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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1990] HCATrans 78
Decision Date

CaseChat Overview and Summary

The High Court of Australia heard an appeal from a majority decision of the New South Wales Court of Appeal. The appeal concerned the refusal by a judge of the Supreme Court of New South Wales to set aside the service of process on the appellant outside the jurisdiction, specifically in the United States, and the refusal to grant a stay of proceedings on the grounds of *forum non conveniens*. The appellant, a resident of the United States and a member of a firm of accountants, was the auditor for Manildra Milling Corporation, a United States subsidiary of the respondent companies. The respondents, incorporated and carrying on business in New South Wales, were involved in the manufacture and sale of starch and starch-related products, with their United States subsidiary purchasing these products and incurring debts for which interest was charged.

The central legal issues before the High Court were whether the New South Wales courts had properly exercised their discretion in allowing service of process on the appellant in the United States and in refusing to stay the proceedings. The respondents alleged that the appellant, as auditor for Manildra Milling Corporation, had failed to ensure the proper withholding and payment of United States income tax on interest owed by the subsidiary to the first respondent. This omission, it was contended, had significant consequences under both United States and Australian revenue laws, as had the tax been withheld, the interest would have been exempt income for the Australian company. The respondents sought to recover damages for losses allegedly incurred due to the appellant's conduct.

The High Court considered the principles governing service of process out of the jurisdiction and the doctrine of *forum non conveniens*. The Court examined whether the appellant had sufficient connection to New South Wales to justify extraterritorial service and whether New South Wales was the appropriate forum for the litigation, given the appellant's residence and the location of the alleged wrongdoing in the United States. The Court's reasoning would have involved a careful balancing of the interests of the parties and the courts, as well as considerations of justice and convenience, in determining whether to uphold the lower courts' decisions.

Orders