Seed Enhancements Limited v Agrisource 2000 Limited HC Auckland CIV 2010-404-004243

[2011] NZHC 1665

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-004243

BETWEEN  SEED ENHANCEMENTS LIMITED Plaintiff

ANDAGRISOURCE 2000 LIMITED First Defendant

ANDQBE INSURANCE (INTERNATIONAL) LIMITED (DISCONTINUED)

Second Defendant

ANDSTEFES GMBH First Third party

ANDGRASS VALLEY FORMULATIONS PTY LIMITED (IN LIQUIDATION)

Second Third Party

Hearing:         16 November 2011

Appearances: G D Wadsworth for the First Defendant/Applicant

B Morley and S Holderness for the First Third Party/Respondent

Judgment:      18 November 2011

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

18.11.11 at 4:00 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:

K Berman, Barrister, Auckland – [email protected]

G Wadsworth, Barrister, Auckland – [email protected]
B Morley, Hesketh Henry, Auckland –  [email protected] /

[email protected]

SEED ENHANCEMENTS LIMITED V AGRISOURCE 2000 LIMITED HC AK CIV 2010-404-004243 18

November 2011

[1]      The applicant (Agrisource) has applied to strike out the first third party‟s (Stefes) notice of appearance under protest to jurisdiction.  The applicant is a New Zealand company, Stefes is domiciled in Germany.  Stefes supplied Agrisource with a chemical product known as Furakote for its inclusion in a coating applied to carrot seeds sold by Agrisource in New Zealand.  Agrisource alleges that a particular batch of Furakote (batch 656) supplied by Stefes was responsible for causing low germination results in seeds that were treated with a seed protection coating formulated from that Furakote batch.

[2]      Stefes filed an appearance under protest to jurisdiction.  In issue is whether New Zealand is the appropriate forum for a trial of issues between Agrisource and Stefes.   Having filed an application to set the appearance as to protest aside Agrisource assumes the onus of establishing that New Zealand is the appropriate trial forum.

[3]      This case presents some novelty because the party protesting jurisdiction has been joined by a defendant.  Also, Stefes claims there is an agreement between the parties which compels them to concede both law and jurisdiction to a German Court.

[4]      This judgment reviews the procedural background including the claim against Agrisource; it will discuss the relevant High Court Rules; it will examine opposing claims about the existence of exclusive jurisdiction clauses; and it will review the parties‟ competing claims about appropriate trial forum.

Background

[5]      The plaintiff (SEL) is a company based in Pukekohe whose activities include the application of seed treatment products to seeds.

[6]     Agrisource is also based in Pukekohe.   It specialises in the importing, formulation and supply of chemicals for crop protection and other agricultural treatments.

[7]      Stefes carries on the business of supplying chemicals.    Stefes developed Furakote.    It  supplied  it  to Agrisource  through  its Australian  agent  Gulmohar. Furakote is a combination of ingredients sourced from a company in Korea and a company in Canada.   Upon receipt of Agrisource‟s order Stefes arranged for the Korean and Canadian companies to supply the components to GVF (the second third party – now in liquidation).  GVF then combined the ingredients according to Stefes‟ recipe, to produce Furakote.

[8]      GVF  would  test  the  Furakote  and  send  Stefes  a  Certificate  of Analysis. Without doing any of its own testing, Stefes would replicate the test results on its own  Certificate  of Analysis  for  sending  to Agrisource.    Having  purchased  the Furakote  from  GVF  Stefes  arranged  for  its  shipping  to Agrisource,  and  Stefes‟ invoice together with any shipping documents including the bill of lading was sent to Agrisource directly.   Those documents indicated the Furakote batch was sent CIF (inclusive of insurance and freight) to Lyttleton for a cost of US$170,052.

[9]      SEL alleges that batch 656 was responsible for causing low germination results in its customer seeds that were treated with a seed protection coating from that batch.   After carrying out germination tests using the Furakote batch which allegedly produced similar low germination results, SEL have replaced and recoated its customer seeds using a different batch of Furakote.

[10]     There is no evidence presently before the Court which supports SEL‟s claims of causing low germination results – indeed none could be expected and certainly none in connection with Agrisource‟s claim against Stefes.  But, the fact is there is no  evidence  of  the  precise  cause  of  the  alleged  seed  germination  failure. Agrisource‟s position is that if the seed germination failure is attributable to Furakote

656 then no responsibility for that outcome can be levelled at it – rather such claims should be levelled at Stefes, the product supplier.  Implicitly Agrisource would reject claims of contribution or cause related to that period when batch 656 was in its possession  and  control.    Regardless  and  for present  purposes,  the Court  should assume SEL and Agrisource are able to prove the claims pleaded.

[11]     In the course of communication between counsel it has become clear that Stefes would wish to join the Korean and Canadian companies for they were the producers/suppliers of the chemicals that were mixed to form Furakote.   It would also have wished to cross claim against GVF which mixed the Furakote compound, tested it and supplied a Certificate of Analysis.

[12]     Somewhat akin to the position adopted by Agrisource (that it simply received the product which was believed to be faulty), Stefes‟ position is that it was the organiser of delivery, and therefore if the product was at fault then liability would more likely lie with those who supplied the chemicals or with GVF who mixed it, tested it and certified it.

[13]     Recourse to GVF is likely to be futile because it is in liquidation.

[14]     Stefes asserts that recourse against the Korean and Canadian companies is subject  to  contracts  governed  by Stefes‟ General  Conditions  of  Purchase  which provide  that  the  law  of  the  contract  is  German  law,  and  that  the  local  and international jurisdiction for all contractual and non contractual disputes arising will be that of the Court responsible for the area and which Stefes is based, namely Hamburg.

[15]     Stefes also claims that its supply of product to Agrisource was subject to its General Conditions of Sale and Delivery (General Conditions) by which recourse to law and jurisdiction is confined to Germany.

[16]     In this case there is a dispute about whether Agrisource agreed to these General Conditions.  In that regard I will review the evidence of the opposing claims for in that outcome the Court will obtain some direction concerning those factors usually weighed when deciding the choice of forum.

The High Court Rules

[17]     Agrisource issued its third party proceeding against Stefes and GVF after

SEL discontinued its claim against the second defendant QBE. Agrisource elected to

serve the third party proceedings against Stefes and GVF out of jurisdiction and without leave as it considered that the third parties‟ proceedings fell within the categories outlined in r 6.27(2) inter alia because the damage complained of occurred in New Zealand and was related to products supplied to Agrisource in New Zealand for its commercial purposes there.

[18]     Due to Stefes filing a Protest, Agrisource has bought this application to strike out that Protest pursuant to r 5.49(5) in respect of which outcomes are provided by r

5.49(6).

[19]     Rules 6.27 to 6.29 outline matters for consideration upon the question of whether or not jurisdiction ought to be assumed by a New Zealand Court.

[20]     Rule 5.49(6) provides:

5.49     Appearance and objection to jurisdiction

...

(6)      The court hearing the application must, -

(a)       if it is satisfied that it has jurisdiction to hear and determine the proceeding, set aside the appearance; but

(b)       if it is satisfied that it has no jurisdiction to hear and determine the proceeding, dismiss both the application and the proceeding.

[21]     Because the application relates to service outside New Zealand, it must be determined under r 6.29(1):

6.29     Court‟s jurisdiction 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

...

[22]     Therefore, the enquiry whether to assume jurisdiction involves a two stage approach, the first being whether there is a good arguable case that one or more of the pleaded causes of action falls within one or more of the provisions of r 6.27(2) governing when an originating document may be served out of New Zealand without leave;  and secondly that the Court should  assume jurisdiction by reason of the criteria set out in r 6.28(5)(b) to (d).

[23]     The factors in 6.28(5)(b) to (d) are as follows:

6.28     When allowed with leave

...

5.        ...

(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.

[24]     In this case Stefes accepts there is a r 6.27good arguable case and therefore r

6.29(1)(a) is satisfied.  Stefes also concedes that there is a serious issue to be tried on the merits pursuant to r 6.28(5)(b), but it concedes no more than that.

[25]     Therefore,  for  the  application  (in  effect)  for  trial  of  the  matter  in  New Zealand to be successful, Agrisource must also satisfy the onus of establishing that New Zealand is the appropriate forum for the trial (r 6.28(5)(c)).

[26]     It is usual in dealing with applications of the kind brought by Agrisource, for Courts to embark upon an enquiry about choice of appropriate forum, by reference to which option has the most real and substantial connection to the matter in dispute. Agrisource‟s position is that it was supplied with a product in New Zealand for the purpose of use in New Zealand.

[27]     However, in this case recourse to the usual choice of forum factors needs to be deferred for a determination of the claim that Stefes‟ General Conditions applied in the instance of the delivery of batch 656.  If those General Conditions do apply and if they bind Agrisource then it appears this Court‟s ability to balance competing considerations is significantly circumscribed.

Stefes’ General Conditions of Sale and Delivery

[28]     Relevant clauses include;

1.        General

...

2.We do not accept any conditions of purchase drawn up by the customer which contradict the Conditions defined herein unless we have explicitly agreed to them, in writing, in advance.  This also applies when we do not challenge such conditions explicitly.  We will not recognise any conditions of purchase put forward by the customer unless we have explicitly agreed to them in writing in advance.

...

8.        Miscellaneous

1.All  legal  relationships  which  exist  between  us  and  our customer are based exclusively on German law.   The provisions made for the conflict of laws as well as the UN Law on the International Sale of Goods are excluded.

2.The place of performance for all the customer‟s obligations, including  payment  obligations,  is  Hamburg,  unless otherwise  specified  in  these  Conditions  or  in  any  other written agreement.   This also applies to cheques and bills payable.

...

5.The  jurisdiction  for  all  disputes  which  arise  directly  or indirectly from the business relationship and [which] cannot be resolved by the Arbitration Tribunal is Hamburg.  We also reserve the right to initiate legal proceedings in other courts of  law  in  accordance  with  the  Code  of  Civil  Procedure (ZPO) or to take legal action against the customer at his place of jurisdiction (legal domicile).

Whether the General Conditions bind Agrisource to submit to the German law and to a German Court to resolve its claim against Stefes

[29]     This inquiry involves:

(a)       A consideration of the „exclusive  jurisdiction‟ terms in the General

Conditions.

(b)      Whether the General Conditions bind Agrisource at all.

(c)       If  they  do,  in  what  circumstances  may  a  New  Zealand  Court nevertheless assume a right of jurisdiction.

Terms of ‘exclusive jurisdiction’

[30]     The clauses referred to in para [28] herein appear clearly to reserve recourse to law and jurisdiction to Germany alone.   However, Mr Wadsworth, counsel for Agrisource,  submits  that  clause  8.5  provides  “by  implication  [that  Agrisource] should also have the right to take legal action against [Stefes] in [Agrisource‟s] place of jurisdiction”.

[31]     I disagree with this interpretation of the relevant position.  Clearly the clause preserves to Stefes alone the right to bring an action in the jurisdiction of the other party.   One assumes that right is preserved where it is necessary to sue that other party to recover any payment due, because any judgment upon that claim is more easily enforceable in the country of that other party.

[32]     The  General  Conditions  clearly  confer  exclusive  jurisdiction  to  German

Courts.

[33]     Another aspect concerning the General Condition clauses concerns whether they apply to a claim of negligence in tort as well as to claims for breach of contract.

[34]     In  its  claim  against  Stefes,  Agrisource  has  pleaded  causes  of  action  in contract and in tort.   Both are clearly linked to the supply of batch 656 and are

concerned directly or indirectly with the parties‟ business relationship.  It is clear that the words of the General Conditions are sufficient to deal with both aspects of Agrisource‟s claim against Stefes.   The evidence of Dr. Alexander, a lawyer of Cologne, Germany is that any dispute relating to the contract is able to be dealt with under the German  Code of Civil Procedure (ZPO) and  as  well  pursuant  to  the provisions of the German civil code (BGB) where Agrisource could bring both its causes of action (in contract and negligence) against Stefes in Germany.

Whether the General Conditions bind Agrisource

[35]     Agrisource‟s position is that Stefes has failed to establish that Agrisource received or accepted their terms and conditions at any time before this dispute began.

[36]     Evidence in support of this position was initially provided by Mr Haig.  He deposed that in connection with the shipment of batch 656 he cannot recall there being any terms and conditions attached to or included with the correspondence with Stefes or Gulmohar (or with the documentation that accompanied the shipment of the batch).

[37]     In  response  Mr  Rempel  of  Stefes  deposed  that  the  General  Conditions referred to in the shipping documents had already been provided to Agrisource and applied to all dealings between Stefes and Agrisource including the present contract. He said they were sent to Agrisource about six to seven years previously by post or email – he could not recall which, when Agrisource and Stefes first began to do business.

[38]     He also exhibited a copy of a letter from Harrison Stone Lawyers dated 19

April 2010, sent to him.  It noted:

Furakote Batch GVF 0656

1.We act for Agrisource... and [SEL] and write on behalf of our clients to request that Stefes meet the costs incurred in relation to Furakote batch GVF 0656.

...

3.SEL instructs us it has used Furakote for the last four to five years with no adverse effect on carrot seed performance until the current problems with batch GVF 0656...

4.        SEL instructs it  has  incurred  significant  cost...  and has  invoiced

Agrisource  for  reimbursement  of  these  costs...  in  the  amount  of

$556,675.85.

5.Agrisource  and  SEL are jointly insured  under a  general  liability policy... with QBE.  QBE has denied liability under the policy... due to its interpretation of a Product Efficacy Exclusion clause.

6.Given the evidence that the loss has been caused by a  batch of Furakote which germination testing has shown is faulty, Agrisource unfortunately needs to seek reimbursement from Stefes pursuant to the Stefes‟ General Conditions of Sale and Delivery (Stefes‟ Supply Contract) for the costs involved in satisfying a claim brought against it by SEL.   The relevant provision is clause [8.] 5 of the Stefes‟ Supply Contract.

...

[39]     In response Mr Wilson, a director and the general manager of Agrisource deposed that he did not agree with Mr Rempel‟s statement that a copy of Stefes‟ General Conditions had been sent to Agrisource.  He said that had such been sent then they would have come to his attention but he does not have any recall of receiving them.  Also he said that Mr Rempel‟s recollections were incorrect because Agrisource was not trading with Stefes six or seven years previously.

[40]     Agrisource‟s  position is based upon the proposition that it is not bound by any terms unless they are sufficiently brought to its notice beforehand.  There is no disputing this general proposition but an assessment of it requires consideration in the particular circumstances of the case.  In this case my clear preference is for the account given on behalf of Stefes. Also, in the context of the present application it is Agrisource which bears the responsibility of proof or persuasion.

[41]     Leaving aside the competing evidence between Mr Rempel and Mr Wilson as to whether Stefes‟ conditions were provided to Agrisource, those conditions applied whether Agrisource had a copy of them at the time or not.

[42]     A reasonable inference from available evidence is that those same conditions

have applied during the course of the parties‟ business relationship over a number of

years.  In the particular case the shipping documents sent to Agrisource, prior to the departure of the shipment from Freemantle for delivery in Lyttleton, noted that the sale was governed by the “General Sales Conditions of the Seller”.   Despite the specific reference in that documentation, Agrisource took no step to enquire, let alone dispute the applicability of Stefes‟ conditions.

[43]     Concerning the letter written by Harrison Stone, Mr Fraser deposed he was not aware of it and did not agree “to the Harrison Stone letter dated 19 April 2010...”. He said it was apparent the letter was sent after Agrisource had received the terms and conditions from Stefes in February 2010.  He said that Harrison Stone were not authorised  to  make  any  acknowledgment  on  behalf  of Agrisource  regarding  its contractual arrangement with Stefes.   He said Harrison Stone did not act for Agrisource in these proceedings, that instead they acted for SEL.

[44]     What Mr Fraser does not say is why, he being the general manager, the letter was sent at all by a solicitor purporting to act on behalf of Agrisource.

[45]     The acceptable evidence is that Agrisource were aware of the conditions and certainly to the extent they could have accessed them in order to challenge them if they wished, but they had not done so in relation to the 2009 shipment of batch 656, nor indeed previously during the course of the parties‟ business relationship.

Whether, because the General Conditions are binding upon Agrisource, the Courts have any ability to do other than required by the terms of those conditions

[46]     Much of the case authority referred by counsel to me addressed the balancing exercise commonly undertaken in protest to jurisdiction issues.   Few of those authorities involve cases where the parties were bound to an agreement containing an exclusive jurisdiction clause and in none of those was there a situation where the protest to jurisdiction was filed by a party joined as a third party.

[47]     For present purposes I will deal with the General Conditions as they affect the balancing exercise.  Later I will undertake the balancing exercise with a view to assessing whether that would have made any difference in the outcome.

[48]     Because of the exclusive jurisdiction clause the prima facie position is that this court lacks jurisdiction because the parties have so agreed.  Furthermore a strong case for the existence of exception circumstances is required to displace this position

- Advanced Cardiovascular Systems Inc v Universal Specialties Ltd [1].  In that case

[1] Advanced Cardiovascular Systems Inc v Universal Specialties Ltd [1997] 1 NZLR 186 at 190.

the Court of Appeal noted:

As earlier noted, cl 18 is to be construed as a provision giving exclusive jurisdiction to the Courts of California. Prima facie therefore the New Zealand Courts lacked jurisdiction to entertain the proceeding because the parties have so agreed. However it is settled law that the Court nevertheless has a discretion to exercise jurisdiction if it otherwise exists. It can also be regarded as settled law that the discretion will not be exercised unless there is a strong case or the existence of exception circumstances for denying the contractual provision its operative effect. The principle is equally applicable to an application for stay under R 477. In Society of Lloyd‟s and Oxford Member‟s Agency Limited v Hyslop [1993] 3 NZLR 135 Richardson J observed at p 142:

The existence of an exclusive jurisdiction clause places a heavy burden on the parties seeking to oppose the clause.  The Court has a discretion, a stay should be granted unless strong cause for not doing so shown by the plaintiff.

[49]     Obviously the matter of jurisdiction is for consideration having regard to the particular circumstances of the case.  However, it is clear that the balancing exercise presents a significantly greater challenge for Agrisource than would have been the case if the exclusive jurisdiction clause did not apply.

Weighing of factors

[50]     Agrisource accepts it has the onus of proving to this Court that it is before the New Zealand Courts that its case against Stefes should be heard.  Clearly it does for since the coming into force of the new High Court Rules, no obligation remains upon an overseas party to show that New Zealand is not the natural forum, or that another forum is distinctly more appropriate.  Instead it is clear from r 6.28(5)(c) that it is for the party bringing the claim to prove that New Zealand is the appropriate forum for a trial.

[51]     Agrisource‟s burden is the greater because of the exclusive jurisdiction clause which  binds  it.    In  practical  terms Agrisource  needs  to  demonstrate  there  is  a

significant advantage to be had for a New Zealand Court to hear the dispute.  The case of Rimini [2] is one where the High Court was prepared to decline jurisdiction in favour of an Australian Court, notwithstanding the parties‟ agreement provided that disputes were to be governed by New Zealand law.

[2] Rimini Ltd v Manning Management and Marketing Pty Ltd [2003] NZLR 22 [para 33].

[52]     In that case Rimini had entered into a franchise agreement in Sydney with the first defendant, an Australian company.  Rimini purported to terminate the agreement after a dispute and then brought proceedings in New Zealand claiming interim relief. Randerson J held that except for the factor of the choice of law provision in the agreement, an Australian Court was unquestionably the natural forum for disposition of the dispute.  The agreement had been made and executed in Australia and was to be performed  in  Sydney,  where the purported  termination  occurred,  and  all  the defendants resided there.

[53]     In his submissions Mr Wadsworth considered there were nine factors for consideration in the balancing exercise.   Most of those he said clearly favoured Agrisource‟s position. These (including my comments upon them) are:

1.        The location of witnesses

(a)      Because SEL‟s claim concerns an analysis of Stefes‟ product likely there will be more witnesses from New Zealand than from abroad.

(b)In my assessment that is not clearly so, and in particular if the Korean and Canadian companies are joined as parties.  Each is likely to call a witness, and evidence may also be called (or a subpoena may have

to issue to call evidence) from GVF.

(a)      Counsel considers that two witnesses would be required from New Zealand, one from Germany and one each from Korea and Canada.

(b)As noted above this estimate may be and probably will be incorrect if other parties are joined to the proceeding. Also, and because Stefes’ contract with those other parties contains an exclusive jurisdiction clause, it will conceivably be significantly more expensive for those parties to be brought to New Zealand.

3.        Enforcement of a judgment

(a)      Although a judgment against Stefes could not be enforced in New Zealand for Stefes has no presence nor assets in New Zealand, Counsel submits that any judgment could be enforced in Germany pursuant to the provisions of the Reciprocal Enforcement of Judgments Act 1934.

(b)It appears the provisions of that Act do not apply to Germany.  But, even if it did it is a factor which weighs against Agrisource rather than for it.

4.        Whether either party is unduly disadvantaged

(a)      Clearly Agrisource would be advantaged.  Counsel submits that notwithstanding unless the advantage is unfair to Stefes then it should not count against Agrisource.

(b)      Clearly a New Zealand trial would be more expensive for Stefes. Also it is likely there will be complexities in compelling other parties to attend court in New Zealand, particularly if those parties insist their contracts bind them to the jurisdiction of the German Courts.

5.        Arranging evidence

(a)      Counsel submits this ought to present no difficulties for Stefes for its involvement in the transaction was little more than as an organiser of supply i.e. it had no function in the manufacture of the product or even (effectively) as a certifier of product.

(b)I think that submission also ignores the impact of bringing other parties to a proceeding in New Zealand.

6.        Where the product was to be used

(a)      The claim is based upon the suitability of a product delivered to New Zealand for use in New Zealand in circumstances where it is readily foreseeable that any product harm would occur in its use in New Zealand.

(b)I agree with counsel that this is a factor in favour of the choice of New Zealand Courts.

7.        The amount in dispute

(a)      It is for the sum of $556,675.85 and is not insubstantial. (b)    A claim for a significantly less amount would have

operated to Agrisources’ disadvantage.

(a)      Counsel submits there is a real and substantial connection to New Zealand.  Conversely, that there is a limited connection with Germany.

(b)That may be so but Stefes is an international company whose business dealings with its suppliers worldwide have deliberately been focussed upon Germany as its base. It has gone to the trouble to exercise control over where and by which law its disputes shall be resolved.

It is overstating things then to assert this case has little connection with Germany.

9.Where might the case be more suitably heard having regard to the interests of the parties, in the interests of justice

(a)      Counsel submits this consideration favours a New

Zealand Court hearing.

(b)      Undoubtedly the multitude of considerations are many.

SEL and Agrisource appear to have a close business relationship – they share common insurance and (until this proceeding), common lawyers.

Agrisource is a defendant because it supplied a product which it had no part in producing.  It would be put to significant expense if it was required to pursue its claim against Stefes in a German Court – certainly at much greater cost than if it was able to pursue its claim in New Zealand. Also, it could face the risk of a judgment being entered against it in New Zealand upon SEL’s claim well before a claim against Stefes in Germany

was concluded.  One assumes that cost and delay

considerations would not likely adversely affect Stefes as much.

[54]     As well there are other considerations.  Agrisource contends that there is a risk of contrasting verdicts if SEL‟s claim against it is heard in New Zealand and its claim against Stefes is heard in Germany.  That is so, but the same risk applies if the claim against Stefes is heard in New Zealand and the claims against the Korean and Canadian companies has to be heard in Germany.  It is most unlikely that the issues raised by SEL‟s proceeding will not ultimately involve also a determination about whether there is liability of the part of the Korean and Canadian chemical suppliers.

[55]     Another issue for Agrisource concerns the terms of its contract with Stefes for the delivery of product to New Zealand.  As earlier noted the product was delivered CIF Lyttleton.  Usually by the terms of a CIF delivery, delivery is effected when the goods are loaded onboard ship at the port of shipment.  At that time the supplier‟s obligations are at an end.  Accordingly in this case it is arguable that both causes of action alleged against Stefes occurred in the port of shipment, being Freemantle in Australia – not in New Zealand.   It is just another matter to be weighed in the balance of considerations.

Conclusions

[56]     The Court must be weary of giving undue weight to considerations affecting other parties, or, as in this case to the interests of parties whom Stefes would almost certainly join in its defence of Agrisources‟ claim.  In this case the interests of those other parties cannot be ignored, nor can the fallout that will likely occur concerning the exclusive jurisdiction clause affecting the business relationships with those other parties.

[57]     Agrisources‟ case concerns an overseas product supplied to it for use in New Zealand.   In that view of matters it appears unreasonable to require Agrisource to prosecute its proceeding on the other side of the world.  But, that is what Agrisource agreed to do when it purchased the product, and when it knew that product was

being sourced from other countries for the mixing of and shipping from Freemantle, Australia.

[58]     It knew of those factors and of the General Conditions affecting its contract of supply because that is an appropriate inference to draw from the evidence available.

[59]     It is in that context and because of that concession there is an insufficiency of weighing factors that could justify a New Zealand Court assuming jurisdiction in the circumstances.  There is not a sufficiently strong or exceptional case to persuade this court otherwise.

[60]     The case is not just about convenience and expense, or of the availability of witnesses, or of advantage or enforcement capabilities.  It is not just about a discreet contract for the delivery of a chemical compound to treat carrot seeds.  Rather, in a global business context it is about a relationship carefully controlled, where the choice of law and jurisdiction is agreed, and where there cannot be any question about the competence of or the resolution processes available to ensure a proper and just outcome.

[61]     There is too little in the balancing of usual considerations to encourage this Court to ignore the agreement the parties were bound to.  The statement of the Court of Appeal in the penultimate paragraph in the Advanced Cardiovascular Systems Inc case[3], is apposite:

[3] (Supra)

A careful weighing of all factors does not persuade us that there are exceptional circumstances or strong grounds which would justify the jurisdictional provisions of cl 18 being defeated.  The choice of forum was negotiated by the parties as part of their overall bargain.  It was one of the conditions accepted by USL when it obtained distribution rights to the ACS products.  It can be observed that one of the effects of the clause is to deprive USL of the right to use the summary judgment procedure available in this jurisdiction.  The desire of ACS to ensure contractual procedure available in this  jurisdiction.    The  desire  of ACS  to  ensure  contractual  disputes  are resolved within the nominated jurisdiction is understandable, and there is nothing unreasonable in enforcing that right in the present circumstances. Accordingly  cl  18  of  the  agreement  should  be  given  effect,  with  the

consequence that the jurisdiction of the New Zealand Courts to hear and determine the proceeding is necessarily removed.

[62]     Even if there was no binding agreement containing an exclusive jurisdiction clause, it is my assessment that the other weighing factors did not necessarily favour one party over the other, with the consequence that I would have considered Agrisource had not satisfied the onus upon it to show that New Zealand was the preferred forum.

Decision

[63]     The application to strike out the Protest to Jurisdiction, is dismissed.   It follows that there will be an order dismissing Agrisource‟s claim against Stefes.

[64]     Costs are fixed on a 2B basis to be paid by Agrisource to Stefes.

Associate Judge Christiansen