875 Frankton Road Limited v Brookes

[2012] NZHC 78

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2011-425-000040 [2012] NZHC 78

BETWEEN  875 FRANKTON ROAD LIMITED Plaintiff

ANDNEIL BROOKES First Defendant

ANDKIRSTEN HARRISON Second Defendant

Hearing:         9 February 2012 (Heard at Invercargill)

Counsel:         S N McKenzie for Plaintiff

N Campbell/D Mitchell for Applicants/Defendants

Judgment:      27 February 2012

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

on application to dismiss proceeding (for forum non conveniens)

[1]      This  judgment  deals  with  an  application  by the  defendants  for  an  order dismissing the plaintiff’s proceeding on the basis that this Court is not the forum conveniens.   The defendants filed the appropriate appearance under protest to jurisdiction, pursuant to r 5.49 High Court Rules.

[2]      The defendants live in England.  They entered a contract to buy an apartment in Queenstown, New Zealand.  The plaintiff says the contract was cancelled because of the defendants’ failure to settle.   The plaintiff issued this proceeding in New

Zealand to obtain damages.

875 FRANKTON ROAD LIMITED V BROOKES HC INV CIV-2011-425-000040 [27 February 2012]

The parties enter a contract

[3]      The apartment is part of the Marina Apartments development (also known as the Marina Baches) at Queenstown.   The Marina Apartments were developed and owned by Wensley Developments The Marina Limited (―Wensley‖) which is now in liquidation.

[4]     In July 2007, Wensley placed advertisements in newspapers in London promoting the Marina Apartments.   The advertisements invited people to contact Wensley  for  details.    Advertisements  were  run  in  the  Metro  and  the  Evening Standard on a number of days in July 2007.  An advertisement was also placed on a New Zealand/United Kingdom news website to ―target Kiwis living in the United Kingdom‖.

[5]      The defendants are partners.  Mr Brookes is a United Kingdom citizen and Ms Harrison a New Zealand citizen.  Ms Harrison has lived in London for 12 years. Mr Brookes is a digital project manager in London.  Ms Harrison is a nanny in the same city.

[6]      The defendants saw the advertisement in the Metro.

[7]      Wensley ran an exhibition at One Aldwych, London on 19 and 20 July 2007. The defendants attended (with ten other people) on one of those evenings.

[8]      Ross Wensley and Gregory Wensley ran the exhibition for Wensley.   Ross Wensley was a director of Wensley; Gregory Wensley was the Assistant Manager. They provided DVDs and a brochure to the defendants.   Ross Wensley presented information as to how the apartments would be managed (as serviced, short-stay, apartments) and how purchasers might fund their purchase, together with much other information.

[9]      The defendants focussed on Unit 404.   The Wensleys indicated a purchase price of $1,299,375 including furniture.  The deposit required was $129,937.50.  The defendants indicated that they did not have significant equity or disposable income

to pay either a deposit or the purchase price generally.  Ross Wensley explained a system whereby the defendants could obtain a bond from New Zealand Home Bonds Limited.  Security would be required for the bond but Ross Wensley suggested (in the absence of equity held by the defendants) that the defendants have family in New Zealand provide the security.  Ross Wensley indicated that Wensley would pay the fee (NZ$12,054) for the provision of the bond so that obtaining the bond would not be a cost to the defendants.  Ross Wensley explained the ability of the defendants to obtain in New Zealand a GST refund of $144,375 as the apartment would be let as a managed apartment.  Wensley presented a typed price-list recording the details of the

―GST return‖.    The  defendants  were  given  to  understand  that  four  weeks  after purchasing the apartment they would receive a GST refund which would cover the

10 percent deposit required by New Zealand Home Bonds Ltd.  The defendants were advised that settlement of the contract (upon completion of the development) might be expected in early 2009.

[10]     The defendants (each ―as agent‖)  entered the contract with Wensley.   It is dated 24 July 2007.   The defendants signed it in England.   A copy was faxed to Wensley and a director, Julie Jack, signed the faxed copy at Invercargill on 30 July

2007.  It is on the standard REINZ/ADLS form (7th ed. (3)), with additional Special

Conditions of Sale.  Many of the Special Conditions related to the completion of the development and the structuring of ownership and of the body corporate.  Wensley guaranteed a stated level of return.  The contract was conditional on the purchasers’ receiving bond approval within 21 working days.

[11]     The Wensleys put the defendants in touch with Christine Anderson, the sales manager of Wensley.  She was in New Zealand.  By email she made arrangements for the bond including having the relevant forms emailed to Ms Harrison’s mother (as the person who had agreed to provide security).

[12]     Christine Anderson  also  recommended  to  the  defendants  a  solicitor  who could act for the defendants in New Zealand.

[13]     The defendants did not receive bond approval until 24 August 2007 but then had their new solicitor advise Wensley that the contract was unconditional.

[14]     At that point the purchasers understood that settlement might be expected around February 2009.

Time for performance

[15]     The defendants say they were expecting to have to complete settlement in or after February 2009.   Mr Brookes contacted Wensley in October 2008, concerned that he had not heard anything from Wensley for some time.  He wanted to confirm that  completion  would  be  going  ahead  in  February  2009.    He  was  told  that completion was now expected in December 2008.  He says that Wensley claimed to have been emailing information to him but that it transpired that the email address they had been using was an incorrect address.  Mr Brookes discussed with Christine Anderson his concern as to his inability to arrange finance in such a short time. Christine Anderson  offered  that  Wensley  would  advance  to  the  defendants  the equivalent of the GST refund.

[16]     Mr Brookes says that he advised Wensley that the defendants would require a valuation in order to obtain a mortgage.   He says that Wensley said they would arrange the valuation.

[17]     On 4 November 2008 Wensley sent a letter to the defendants.   The letter speaks of Wensley having investigated different options for income from the apartments.  Wensley states that permanent rentals were becoming a more attractive proposition. They then state –

Therefore we have decided that instead of operating baches as short term visitor’s accommodation (serviced apartments) they will be operated as long term rentals with permanent tenants.   This means that the Baches are no longer serviced apartments.

The letter then confirms that the guaranteed return will remain in place.

[18]     Mr Brookes states that the defendants were immediately very concerned by the letter.  He says that the whole basis on which the defendants had purchased the apartments  was  the  GST  and  other  benefits  of  the  premises  being  serviced apartments rather than permanent rentals.   The defendants took advice from their

solicitors and then took specific tax advice.   On the basis of that advice they understood that a GST refund would no longer be available.  Mr Brookes states that the defendants were concerned that the change to permanent rentals also undermined Wensley’s represented projected return, and Wensley’s representations that the defendants could use the apartments themselves and that finance would be available. He says that he made repeated requests to Wensley for the promised valuation which was not provided.   He says that as a result it became almost impossible for the defendants to obtain finance.  Additionally, with the GST refund not being available, the amount of finance that the defendants were being required to obtain was effectively 100 percent of the purchase price, meaning that it was impossible also for that reason for the defendants to obtain finance.

[19]     On  23  January  2009  the  defendants’ solicitors  sent  a  fax  to  Wensley’s solicitors.   In the letter it was stated that Wensley had not, despite a number of requests, provided the requested information.

[20]     The letter then stated that when the defendants were considering entering into the contract a number of representations were made, and these included –

1.That the property would be operated as a serviced apartment with short term occupancy;

As a result:

(i)       Our  clients  could  recover  the  GST  component  of  the purchase price;

(ii)      Certain predictions as to future earnings could be properly made;

(iii)     They would have the use of the apartment for personal use.

2.        That Wensley would actually advance the GST rebate itself;

3.That the property had been approved for finance which could be expected to be up to 75 % of the purchase price;

4.        That settlement would be in early 2009;

5.        That Wensley would make a valuation available.

[21]     The letter went on to state that in November 2007 Wensley had unilaterally changed  the  entire  business  proposition  from  serviced  apartments  to  long-term

residential  accommodation  with  the  result  that  GST  benefits  were  no  longer available, earnings projections were no longer sustainable and finance was no longer plausible.

[22]     The letter stated that the quoted representations were incorrect and to the extent that they had become terms of the contract had not been fulfilled.  The letter then advised that the defendants are cancelling the contract with immediate effect.

[23]     Wensley’s solicitors responded by letter dated 2 February 2009.  They stated that Wensley did not consider that the issues raised were a legitimate basis for claiming repudiation.  The defendant’s right to cancel was therefore rejected.  The letter then stated that –

Whilst our client was reviewing this [long term rental properties] at one stage, the long term lease option requested by some purchasers  has not eventuated.

[24]     The letter stated that the apartments were essentially being run as a hotel and had been so for six weeks.  The letter went on to state that the property would be operated as serviced apartments with short-term occupancy and that the GST issues and rebate remained as recorded in a 23 January 2009 fax.

[25]     On  9  February  2009  the  defendants’  solicitors  faxed  confirmation  to

Wensley’s solicitors that the defendants stood by their cancellation of the contract.

[26]     Wensley then proceeded upon the basis that the defendants were in default. They had previously (on 23 December 2008) issued a settlement notice.  There had been correspondence between solicitors following that settlement notice in relation to additional information such as income protection.  The period for compliance with the settlement notice expired on 22 January 2009.  It had been immediately followed by the defendants’ solicitor’s fax of 23 January 2009 in which the defendants gave notice of cancellation.

The plaintiff ’s case

[27]     On 20 October 2009, Wensley’s solicitors wrote to the defendants’ solicitors advising that the contract was cancelled due to the defendants’ failure to settle. Wensley forfeited the deposit (which had been paid in March 2009 by New Zealand Home Bonds Ltd pursuant to the bond arrangement).

[28]     On 27 October 2010 Wensley entered into an assignment of all of its rights pursuant to the contract to the plaintiff.  Notice of that assignment was subsequently given to the defendants.

[29]     The  plaintiff  sues  in  this  proceeding  for  judgment  for  an  amount  to  be quantified prior to trial.

The issues for trial

[30]     By the nature of the present  application the defendants  have not filed a statement of defence. To that extent, the issues have yet to be clearly identified.

[31]     What is clear is that the plaintiff’s case is conceptually straight forward, involving proof (and possibly admission) of the technical steps in relation to settlement notice, cancellation and assignment.

[32]     It is clear from the affidavits filed on this application that the case is likely to turn on the defendants’ affirmative defences.

[33]     The defences mainly relate to the representations which the defendants say were made to them at the exhibition in London in 2007 and in telephone conversations and emails with Christine Anderson.  In his submissions, Mr Campbell helpfully identified the six key representations for trial as being:

(a)       The property would be operated as a serviced apartment with short- term occupancy;

(b)The defendants would be able to recover the GST component of the purchase price;

(c)       Predictions as to future earnings could be properly made;

(d)      The defendants would have the use of the apartment for personal use; (e)     The property would easily get financed for 90 percent of the purchase

price;

(f)       Settlement would be in early 2009.

[34]     While some of these representations, at least arguably, appear to be contained also  in  the  documentary  material  provided  to  the  defendants  at  the  London exhibition, the evidence of Mr Brookes is that the information was also conveyed to the participants assembled for the London exhibition by Ross and Greg Wensley in the course of their presentations.  Mr Brookes, from other New Zealand proceedings issued by the plaintiff against other defendants, has obtained the names of five other people (three sets of purchasers) who probably attended the same presentations in London.  He has not been able at this point identify all others.  There has been no discovery to date.

The defendants’ application

[35]     The  grounds  on  which  the  defendants  seek  an  order  dismissing  this proceeding are:

(a)       New  Zealand  is  not  the  appropriate  forum  for  the  trial  of  the proceeding;

(b)The  dispute  would  be  more  appropriately  determined  in  England because:

(i)       The defendants reside in England;

(ii)      Independent witnesses reside in England;

(iii)Although New Zealand law is the proper law of the contract, England has similar contract law principles to New Zealand;

(iv)     United Kingdom law, in the form of the Financial Services and

Markets Act 2000 (―FSM Act 2000‖) is also applicable;

(v)      Other similar proceedings issued by the plaintiffs are against

English defendants;

(vi)     The defendants have arguable defences to the plaintiff’s claim.

Applications to dismiss a proceeding on forum non conveniens grounds

[36]     The rules governing the procedure in relation to objection to jurisdiction are contained in rr 5.49, 6.27, 6.28 and 6.29 High Court Rules.  An authoritative discussion  of those  rules  is  contained  in  the judgment  of  the Court  of Appeal, delivered by Randerson J, in Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd.1

Rule 5.49 – appearance and objection to jurisdiction

[37]     This rule enables a defendant who has filed an appearance to apply to the Court to dismiss the proceeding on the ground of lack of jurisdiction.  Where (as in this case) service on the defendants has been effected outside New Zealand under r

6.27 (or alternatively under r 6.28), the defendants’ application must be determined

under r 6.29.

[38]     Pursuant to r 5.49(8) the Court may in exercising its powers under the rule do so on any terms and conditions which the Court thinks just.   Unsurprisingly, the

Court of Appeal (in Wing Hung at [21]) has described these as ―wide powers‖.

1      Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd [2010] NZCA 502; [2011] 1 NZLR

754 (CA); leave to appeal was dismissed – [2011] NZSC 20.

Rule 6.27 – Service overseas without leave

[39]     The defendants in this case were each served overseas (in England) without leave.

[40]     Rule  6.27  sets  out  a  list  of  the  circumstances  in  which  service  may  be effected overseas without the leave of the Court.

[41]     The plaintiff relied on r 6.27(2)(b)(ii), (iii) and (iv) as permitting service. Those provisions deal with –

(a)      Contracts made by or through an agent trading or residing within New Zealand, upon the basis that Ms Jack, a resident operating from Queenstown, executed the agreement for Wensley.

(b)The contract was to be wholly or partly performed in New Zealand, upon the basis that the contract concerned the sale and purchase of a unit at Queenstown.

(c)      The contract was by its terms or by implication to be governed by New Zealand law, with the contract throughout having various references  to  New  Zealand  law  and  New  Zealand  Statutes  in particular.

[42]     For the purposes of the present application, the defendants concede that the plaintiff was permitted by r 6.27 to effect service overseas without leave.

Rule 6.29 Court’s discretion whether to assume jurisdiction

[43]     Rule 6.29(1) governs the present application. That rule provides –

6.29     Court's discretion whether to assume jurisdiction

(1)       If service of process has been effected out of New Zealand without leave, and the court's jurisdiction is protested under rule 5.49, the court must dismiss the proceeding unless the party effecting service establishes—

(a)      that there is—

(i)       a  good  arguable  case  that  the  claim  falls  wholly within 1 or more of the paragraphs of rule 6.27; and

(ii)      the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d); or

(b)      that, had the party applied for leave under rule 6.28,—

(i)       leave would have been granted; and

(ii)      it is in the interests of justice that the failure to apply for leave should be excused.

[44]     The considerations imported into r 6.29(1) are those set out in r 6.28(5)(b)- (d).  In its entirety r  6.28(5) reads –

6.28     When allowed with leave

...

(5)      The  court  may  grant  an  application  for  leave  if  the  applicant establishes that—

(a)      the claim has a real and substantial connection with New

Zealand; and

(b)      there is a serious issue to be tried on the merits; and

(c)      New Zealand is the appropriate forum for the trial; and

(d)      any other relevant circumstances support an assumption of jurisdiction.

[45]     It is conceded by the defendants that the first (r 6.29(1)(a)(i)) criterion (good arguable case that the claim falls within r 6.27) is established in this case.

[46]     It then remains  for the plaintiff to establish the merits of the claim and appropriate forum issues under r 6.28(5)(b)-(d).

Serious issue to be tried on the merits (r 6.28(5)(b))

[47]     The defendants concede that there is a serious issue to be tried on the merits. The Court of Appeal in Wing Hung Printing at [42] adopted the enquiry described by

Lord Goff in Seaconsar Far East Ltd v Bank Markazi2 in which his Lordship described the test as being whether –

... at the end of the day, there remains a substantial question of law or fact or both, arising on the facts disclosed by the affidavits, which the plaintiff bona fide desires to try...

[48]     The plaintiff clearly satisfies that test in this case.

The appropriate forum(r 6.28(5)(c))

[49]     The only test under r 6.29(1) which the defendants put in issue in this case is whether (under r 6.28(5)(c)) the plaintiff has established that New Zealand is the appropriate forum for the trial.

[50]     In a reverse of the position which pertained prior to the current High Court Rules, the burden of proof is on the plaintiff.  The defendants do not now have to establish that another available forum is clearly or distinctly more appropriate.

[51]     In Wing Hung Printing the Court of Appeal at [45] – [46] identified the relevant considerations –

[45]  In considering whether another forum is more appropriate, the Court looks for the forum with which the proceeding has the most real and substantial connection. Relevant factors include issues of convenience or expense, availability of witnesses, the law governing the relevant transaction and the places where the parties resided or carried on business.

[46] We accept that other relevant considerations also bear on the issue of appropriate forum. These include the cautious approach already discussed to the subjection of foreigners to the jurisdiction of a New  Zealand court; whether other related proceedings are pending elsewhere; whether the New Zealand court would provide the most effective relief or whether a foreign court is in a better position to do so; whether the overseas defendants will suffer an unfair disadvantage if a New Zealand court assumes jurisdiction; and any choice of jurisdiction previously agreed by the parties.

[52]     Before turning  to  these  discussions  of the  specific nature of the Court’s enquiry, the Court of Appeal had earlier in its judgment discussed the principles which underpin the Court’s discretion under r 6.29 in determining whether to assume

jurisdiction.   The Court, at [27], noted that the jurisdiction of domestic Courts is

2 Seaconsar Far East Ltd v Bank Markazi [1994] 1 AC 438 (HL) per Lord Goff at 452.

essentially territorial in nature and that legislative permission to serve proceedings in overseas jurisdictions is an exception to that principle of territoriality.   The Court noted the adoption of this principle from 1885 (in Société Générale de Paris v Dreyfus Bros.);3 and the recent rejection by the Supreme Court (in Poynter v Commerce Commission)4 of a suggestion that the territorial principle may have less weight today than it did in the past.

[53]     Two  aspects  of  principle  are  involved.  The  first  is  the  principle  (of territoriality) deriving from Dreyfus.  The second is that the New Zealand legislature will  be  slow  to  assert  jurisdiction  over  conduct  occurring  wholly  outside  New Zealand even if that conduct has consequences in New Zealand, per Randerson J in Wing Hung Printing at [28], adopting Harris v Commerce Commission5 and Poynter at [30].

[54]     As  the  Court  of  Appeal’s  formulation  of  considerations  in  Wing  Hung Printing (above at [51]) so indicates, the Court ultimately looks for the forum with which the proceeding has the most real and substantial connection.  In its discussion of considerations, the Court of Appeal at [43] noted the guidance provided on these matters by the House of Lords in Spiliadi Maritime Corporation v Cansulex Ltd (The

Spiliadi)6.  In his leading judgment in The Spiliadi, Lord Goff (at 854j) formulated

the fundamental principle applicable in this area as being that the Court would choose the forum in which the case could be tried more suitably for the interests of all the parties and for the interests of justice.

The parties’ submissions as to the forum considerations

[55]     For the defendants Mr Campbell identified six factors which he submitted the

Court needs to assess –

(a)       Location and availability of the parties’ contract;

3      Société Générale de Paris v Dreyfus Bros. (1885) 29 Ch D 239 at 243.

4      Poynter v Commerce Commission [2010] NZSC 38, [2010] 3 NZLR 300 at [43].

5      Harris v Commerce Commission [2009] NZCA 84, (2009) 12 TCLR 379 at [20] and [57] – [61].

6      Spiliadi Maritime Corporation v Cansulex Ltd (The Spiliadi)[1986] 3 All ER 843.

(b)      Location and availability of witnesses;

(c)       The place where the activities relevant to the issues took place; (d)    The applicable law;

(e)       The strength of the parties’ cases;

(f)       The existence of similar proceedings against others.

[56]     Ms McKenzie for the plaintiff identified four factors which would require particular consideration –

(a)       Issues  of  convenience  or  expense,  including  the  availability  of witnesses;

(b)      The place where the parties reside or carry on business;

(c)       The existence of litigation in another jurisdiction and the current state of that litigation;

(d)      The applicable law.

My assessment of relevant considerations

[57]     I turn to assess the competing considerations.  In doing so I recognise that the intention of weighing these various considerations is to reach a view as to the forum with which this proceeding has its most real and substantial connection, which will be that in which the interests of all parties and the ends of justice may be appropriately served.

The forum to which the proceeding has the most real and substantial connection

The location of the parties

[58]     The  defendants  when  they  entered  the  contract  resided  and  worked  in England.   They continue to do so.   Wensley, as the vendor, was a New Zealand company which had its business base in New Zealand.   Mr Campbell fairly recognised that the location of the parties as a factor was relatively evenly balanced. This case has the complication that, following Wensley’s liquidation, the rights in the contract had been assigned to the plaintiff.   In such a case the Court would be entitled to give less weight to the location of the assignee than to that of the assignor. As it happens in this case the plaintiff shares Wensley’s characteristics in terms of incorporation, place of residence and place of primary business.

[59]     Mr Campbell submitted that a distinguishing feature of this case is that the vendor chose to go to the United Kingdom to seek out purchasers and to do business there.  Business was done in the place of residence of the defendants.  Ms McKenzie, for the plaintiff, submitted that any emphasis to be given to the fact that Wensley went to the United Kingdom to seek out purchasers is counter-balanced by the fact that the defendants approached Wensley in order to buy a New Zealand property.

[60]     I prefer the thrust of Mr Campbell’s submissions in relation to the ―location‖ factor.  While categories of consideration overlap, Ms McKenzie’s switch of focus to where the subject matter of the contract exists focuses on a different consideration to the location of the parties.

[61]     Mr Campbell’s submissions are reinforced by the approach taken by the Court of Appeal (in upholding the decision of the High Court, in Auckland Receivers Ltd v Diners’ Club).7   Auckland Receivers (a debt collecting agency) had entered a contract with Diners’ Club (which as distinct from its franchisee) did not carry on business in New Zealand.   The contract was to collect in Egypt and  elsewhere

outside New Zealand a debt owing by an Egyptian national.  Auckland Receivers

7      Auckland Receivers Ltd v Diners’ Club [1985] 2 NZLR 652.

issued a New Zealand proceeding claiming payment on account of commission and services rendered.

[62]     In the High Court, Auckland Receivers initially obtained an ex parte order granting leave to serve a writ of summons on the defendant out of New Zealand by reason of Diners’ Club’s duty to make payment of the commission in New Zealand. That qualifying jurisdiction was accepted by both Prichard J, on review in the High Court and by the Court of Appeal.   Prichard J nevertheless set aside the ex parte order on the grounds of the High Court’s discretion in forum conveniens cases.  It was this decision which was upheld by the Court of Appeal.

[63]     The Court of Appeal reviewed the various factors considered by Prichard J. Richardson J, delivering the judgment of the Court said, at 654 –

In the end what weighed with Prichard J was that the matter had the stamp of an American case - the terms were negotiated in California with American personnel of this American company for recovery of an American  debt. Nothing of substance was done or transacted in New Zealand.  The principal issues for determination are the terms of the applicant’s engagement and what work was done by the appellant.

[64]     The single point of valid distinction between the features of the two cases (Auckland Receivers) and this case is that the subject matter in Auckland Receivers was  a foreign  (American) debt  whereas  the subject  matter of this  case is  New Zealand property.  Everything of substance done in the present case, including the key oral discussions as to the business proposal, was transacted in London. Julie Jack happened to sign the contract in New Zealand but there is nothing to suggest that Ross Wensley, as a director, could not have done so in England.

[65]     This factor – where the parties resided or chose to do this business - connects this case much more closely to England than to New Zealand.

The place where the business was transacted

[66]     In  the  way  in  which  the  various  factors  that  can  be  considered  tend  to overlap, I have already merged my consideration of where the parties carried on business into a consideration of where the particular activities associated with this

contract took place.  The relevance of this consideration is illustrated by the Court of

Appeal’s judgment in Auckland Receivers.

[67]     In the present case the activities of most importance are the presentations and negotiations which took place in London.  This can be contrasted with a case such as Pacific  Fundraising  Ltd  v  Universal  Australia  Pty  Ltd,8    in  which  the  main contentious issue related to the termination of a contract, so that it was the location of the activities relevant to the termination of the agreement which was focussed upon.9

Location of witnesses

[68]     Julie Jack gave evidence as to where witnesses were or might be located.  I will return to the location of witnesses as such.  One topic which Ms Jack suggested would need to be covered was noise.   Ms McKenzie did not seek to develop any submission based on that evidence – it appears that the noise issues may have been raised  in  other  cases  but  not  in  this.    The  evidence  serves  to  emphasise  the importance of focussing upon what are the real issues for evidence in this case.

[69]     Ms Jack’s evidence is that the plaintiff ’s factual witnesses are all from New Zealand (being herself, Ross Wensley, Gregg Wensley and Christine Anderson). Leaving aside evidence on noise issues (which I have dealt with already) Ms Jack says there would also be an expert planning witness from New Zealand.

[70]     Mr Brookes deposes that the defendants would call as witnesses a majority of people who attended the presentations in England.   Mr Brookes and Ms Harrison themselves continue to live and work in London.

[71]     Mr Campbell accepted  that expert evidence also may be necessary from planners, who would come from New Zealand.  He conceded that if technical legal

issues  rose  in  relation  to  New  Zealand  contractual  legislation  such  as  the  Fair

8      Pacific Fundraising Ltd v Universal Australia Pty Ltd HC Auckland CP 2489/89, 9 March 1990 (Tompkins J).

9      See especially per Tompkins J at p 8.

Trading Act 1986 or the Contractual Remedies Act 1979, then an expert with New

Zealand legal knowledge may also be required.

[72] On the other hand, the defendants intend to plead a defence based on Wensley’s alleged breaches of provisions of the FSM Act 2000, as to which I will return below [80]. Just as expert evidence on New Zealand law may be required if this litigation is heard in England, expert evidence on United Kingdom law and, in particular, on the application of the FSM Act 2000, is likely to be required if this litigation is heard in New Zealand.

[73]     The position relating to the potential for expert evidence on legal issues is evenly balanced – a case heard in New Zealand may well require evidence as to United Kingdom law and a case heard in England may require evidence of New Zealand law.  Any expert evidence on planning law would be from a New Zealand witness only with resulting convenience if the litigation were heard in New Zealand.

[74]     The location of independent potential witnesses in England is an important factor in this case.  I refer to the other potential purchasers who attended the London presentations.  Mr Campbell notes that some or all of such witnesses may need to be subpoenaed to give evidence.  That will make them compellable witnesses only in relation an English proceeding.  Persons living in England would not be compelled to give evidence in a New Zealand proceeding.

[75]     Ms McKenzie noted that at this point of the litigation (when a defence is yet to be filed) it is difficult to know how far the pool of witnesses will extend.  She also suggested that the plaintiff, in the event of a proceeding in England, will have the equivalent difficulty arising from the inability to subpoena a witness residing in New Zealand.

[76]     I find the location of the witnesses to be a factor significantly in favour of the defendants.  The defendants are not in the business of property-dealing.  Any other people who attended the London presentations may well also not be into property- dealing. There may be an appreciable number of them.

[77]     On the other hand, any witnesses called from the Wensley organisation are business people who transacted their business in London with local residents.   A return trip to London for a trial cannot be viewed as an exceptional attendance in their lives.  There must also be some doubt as to whether all four of the potential witnesses identified by Ms Jack will be required as witnesses.   Ms Jack herself appears to have as her most significant connection with the issues in the litigation the fact that she signed the contract. She may well not be a material witness.

[78]     I have regard also to the ability of counsel to reduce costs by the taking of evidence  audio-visually so as to avoid travel  costs.   When other factors favour England as the appropriate forum, the interests of justice may be seen as being served through the ability of the plaintiff to still have all its desired witnesses give evidence in an economic way.

The relevant law

[79]     Mr Campbell submitted correctly that a feature of this case is that the two fora  proposed  –  New  Zealand  and  England  –  share  a  similar  common  law  of contract. He further submitted that an English Court will be comparatively well qualified to apply New Zealand law as the proper law of the contract.

[80]     Mr Campbell suggested that particular legislation to be invoked from each country – the Contractual Remedies Act and Fair Trading Act of New Zealand and the FSM Act 2000 of the United Kingdom - may be contrasted in the degree of familiarity the foreign Court will have with each.  Mr Campbell suggested that the areas  of  cancellation  of  contracts  (Contractual  Remedies  Act)  and  misleading conduct in trade (Fair Trading Act) either share some general common law background or have equivalent legislation through Commonwealth jurisdictions so as to facilitate for foreign Judges some ease of application of principle.  On the other hand, the FSM Act 2000 appears to be a specific United Kingdom response to such matters as the issuing of what in New Zealand would be called securities.   It is clearly a complex and in parts technical piece of legislation.

[81]     Ms McKenzie rejected Mr Campbell’s submission that the FSM Act 2000 legislation would present challenges of application for a New Zealand court. She submitted that huge similarities exist between the (New Zealand) Securities Act and the FSM Act 2000.   This is not the place, nor did I receive sufficiently detailed submissions, to enable the Court to opine on the extent of differences in the New Zealand and United Kingdom securities law.   What is clear is that Wensley was subject to the FSM Act 2000 when it chose to do business in the United Kingdom. The defendants intend to argue that the arrangements which Wensley was proposing for the Marina Apartments amounted to a collective investment scheme under the FSM Act  2000  and  that  Wensley  through  the  London  presentations  was,  when communicating an invitation or inducement to the defendants and others to engage in investment activity not an authorised person under the Act.  It is the defendants’ case that such activity rendered the contract unenforceable.

[82]     The  English  Courts  are  the  forum  best  placed  to  adjudicate  upon  the defendants’ arguments  under  the  FSM Act  2000.    The  need  for  application  of technical  United  Kingdom  legislation  at  least  balances  out  any  call  for  a  New Zealand forum based on the fact that New Zealand is the proper law of the contract – in my judgment the need to apply relevant law is slightly in favour of the defendants’ preference of an English forum.

Strength of the parties’ cases

[83]     Understandably, neither counsel presented any detailed submission on this factor.   The case is underpinned by factual allegations which in a significant part relate to oral presentations. It is not possible on the present evidence to suggest that the case of either party is so strong as to influence considerations of appropriate forum.

The absence of proceedings elsewhere

[84]     These parties do not have proceedings against one another in a foreign Court.

[85]     Wensley and/or its assignee have issued proceedings against three other sets of English purchasers, in each case in this Court.  There is no evidence as to the way in which those proceedings have been progressing or the particular defences which have been filed or issues which have arisen in those cases.  The defendants in those cases have apparently not taken any issue as to appropriate forum.

[86]   Ms McKenzie submitted that concepts of cost-effectiveness and ease of presentation favour New Zealand as the forum for this litigation given that (as she advised the Court from the Bar) two of the existing New Zealand proceedings are scheduled for trial (in May 2012 and November 2012 respectively).

[87]     Ms McKenzie noted that the plaintiff and the defendants in this case have each engaged New Zealand counsel who are familiar with the proceeding and have assembled a vast number of documents in preparation for the hearing of the dispute. I accept that if this litigation is to be pursued in New Zealand then the plaintiff will have the benefit if it chooses of having only one firm of solicitors dealing with its existing  litigation  against  all  English  purchasers.    The  instruction  of  English solicitors and counsel would be avoided (except to any extent necessary for evidence on English law).

[88]     I do not place significant weight on the fact that the defendants have retained New Zealand counsel in this proceeding to date.  In order to preserve their position and to seek dismissal of this New Zealand proceeding, the defendants had little choice but to engage New Zealand counsel.  Given the defendants’ preference for the English  forum  which  this  Court  has  now  found  for  other  reasons  to  be  the appropriate  forum,  there  is  no  justification  to  reassess  that  conclusion  simply because the defendants had local counsel do what was necessary to vindicate the defendants’ preference for an English forum.

[89]     In this case I do not view the existence of New Zealand proceedings in relation to other purchasers as materially affecting the appropriateness of the forum of this litigation.  The defendants in this case are entitled to raise forum conveniens arguments  even  if  none  of  the  other  purchasers  has  seen  fit  to  challenge  the plaintiff’s choice of forum.  Had the defendants in this proceeding elected to issue

proceedings against the plaintiff in the English Courts prior to the commencement of this litigation, that may well have been an additional factor in favour of their choice of forum.  Given the number of factors which exist on the facts of this case in favour of an English forum, any suggested convenience for the plaintiff in having its various proceedings sequentially heard in New Zealand does not alter the balance of justice and fairness.

Conclusion – the appropriate forum

[90]     The plaintiff has not established that New Zealand is the appropriate forum for the trial of this proceeding.  The factors which I have reviewed preponderantly point to England as the appropriate forum.

Any other relevant circumstances (r 6.28(5)(d))

[91]     Ms McKenzie for the plaintiff did not suggest that there were other relevant circumstances to consider under r 6.28(5)(d), that is to say other than those already addressed under earlier heads.  I do not find other relevant circumstances in this case to support an assumption of jurisdiction.

Outcome

[92]     The  plaintiff  has  failed  to  satisfy  the  Court  that  New  Zealand  is  the appropriate forum for trial.

Orders

[93]     I order that the proceeding is dismissed.

Costs

[94]     Costs must follow the event.  A 2B award is appropriate.   I order that the

plaintiff pay the defendants’ costs on a 2B basis together with disbursements to be

fixed by the Registrar.

Associate Judge Osborne

Solicitors:

Preston Russell Law, PO Box 355, Invercargill - [email protected] Turner Hopkins, PO Box 33-237, Takapuna - [email protected] Counsel: Mr N Campbell, PO Box 4338, Shortland Street, Auckland 1140

- [email protected]