Watson Farley & Williams (Thailand) Ltd v Briton

Case •

[2018] NSWLC 8

•

02 February 2018

No judgment structure available for this case.

Local Court


New South Wales

Medium Neutral Citation: Watson Farley & Williams (Thailand) Ltd v Briton [2018] NSWLC 8
Hearing dates: 9 January 2018
Decision date: 02 February 2018
Jurisdiction:Civil
Before: Magistrate Antrum
Decision:

Judgment for the Defendant. Statement of Claim dismissed. No order as to costs.

Catchwords: CONTRACTS – Terms - exclusive jurisdiction clause – plain meaning of words within an exclusive jurisdiction clause to operate in commercial contracts – purpose of an exclusive jurisdiction clause the determination of all disputes in a single jurisdiction
Legislation Cited: Civil Procedure Act 2005 s 56
Cases Cited: Akai Pty Ltd v People’s Insurance Co Limited (1996) 188 CLR 418
Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45
Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40; [2008] 1 Lloyd’s Rep 254
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways (1996) 39 NSWLR 160
Global Partners Fund Ltd v Babcock & Brown Limited (in liq) [2010] NSWCA 196
Category:Principal judgment
Parties: Watson Farley & Williams (Thailand) Ltd (Plaintiff)
Tony Brighton (Defendant)
Representation: Mr G Herring, Herring & Co Solicitors (for the plaintiff)
Mr T Brighton (in person for the defendant)
File Number(s): 2017/00171707
Publication restriction: Nil

Judgment

  1. This is a claim brought in the Small Claims Division of the Local Court of New South Wales. The claim is brought by an incorporated body based in Thailand which provides legal services from Bangkok.

  2. The defendant sought legal services from the plaintiff’s firm on referral from a friend.

  3. Amongst other aspects the defendant submits that the claim should more properly have been brought against another incorporated body of which the named defendant is a director or officer.

  4. The Small Claims Division is established to provide resolution of disputes in a just, quick and cheap manner as section 56 of the Civil Procedure Act 2005 ("the Act") requires, and with as little formality and technicality as fairness will allow. This matter has proceeded largely on the basis of the submission of evidence in documentary form, which is in conformity with the conduct of matters within the Small Claims Division pursuant to the Local Court Practice Note Civ 1.

  5. The Statement of Claim seeks an amount of $9550.02 of which the principal claim is $8249.24. This sum has been calculated and converted at the relevant exchange rate to the Thai Baht and relates to outstanding invoices against the defendant as at the date of 8 June 2017. The balance of the sum is made up of interest, filing, and service fees, and solicitor's fees.

Jurisdiction

  1. I am satisfied that the plaintiff has standing to commence proceedings in the Local Court of New South Wales, in the best traditions of courts finding jurisdiction if there is the possibility to do so. It is nevertheless on the evidence before me difficult to understand, that if the matter was to be commenced in an Australian court, why the matter was not commenced in the equivalent jurisdiction in the Australian Capital Territory. Most of the material generated by the defendant carries an address in the Australian Capital Territory and it is difficult to identify the nexus between the majority of the negotiations between the parties with the State of New South Wales.

  2. Nevertheless the matter has proceeded to this point for determination and consonant with the objects of the Act, the dispute should be resolved quickly, and without further complication.

The issues

  1. The defendant makes a number of objections and says that he is not liable for any part of the fees that have been generated by the plaintiff on behalf of the defendant.

  2. The objections might be summarized as follows:

  1. that no work was actually requested by the defendant;

  2. that the defendant, the individual Mr Tony Briton, is not the proper defendant in these proceedings; and

  3. that the exclusive jurisdiction clause in the terms of engagement identifies another jurisdiction for the determination of disputes arising out of the terms of engagement.

Work requested

  1. From my reading of the email correspondence between the parties I have formed the view that the defendant was on notice and was clearly cognisant of the fact that the plaintiff was performing legal enquiries and work on his behalf. Certainly at least up until 13 February 2013 the plaintiff performed legitimate legal work according to the terms of engagement between the parties, and at no stage up to that date was that work objected to by the defendant.

  2. There was regular communication between the parties, and contrary to the defendant's assertion, the defendant was well aware that work was being performed on his behalf and at his request. The plaintiff indicated that certain enquiries were being undertaken and that was known to the defendant.

  3. Further, the defendant’s assertion that he was waiting to be told what to do stands in stark contrast to the emails to him, which were acknowledged by him, requesting that instructions be provided with respect to certain aspects of the work.

  4. The hourly rates applied are consistent with those set out in the Terms of Engagement.

Proper defendant

  1. The second objection of the defendant suggests that an incorporated entity, TKAM Pty Ltd, is the proper defendant in these proceedings. That may well have been the better course in retrospect however at no stage did the defendant posit that company as the entity seeking instructions and at all times he conducted negotiations with the plaintiff as an individual with apparent authority to give those instructions, and seek that advice. There is nothing unusual in an individual seeking such assistance where he or she has a financial stake in the outcome.

  2. The plaintiff was entitled to consider the defendant in these proceedings as the proper client, or acting as the agent of any other relevant interest.

Exclusive jurisdiction

  1. The third limb of the defence is that relating to the exclusive jurisdiction clause in the Terms of Engagement.

  2. On 10 January 2013 the plaintiff forwarded to the defendant the Terms of Engagement with respect to the advice requested. Those Terms of Engagement were in plain English, and in any event it might be garnered from the material tendered in these proceedings that the defendant is a sophisticated client and well versed in commercial agreements. The plaintiff is a law firm which might be expected to understand the clauses it includes in its agreements.

  3. At no stage did the defendant object to or indicate any difficulty with those Terms of Engagement and I accept that those terms are the basis of the services agreement between the parties.

  4. On page 3 under the heading “Complaints – Concerns”, the Terms include the following:

…if you still remain dissatisfied, or if there is any other dispute between us, the matter will be finally resolved under the exclusive jurisdiction of the Courts of England and Wales and under the laws of England.

  1. Following that, there is a paragraph with respect to variation of the Terms of Engagement and there is no evidence before the Court to suggest that there has been any variation of or addition to those terms.

  2. I cannot speak or make any authoritative comment in relation to Thai law but I would expect that lawyers operating in an international legal services environment would be well versed in the usual interpretation around exclusive jurisdiction clauses, particularly where they defer to the law of England and Wales.

  3. A term will be incorporated into a contract in a number of ways, including by signature on a contractual document, by reasonable notice, and/or by a sufficient course of dealing. I am satisfied that the Terms of Engagement reflect the nature of the agreement between the parties and that there is nothing that would sever or alter the effect of the exclusive jurisdiction clause contained within those terms.

  4. The decision in Global Partners Fund Ltd v Babcock & Brown Limited (in liq) [2010] NSWCA 196 - a decision of Spigelman CJ, Giles and Tobias JJ in the New South Wales Court of Appeal - reviewed amongst other things the interpretation of an exclusive jurisdiction clause.

  5. The ratio of each of the members of that bench was that an exclusive jurisdiction clause in a commercial contract is not to be narrowly construed. The court to which the parties agree to submit their disputes should determine disputes arising from the contractual relationship (at [60]-[66]).

  6. Further, in the context of a contract intended to have international operation, there is no basis for a narrow interpretation of an exclusive jurisdiction clause. Chief Justice Spigelman observed that although an exclusive jurisdiction clause will not operate to exclude the matter being reviewed by another court, that court, at least in New South Wales, will hold their parties to the bargain (at [67]-[69]).

  7. The Court held that it is not appropriate to give general words in such a commercial context a narrow interpretation, with the consequence that some dispute which, in a practical sense, arises from the contractual relationship, could be determined by courts and tribunals other than that to which the parties have agreed to submit their disputes (at [60]).

  8. His Honour (at [61]) referred to the decision of Gleeson CJ in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways (1996) 39 NSWLR 160:

When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have yet arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be construed narrowly. They are unlikely to have intended that different disputes should be resolved before different tribunals or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument.

  1. There was also reference (at [62]) to the decision of Allsop J in Comandate Marine Corp vPan Australia Shipping Pty Ltd (2006) 157 FCR 45:

…The court should, however, construe the contract giving meaning to the words chosen by the parties... This liberal approach is underpinned by the sensible commercial presumption that the parties did not intend the inconvenience of having possible disputes from their transaction being heard in two places.

  1. Chief Justice Spigelman referred (at [65]) to the observations of Lord Hoffmann in Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40; [2008] 1 Lloyd’s Rep 254:

In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessman, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.

  1. In Akai Pty Ltd v People’s Insurance Co Limited (1996) 188 CLR 418 at 445:

If it were necessary, and we do not think that it is, it may be possible to have regard to the course of negotiations from which the submission arose and that would lead inevitably to the conclusion that the second sentence of cl 9 amounts to an exclusive jurisdiction clause. In Sohio Supply Co v Gatoil (USA) Inc (18), Staughton LJ observed of a much less clearly worded clause:

“It is, I think, part of the matrix background, or surrounding circumstances, whichever term one chooses to use, that this was a contract made between sophisticated business men who specifically chose their words as to English jurisdiction for the purpose of this contract. It is not a consumer contract on a printed form, or anything like that. To my mind, it is manifest that these business men intended that clause to apply to all disputes that should arise between them. I can think of no reason at all why they should choose to go to the trouble of saying that the English Courts should have non-exclusive jurisdiction. I can think of every reason why they should choose that some Court, in this case the English Court, should have exclusive jurisdiction.”

  1. As Spigelman CJ observed in Global Partners Fund “a significant purpose of an exclusive jurisdiction clause is to ensure that all disputes are determined in a coherent manner by a single jurisdiction” (at [67]).

  2. It is abundantly clear that the courts of this State intend for the plain meaning of words contained within an exclusive jurisdiction clause to operate.

  3. This claim is misconstrued and should have been referred to the Courts of England and Wales as the Terms of Engagement clearly articulate.

Judgment

  1. For the reasons that I have set out above, judgment is for the Defendant. The Statement of Claim is dismissed. No order as to costs.   

Magistrate Antrum

Queanbeyan Local Court   

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Decision last updated: 17 October 2018

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