and we have given the reference to the two
principal American authorities in our outline submissions~

the ROBINS V FLINT and also the more recent

EAST RIVER STEAMSHIP COMPANY.

So, it is an area of great controversy and what might well happen if the litigation remains in

New South Wales is that the New South Wales court

would be subjected to a double burden, because if

PHILLIPS V EYRE applied, the New South Wales court

would not only have to decide the difficult question

of whether there was a civil liability to the respondent

under American law, it would have to decide whether

there was a liability under Australian law. So it would

have to determine both questions: a double burden, we

would suggest. And, to refer to something that was

said by Justice Gaudron in OCEANIC concerning the

pronouncement by foreign courts on questions of

Australian law, we would suggest that if there is a
reluctance to allow foreign courts to pronounce upon

Australian law, then comity would suggest the reverse

would be the position also, namely that Australian

courts should be reluctant to pronounce upon foreign

law, all other things being equal.

DEANE J:	Mr Macfarlan, is there anything in the material to indicate
whether the Australian companies expected the income to
be exempt.
ClT54/l/FK	88
Voth(2)
MR MA.CFARLAN:	The material suggests, Your Honour, that they

were ignorant of the possibility that it might be

exempt, and treated it as ordinary assessable

income.	I am not sure if that answers Your Honour's
question.

DEANE J: It does. It is a bit surprising. I would have

thought anybody being paid interest from overseas

would go straight to the exempt· income

sections and ask the relevant questions. But, it is

difficult here, because so much depends on the way
you look at it. If you were to look at the picture,

in a way .contrary, indeed from the ~rst point of view from

your argument, you might say, well this was an

Australian company lending money to an American company• Now, if it were the case, assuming something

the American company, through negligence, did not
withhold, therefore you look to see who was really
responsible for the negligence, and your client,
as an officer of the American company, may be one of

the people that you start talking about duties of

care, and so on.

The other side of it is: you look at it as an

Australian company going to America and selling goods

to an American compan~ You get the best scenario

from your point of view. Well, we are really just left

to speculate about where, between the two extremes,

the facts fall.

(Continued on page 90)

ClT54/2/FK	89
Voth(2)
MR MACFARLAN:	The evidence rather suggests it is the

latter because - - -

DEANE J: Except, is there anything to say where the loan was

made?

MR MAGFARLAN:  No, I think, Your Honour, not other than that

it was made. The evidence about that is at page 28

of the appeal book, line 6:

the First Plaintiff lent -

so much -

to MMC at an interest rate - and so forth. The next matter we put, in support

of this submission, is that it would be distinctly

odd, and we borrow words of His Honour Mr Justice Kirby,

in that respect, distinctly odd for the

liability of the appellant incurred in the course of giving advice in Kansas City - the Kansas City

clients - to be determined in New South Wales and

we remind Your Honours that the trial judge did

express the view that Missouri was the natural

forum, and that is at 49 point 6 of the appeal book.

DEANE J:  He said Kansas?

MR MACFARLAN: Yes,he did, I stand corrected - an American

jurisdiction - I am indebted, Your Honour. So the

appellant was really engaged in what was an entirely

local transaction and it really is extraordinary,

in our submission, to contemplate the possibiliy of

him being brought here to this jurisdiction to

defend this action.

The question of breach is, when examined, one which militates strongly in favour of a conclusion that New South Wales is an inappropriate forum.	Firstly, there would have to be evidence, of course,	from America as to the appropriate standards of care
required of the auditor/accountant and, also,
evidence from the United States as to what was, in fact, done, or omitted to be done, and one can add
to that the statements of the judges with which we
would respectfully agree,. that a professional
person really is prima facie entitled to be judged
by persons in the jurisdiction where he practices
and there are two cases in which that point has been
made with some force. One is a New South Wales
decision concerned with the cross vesting legislation,
BANK.INVEST V SEABROOK, (1988) 14 NSWLR 711, and
at 729D, Mr Justice Rogers said this, and
Mr Justice Street and Mr Justice Kirby agreed with him:

ClTSS/1/JL	· 90	10/4/90
Voth(2)

Although neglected in argument -

it was said -

it should not be forgotten that an important

aspect of the cross-claim is the claim of

negligence against the Queensland solicitors.

Once again, it seems to me, that a determination

whether or not a professional person has

been negligent is much better gauged by a

local tribunal more closely aware of local

practice and the demands imposed on

practitioners.

Then, anothe·r statement is to be fo,md in an American

decision of CREDIT LYONNAIS V MANATT, which is in the copied material, in fact separate in the back of that volume, and it was a case concerned with the

liability of English solicitors and at the page

numbered 9667 of the report, in the right-hand

column, second-last paragraph, this is said: Finally, if the question of Amhurst's alleged

legal malpractice is to be resolved, that

issue should be judged by English standards

and practice, not by those of California.

Amhurst, in England, will be held to the

standard of practice applicable to English

solicitors acting in similar situations.

California has no interest in regulating

Amhurst's conduct yet England's interest is paramount. While the general law of professional

negligence may be the same in England and

California, the standards within the two legal

conununities could well be different, thus

leading to serious jury confusion. Moreover,

it would be an unfair burden to impose on

Amhurst to have a California jury, instead of

an English judge, decide the issue of Amhurst's

professional competence.

(Continued on page 92)

C1T55/2/JL	91	10/4/90
Voth(2)

MR MACFARLAN (continuing): That is reasoning we would adopt,

with respect. Other factors that are relevant to

this question are these: that the appellant has

no place of business in Australia and does not

conduct any operations here.- that appears at
appeal book 21, point 1 .- whereas the respondents

conducted operations in the United States through

the second plaintiff's subsidiary.- and the references

for that are at page 27, point 6, of the appeal book

and page 28, point 2 - and the respondent's ~onnection

is the greater with the United States because the

principal shareholder regularly travelled to Missouri

and was, in fact, paid a salary by the United States

subsidiary. That appears at page 22.1. And we would.

submit, in those circumstances, the respondents could

reasonably have expected that litigation relating to their United States business would take place in the

United States.

Your Honours, all it remains for me to do is to

just enumerate in summary form the reasons in the court below and to mention the reason why they are not of relevance or weight. Firstly, Their Honours

below relied on the fact that the respondents were

residents of New South Wales. Our submissions as

we have put them are that that fact is neutral because

the appellant is a resident of the competing jurisdicti~n
and there should not be any preference to the local

resident. Secondly, Their Honours relied upon or

asserted that there was a significant connection with

New South Wales. In fact, Your Honours, the only links are that part of the damage was suffered here and that

the respondents are resident here. To the contrary,

we would say the links with the United States are

overwhelming. Thirdly, Their Honours below asserted

that it was strongly arguable that substantive law

would be New South Wales. For the reasons we have

given we say that the relevant law is that of the

United States because the tort was committed there.

Fourthly, Their Honours placed emphasis on a conclusion

that it was strongly arguable that the cause of action
arose here.	We would submit that if one leaves to

one's side the question of the identification of the

relevant substantive law,which has already been dealt

with in the point I have just mentioned, and leaves

aside the question of the factual connections of the

parties, it is really quite a barren exercise to

look for any other reason where the cause of action arose.

It really does not help to say that the last ingredient

occurred in New South Wales. It is not a relevant

consideration,in our submission. In fact, one could

probably say that the first damage was suffered in the

United States because that was where the penalty tax

was paid.

ClT56/1/LW	92	10/4/90
Voth(2)

And fifthly, it was asserted that Missouri

was not the natural forum but when His Honour

the Chief Justice said that he was relying very

much on what we say, with respect, was his erroneous

conclusion that the tort was committed in New South

Wales and it really states or restates the question,

rather than answers it, to say that Missouri is not the natural forum, and in any event we say that it, in fact, is the natural forum if that is a relevant matters.

And sixthly, Their Honours relied on their assertion that the respondents were in pursuit of significant

and legitimate pe~sonal or juridical advantages and

we have g~ven reasons why we say that is irrelevant

and the emphasis placed on that type of factor by

. '

Lord Diplock in MacSHANNON's case has now receded into the background and those type of factors have been

rejected as relevant.

In those circumstances, Your Honours, we submit

that New South Wales is, in fact, a clearly inappropriate forum for the proceedings and that the proceedings should be stayed under the test fornrulated by His Honour

Justice Deane. Similarly, under the test or tests

formulated by Justice Gaudron, the view should be taken

that the tort was committed in the United States and

a stay should be granted consistently with

Justice Deane's test. And those are alternative

submissions to the ones I made earlier and f~i those

reasons, Your Honours, we submit the appeal should be

allowed and the service should be set aside or,

alternatively, a stay should be granted.

GAUNDRON J:	Mr Macfarlan, it is not a matter that looms large but I have some difficulty with the notion that in
these cases stays are granted on terms that a particular
defence or procedural advantage is not relied upon. Is there anything you can say - I just have some difficulty
with the notion that if you are refusing to exercise,
or standing back from your own jurisdiction, you can
then dictate how it is going to be fought out elsewhere. (Continued on page 94)

ClT56/2/LW	93	10/4/90
Voth(2)
MR MACFARLAN:	Yes.	Your Honour, that was a matter that

was raised below, because there became a question

about limitation of actions and we have acknowledged

that there will not be any reliance upon a time-bar

defence, so that disappears, in our respectful

submission, as a consideration.

GAUDRON.J:  It seemed to be implicit in the judgment of

Mr Justice Kirby that, had that undertaking not

been given, that condition would have been

imposed on the grant of a stay. Now the

difficulty I have is that the domestic court,

the Australian court, stepping back, none the less
seeks to dictate at least some of the rul~s of

the litigation in the other forum.

MR MACFARLAN:  Yes. Well, it would not be a dictation,

with respect, because that is a matter that is

preferred by the appellant, but the respondents

have allowed the time to elapse and it may be

the existence of a time-bar defence in America

would not be a persuasive factor in any event which would lead the court to decline a stay,
which was otherwise thought to be appropriate.

But the way in which this litigation has gone has

resulted in the merits of the respondent's claim

not being litigated yet and the appellant has been

prepared to overcome what prejudice there might

be to the respondents as a result of the respondents

not taking the precaution which, we submit, should

have been taken	commencing proceedings in the
United States.	So the question really disappears,

in our submission,and Your Honours do not have

the more difficult question to decide of what the

position would be if that undertaking were not

forthcoming. Yes, those are our submissions.

MASON CJ: Thank you, Mr Macfarlan. Mr Jackson.

MR JACKSON:  Your Honours, may I hand to the Court copies

of our outline of submissions.

MASON CJ: Thank you.

HR JACKSON:	Your Honours, there is one matter I wanted to mention concerning the outline of submissions
and it is this. Your Honours will see that it
contains no reference to the question of the
relationship between an application for leave to
proceed, as it were, and the application to stay,
and I will deal with that in a little more detail
later, but the reason for that, Your Honours, is
that the issue was one which was not pursued in
the Court of Appeal, and I will come to give
Your Honours the references to that, so that
Your Honours, really for the first time, as it were, apart from some observations made in passing by the
CITS7/l/CM	94
Voth(2)

·· Chief Justice in the Court of Appeal, are dealing

with that part of the case as a new argument.

Your Honours, I will come back to that as I said.

Your Honours, may I follow through the order of

submissions in the outline of submissions and

as Your Honours will see there, we accept, of course,

that one of the courts of the United States is

an appropriate forum, but we would submit also that

New South Wales was also an appropriate forum. Now

Your Honours will see that in the statement of claim

and also the document to which I will come, what

is recognized or asserted,as the case might be,is

that, not merely was the accounting work and the

auditing work to be carried out in the United States,.

but it was known that what was done there had

some effect upon the financial state of the group

of which the respondents were parties.

Could I take Your Honours to page 33. There

was a letter which is written in an endeavour to

explain what had occurred. Now Your Honours will

see that the letter is addressed to Mr J.T. Honan,

Junior and the Manildra group and it is addressed
to him, Your Honours, on behalf of the Manildra group

and it is addressed to him in New South Wales. Now, Your Honours, he was, as appears from the

preceding page, a director of each of the respondent

companies.·

(Continued on page 96)

CIT57/2/CM	95
Voth(2)

MR JACKSON (continuing):  Now, the letter encloses a

memorandum saying what happened, in effect, and

then, Your Honours, in the third paragraph,

what appears, at about the sixth line, there is

a reference to:

withholding payments to a foreign parent

corporation -

and then, it goes on to say:

The question as to whether or not such withholdings were in fact being made simply did not arise until a few weeks ago when

the question was raised by one of our tax

specialists. Had the question arisen

earlier, either from Manildra personnel - who seem to be the "Jim" and "Jean" earlier referred

to -

or from our personnel involved on the

audit engagement, the matter would have

been pursued until a conclusion was reached

and we would have notified you that the

withholding law also pertained to payments

of interest.

And then, they go on to refer to the difficulties

caused by it. Your Honours, that is simply one

factor, of course. What it does indicate is that

there was a recognition of two things. One, that
the effects of their activities might affect the

respondents. The second is, that there was a

recognition of the cormnunication or the need to

cormnunicate the results of what they were doing.

Your Honours, if I could go then very briefly to

the statement of claim, Your Honours will see

at page 1, paragraph 3, the relationship between the

companies alleged. Then, Your Honours will also see	in paragraphs 4 and 5, the introductory allegations,
as it were and in paragraph 11, the various
allegations made as to the knowledge of the
defendant of this pattnership, and Your Honours will see in paragraph ll(a), a holding out to the
American company and to the group; an allegation
in ll(b) as to knowledge of the matters to which I
have earlier referred in paragraphs 3 and following;
an allegation in ll(c) that they:

knew or ought reasonably to have known

that the -

respondents -

ClT58/l/JH	96	10/4/90
Voth(2)

relied upon the accounts of MMC and

upon the accuracy of such accounts in

the course of and for the purpose of

conducting its business.

Now, Your Honours, I shall not read them out but

could I ask Your Honours to look at the remaining
subparagraphs of that paragraph and, in particular,

subparagraphs (e), (f), (g) and (i). I think, in

fact, that is all of them, Your Honours.

Your Honours, what emerges from that is that

there is knowledge of two things, in effect. One

is that the activities carried on by them would have

an effect upon the activities of the respondents

and the second thing is. that in the ordinary course

of events their activities, or the results of them,

would be communicated to Australia to the group and

might cause damage here.

Your Honours, if one looks at the cause of action sued on by the respondents, that cause of
action, in our submission, at least arguably arose

in substance, if I could use the words of the

passage but the reference is (1971) AC 458.

DISTILLERS company case, in New South Wales.

(Continued on page 98)

ClT58/2/JH	97	10/4/90
Voth(2)

MR JACKSON: 

Now, Your Honours, that tort of negligent

misrepresentation, in our submission, or that
tort of negligence, was connnitted where the

representation was received and where it was

acted upon and, Your Honours, could I take

Your Honours very briefly to two references,

the first is to DIAMOND V BANK OF LONDON AND

MONTREAL LTD, (1979) 1 QB 333, at page 345 to 346,

that is a passage to which my learned friend
referred~ he referred in part - and Your Honours

will see at page 345G, the preliminary point is

referred to and then at the top of page 346
Lord Denning refers to the tort being connnitted

"where the message is received" and then, Your Honours,
the paragraph connnencing letter E , sets out his view on

• 

the topic, and to the same effect is the judgment of

Lord Justice Stephenson on this point, at page 348,

in the second paragraph, his reasons for judgment,

and then at page 349, the passage connnencing between
letters B and C, "But it is settled law', and then

going on, Your Honours, to letter F, the first couple

of lines of the new paragraph on the page and then,

Your Honours, at the bottom of the page the last

five lines of the penultimate paragraph. And

Lord Justice Shaw agreed with both those judgments.

Now, Your Honours, that approach was adopted,

also, in the case to which my learned friend also

referred, that is CORDOBA SHIPPING CO LTD V

NATIONAL STATE BANK, ELIZABETH, NEW JERSEY, (1984)

2 All ER 91, at 96. Now, Your Honours, what that

illustrates, in our submission, is that there was

nothing at all unusual or unorthodox in the

Chief Justice, in this case, saying as he did,

first of all at page 73, Your Honours, in the

passage connnencing about line 10, he referred to

those two cases and then, in the passage that

goes over to the next page, His Honour said at

the top of the page:

To describe what is involved as "a

foreign tort" is at the very least a

dangerous over-simplification, and a

description of the State of Missouri as

"the natural forum" is not easy to

reconcile with what Goff L.J. said in

CORDOBA SHIPPING.

BRENNAN J: Does·thatpassage go beyond what DIAMOND and CORDOBA

says though- because there is, I suppose, at least

a verbal difference between a representation which is made by A. to B in one location;

transmitted by B to C in another, if the

action lies between C and A and a conmrunication

made directly between A	and	C , from one
jurisdiction to the other?

C1T59/l/JL	98	10/4/90
Voth(2)

MR JACKSON:  Your Honour, it would. very much depend on

the particular circumstance& What I mean by that

is that if it was understood by, I have forgotten

which was (a) and (b) now Your Honour, if it is

understood by that person overseas, when communicating

to the other person overseas that the natural and

probable consequence, if I could use that

expression of that, will be that it will be

communicated to Australia and then, if one could

use the analogy of defamation cases, Your Honours,

that is something for which, in our submission, it

would be appropriate to say the communication by

the person to whom it is first made is one which

was made by, first, by the person who made it,

albeit through the agency of someone else.

(Continued on page 100)

ClT59/2/JL	99	10/4/90
Voth(2)

MR JACKSON. (continuing):  Now, Your Honours, I said it depends

on the circumstances of the case, and I am conscious
that I have really wandered between two concepts,

natural and probable consequence and agency, but

there are, of course, other cases where the

alteration of the statement or the addition of

personal con:nnents or something of that kind, by the
person to whom it is first made, could put it in a

different category. But, Your Honours, the point I

am really trying to make, I think, is this, that it

is possible to say in appropriate cases, that the

con:nnunication from A to Band then B to C is really

from A to C. It will not always be so, but in the

present case one has the allegations in. the

statement of claim of the knowledge of what would

happen to the improperly audited accounts.

Your Honours, the other reference which I was

going to give is at page 91 in the appeal book and,

Your Honours, at the bottom of page 91:

neither the State of Missouri nor the State

of New South Wales could appropriately be
characterised as being the single of

exclusive "natural forum" of the. litigation.

Now, Your Honours, if I could move from there - or

perhaps I should say, our submission is,tha.t this is a

case in which the cause of action did, at least arguably, arise in substance in New South Wales

and, Your Honours, had in any event distinct

connections with New South Wales and one sees, of

course, from page 33 of the document, that that is
exemplified by the fact that as soon as the trouble

arose the letter was written to the parent in

New South Wales.

Your Honours, could I come then to the second

point with which we wish to deal. The outline of

submissions in paragraph 2, really in the first

sentence of it, simply states really. the obverse

move on to paragraph 3, we would submit that the	of one of their grounds of appeal, but if I could	Court should not adopt the SPILIADA test, or a test
which is similar to it, for a number of reasons.
The first, Your Honours, and a. very important matter,
in our submission, is that which was identified by the
members of the majority in OCEANIC SUN at the. various
passages there referred to, and. that is that the
court is given too wide a discretion to decline to
exercise jurisdiction.

Now, Your Honours, that involves, of course, a

value judgment, and whatever test one has does

involve some element of declining to· exercise jurisdiction.	We
would submit, however, that the Court is in a position
where it should treat the rule as one which applies

ClT60/l/FK	100	10/4/90
Voth(2)

in a relatively small number of cases, and it

should not allow courts, in effect, to be in a

position where they have too wide a discretion

to pick and choose which cases they will do.

Your Honours, I do not make - - -

TOOHEY J:  Mr Jackson, how wide do you suggest the

discretion is, applying the SPILIADA test?

MR JACKSON: Well, Your Honour, the first thing is to decide

what the SPILIADA test is, with respect. If I

could just put it two ways, Your Honour. If the

SPILIADA test is that one simply de~ermines which

is the more appropriate forum, then, in our

submission, that is a test which is far too wide.

If the test is one which involves determining

whether there is some other_ clearly appropriate

forum, then again, that probably says the same thing

in just a different way. If the test is that there

must be a forum which is clearly more appropriate,

then, no doubt, the test is narrower but, Your Honour,

we would submit that that still should not be the

test, as the test. In some cases that test would

be an appropriate - if I could use the word - way of

deciding whether the Court should or should not

stay the proceedings bu4 in our submission, it

should not be the test because the test is one which

looks at the wrong thing, in effect.

(Continued on page 102)

ClT60/2/FK	101	10/4/90
Voth(2)

MR JACKSON (continuing):  Your Honour, what we are submitting

really is that what one should be looking at is

whether the Australian court is inappropriate as

distinct from whether there is some other more appropriate court. Your Honour, how wide the current test is seems to be - the better view of it

seems to be that the other court has to be clearly

more appropriate. Your Honour, that is still, in our

submission, a test of considerable width.

Your Honours, could I move on to the second aspect to which we wish to direct attention, and that is that it would be - perhaps I should say the determination

of the question of what is a more appropriate court

is one which does not take place in the abstract

because what is being done is to consider a
comparison between, in effect, the Australian court
in which the proceedings have been commenced, on the

one hand, and, on the other hand, a court or the courts

of another country or countries. In that regard,

could I refer Your Honours to OCEANIC SUN at page 248

where Your Honour Justice Deane referred to that fact.

Your Honour refers, for example, about one-third of

the way down the page:

Ordinarily, a defendant will be unable

to discharge that onus unless he can
identify some appropriate foreign tribunal

to whose jurisdiction the defendant is

amenable and which would entertain the

particular proceedings at the suit of the

plaintiff.

Now, Your Honours, it would be, in our submission, a

happy position if it were true, but it is not, that

the other nations of the world have all adopted

judicial systems which have the attributes of fairness

and impartiality and independence from the government

which the Australian judicial system has brought about.

Your Honours, one does not know, for example, what

legal systems will emerge from the recent political

changes in Eastern Europe, and the same, Your Honours,

can be said of some parts of Asia and the Pacific and
South America.

Your Honours, it is an unpleasant task, no doubt, for a court to have to engage in an assessment of the

relative merits of another judicial system but, in

our submission, the adoption of the test in SPILIADA

is one which does bring about that result. Your Honours,

could I give a number of references in that regard:

first to OCEANIC SUN at page 240 where Your Honour

Justice Brennan said in the first new paragraph on

the page:

C1T61/1/HS	102	10/4/90
Voth(2)

If this view be thought chauvinistic,

it may be remembered that the law applied

in many other countries preserves local

jurisdiction even more jealously. Moreover,

the established rule does not call for an

assessment by the courts of this country

of the quality of justice administered

elsewhere:  an assessment which would be

often of dubious validity, if not a source

of grave embarrassment -

and then Your Honour goes on a little further.

Now, Your Honours, the possible need to look at the

appropriateness of other systems in that way

appears in three of the English cases and also in a

.,	comment about them on this point in the Law Quarterly
Review to which I will come. The first, Your Honours,
is SPILIADA itself, (1987) 1 AC, at page 478.

(Continued on page 104)

ClT61/2/HS	103	10/4/90
Voth(2)

MR JACKSON (continuing): In the paragraph commencing

after the letter C, paragraph (f), where Lord Goff

said - and this is the second sentence of it:

In this inquiry, the court will consider

all the circumstances of the case, including

circumstances which go beyond those taken

into account when considering connecting

factors with other jurisdictions. One

such factor can be the fact, if established

objectively by cogent evidence, that the

plaintiff will not obtain justice in the	foreign jurisdictions; see the THE ABIDIN
DAVER (1984) AC 398, 411, per Lord Diplock, a passage which now makes plain that, on
this inquiry, the burden of proof shifts to the plaintiff.

So that that passage recognizes one aspect of the

general topic is capable of investigation on such

an application, that is, the inability to obtain

justice in the foreign jurisdiction, but the	two earlier cases demonstrate, as one might expect,
that there is a rather wider issue involved.
Your Honours, if I could go then to THE ABIDIN DAVER (1984) 1 AC 398 at page 411._ Lord Diplock said in the
paragraph commencing at letter B:

The possibility cannot be excluded that

there are still some countries in whose

courts there is a risk that justice will not

be obtained by a foreign litigant in particular

kinds of suits whether for ideological or

political reasons, or because of inexperience or inefficiency of the judiciary or excessive delay in the conduct of the business of the

courts, or the unavailability of appropriate

remedie·s. But where there is already a lis

alibi pendens in a foreign jurisdiction which

constitutes a natural and appropriate forum

for the resolution of the dispute, a plaintiff

in an English action, if he wishes to resist

a stay upon the ground that even-handed
justice may not be done to him in that

particular foreign jurisdiction, must assert

this candidly and support his allegations with

positive and cogent evidence.

And then he went on to deal with the facts of the particular case and then at page 424 of the same decision, letter F, Lord Brandon said there were

two further matters that he wanted to deal with.

One was:

CIT62/1/CM	104
Voth(2)

that the judge expressly declined to enter

into any comparison between the capacities

of the Turkish and English courts to try

justly and satisfactorily the dispute between

the parties. In doing so he was following

observations made by me when sitting in the

Court of Appeal in THE EL AMR.IA ..... observations

which appear to me to accord with the view of

your Lordships' House, as recently expressed

by my noble and learned friend, Lord Diplock.

And then he went on to say that Lord Donaldson

only paid:

lip service to the avoidance of any

comparisons of that kind -

and then he went on to say, at letter Con page 425:

The Master of the Rolls will, I trust,

forgive me if I say that, having paid lip

service to the need to avoid comparison

between English and foreign courts, he

then proceeded to make just such a comparison.

Now, it is not at all clear from that whether

His Lordship is saying that one should never do it

but,Your Honours, it would be an impossible

situation if the parties were not able to deal with

that aspect if it became necessary to deal with it.

And Your Honours, it is referred to also in

AMIN RASHEED, a shipping corporation, V KUWAIT

INSURANCE,(1984)1 AC 50, at page 67, where

Lord Diplock said:

(Continued on page 106)

CIT62/2/CM	105
Voth(2)

MR JACKSON (continuing):  Page 67:

My Lords, it was urged ..... the ability of a Kuwaiti court to decide matters of

disputed fact is markedly inferior to that

of the Commercial Court in England. None

of the judges in the courts below accepted
this invitation to embark on the
invidious task of making a comparison of

the relative efficiency of the civil law

and common law procedures for the

determination of disputed facts. In my

opinion, it would have been wholly wrong

for an English court, with quite inadequate

experience of how it works in practice in a

particular country, to condemn as inferior

to that of our own country a system of

procedure for the trial of issues of fact

that has long been adopted -

and so on. Your Honours, if the question is, what is

the more appropriate forum or whether the court of

another· country is an appropriate forum, then one

would have thought, in our submission, that in

considering that question one is entitled to examine the quality of justice, if I could put it in a broad compendious form, administered in that country.

If one cannot and if there is automatically

adopted a rule that excludes or excludes

significantly considerations of that kind then, in

our submission, one would look at the validity of

the rule itself that was set up to do so.

Your Honours, the issue I mentioned a moment ago

was discussed as part of an article by Slater
entitled "Forum Non Conveniens: A View From The
Shop Floor". 104 LQR 554 at 569 to 571.
Your Honours, the article discusses the SPILIADA,

not with an excess of enthusiasm and then, at page 569

towards the bottom of the page in the last paragraph

refers to the issue to 'Which I havejust been adverting.

Your Honours, that issue is discussed at page 570

and going on to page 571 and at page 571 at the top

of the page the author says:

Suppose that in Ruritania the judiciary were

ideologically or politically motivated or
inexperienced, and that its suitability
as an alternative forum was called in
question on the ground that the plaintiff
could not expect even-handed justice. If
statements of honest belief, based on general
experience or cormnon knowledge, are

unacceptable -

he is referring back to one of the earlier cases -

ClT63/l/JH	106	MR JACKSON, QC	10/4/90
Voth( 2)

how is the plaintiff to establish his

case? How many specific instances would it

be necessary to cite? Would evidence have

to be given by parties or lawyers involved

in other cases in that jurisdiction?

What is to be done if competent witnesses

are not prepared to give evidence for

reasons of cormnercial interest or personal

safety -

and so on, Your Honours, and that goes down to the

end of that paragraph and part of the next paragraph.

TOOHEY J:  Mr Jackson, the difficulty I have with some of this

argument is that it tends to lose sight of the onus
of proof that is involved. It tends to suggest that,
perhaps, whenever there is an application of the

sort that we are concerned with here, the Court

inn:nediately embarks upon a consideration of a whole

range of circumstances but, in truth, the

defendant who seeks a stay has an onus to show

that some other jurisdiction is cLearly more

appropriate. That is not an onus that is easily

satisfied. Once satisfied, it is seen then that if

the plaintiff wishes to demonstrate that he will not
be able to obtain justice in that other jurisdiction,
the onus then rests on him to make good that
proposition which, in turn, would not be a very easy

proposition to make good. All I am suggesting to

you is that the onus itself, or both onuses, would

operate as some sort of growth on the range of
considerations that the Court would be called upon

to assess.

(Continued on page 108)

ClT63/2/JH	107	MR JACKSON, QC	10/4/90
Voth( 2)

MR JACKSON:  Your Honour, could I say a couple of things about

that. I would accept, of course, if the issue

is not raised, the issue is not likely to be dealt with,

and one would accept and hope that it would very

infrequently be the case, that such an issue would be

raised, but, Your Honour, there are two features about

it when such an issue does arise. One is that the

observations in the article to which I have just been

referring show that there are practical difficulties

for a plaintiff seeking to discharge that onus

because it might well be that a plaintiff is not able

to point to specific matters but, in effect, to the

reputation of the country - and, Your Honour, I shall

not go over what is in that article but I will adopt

it. But the second thing about it, Your Honour,

is that the need to go into the issue is itself,

in our submission, a question or a factor which

militates against the adoption of an approach which may give rise to those questions arising. And that

is why, in our submission, the better test is one

which says,. "Is the Australian court inappropriate?",

rather than by comparing the Australian court with

another court when it is not otherwise necessary to

do so.

Your Honours, could I just say a couple more things

about this aspect of the matter. One is that the

consideration- of the merits and demerits, as it were,

of the court of another country is subject to a number

of disadvantages. One is, of course, that it depends

on the evidence in each case and at the same time

the possibility arises that judge A might decide that

the courts of Ruritania are not capable of doing justice;

judge B might decide that they are eminently suited

to doing so. Your Honours, the second thing is that

the subject-matter of the inquiry is one which, if

decided against, in effect, the other country, by
reason of some such consideration, is one which is
capable of causing political repercussions which,

otherwise, might be unnecessary,- international political

repercussions I mean. The third feature is, Your Honours, that so much

of the evidence on an issue like that is one of

impression rather than something one can deal with in

terms of detailed evidence. And the fourth thing,

Your Honours, is that if the plaintiff bears the onus
in such a case as Your Honour Justice Toohey was putting

to me and as Lord Goff had said in SPILIADA at page 478,

then the plaintiff who has followed the law of his own
country in starting the action, has to go on then to

show that the plaintiff will not obtain justice in

some other country.

ClT64/l/LW	108	10/4/90
Voth(2)

Now, Your Honours, it is for those reasons,

in our submission, that a rather better starting

point is to look, not at which court is more or

most appropriate, but rather to look at the question

whether the court in which the proceedings have been

instituted is inappropriate.

Your Honours, could I move on then to the next aspect which we wish to advance against the adoption

of the SPILIADA test and that is that, in our submission,

MARITIME INSURANCE CO. LTD V GEELONG HARBOR TRUST

COMMISSIONERS is, of course, a unanimous decision of

the Court which represents one of the ways in which

the issue might be resolved or might have been resolved.

Your Honours, the question whether it should be

overruled or not was before the Court, in effect at

least, in OCEANIC SUN and the Court by majority decided

not to do so.

Your Honours, related to that is the next point

which we would wish to make and it is this: that what one is

talking about in relation, firs.t..,- to rules of court

permitting service outside the ju:r:isdiction and,
secondly, in relation to applications for stays in
such cases, is that it is for the various jurisdictions
of the nation, in our submission, to decide what is the

appropriate test in that regard for each jurisdiction.

(Continued on page 110)

ClT64/2/LW	109	MR JACKSON, QC	10/4/90
Voth(2)

MR JACKSON- ~continuing):  If there is disconformity to an

extent where there needs to be uniformity, then the

Commonwealth is able to legislate to cure that.

Your Honours, what has happened, of course - and this
relates to the question whether the courts should now

adopt a different test - what has happened is that

two States have adopted, at least for the future in

the case of New South Wales, a SPILIADA-type approach

by amending the rules of court. Others have, at least

so far, chosen not to. Now, Your Honours, in that

regard could I give Your Honours references to the

two States' rules.	The New South Wales rule is
Part 1O.6A(2)(b).	Your Honours will see at the

bottom of the page·that I think Your Honours have been

given. It.~llows the making of an order under the rule:

on the ground -

(b) that this Court is an inappropriate forum

for the trial of the proceedings.

SPILIADA plus, perhaps, Your Honours.

BRENNAN J:  That is more Deane J, is it not, than it is SPILIADA?

MR JACKSON:  Your Honour, I really do not know. I would have

thought - I am sorry. Your Honour is right, of course:

it is an inappropriate forum for the

trial of the proceedings.

That is the approach, I should say, that has been taken

in New South Wales. That is an approach which does

not apply to this case because it came into force on

17 June which was almost a fortnight before the Court

gave judgment in OCEANIC SUN. In Victoria a different

approach has been taken and in the 1986 rules in

rule 7.O5(2)(b) allows the court to make an order

setting aside process:

on the ground -

(b) that Victoria is not a convenient forum
for the tr i a 1 of the proceeding ..

Your Honours, without attempting to work out precisely
what that means, it does seem to be a test which is
different from the New South Wales test, it seems to
be different from the tests that Your. Honour .

Justice Deane adopted in OCEANIC SUN and :

it is closer to what some would say is the American

test, perhaps, than anything else.

C1T65/1/HS	110	10/4/90
Voth(2)

DEANE J:	·:i:t depends what "convenient" means there, does it not?
MR JACKSON:	Of course, Your Honour.
DEANE J:	One has the feeling that somebody has just translated

'non conveniens", with a bad translation.

MR JACK.SON:	That is so, Your Honour.
MASON CJ:	Are these the two instances that you previously

referred to as adoption of the SPILIADA test?

MR JACKSON:  Your Honour, I am sorry, I put that loosely and

incorrectly.	I think I may have said a SPILIADA-type
test.	·

BRENNAN J:  Therein lies the problem.

(Continued on page 112)

C1T65/2/HS	1 1 1	10/4/90
Voth(2)

MR JACKSON:  Your Honour, could I just say this in relation

to them, what they do demonstrate is that those

States have chosen to exercise their powers to

determine what the rule should be for the

future. Now, Your Honours, that does not, of

course, prevent the court from giving a decision the Court, if it were to overrule the existing decision, would not apply, for example, to New
in relation to, if it were t~ say, overrule the

South Wales where this case comes from; would

not apply to Victoria and would apply to the other

States to the extent and only for such time as

those States chose not to amend their rules of

court - - -

GAUDRON J:  Mr Jackson, could I ask what relevance that this

case would have other than to say what

"inappropriate' is for the law of New South Wales,

following that amendment?

MR JACKSON: Well, Your Honour, it would have an effect, really,

upon this case only - upon the instant case, I

mean. So, that it has, in our submission - that fact

is one which militates against the court deciding that

the earlier decisions should be overruled.

MASON CJ: Are you approaching an application for rescission

of the grant of special leave?

MR JACKSON:  No, Your Honour, I am not, I am not saying that

but, Your Honour, the argument that I am advancing

is one which I advancedin a different way in

resisting special leave, unsuccessfully, of course.

What I am submitting now is that it is relevant

to a differnt matter and that is whether the Court

should enter into a reconsideration of the earlier

decisions - enter into and, in the event, overrule.

So, Your Honours, if I could just put it this

way. the point did not prevent them getting here,
it should, however, be	one that sends them away.

DEANE J: Mr Jackson, in the case of New South Wales and Victoria,

the rules of court are made by the judges still,

are they?

MR JACKSON:  Yes.

DEANE J: And subject to disallowance by the Parliament in each

case?

MR JACKSON:  Your Honour, I believe that to be the case, yes.

Your Honour, perhaps I could send Your Honours and

my learned friends a note of the provision which

permits the Parliament to disallow them.

ClT66/l/JL	112	10/4/90
Voth(2)

DEANE J: Well, unless what I put to you is wrong, I do not

think there is any need for that.

MR JACKSON: Yes.

DEANE J:  Ifr,what I puil:! to you is wrong, I would be grateful

to be told.

MR JACKSON:  Of course, yes. Now, Your Honours, a further

aspect, a further matter on this issue,

Your Honours, is that fundamentally the question

is a question of policy and it is, in a sense,

a question of naked policy, as it were,involving

some international elements - involving some

matters which the Court cannot possibly-know, with

respect, and some matters which, in the end, are

ones which are, perhaps, better dealt with by

committees and by bodies which can carry out an

inquiry otherwise than by reference to the

particular case. Could I, in that regard, give

Your Honours a reference to the observations of
Your Honour Justice Deane, to that effect, in

OCEANIC SUN, at page 255 - that is 165 CLR, at

page 255, where His Honour said in the third line

of the page:

(Continued on page 114)

C1T66/2/JL	113	10/4/90
Voth(2)

MR JACKSON (continuing):

If the law of this country is to be

changed in that regard, it seems to me

to be preferable that it be done by

legislation enacted after full inquiry and

informed assessment of international as well
as domestic considerations of a kind which

this Court is not equipped to make of its

own initiative. Such legislation could lay

down comprehensive rules and guidelines

and so on. And,Your Honours, one might well say

that those jurisdictions which have not altered

their rules of court, have done so in reliance

on the past decisions of the Court, and that

itself, in our submission, is a matter which can

be taken into account. Now,Your Honours, the

next point with which we would deal is that in

paragraph 3(e)and that is that if one is to

adopt some different test, in effect, why should

it be the SPILIADA test, and the SPILIADA test

does not seem to be quite the test which has been

adopted in the United States. Your Honours, indeed,

the United States test,in some respects, is

expressed in a way which seems to make it not very
dissimilar,in at least many of its applications, to

the tests adopted in Australia before SPILIADA. Your Honours, could I refer to KOSTER V

LUMBERMENS MUTUAL CASUALTY CO , 330 US 518, in

particular at page 524. Now, Your Honours, in

referring to this decision I am conscious of the

fact that the most recent decision on the point

seems to be PIPER AIRCRAFT CO V REYNO, but that

case itself seems to treat KOSTER as being correct

or KOSTER and its associated case, the GULF OIL case,

as stating appropriate tests. Your Honours,at

page 524, the court said, in the first new paragraph:

Where there are only two parties to a

dispute, there is good reason why it should

be tried in the plaintiff's home forum if

that has been his choice. He should not be

deprived of the presumed advantages of his

home jurisdiction except upon a clear showing

of facts which either (1) establish such

oppressiveness and vexation to a defendant

as to be out of all proportion to plaintiff's

convenience, which may be shown to be slight

or nonexistent

and,Your Honours, the words "oppressiveness and

vexation" have a familiar ring in this context, and -

CIT67/l/CM	114
Voth(2)

or (2) make trial in the chosen forum

inappropriate because of considerations

affecting the court's own administrative

and legal problems.

Now, Your Honours, the second part of the test

is used perhaps more frequently in the United

States than here. Your Honours, could I refer

also to the companion case, in effect, which is

GULF OIL CORPORATION V GILBERT, 330 US 501 and,

Your Honours, at page 507, under the heading II:

The principle of forum non conveniens

is simply that a court may resist imposition

upon its jurisdiction even when jurisdiction

is authorized by the letter of a general

venue statute. These statutes are drawn

with a necessary generality ..... But the open

door may admit those who seek not simply

justice but perhaps justice blended with

some harassment.

And Your Honours, that seems to relate back to

the test in KOSTER's case. In PAPER OPERATIONS

CONSULTANTS INTERNATIONAL LIMITED V SS HONG KONG

AMBER ( 19 7 5) 513 F. 2d 667, Your Sonour, one is getting

close~ in time to the ~resent, so this is no old

test. At page 672 -

(Continued on page li6)

CIT67/2/CM	115
Voth(2)

MASON CJ:  We do not have it, Mr Jackson.

MR JACKSON:  Your Honours, I am sorry. I did not have copies

of it made, because it was on our learned friend's

lists, but could I just say this, Your Honours, at

page 670 - I should have said - the court says:

The district court relied on the

following standard enunciated by

the Third Circuit -

in a case which it names. And then it says in

footnote 3 that what the Third Circuit was doing

was citing KOSTER's case and the passage from

KOSTER's case which is there, with the passage

cited, is that to which I have earlier referred.

It is at page 670 in the right column, Your Honours. Your Honours, and finally, could I go to

PIPER AIRCRAFT COMPANY V REYNO, (1981) 454 US 235.

Now, Your Honours, at page 248, in the last paragraph

of the text, the court says:

It is true that CANADA MALTING was decided

before GILBERT, and that the doctrine of

forum non conveniens was not fully

crystallized until our decision in that

case.

And _in the reference, Your Honours, to the

footnote Your Honours will see:

The doctrine of forum non conveniens has a long history.

And then at the end of that paragraph:

The doctrine became firmly established

when GILBERT and KOSTER were decided one

year later.

Now, Your Honours, on the next page, in the fourth

line on the page, the principle stated as being:

Under GILBERT, dismissal -

that is, dismissal because of forum non conveniens -

will ordinarily be appropriate where trial in

the plaintiff's chosen forum imposes a heavy

burden on the defendant or the court, and

where the plaintiff is unable to offer any

specific reasons of convenience supporting

his choice.

ClT68/l/FK	116	10/4/90
Voth(2)

. ' ·.

· ....

And, Your Honours, at the bottom of the page,

·the footnote, no 15, paraphrases is by saying:

that dismissal may be warranted where

a plaintiff chooses a particular forum,

not because it is convenient, but solely
in order to harass the defendant or

take advantage of favorable law.

Your Honours, the test adopted in the United States

is not, with respec~ a hundred per cent clear

because, what does seem apparent is that
PIPER AIRCRAFT, with respect to Their Honours, perhaps, blurs the test a little, compared with the

test which had obtained prior to that, and there

seems in no doubt also that the question of convenience,

in the English sense of the word, is one which looms

larger in the United States, but what is made clear

enough, we would submit, is that the approach taken

by the Supreme Court in KOSTER is still one which is

relevant to determine such applications although

it may not be absolutely determinative of them.

(Continued on page 118)

ClT68/2/FK	117	10/4/90
Voth(2)

MR JACKSON.(continuing):  The point of all that is that,

we would submit, the SPILIADA test is not the only

possibility. Your. Honours, we would submit, whichever

be the precise test to be applicable in the present

case, the case was one where the stay should not

have been granted.

Now, Your Honours, I do not want to go over

the facts of the case but, we would submit, simply
that it was a case where, for the reasons set out in

the judgment of the Chief Justice, the case was one

where it was appropriate for - if I could put it in

that way - the court in New South Wales to continue

to exercise its jurisdiction and there was nothing

demonstrated to show that the court should not.

• Your Honours, could I deal with one aspect of

the matter in that regard and that is the

submissions which were made in relation to the

question of leave to proceed. Your Honours, that is

an issue which, in our submission, was not raised

below and it was an issue with which the court below

did not deal,	the court dealing with the matter
purely as an application for a stay.	Now, in that

regard, could I take Your Honours to page 90.

At page 90 commencing about line 16, the

Chief Justice said:

In the present case the appellant did not

submit that there was, in the circumstances,

any material difference between the test

to be applied in considering its application

for a stay of proceedings based upon

considerations of forum non conveniens and

that to be applied in considering its

application directed at reversing the leave

to grant service out of the jurisdiction

under Part 10 Rule 1. Indeed, in his

written submissions filed prior to oral

argument in this Court, which were not

departed from ..... Counsel for the appellant

summarised the effect of the majority

decision in OCEANIC SUN LINE as including
the principle "that in such an application

irrespective of whether the plaintiff in

bringing the action is invoking the inherent
jurisdiction of the Court or whether, on

the other hand, he is invoking its statutory

jurisdiction, the onus rests upon the defendant

to persuade the Court that the stay should not
be granted."

ClT69/l/JH	118	MR JACKSON, QC	10/4/90
Voth( 2)

MR JACKSON (continuing):. And His Honour went on to say that

· might well go too far and then lie said. about

. line 9:

in the circumstances of the particular case

it does not seem to me that there is any material

difference between the discretionary considerations

relevant to the alternative bases ..... and none

has been suggested by counsel.

And,Your Honours, if one goes to the decision

of the primary judge at page 47, at the bottom of page 46

he sets out the applications which were made, says

at the top of page 47:

The first question which arises is whether

the Court has jurisdiction to try the action.

That seems to be the pure question whether the Court

had jurisdiction under the rules, not whether it should

be exercised, and then, Your Honours, at about line 15,

His Honour says:

Some at least of this damage would appear

to have been suffered in New South Wales and

I think I am right in saying that this was not

disputed. In view of this conclusion, Mr Donohue
described his submission on the jurisdiction

question as a formal one. I am, he conceded,

bound by the decision of the Court of Appeal

in FLAHERTY V GIRGIS, (1985) 4 NSWLR 248, to

reject the submission and I do so.

I turn then to the application for a stay.

And, Your Honours, one just does not see in either

court below the point being dealt with in response

to a submission of the kind that is now being made.

Your Honours, and the relevance of that is that,

at first instance, in our submission, the Court

did not consider the application of the test now

suggested to the particular facts. (Continued on page 120)

ClT70/l/LW	119	10/4/90
Voth(2)

MR JACKSON.(continuing:  In so far as the question was dealt

with in passing in the Court of Appeal the view taken
was - I should not say in passing because His Honour

dealt with a bit more than that - but in so far as

the question was dealt with in the Court of Appeal

it was decided adversely to the other side. That

appears at page 86, Your Honours, the new paragraph

commencing on that page. His Honour refers, after

referring to JOHN RUSSELL & CO and so on - he

goes on to say:

Presence within the jurisdiction ..... is

a very different thing from residence.

He goes on to say at the bottom of the page:

. ,

it would be illogical to draw a hard and

fast distinction between -

the two types of case and proceeds to expand upon that

on page 87 and at about line 12 on page 87 he says

he would:

find logically unacceptable any proposition

which involved a radical difference between

the approach -

on the two issues.	At the bottom of the page he
says he would not:

find it easy to accept that when the

members of the majority in OCEANIC SUN

LINE used the expression "regularly

invoked" -

they were drawing a line between the two kinds. I

would refer Your Honours also to page 88 and to page 89
and then, after referring to the new rule at page 90

His Honour goes on to say then at line 16 that:

the appellant did not submit that there

was ..... any material difference between the test to be applied.

Your Honours, in our submission, it is difficult, we

would submit, to see any justification for the application

of a different test where the application is for leave

to proceed or to set aside service of a writ on the

one hand, or for a stay on the other.

(Continued on page 121)

C1T71/1/HS	120	10/4/90
Voth(2)

MR JACKSON .·(continuing):  Exactly the same considerations

would seem to apply an~ prima facie, the same

issues would appear to be involved. It may well be

that a different ultimate onus of proof would

apply depending upon the nature of the application

but, Your Honours, when the factsha~e been found by

the primary judge, it would seem to be only in the rare cases that the case would fall one way or the

other depending on the question of onus of proof.

Your Honours, could I deal with a couple of

other matters very briefly?

BRENNAN J:	Mr Jackson, I am not sure that I quite understand the basis on which you are putting this. Are you
saying that the Court should not consider whether
there is a material difference between the two
because the existence or material difference
was eschewed by the counsel on the other side - - -
MR JACKSON:	Your Honour, I am sorry, I should have made

myself clear. What I am saying is this: that the
Court in determining what is the correct approach to

be taken - if I could say, generally, first of all - may wish to consider whether there is any difference between the two types of application and what I

have submitted in relation to that is that there is

no difference in relation to the factors which

could be taken into account but, at the same time,

there may be in the end a difference in the ultimate
onus of proof. What I am submitting in relation to

the particular case, Your Honour, is that

Your Honours should not deal with the case as .if it

were one for leave to proceed but should really treat

it as a case depending on the question whether

there should have been a stay and that the resolution

of that question in the particular case would resolve

also the other question of leave to proceed.

BRENNAN J:  Why should we not start on the basis of this

being an application on a leave to proceed question?

(Continued on page 122)

ClT72/l/JH	121	MR JACKSON, QC	10/4/90
Voth( 2)

MR JACKSON: Well, Your Honour, because of the way in which

the case had been dealt with below, in my submission,

and by that I mean that it does not appear to have

been dealt with before the primary judge as other

than a question of a stay. Now, Your Honour, if it

had been dealt with differently before the primary

judge, what: I mean by that, Your Honour, is that the

primary judge appears to have treated the case and

does not record there being any submission to the

contrary, as if once it was decided the case was

within jurisdiction in the sense of being within the
class of cases where the court might have

jurisdiction, the question was then whether there

should be a stay. The question whether leave to

proceed should not be given for other reasons, for

example, because a different onus of proof applied,

does not appear to have been dealt with by him and

one does not know what course he would have adopted
on that if he had to deal with that question.

Now, Your Honours, which really makes it very

difficult for the Court - for the Court now, I mean.

Your Honours, so when one goes to the Court of

Appeal it is apparent, in our submission, from the

passage to which I referred earlier, that the

particular question, sorry, that the case was dealt

with on the basis that it was accepted on behalf of

the appellant that there was no difference between
the two tests and it is apparent from the context

in which that is said that the decision on the
question of a stay was treated as determining the other
issue as well.

Now, Your Honours, where I go from that is really to say -that the Court should deal with the matter

on the basis of that assumption, that is, that

in so far as the particular case is concerned, the

issue is determined both ways by the decision on the

stay, and. I ·am sorry I have taken a long time to

say that and I am not sure that I have made myself

100 per cent clear.

BRENNAN J: If, as a matter of principle, there is a difference

between the two questions, is there any reason why

we should approach this case bounQ, as it were,

by any misconception that there may have been as to

the identity of the two questions?

(Continued on page 123)

ClT73/l/JL	122	10/4/90
Voth(2)

MR JACKSON:·:: I am sorry, did Your Honour say "bound'~ or - -

BRENNAN J: Should we approach it, as it were, as though we

were bound by the misconception in the courts below

that there was no difference?

MR JACKSON:  The answer to that, Your Honour, is no and yes.

So far as the general question is concerned of

what is the law - if I can put it that way -

Your Honours, of course, are not bound by that.

So far as the particular case is concerned,

Your Honours should treat the determination of

the case by, in effect, the approach that was

taken below.

BRENNAN J: Yes.

MR JACKSON:  Your Hdnours, the next matter to which I wish to

refer is this: in the course of my learned friend's

argument - - -

DEANE J: 

Mr Jackson, if the test on each is the same, putting

aside questions of onus of proof, that is a
consideration which would favour deleting the clearly

part of an inappropriate test, is it not, in that

it is a little difficult to really see that using

the word, the "exhorbitant" jurisdiction, should be

made available simply on the basis that the court

was not clearly inappropriate if the judge, looking
at the application for leave to serve outside the

jurisdiction, thought that the court was an

inappropriate one?

MR JACKSON: 

Your Honour, I would submit the answer would be

no and it does, in fact, involve; in a sense -
going back just one stage if I may - and what I

mean by that is this: the jurisdiction which the

courts have and may exercise, given by the various
rules of court which permit service outside the

jurisdiction, are rules which have been adopted

in differing ways in differing Australian jurisdictions.

(Continued on page 124)

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MR JACKSON (continuing):  Now, the way in which they are

expressed reflects, Your Honour, a view that the

Court should have and may exercise, subject to a

matter to which I will come, that jurisdiction in
respect of persons not served within the jurisdiction

but who have been engaged in activities which have

the described relationship to it.

Well now, Your Honour, that legislative - if I can

put it that way - judgment having been made, there is not any particular reason, in our submission, why one

should say that in determining whether to permit that

jurisdiction to be exercised, one should simply say,

"Is there a more appropriate court or is there a clearly

more appropriate court?". The question would really,

we would submit, be, "Is the court that has been

legislatively chosen one which is inappropriate or

clearly inappropriate?".

BRENNAN J: Mr Jackson, if one looks at the problem of stay

as a problem of identifying the circumstances in

which a court should decline jurisdiction which has
been regularly invoked, one can see that the question

of whether a plaintiff should be at liberty to invoke

its jurisdiction is a question of a very different kind.

MR JACKSON:  Your Honour, it depends on what is meant by

"regularly" no doubt.

BRENNAN J: 

As of right, by reason of service, or under the

exhorbitant jurisdiction, when it has been thought
appropriate to allow the plaintiff to sue?

MR JACKSON: Yes, Your Honour, if one treats jurisdiction as of

right, as being jurisdiction affected by service,

it is true to say that it results in, subject to the

question of a stay, the court having jurisdiction which

it must exer·cise.

(Continued on page 125)

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MR JACKSON (continuing): Your Honour, one must bear in

mind, as is said by the Chief Justice in the

Court of Appeal, that that itself has,. on many

occasions,an accidental aspect to iti a4cidental

in the sense that the fact of service within the

jurisdiciton really does not say anymore than

that there was presence within the jurisdiction at

the time when that occurred. Now, Your Honour,

if one took by way of comparison an agreement between

parties that an Australian court would have

exclusive jurisdiction in respect of their contract,

then even though it may be that neither of them was

a resident of Australia or at any material time really

within the relevant jurisdiction, then one would have

thought that that provision would be one which would

have a greater relationship to the jurisdiction than the mere presence of a person there at the time when the person was served.

Your Honour, what I am trying to make out of all

that is that there are various questions of degree

involved and it is not necessarily the case, in our

submission, to say that the fact that the oldest

way to acquire jurisdiction was by service within

the jurisdiction is necessarily the best in

terms of the appropriateness of it for the particular

court. So Your Honour, what I am really seeking
to submit is that there is not necessarily the

gulf between the two concepts. It is true to say

that in the case of jurisdiction acquired otherwise

than by service within the jurisdiction, then it

may be,depending on the particular jurisdiction,

that either leave to proceed has to be obtained, or

else that the proceedings can be stayed at the

instance of the person served overseas.

BRENNAN J: Take,for example, I think it isl.lE of the

New South Wales rules, which has to do with the

suffering of damage within the jurisdiction, and	forget the overseas situation at the moment. If my
understanding of the rules is correct,and this goes
back to FLAHERTY V GIRGIS, aew South Wales asserted
that jurisdiction in respect of defendants who
might be resident in other States and in respect
of motor car accidents that might occur in other States.

(Continued on page 126)

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BRENNAN J (continuing):  Now, why is it that one should not

look at a New South Wales application under l.lE

in a motor car case and say the accident happened

in Queensland or Victoria or wherever and it is

more appropriate that it be tried there rather than saying

New South Wales is inappropriate or clearly inappropriate?

MR JACKSON:.	Well, Your Honour, once one does that, of course, the question of relative appropriateness comes into
play and on that approach, no doubt, one could take it
into account but one would take it into account
really by saying, "Is New South Wales inappropriate
because of a number of matters including the fact that the events which gave rise to the liability occurred significantly outside New South Wales?"

Your Honours, could I say two other things.

The first is that my learned friend's argument has said that really what was being suggested was not

that a court in the case of the forum non

conveniens test was not being asked to decline

to exercise jurisdiction. Your Honours, one notes
that that is exactly the way in which it is

described in American Jurisprudence, the

volume on courts at articles 93 and 172 -

Your Honours, I do not have copies of those, I am

afraid, but that is how it is described in
articles 93 and 172 when the question of forum non

conveniens is relied upon.

Your Honours, the last matter is in relation to

the residence of the plaintiff and that is item 5

in our outline of submissions. Your Honours, we

would make the submission that we have set out there,

that the jurisdiction of a court is determined by or pursuant to legislation of the forum for the benefit of at least those residing there and substantial

reasons need to appear to deny that such a resident, the

exercise of jurisidction by those courts and,

Your Honours, there are some references to decisions

in the United States dealing with that point. (Continued on page 127)

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MR JACKSON (continuing): Your Honours, I do not think I need

to refer to them" _ The references Your Honours

will see there. ·Your Honour, those are our

submissions.

MASON CJ: Yes. Thank you, Mr Jackson. Now, Mr Macfarlan,

how long will your reply take?

MR MACFARLAN: About 10 minutes, Your Honour.

MASON CJ: Yes, very well, we will hear your reply now.

MR MACFARLAN: If your Honours please. Your Honours, there

were three points; The first is that my learned

friend said that the letter written by the

appellant and appearing in the appeal book at

page 33 was written to the parent company in

New South Wales. I would remind Your Honours that

Mr Honan, who is the principal officer and to whom

the letter was addressed was, in fact, employed by

MMC, the American company, and his salary is referred

to as being a substantial one. At the appeal book, company, is referred to as being between

$US40-65,000 so, the person to whom the letter at

page 33 was addressed was, in fact, an employee

of the American company as well, of course, no

doubt, as an employee and officer of the Australian

companies.

Your Honours, the second point concerns the

rules of court to which reference was made~ We

would make three points about those. The first

is that the New South Wales rule applies only to

the matter of leave to serve outside the jurisdiction,

it does not touch the question of stay; it does not

define the circumstances in which a stay may be

granted, so .this decision, at least, remains highly

relevant to the question of stay in New South Wales

but, in any event, and perhaps more importantly,

the rule does not state exhaustively the grounds

for granting a stay. All the New South Wales rule

does is to state that - we are paraphrasing it -

at least service may be set aside in circumstances

which fall within the ambit of the test which has

been formulated by His Honour Justice Deane.

(Continued on page 128)

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MR MACFARLAN (continuing): It does not seek to foreclose

the possibility or probability that service would

be set aside in circumstances going beyond that

and in circumstances where the SPILIADA test

was applicable.

The third point we would make about those rules

is that what the judges of the supreme court of those

two States may choose to insert in the rules should

not inhibit the Court, or this Court, in declaring

what the common law is as to the position.

The third and final point of reply relates to

my learned ~riend's point concerning what occurred

below. The position at first instance was that there

was not only an application for a stay but also an

application to set aside service and the trial judge

at 42 of the appeal book referred to the existence of

that application at line 20 and did not suggest that

had been abandoned or was not pursued.

Now, His Honour the trial judge approached the matter, we would suggest, for good reason on the basis

that the MacSHANNON test was applicable and that was

what was asserted to be the relevant test by,

or on behalf of, Mr Voth at that time, and it was not

suggested at first instance that there was any difference

in those circumstances between the leave to serve

outside question and the stay question. The approach

was that the English authorities, such as they then
stood, were applicable, and that was accepted by the
trial judge and there is no suggestion in the judgment

that that was the subject of an issue before him,

and there is nothing inconsistent in that approach with

the appellant's approach in this Court.

The position in the Court of Appeal was that it was

asserted in written submissions prepared before the

judgment of this Court in OCEANIC was handed down

considering the service question were those enunicated	that the principles to be applied by the Court in
by Lord Goff in SPILIADA.

(Continued on page 129)

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MR MACFARLAN (continuing):  We do not have multiple copies

of these submissions because we were not aware

that the point was to be taken but we can supply

those if necessary, Your Honours. The written

submissions handed up on that basis asserted

that in leave cases the plaintiff must satisfy

the Court not only that New South Wales is the

appropriate forum but that it is clearly so

and reference was made to SPILIADA. When the

decision of this Court in OCEANIC was handed
down, the present appellant put the position to
the Court of Appeal that the decision in OCEANIC

effectively determined both questions. Now, rightly or wrongly, that was what was put to

the Court of Appeal and that a different test

might be applied on the leave question was put

formally and only formally at that stage and

that ap_pears at page 12 point 4 of the transcript of the

hearing oefore the Court of Appeal.

So, the position as it stands is simply

this, Your Honours: that in the Court of Appeal

after the decision in OCEANIC there was simply

a recognition that OCEANIC had enunciated the

principles in circumstances where there had

been not only an application for stay but also

an application for leave to set aside service

and nothing has been done, in our submission,

which constitutes any abandonment by the

appellant of its right to pursue its application

made at first instance to set aside service

and my learned friend has not suggested that

there is any prejudice which the respondents

have suffered by any perceived conduct of the

appellant which is inconsistent with the pursuit

of that application. Those are our submissions

in reply, Your Honours.

MASON CJ: Yes, thank you, Mr Macfarlan. Yes, Mr Jackson?

MR JACKSO?f:

Your Honours, may I say one thing, I am sorry,

Your Honour. It relates to an observation made

by my learned friend that the New South Wales'

rule 6A did not apply to applications for a

stay.

Rule 6A( 1) says:

The Court may make an order of a kind referred

to in Part 11 rule 8 (which relates to - and the rule says these words:

setting aside etc originating process) -

and so on.

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MR JACKSON·(continuing):  When one goes to Part 11 rule 8

what one finds is that it lists a number of orders

that may be made and one of them is that the court

may decline in its discretion to exercise its

jurisdiction in the proceedings and, Your Honours,

one of the notes to the rule, note 11.8.4, does not

seem to have caught up with the law really. It says,

in cases where a stay is sought, because another

more appropriate forum has jurisdiction, this rule

does not apply but the court has jurisdiction to grant

a stay under its inherent power - as to this power

see annotations to Part 15 rule 26 and Part 15 rule 26
deals with striking out pleadings and staying actions

because of that and it has, at the end, something

about staying under the inherent jurisdiction.

Your Honours, it is clear beyond meter, in our submission, that it applies to stays.

MASON CJ:  Only a Queenslander could have such an encyclopaedic

knowledge of the New South Wales rules.

MR JACKSON:	Your Honour, perhaps I will change forum.
MASON CJ:	The Court will consider its decision in this

matter.

AT 4.35 PM THE MATTER WAS ADJOURNED SINE DIE

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