Exportrade Corp v Irie Blue New Zealand Ltd

[2012] NZHC 2870

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-7130 [2012] NZHC 2870

BETWEEN  EXPORTRADE CORPORATION Plaintiff

ANDIRIE BLUE NEW ZEALAND LIMITED First Defendant

ANDEDITH SHELLEY ROZANNE GRIBBLE AKA ROZANNE GRIBBLE

Second Defendant

ANDSCOTT GEOFFREY GRIBBLE AKA SCOTT GRIBBLE

Third Defendant

Hearing:         31 October and 1 November 2011

Counsel:         G Thwaite for Plaintiff

H Fulton for Defendants

Judgment:      1 November 2012

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 1 November 2012 at 11:00 am

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:

GJ Thwait, Auckland:  [email protected]

H Fulton, Auckland:  [email protected]

EXPORTRADE CORPORATION V IRIE BLUE NEW ZEALAND LIMITED HC AK CIV-2008-404-7130 [1

November 2012]

Background

[1]      This matter concerns attempts by a company in the United States to recover a debt said to be owed for the delivery of clothing to the defendants,  or entities allegedly associated with them, in Barbados.   It has a protracted and complicated background.

[2]      The plaintiff, Exportrade Corporation, is incorporated in the state of Florida. On 30 August 2007, it obtained judgment in the Circuit Court of the 11th  Judicial Circuit for Miami-Dade County, Florida, for US$288,718.50 and interest against the first defendant, Irie Blue New Zealand Limited (a New Zealand registered company) and the second and third defendants, Rozanne and Scott Gribble respectively.

[3]      On  30  September  2008,  the  plaintiff  filed  a  statement  of  claim  in  this proceeding, pleading three causes of action.   It sought first to enforce the Florida judgment in New Zealand.  Alternatively, the plaintiff sought to sue the defendants for breach of contract and to enforce a guarantee against the third defendant.

[4]      A minute issued by Sargisson AJ on 8 May 2009 recorded that the second defendant had been served but the first and third defendants had not.  An affidavit of service sworn on 22 April 2009 deposed that the second defendant was served on

27 March 2009 in Barbados.  A later affidavit of the same process server (10 August

2009)  recorded  that  service  on  the  third  defendant  had  not  been  possible  on

27 March because he had left Barbados.

[5]      An  order  for  substituted  service  on  the  third  defendant  was  made  on

24 September  2009.  Documents  were  to  be  treated  as  served  upon  delivery  to solicitors Bell-Booth Sherry and an address in Takapuna.

[6]      On 29 September 2009, the plaintiff filed a “Notice of proceeding when summary judgment sought by plaintiff”.

[7]      On 28 October 2009, the defendants filed an appearance under protest to jurisdiction which recorded that the defendants appeared “under protest to object to the jurisdiction of the Court to hear and determine this proceeding.”

[8]      On 4 November 2009, Heath J issued a minute setting a timetable for the filing of an application to set aside the protest, and for the filing of any opposition and affidavits.

[9]      That application was filed on 18 December 2009 and, on 22 January 2010, the defendants filed opposition to the plaintiff’s application to set the protests aside.

[10]     On  9 April  2010,  the plaintiff  filed  an  amended  statement  of  claim.    It repeated the three causes of action articulated in the original statement of claim but added two further causes against the second and third defendants.  The fourth cause of  action  was  an  allegation  of  negligence  in  breach  of  the  Companies Act  of Barbados and the fifth alleged a breach of statutory duty contrary to the Companies Act of Barbados.

First protest decision

[11]     On 19 April 2010, Christiansen AJ heard the application to set aside the defendants’ protests.  In a judgment dated 28 April 2010, the Associate Judge granted the plaintiff’s application to set aside the appearance under protest (“the first protest decision”).  He noted at the outset of the judgment that Exportrade’s case could be summarised as one by which it pleads an entitlement to the fruits of the Florida judgment or, in any event, an entitlement to judgment in the New Zealand courts

upon its claim.1    Christiansen AJ said that for the purposes of the application to set

aside the protests, it was the first option that the court was concerned with.

[12]     He went on to record that service or substituted service had been effected which was the focus of that challenge to jurisdiction.  In setting aside the protest, the

Associate Judge observed that, in due course, a decision regarding the issue of the

1      At [4]-[5].

Florida judgment would resolve issues of immunity but considered that was an issue for subsequent decisions.2

Review

[13]     On 4 May 2010, the defendants filed an application to review Christiansen

AJ's decision.  The plaintiff gave notice of its opposition to that application on 12

May 2010.

[14]     On 7 July 2010, prior to the hearing of the review, the defendants filed an appearance under protest to jurisdiction to determine the second amended statement of claim (filed 9 April 2010).

[15]     The review of the first protest decision was heard by Duffy J on 14 July

2010.  In a judgment dated 22 December 2010, Duffy J granted the application for review and held that it was for the plaintiff to establish that the defendants had submitted to the jurisdiction of the state of Florida before the New Zealand High Court could enforce the Florida judgment.3  She determined that the plaintiff had failed to do so.  Duffy J concluded that the application for review should be granted, and that the Florida judgment was unenforceable by a New Zealand court. The Judge

dismissed  the  plaintiff’s  proceeding  to  enforce  the  Florida  judgment  in  New

Zealand.4

[16]     The parties dispute the meaning and effect of that decision.

[17]     On 14 January 2011 the plaintiff applied for the recall of Duffy J’s judgment

or for leave to appeal to the Court of Appeal.

[18]     On 11 March 2011, Duffy J issued a minute clarifying that the Associate Judge had allowed the summary judgment application to proceed, setting aside the protest; the application for review had been successful, the Court finding that the

Florida  judgment  is  unenforceable  by  a  New  Zealand  court;  and  the  plaintiff’s

2 At [70].

3 At [25].

4 At [26].

application  for  summary  judgment  could  consequently  not  proceed  and  was therefore dismissed.

[19]     The Judge invoked the slip rule to correct a clerical error so that the judgment now read that the “plaintiff’s summary judgment proceeding” was dismissed, the first cause of action being redundant following her judgment.   She noted that the remaining causes of action remained on foot and that a timetable should be set for the hearing of the second protest to jurisdiction.  Duffy J observed that the second protest to jurisdiction application was not subject to the judgment of 22 December

2010, which related to the plaintiff’s first cause of action only.  The Court noted that the  parties  were  agreed  that  the  plaintiff  is  not  prejudiced  by the  judgment  of

22 December 2010 when it comes to the second to fifth causes of action and the issue of jurisdiction thereon.

Further developments

[20]     On 6 May 2011, the plaintiff filed the applications currently before the Court. A notice of opposition was filed by the defendants on 10 May 2011.

[21]     On  15  July  2011,  a  minute  of  Duffy  J  made  timetable  orders.    The defendants’ position was that the  Court had no jurisdiction and was  forum non conveniens.   The plaintiff maintained that the Court had and should exercise jurisdiction and that the second protest was blocked by issue estoppels.

[22]     The first defendant applied pursuant to r 5.45 of the High Court Rules for security for costs against Exportrade.  Courtney J heard that application on 7 October

2011.  In a judgment dated 14 October 2011, she declined the application, noting the unhappy procedural history of the case and the uncertainty regarding the effect of the previous decisions.  She did, however, observe that the costs order made by Duffy J remained unaffected by the subsequent recall of her judgment.

Current applications

(a)       Setting time for the defendants to file a statement of defence;

(b)      Setting aside the appearance under protest to jurisdiction dated 7 July

2010, and, in effect, affirming this Court’s jurisdiction to adjudicate

on the plaintiff’s remaining claims;

(c)       Setting aside the order for costs dated 25 February 2011; (d)  Permitting the reading of affidavits on another file;

(e)       Granting the plaintiff leave to serve abroad; and

(f)       For costs on an increased basis.

The plaintiff ’s position

[24]     The plaintiff’s position can be conveniently summarised as follows.

Protest to jurisdiction

[25]     The issues relating to the protest to jurisdiction can be considered together. The plaintiff says, first, that the protest is not validly brought and, second, that if it is validly brought, it should be set aside.

[26]     The plaintiff says that the second protest was not validly brought because:

(a)      The  first  protest,  having  been  set  aside  by  Christiansen AJ,  was unaffected by the decision of Duffy J, who conflated the issue of protest with summary judgment on review;

(b)      Issues of res judicata and issue estoppel arise as a consequence of (a); (c)     The second protest is out of time; and

[27]   In this regard, the plaintiff says that Duffy J’s decision “manifests imperfections” and that it agreed not to challenge or appeal that decision when the basis for the judgment was disclosed.  It claims, however, that it retains all rights on jurisdiction.

[28]     If the second protest was validly brought, the plaintiff’s submissions that it should be set aside focus largely on the issue of forum.  The application to set aside will fall to be considered in the conventional way under r 5.49 (with protests relating to service to be determined under r 6.29).

[29]     The first order sought, relating to setting a time for the filing a statement of defence, necessarily depends on the outcome of the application to set aside the protest.  Such an order is the natural consequence of setting aside the protest.

[30]     Similarly, the necessity of an order seeking leave to serve abroad will depend on the outcome of the application to set aside.

Costs

[31]     The  plaintiff  also  seeks  an  order  setting  aside  Duffy  J’s  costs  order  of

25 February  2011.    It  says  that  the  order  was  inappropriate  and  added  to  the confusion of what the Judge had done.  It says that it appeared that the Judge thought she was reviewing a summary judgment application when in actual fact she was dealing with a review of a protest decision.

[32]     The plaintiff says that, although it no longer relies on enforcing the Florida judgment  in  New  Zealand,  it  continues  to  dispute  the  correctness  of  Duffy  J’s decision because it disputes its liability to pay the costs awarded.  It argues that the judgment should be recalled because Duffy J had no authority to consider summary judgment and the Court ignored arguments made.

[33]     Further, the plaintiff seeks an order that affidavits on another file be read in this proceeding.

Defendants’ submissions

[34]     The  defendants  submit  that  only  one  issue  has  been  decided  in  this proceeding thus far, that being in Duffy J’s decision of 20 December 2010, where she  held  that  the  Court  would  not  exercise  jurisdiction  to  enforce  the  default judgment in favour of the plaintiff obtained in Florida where the defendants did not submit to that Court’s jurisdiction.

[35]     The defendants say that there remain for decision the defendants’ second protest to jurisdiction (7 July 2010) and a forum non conveniens argument that the Supreme Court of Barbados would be a better court of first instance.

[36]     In response to the plaintiff’s objections to Duffy J's reference to a summary judgment, the defendants say that in upholding the protest (on review of Christiansen AJ’s decision) the Judge essentially defeated the summary judgment application. The logical and direct consequence of the decision, it says, was that the attempts to enforce the Florida judgment in New Zealand must fail and there was no summary judgment application to answer.

[37]     Further, the defendants say that it was clarified by Duffy J in her minute of

11 March 2011, and agreed to by the parties, that the first protest had related only to the first cause of action; that the remaining causes of action remained unaffected; and that the first cause of action was now redundant.

Protest to jurisdiction

[38]     The  plaintiff  applies  to  set  aside  so  much  of  the  defendants’ protest  to jurisdiction as relates to all but the now-redundant first cause of action.  It does so, first, on the basis that the protest is improperly brought and, second, on the basis that the protest should be set aside on the merits.

Legal framework

[39]     Rule 5.49 of the High Court Rules sets out the procedure to be followed when an appearance under protest has been made.

[40]     The Court of Appeal considered the current High Court Rules on this topic, which came into force on 1 February 2009, for the first time in Wing Hung Printing Company Ltd & Ors v Saito Offshore Pty Ltd, 5 a judgment delivered on 5 November

2010.  Neither Christiansen AJ nor Duffy J had the benefit of the Court of Appeal’s decision in Wing Hung when they reserved their decisions for consideration and it appears that the decision was not brought to Duffy J’s attention before she issued her judgment the following month.   It is appropriate, therefore, to set out the matters addressed by the Court of Appeal in some detail.

[41]     The Court summarised the key features of r 5.49:

(a)      The rule applies where a defendant seeks to object to the jurisdiction of the Court in respect of proceedings served either within New Zealand or overseas.

(b)The defendant may object to the jurisdiction within the time allowed for filing a statement of defence by filing and serving an appearance stating the objection and the grounds for it.

(c)      Any  such  appearance  does  not  operate  as  a  submission  to  the jurisdiction of the Court.

(d)A defendant who has filed an appearance may apply to the Court to dismiss the proceeding on the ground of lack of jurisdiction and the plaintiff may apply to set aside the appearance.

(e)       In cases where the proceedings are served within New Zealand, the

Court determines the applications under sub-rules (4) and (6) as the case may be.

5      Wing Hung Printing Company Ltd & Ors v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1

NZLR 754.

(f)      However, in a departure from the old rule, applications relating to service of process effected outside New Zealand under rr 6.27 or 6.28 must be determined under r 6.29 which is an entirely new provision.

(g)In exercising the powers under the rule, the court has wide powers to do so on any terms and conditions the court thinks fit and may give appropriate directions.

[42]     Rule 6.29 sets out the matters to be taken into account when considering a protest  to  jurisdiction  by parties served  overseas.    So  far  as  is  relevant  to  this proceeding, it 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.

(2)      ...

(3)       When  service  of  process  has  been  validly  effected  within  New Zealand, but New Zealand is not the appropriate forum for trial of the action, the defendant may apply for a stay, or for a dismissal of the proceeding under rule 15.1.

[43]     In Wing Hung, the Court of Appeal discussed the principles relating to such protests.    It  observed  that  the  jurisdiction  of  the  domestic  courts  is  essentially

territorial in nature and that service overseas was an exception to that principle.6   It

6 At [27].

pointed  to  a  recent  decision  of  the  Supreme  Court  which  had  identified  two important principles in relation to the extra-territorial application of the law:7

(a)      The  Courts  will  not  lightly  exercise  their  discretion  to  assume jurisdiction over foreign parties; and

(b)The  legislature  will  be  slow  to  assert  jurisdiction  over  conduct occurring wholly outside of New Zealand (even where consequences of that conduct manifest themselves in New Zealand).

[44]     The Court identified a two-stage approach where r 6.29(1)(a) was relied on by  the  party  effecting  service.  The  gateway  or  threshold  issue  under  sub- paragraph (i) is whether there is a good arguable case that the claim falls wholly within one of the paragraphs of r 6.27.  The Court observed that the good arguable case test required at this stage does not relate to the merits of the case but to whether the claim falls within one or more of the circumstances under r 6.27 in which service

overseas may be effected without leave.8

[45]     Once that threshold has been surmounted, the Court must consider the second stage under sub-paragraph (ii); namely, whether it should assume jurisdiction by reason of the matters set out in r 6.28(5)(b)-(d). The applicant must establish that:9

(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.

[46]     Where  the  party  effecting  service  fails  to  satisfy  both  stages  of  the r 6.29(1)(a) test, the proceeding will be dismissed unless the grounds in r 6.29(1)(b)

are met.  Those grounds are that leave would have been granted under r 6.28 if it had

7      Poynter v Commerce Commission [2010] NZSC 38, [2010] 3 NZLR 300 at [43]. Tipping J rejected the suggestion of the Court of Appeal in that case that there should or could be some retreat from these fundamental principles because of developments in communications, technology and transport.

8 At [33].

9      At [36] the Court of Appeal noted that consideration of paragraph (a) is unnecessary because it is assumed to be established that the claim has a real or substantial connection with New Zealand where the party effecting has overcome the r 6.27 threshold.

been applied for and that it is in the interests of justice for the failure to do so to be excused. As was noted in Wing Hung:10

That inquiry requires the court to consider whether the applicant has established all four of the matters identified in r 6.28(5)(a) to (d). Under the first of these (real and substantial connection with New Zealand) the party effecting service is not required to establish that the claim falls within one or more of the circumstances in r 6.27 since an application under r 6.28 presupposes that service overseas without leave could not be effected under r 6.27 ... the matters already discussed in relation to r 6.28(5)(b) to (d) apply in this context as well.

[47]     The Court did not attempt to provide any guidance on whether excusing a failure to apply would be in the interests of justice.  It merely observed that the test may encompass a broad range of considerations and that constraints should not be placed on what might be relevant.

[48]     The Court then went on to consider what it identified as the “all or nothing” argument:  that the Court must dismiss the proceeding if one of the causes of action failed to meet the test prescribed by r 6.29(1)(a). That argument centred on the meaning of the word 'claim' in r 6.27(1)(a)(i), the Court of Appeal concluding that a

'claim' is a broad term which is wide enough to include one or more causes of action.11

[49]     The Court did not accept the proposition that if one cause of action does not fall within r 6.27, the proceeding must be dismissed.12    To the extent that a claim does not fall within that rule, the party serving overseas may rely alternatively on r 6.29(1)(b).  If necessary, an application under r 6.29 may be disposed of on terms requiring the party effecting service to file and serve an amended statement of claim confining the causes of action to those found to warrant the court assuming jurisdiction.

[50]     The Court of Appeal doubted that where a good arguable case is found on one cause of action, it is appropriate to permit other causes of action, at least where

10 At [48].

11 At [53].

12     At [69] – [72].

they arise from the same set of facts.13   It observed that it will often be the case that a number of causes of action are pleaded arising from the same set of facts  and considered that r 6.29 requires separate consideration of each cause of action.  At the threshold stage of the inquiry, the question whether a particular cause of action falls within r 6.27 will depend on which (if any) of the circumstances set out in that rule applies.   This aspect requires an assessment of whether the cause of action is in contract, tort, a claim under an enactment or none of those.

[51]     The Court held that, in the second stage, an assessment as to whether there is a serious issue to be tried will require separate assessment of both the factual and legal bases for each cause of action.   There may be commonalities but it is not permissible to reason that if one cause of action passes muster, the others arising from the same or similar facts must meet the criteria too.  Nevertheless, the Court noted that it would often be proper to assess the appropriate forum issue and any other relevant factors supporting the assumption of jurisdiction on a global basis where there are multiple causes of action.

These proceedings to date

[52]     It is evident from Wing Hung that it is at least open to the Court to consider a protest to jurisdiction on a cause by cause basis, and that such a course might be mandatory.   It is apparent from the preceding summary of the interlocutory proceedings to date that that was the course adopted in the present case.

[53]     Associate  Judge  Christiansen  considered  that  he  was  seized  of  a  protest against the jurisdiction of the Court only in relation to the first cause of action.14

Similarly, Duffy J, on review, considered that she was concerned only with the first cause of action. She said as much in her judgment of 22 December 201015  and

clarified the position in a minute dated 11 March 2011.16

13     Tentatively expressed in Harris v Commerce Commission [2009] NZCA 84, 2009 12 TCLR 379.

14 See [11] above.

15 See [15] above.

16 See [19] above.

[54]     Dealing with the protests to jurisdiction in that way was sensible considering the implications that the decision would have.  As the defendants point out, had the protests been set aside, a decision in favour of the plaintiff on the summary judgment application would have obviated the need for the protest against the second to fifth causes of action to be considered.

[55]     The protest having been upheld by Duffy J on review, the appropriate course following the Wing Hung procedure would have been to require the plaintiff to file an amended statement of claim confining the causes of action to those found to warrant the Court's assumption of jurisdiction.

[56]   Unaware of the Court of Appeal’s suggested course of action in the circumstances, Duffy J “dismissed” the plaintiffs proceeding to enforce the Florida judgment in New Zealand.

[57]     Before me, the plaintiff queried the effects of such an order, arguing that Duffy J conflated the issues before her.  However, while I agree with Courtney J that the effect of December 2010 judgment was uncertain and potentially confusing, I note that the language used by Duffy J was that adopted by the plaintiff in its application of 29 September 2009.  It seems to me that the Judge did no more than exercise her jurisdiction to strike out the first cause of action.  Having found that the protest should be upheld, such a course was undoubtedly open to her.

[58]     In these circumstances, I consider the plaintiff's argument regarding the effect of Duffy J’s judgment to be untenable.   Duffy J overturned the Associate Judge’s decision on review and struck out the first cause of action. The defendants' protest to the jurisdiction of this Court with regard to the second to fifth causes of action remains on foot.

Remaining protests

[59]     The remaining causes of action are:

(a)      Second cause of action: a claim against all defendants for breach of contract.

(b)Third  cause  of  action:  a  claim  against  the  third  defendant  for enforcement of a guarantee.

(c)      Fourth  cause  of  action:  a  claim  against  the  second  and  third defendants alleging negligence in breach of the Companies Act of Barbados.

(d)Fifth cause of action: a claim against the second and third defendants alleging breach of statutory duty contrary to the Companies Act of Barbados.

The first defendant

[60]     The claim for breach of contract is the only remaining cause of action against the first defendant.   No issue is raised as to the method of service on the first defendant, a New Zealand registered company which was served in accordance with the requirements of the Companies Act.   However, the first defendant argues that New Zealand is forum non conveniens.   When service has been validly effected within New Zealand, but the defendant does not consider New Zealand to be forum conveniens,  the  appropriate  course  is  for  the  defendant  to  apply  for  a  stay  or

dismissal under r 15.1.17    That course has not been followed here but, given the

regrettable delay which this proceeding has already suffered and the assistance I have received from counsel’s submissions on the point, I shall return later in this judgment  to  consider  the  forum  non  conveniens  issues  arising  from  counsel's

arguments as if they had been argued under r 15.1.18

17     High Court Rules, r 6.29(3).

18     At [77] and [78].

The second defendant

[61]     The second defendant was served overseas; leave to effect service in that manner was not sought.   Thus the current application, insofar as it relates to the second defendant, concerns the service of process outside New Zealand under rr 6.27 and 6.28.  In accordance with r 5.49(7), it must be determined under r 6.29.

[62]     Service  having  been  effected  outside  New  Zealand  without  leave,  the proceeding against the second defendant must be dismissed unless the plaintiff can establish that the case falls within r 6.29(1)(a) or (b).   As the Court of Appeal suggested in Wing Hung, I consider each cause of action individually.

[63]     The threshold issue under r 6.29(1)(a) is whether there is a good arguable case that the claim under scrutiny falls within r 6.27.  The Court then must decide whether to assume jurisdiction after considering whether there is a serious issue to be tried on the merits; whether New Zealand is the appropriate forum for the trial; and any other relevant circumstances.

[64]     If r 6.29(1)(a) is not satisfied, the plaintiff must establish under r 6.29(1)(b) that, had it been applied for under r 6.28, leave would have been granted and that it is in the interests of justice for such a failure to be excused.

[65]     The relevant questions in relation to each cause of action, therefore, are: (a)  Is there a good arguable case that it falls within r 6.27?

(b)      Is there a serious issue to be tried on the merits?

(c)       Is New Zealand the appropriate forum for the trial? (d)          Are there any other relevant circumstances?

(e)       If not within r 6.27, would leave under r 6.28 have been granted if applied for?

(e)       Is it in the interests of justice to excuse the failure to apply for leave?

Second cause of action

[66]     I consider, first, whether the plaintiff's claim against the second defendant for breach of contract falls within r 6.27. That rule, so far as is relevant, provides:

6.27     When [service out of New Zealand] allowed without leave

(1)      This rule applies to a document that initiates a civil proceeding ... which under these rules is required to be served but cannot be served in New Zealand under these rules (an originating document).

(2)      An originating document may be served out of New Zealand without leave in the following cases:

(a)      ...

(b)      when a contract sought to be enforced or rescinded, dissolved, annulled, cancelled, otherwise affected or interpreted in any proceeding, or for the breach of which damages or other relief is demanded in the proceeding—

(i)       was made or entered into in New Zealand; or

(ii)      was made by or through an agent trading or residing within New Zealand; or

(iii)     was to be wholly or in part performed in New Zealand;

or

(iv)     was by its terms or by implication to be governed by

New Zealand law:

(c)      when there has been a breach in New Zealand of any contract, wherever made ....

[67]     It is not asserted in this case that the relevant contract or contracts were made in New Zealand or through a New Zealand agent.  The supply of clothing took place in or between the USA and Barbados, and there is no allegation or evidence that the alleged arrangements between the parties specified that New Zealand law would govern them.  It is not asserted that any breach occurred in New Zealand.  Nothing in

the material before the Court suggests that any relevant witness currently resides in

New Zealand.  It follows that r 6.27 does not assist the plaintiff.

[68]     Turning to the matters for consideration under r 6.29(1)(b),19  there does not appear to be any suggestion that the plaintiff's substantive claim lacks merit. As may be obvious from the analysis of the r 6.27 criteria, however, I am far from satisfied that the plaintiff has established any sufficient connection with New Zealand to make this country the appropriate forum for the trial of a claim based on alleged breaches of a contract made in a foreign country, in respect of goods manufactured in one foreign  country  and  allegedly  delivered  to  another  foreign  country.    No  other grounds for the hearing of the claim in New Zealand have been advanced.  I am not persuaded, therefore, that leave to serve the defendant overseas would have been granted.

[69]     It follows that the failure of the plaintiff to obtain leave to serve the breach of contract claim on the second defendant overseas is fatal to that cause of action.

Fourth and fifth causes of action

[70]     I consider the fourth and fifth causes of action against the second defendant together.  The plaintiff claims that the second defendant was negligent in breach of the Companies Act of Barbados (fourth cause of action) and that it breached a statutory duty contrary to the Companies Act of Barbados (fifth cause of action).

[71]     The plaintiff has not advanced any basis on which a New Zealand court should assume jurisdiction to adjudicate on such claims in the absence of any substantive connection with New Zealand.  To do so would be inconsistent with the approach described by the Court of Appeal in Harris v Commerce Commission20 and

referred to by Tipping J in Poynter, to which I have already referred. 21

19 And r 6.28, as discussed at [44]-[46] above.

20     Harris v Commerce Commission [2009] NZCA 84 at [20].

21     See Poynter at [30] as discussed above at fn 7.

The third defendant

[72]     The third defendant was served by substituted service inside New Zealand pursuant to  an order made on  24 September 2009.   Mr Fulton  argued that the evidence indicates that the third defendant was resident out of New Zealand at the time the proceedings were issued, and that substituted service on him by delivery to addresses in New Zealand was a nullity.  In Von Wyl v Engeler, the Court of Appeal noted that the foundation of the Court’s jurisdiction in personam is service of the

originating process.22  It accepted, in reliance on Dicey and Morris,23  that there was

no jurisdiction to order substituted service within New Zealand on a defendant who was outside the jurisdiction when the proceeding was issued.   There cannot be substituted service in New Zealand in circumstances where there could not have been  personal  service  within  New  Zealand  at  the  time  the  proceeding  was commenced because the defendant was outside the jurisdiction.24

[73]     Companies Office records dating back several years prior to the issuing of the proceeding  show  a  New  Zealand  residential  address  for  the  third  defendant  at

24 Blomfield Spa, Takapuna.  The records include a director’s consent form, signed

by the third defendant and related to the first defendant, which is dated 20 October

2008, just eight days before the date on which the notice of proceeding and statement

of  claim  were  filed.    It,  too,  gives  the  third  defendant’s  residential  address  as

24 Blomfield  Spa,  Takapuna.      However,  the  third  defendant  has  sworn  in  an affidavit dated 22 January 2010 that he “was not in New Zealand” when the proceeding  was  commenced  and  that  he  did  not  then  “have  a  residence  at  24

Blomfield Spa, Takapuna.”   Further, he deposed in an affidavit sworn on 8 April

2008 that he was then resident in Christ Church, Barbados.

[74]     In support of the proposition that the reference to residential addresses given in Companies Office documents is not probative, Mr Gribble said that the second

defendant,  his  former  wife,  was  not,  and  had  not  been  for  some  twenty  years,

22     Von Wyl v Engeler [1998] NZLR 416 at 421.

23     Lawrence Collins (ed) Dicey and Morris on the Conflict of Laws (12th ed, Sweet and Maxwell, London, 1993) at 303.

24     Porter v Freudenberg [1915] 1 KB 857, 887-888 (CA) per Lord Reading; Laurie v Carroll

(1958) 98 CLR 310 (HCA). See also the fuller discussion in Dicey and Morris (12th ed) at 302-

303.

resident in New Zealand despite also having the same Takapuna residential address on Companies Act records.

[75]     It is apparent that the third defendant had personal and business connections with New Zealand and I infer that he visited New Zealand from time to time.  But the preponderance of the evidence indicates that Barbados was probably his principal place of residence and that any time spent in New Zealand would be temporary.

[76]     There is no evidence to rebut the third defendant’s evidence that he was not in New Zealand at the time the proceedings were commenced and I accept it on balance.  That means that the Court had no jurisdiction to order substituted service on him in New Zealand, even if his absence was only temporary.25   The “service’ on the third defendant must therefore be regarded as a nullity.

Forum non conveniens

[77]     Even if I am wrong about that, there remains the defendants’ claim that New Zealand is forum non conveniens.   The argument applies to all of the remaining causes of action.  Counsel disagreed as to where the onus lay and it may be that the onus is different under r 6.28(5)(c) when a plaintiff is seeking to persuade the Court to assume jurisdiction under r 6.29(1) from the onus which usually rests on a defendant under r 15.1.  But on either basis, and for the reasons discussed above at [67], I am clearly of the opinion that Barbados (if not Florida) is the more convenient forum for resolving the dispute.  That is the jurisdiction in which the recipient of the

goods involved in the dispute is alleged to have carried on business.26   The Supreme

Court of Barbados can be expected to apply conventional common law principles to the contract dispute.

[78]    The pleadings disclose no New Zealand connection between the alleged transactions giving rise to the claim and the defendants.  The only connections with

this country are that the first defendant is registered here and that that the third

25     See the illustrative cases cited in Lawrence Collins (ed) Dicey and Morris on the Conflict of

Laws (14th ed, Sweet and Maxwell, London, 2006) at 308.

26     Second Amended Statement of Claim dated 9 April 2010, paragraph 25.

defendant may be in New Zealand from time to time.  In the circumstances, that is not enough to make the High Court of New Zealand the appropriate forum.

[79]      For  those  reasons,  I  stay  the  proceeding  in  the  exercise  of  the  Court’s

inherent jurisdiction.

[80]     That means that the remaining ancillary issues raised by the plaintiff do not fall for determination.

[81]     Costs are reserved.

.........................................

Toogood  J