Professional Documents
Culture Documents
VOTH. APPELLANT;
APPLICANT,
AND
H. C. OF A. Practice Action Stay Action brought in Australian State for damages for
1990. negligent accounting advice given in foreign country Loss suffered there and
in Australian State Place of commission of tort Forum non convenience
April 10;
Dec. 13. Appropriate forum.
A company incorporated and resident in New South Wales sued an
Mason C.L. accountant, a citizen of the United States of America practicing in Missouri, in
Brennan.
Deane. the Supreme Court of New South Wales for damages for professional
Dawson. negligence. The company had sold products to a related company in the United
Toohey and
Gaudron JJ. States which became obliged to pay it interest.
Under United States tax law the New South Wales Company was liable to
Pay income tax on the interest and the related company was obliged to deduct and
withhold the tax. The related company did not make the required deductions as a
result of which it had to pay penalty interest to the United States revenue. The New
South Wales Company claimed that it was liable to reimburse the related company
for the penalty interest and that if Had paid more Australian tax than it would have
paid if the withholding tax had been paid on time The company contended that the
accountant had acted without due care in failing to draw the attention of the related
company, for which he acted, and of the New South Wales company, to the
withholding tax requirement.
Held, (1) by Mason C.J., Deane, Dawson, Toohey and Gaudron JJ., Brennan
J. contra, that the act on which the company relied for its cause of action was
committed in Missouri, and thus the tort, if there were one, was committed
there. Accordingly, even if the matter were to be litigated in Australia, the
accountant would be liable only if he were liable under the law of Missouri.
Jackson v. Spittall (1870), L.R. 5 C.P. 542 and Distillers Co. v. Thompson,
[1971] A.C. 458, applied.
Diamond v. Bank of London and Montreal, [1979J Q.B. 333 and the
"Albaforth, [1984] 2 Lloyds Rep. 91, considered.
(2) By Mason C.J., Deane, Dawson, Toohey and Gaudron JJ., Brennan J.
dissenting, that the action should be stayed, by Mason C.J., Deane, Dawson and
Gaudron JJ. On the ground that New South Wales was clearly an inappropriate
forum in which to permit the action to
177
171 C.L.R.] OF AUSTRALIA. 539
Proceed, and by Toohey J. on the ground that Missouri was the more appropriate H. C. OF A.
forum. 1990.
Per Mason CJ. Brennan, Deane, Dawson and Gaudron JJ. (1) A defendant
VOTH
will ordinarily be entitled to an order for a stay or the dismissal of an action if
V.
he persuades the local court that, having regard to the circumstances of the MANILDRA
particular case and the availability of a foreign tribunal to whose jurisdiction the FLOUR
defendant is amenable and which would entertain the matter, it is a clearly MILLS
inappropriate forum for the determination of the dispute. The question whether PTY. LTD.
the local court is a clearly inappropriate forum requires attention to be directed
to the inappropriateness of the local court and not the appropriateness or
comparative appropriateness of the suggested foreign forum. *
Oceanic Sun Line Special Shipping Co. Inc. v. Fay (1928), 165 C.L.R. 197,
at pp. 247-248, applied.
(2) In the application of the clearly inappropriate forum test the discussion
by Lord Goff in Spiliada Maritime Corp. v. Cansulex Ltd., [19871 A.C. 460, at
pp. 477-478, 482484, of relevant connecting factors" and a legitimate personal
-v
or juridical advantage" provides valuable assistance. '*
Per curiam. The same principle should be applied to applications for leave to
serve originating process outside the jurisdiction, applications to set aside
service and applications for a stay of action.
Maritime Insurance Co. Ltd. v. Geelong Harbor Trust Commissioners
(1908), 6 C.L.R. 194; Lewis Construction Co. Pty. Ltd. v. Tichauer S.A., (19661
V.R. 341; Cope Allman (Australia) Ltd v. Celermajer (1968), 11 F.L.R. 488;
Spiliada Maritime Corp. v. Cansulex Ltd., [1987] A.C. 460; Anglo- Australian
Foods Ltd v. Von Planta (1988), 20 F.C.R. 34; and Green v. Australian
Industrial Investment Ltd (1989), 90 A.L.R. 500, considered.
Decision of the Supreme Court of New South Wales (Court of Appeal): Voth
v. Manildra Flour Mills Pty. Ltd (1989), 15 N.S.W.L.R. 513, reversed.
178
540 HIGH COURT [1990.
H. C. OF A. Dismissed (1). The defendant appealed, by special leave, to the High Court
1990.
against the judgment of the Court of Appeal.
179
171 C.L.R.] OF AUSTRALIA. 541
396 (18).] The Maritime Insurance test is biased in favor of the plaintiff. H. C. OF A.
1990.
Spiliada gives a fair recognition to the interests of both parties. There
should not be any preference for either. Maritime Insurance is also biased VOTH
in favor of local residents, and that preferential treatment is undesirable. v.
MANILDRA
Spiliada does not involve any comparison of the advantages to the parties FLOUR
of litigation in one place or another. It would be impossible and MILLS
PTY. LTD.
undesirable for the court of the forum to engage in that exercise. Nor does
Spiliada involve a discretion to decline jurisdiction. Where, as in most
cases, a plaintiff must serve out of the jurisdiction, it cannot be said that
he has a right to be heard in the forum. He must seek the indulgence of the
local court to be heard. To grant a stay in that context is not to decline to
exercise a jurisdiction which has been conferred on the plaintiff as of right.
The plaintiff is not deprived of the right to a hearing, because ex hypothesis
there is another available forum. Spiliada is no more objectionable on
grounds of uncertainty than any competing approach. Even if Spiliada is
not to be adopted in relation to stay applications, it should be adopted in
applications to serve outside the jurisdiction and to set aside such service.
[He referred to George Monro Ltd. v. American Cyanamid and Chemical
Corp. (19); The Hagen (20); Freckmann v. Pengendar Timur Sdh Bhd
(21); Mackender v. Feldia A.G. (22); Rosier v. Hilbery (23); Maharanee
of Baroda v. Wildenstein (24); Cope Allman (Australia) Ltd. v. Celermajer
(25); Holmes v. Holmes (26); Saipem S.p.A. v. Dredging V02 B.V. (27);
and The Waylink (28).] In any event, the appellant is entitled to a stay
on the clearly inappropriate forum test espoused by Deane J. in Oceanic
Sun Line (29). The substantive law to be applied is Missouri law. The
alleged tort is a foreign tort. To succeed in a New South Wales court the
plaintiff must show that the events would give rise to civil liability in
Missouri: Phillips v. Eyre (30). A tort is a foreign tort if the act complained
of occurred outside the jurisdiction, notwithstanding the suffering of
damage in the jurisdiction or somewhere else: George Monro Ltd. v.
American Cyanamid and Chemical Corp. (31); Cordova Land Co. Ltd. v.
Victor Brothers Inc. (32); Distillers Co. v. Thompson (33); Diamond v.
Bank of London and Montreal (34); Castree v. E. R. Squibb &
180
542 HIGH COURT [1990.
HC
990 (35); Cordoba Shipping v. National State Bank (36); Metall
und Rohstoff A.G. v. Donaldson Lufkin & Jenrette Inc. (37); Buttigeig v. Universal
Terminal and Stevedoring Corp. (38); Lewis Construction Co. Pty Australian. Ltd. v.
Tichauer S.A. (39); Hall v. A.C.T. FLOUR Electricity Authority (40). The acts that gave
rise to the plaintiffs PTY* LTD grievance were the giving of advice in Kansas City
and the omission
____ To give advice to the client there. The tort was in substance
Committed there even though the consequences might flow to Australia.
Missouri law relating to professional negligence is more restrictive to
plaintiffs than Australian law: Robins Dry Dock v. Flint (41); East River
Steamship Corp. v. Transamerica Delaval Inc. (42). [He also referred to
Carparo Industries v. Dickman (43); Hawkins v. Clayton (44) and San
Sebastian Pty Ltd. v. The Minister (45).] The fact that a New South Wales
court would have to apply Missouri law makes New South Wales an
inappropriate forum. Evidence relating to breach of duty will have to
come from professionals in America, again making New South Wales a
clearly inappropriate forum. [He also referred to Bankinvest A.G. v.
Seabrook (46).]
(35) [1980] 1 W.L.R. 1248; [1980] (44) (1988) 164 C.L.R. 539.
2 All E.R. 589. (45) (1986) 162 C.L.R. 340.
(36) [1984] 2 Lloyds Rep. 91. (46) (1988) 14 NS.W.L.R. 711.
(37) 11990] 1 Q.B. 391. (47) [1971] A.C. 458.
(38) [1972JV.R. 626, at p. 629. (48) [1979] 1 Q.B., at pp. 345-346.
(39) [19661 V.R. 341. (49) [1984] 1 Lloyds Rep. 91.
(40) [1980] 2 N.S.W.L.R. 26. (50) [1987] A.C. 460.
(41) (1927) 275 U.S. 303. (51) (1988) 165 C.L.R., at pp. 238-
(42) (1986) 476 U.S. 858. 239,241,252-253,265.
(43) [1990] 2 A.C. 605.
181
171 C.L.R.] OF AUSTRALIA. 543
test involves a consideration of the merits and demerits of the other
1990
court with a view to determining its appropriateness (52); The. 1 "Abidin Dover
{53); Amin Rasheed Shipping Corp. v. Kuwait Insurance Co. (54). That is an
inappropriate inquiry, with potential for embarrassment. [He referred to Forum
Non Conveniens: A View from the Shop Floor, Law Quarterly Review, vol. 104
(1988),
554, at pp. 569*571.] A preferable course is to see whether the ______________
Australian court, the nature of which is known, is inappropriate.
Maritime Insurance (55) was not overruled in Oceanic Sun Line. It
represents one of a number of tests that might be adopted. The various
States and Territories should be left to decide their own test for staying
proceedings. This has been done in New South Wales (Rules of the
Supreme Court, Pt 10.6A(2) (b)) and Victoria (Rules of the Supreme
Court, r. 7.05(2)(b)). The matter is one of policy which is inappropriate
for this Court to decide. The United States test is closer to Oceanic Sun
Line than to Spiliada: Koster v. Lumbermens Mutual Casualty Co. (56);
Gulf Oil Corp. v. Gilbert (57); Paper Operations_ Consultants
International Ltd v. S.S. Hong Kong Amber (58); Piper Aircraft Co. v.
Reyno(59). The Court should adopt the clearly inappropriate forum test
or the perhaps stricter test in Maritime Insurance. On either test the Court
of Appeal was correct. We adopt the reasons of Gleeson C.J. why New
South Wales was either an appropriate forum or a not clearly
inappropriate one. Residence of a plaintiff in the territory of a forum is a
factor indicating that the forum is appropriate: Burt v. Isthmus
Development Co. (60); Paper Operations Consultants International Ltd
v. S.S. Hong Kong Amber (SZ)\ Piper Aircraft Co. v. Reyno(6\).
182
544 HIGH COURT (1990.
H. C. OF A. Gaudron JJ.; Wilson and Toohey JJ. dissenting) declined to apply in
1990.
Australia the principles governing the doctrine of forum non conveniens
VOTH stated by the House of Lords in Spiliada Maritime Corp. v. Cansulex Ltd.
V.
MANILDRA
(63).
FLOUR
MILLS The nature of the respondents' case and the history of the proceedings in
PTY. LTD.
the courts below
Mason C.J. The facts are succinctly related in the judgment of Gleeson CJ. in the
Deane J.
Dawson J. New South Wales Court of Appeal. The two respondents (plaintiffs) are
Gaudron J.
companies incorporated and resident in New South Wales. The appellant
(defendant) is an accountant who is and was at all material times a citizen
and resident of the United States of America, practicing in the State of
Missouri. He is a member of a partnership named Deloitte Haskins & Sells.
It is a firm which is separate and distinct from an Australian firm of
accountants of the same name, although some form of association exists
between the two firms.
- The respondents sue for damages for professional negligence. They assert
that the Supreme Court of New South Wales has jurisdiction to entertain
the action because the respondents suffered some or all of the relevant
damage in that State. The appellants contention that the Supreme Court of
New South Wales lacked jurisdiction to entertain the action, which was
rejected both at first instance and by the Court of Appeal, is no longer
pursued in this Court. Accordingly, we need not concern ourselves with
what the Court of Appeal had to say on that topic. It is sufficient to say that
the proceedings fall within Pt 10, r. l(l)(e) of the New South Wales
Supreme Court Rules, which provides for the service of originating process
outside the State where the proceedings, wholly or partly, are founded on,
or are for the recovery of damages in respect of, damage suffered in the
State caused by a tortious act or omission wherever occurring: see
Flaherty v. Girgis (64).
On 17 March 1986 an order was made giving the respondents leave to
serve the statement of claim outside the State of New South Wales and in
the State of Missouri, United States of America. The appellant, having filed
a conditional appearance to that statement of claim, moved to have the
statement of claim or the service of it set aside and sought an order
discharging the earlier order giving leave to serve outside the jurisdiction
and, in the alternative, an order that the proceedings be stayed pending
determination of the issues between the parties in a court of appropriate
jurisdiction in the United States. Before the motion was
183
171 C.L.R.1 OF AUSTRALIA. 545
184
546 HIGH COURT [1990.
H. C. OF A. The respondents claim that, under the Australian revenue laws, had
1990.
M.M.C. accounted to the I.R.S. for withholding tax under the Internal
VOTH Revenue Code, the interest which M.M.C. paid to the first respondent
V.
MANILDRA
would have constituted exempt income in the hands of that respondent.
FLOUR As it happened, M.M.C. did not make the required deductions and
MILLS
PTY. LTD.
payments of withholding tax between 1976 and 1983. The respondents
assert that this omission was the fault of the appellant or those for whom
Mason CJ. he was responsible. In 1984 the appellant's firm discovered the omission.
Deane J.
Dawson J. It was decided that the withholding tax and penalty interest should be paid
Gaudron J.
to the I.R.S.
The first respondent's case is that the appellant, or those for whose
conduct he is responsible, acted without due care in failing to draw the
attention of M.M.C., and of the other companies in the Manildra Group, to
the requirement to pay withholding tax on M.M.C.s interest payments to
the first respondent. That omission had two relevant consequences for the
respondents in relation to .liability to Australian income tax. First, the
interest in question was treated as assessable income of the first respondent,
when it should have been treated as exempt income. This resulted in an
overpayment by the first respondent which, it is alleged, is irrecoverable.
Secondly, the second respondent in some of the years in the relevant
period, if matters had been dealt with properly, would have shown tax
losses and would have been able to carry those losses forward into future
years. It is also alleged that the overstatement of income resulted in the
distribution to shareholders of more than would otherwise have been
distributed by way of dividend.
As Gleeson C.J. expressed it, the respondents allege that the appellant
owed a duty of care to the first respondent in respect of the services which
he rendered to M.M.C. and that his conduct fell below the professional
standards appropriate to that duty of care, resulting in the damage already
described. Apart from that damage, the respondents allege that the first
respondent incurred liability to the LRJ5. for penalty interest. The
contention is that both M.M.C. and the first respondent became liable to
pay the penalty, that M.M.C. discharged the liability by making the
payment, and that the first respondent thereupon became liable to
reimburse M.M.C., the withholding agent", and did so by crediting
M.M.C. in the books of the first respondent with the amount in question.
The respondents concede that this part of the first respondent's damage
should be treated as having been suffered in the United States.
Relevant to the claim that part of the respondents' damage was suffered
in New South Wales is the claim that the first respondent
185
171 C.L.R.J OF AUSTRALIA. 547
relied upon advice given by the appellant, in connexion with the affairs of H. C. OF A.
1990.
in preparing its own accounts and income tax
returns, and that damage resulted. VOTH
V.
M.M.C. was at all material times a wholly-owned subsidiary of the MANILDRA
second respondent. It is on that foundation that the second respondent FLOUR
MILLS
claims that the appellant owed a duty of care to it. Particulars of the PTY. LTD.
damages claimed by the second respondent for breach of that duty are set
out in a document entitled Explanation of Losses Claimed by the Second Mason CJ.
Deane J.
Named [Respondent]. It states: Dawson J.
(Item 1) $196,414 Income tax overpaid. At all material
times the [second respondent] was the holding company of the
members of the Manildra Group of Companies. In the years 1976 to
1984 the affairs of the members of the group were arranged so as to
(where possible) minimize the income tax payable by group
members. If the [second respondent] had been informed prior to 1
December 1983 that interest payable by M.M.C. was exempt income
for the purposes of the Income Tax Assessment Act 1936, the [second
respondent] and its advisors would have caused advances to be made
to M.M.C. by companies in the group which could have taken
advantage of such exempt income namely companies which had no
carry forward tax losses against which such exempt income was
required to be set off pursuant to s. 80(2) of the Income Tax
Assessment Act. The loss to the [second respondent] as a result of
such steps not having been taken amounted to $196,414 such loss
representing the amount which would have been claimed by the
[second respondent] by way of dividends, in respect of which a
rebate would be obtained from its subsidiaries had such steps been
taken [sic]. Had these steps been taken, the assessable income of
group members would have been reduced as would the group income
taxes paid. The sum of A$196,414 represents the difference between
the taxes actually paid by members of the group in the relevant year
(excluding die [first respondent]) and the taxes that would have been
paid had the steps referred to above been taken.
(Item 2) $110,097 Because of the overpayment of income taxes
of A$196,414 in the years 1976 to 1984, the [second respondent] as
group holding company incurred interest on funds made available to
pay such taxes which were unnecessarily paid. The sum of
A$110,097 is the cost of providing the income taxes overpaid
calculated on the bank overdraft rates applicable to the (second
respondent] over the period from 31 March 1978 to 30 September
1985.
(Item 3) $185,955 of the exempt income received in 1979 to
1983 $404,249 was offset against losses incurred by the [first
respondent]. Had such losses not been so offset but made available
to other companies in the group pursuant to s. 80G of the Income
Tax Assessment Act the group taxation liability would have been
reduced by $185,955. This amount would
186
548 HIGH COURT (1990.
otherwise have been available to the [second respondent] in a
similar fashion to the sum referred to in Item 1
The statements of the respective damage suffered by the two respondents may
involve an element of overlapping or alternative
claims, but it is unnecessary for present purposes to be precise about the matter.
The decision at first instance (Clarke J.)
Clarke J. applied the principles expounded by the House of Lords
in MacShannon v. Rockware Glass Ltd. (66) as expressed by Yeldham J. in
Garseabo Nominees Pty. Ltd. v. Taub Pty. Ltd. (67), in these terms:
(1) that a mere balance of convenience is not a sufficient ground
for depriving a plaintiff of the advantage of prosecuting his action
in the forum, if it is otherwise properly brought; (2) that in order to
justify a stay (a) the defendant must satisfy the Court that there is
another forum, to whose jurisdiction he is amenable, in which
justice can be done between the parties at substantially less
inconvenience and expense; (b) and such stay must not deprive the
plaintiff of a legitimate personal or juridical advantage which would
be available to him, if he invoked the jurisdiction of the court in
which the stay is sought.
Applying these principles, Clarke J. concluded that, although Missouri
was the natural forum, the respondents had reasonable justification for
resorting to the local jurisdiction. After reviewing the circumstances, his
Honor went on to decide that the factors in favor of the maintenance of
the litigation in Missouri were not such as obviously to outweigh the
factors in favor of allowing the litigation to remain in New South Wales,
and to determine, alternatively, that the granting of a stay would operate
to deprive the respondents of a legitimate juridical advantage in relation
to the measure of damages and the awarding of costs in Missouri.
187
171 C.L.R.] OF AUSTRALIA. 549
appropriate forum for the trial, but to establish that there is another H. C. OF A.
1990.
available forum which is clearly or distinctly more appropriate than the
English forum. His Lordship described the natural forum as being VOTH
that with which the action had the most real and substantial connexion V.
MANILDRA
and identified the relevant connecting factors pointing to the existence FLOUR
of some other forum as the natural forum as including not only factors MILLS
PTY. LTD.
affecting convenience or expense (such as availability of witnesses), but
also other factors such as the law governing the relevant transaction ... , Mason C.i.
Deane J.
and the places where the parties respectively reside or carry on business Dawson J.
Gatubon J.
(70). In the event that there is no other available forum which is clearly
more appropriate for the trial of the action, the court will ordinarily
refuse a stay. If, however, there is some other available forum which
prima facie is clearly more appropriate to the trial of the action, it will
ordinarily grant a stay unless there are circumstances by reason of which
justice requires that a stay should not be granted.
Subsequently, and before the appeal was heard by the Court of Appeal,
the judgment in Oceanic Sun (71) was also delivered. In that case, the
respondent, a resident of Queensland, sued the appellant in the Supreme
Court of New South Wales for damages for negligence in respect of
personal injuries sustained whilst he was a passenger on a tourist ship in
Greek waters. The appellant was a company incorporated in Greece and
was the owner and operator of the ship, which was registered in Greece.
Its port of both departure and destination was also in Greece. The
respondent had initially sued the appellant in New York where the action
had been stayed on the ground of forum non conveniens. The respondent
then obtained leave from the Supreme Court of New South Wales to
serve his writ outside the jurisdiction on the basis that he had suffered
injury within New South Wales caused by the tort. The contract of
carriage was entered into in that State. In these circumstances the
majority held that the primary judge's refusal to grant a stay and dismiss
the action on the ground of forum non conveniens, upheld by the New
South Wales Court of Appeal, should stand. Although the minority
considered that Spiliada should be followed, with the consequence that
a stay should be granted and that Greece was the natural and most
appropriate forum, the majority declined to follow the approach adopted
in Spiliada.
188
550 HIGH COURT [1990.
H. C. OF A. The decision of the Court of Appeal in this case In the Court of Appeal in
1990.
the present case, Gleeson C.J. and McHugh J.A. concluded that the
VOTH majority approach in Oceanic Sun required refusal of the stay. Gleeson
v.
MANILDRA
C.J. observed (72) that the majority re-asserted what had long been
FLOUR regarded as the law in this country and cited the following passage from
MILLS
PTY. LTD. the judgment of Deane J. in Oceanic Sun (73):
A party who has regularly invoked the jurisdiction of a
Mason C.J. competent court has a prima facie right to insist upon its exercise
Deane J.
Dawson I.
and to have his claim heard and determined ... In this country,
Gaudion J. [certain] special categories of case have not traditionally
encompassed a general judicial discretion to dismiss or stay
proceedings in a case within jurisdiction merely on the ground that
the local court is persuaded that some tribunal in another country
would be a more appropriate forum.
189
171 C.L.R.] OF AUSTRALIA. 551
[I]t cannot be denied that, whatever the substance of the claim H. C. OF A.
might ultimately be shown to be, the claim as pleaded is based at 1990.
least in large part upon negligent representations received and acted
VOTH
upon in New South Wales and causing damage here. To describe V.
what is involved as a foreign tort7 is at the very least a dangerous MANILDRA
over-simplification, and a description of the State of Missouri as FLOUR
the natural forum is not easy to reconcile with what Goff L.J. said MILLS
PTY. LTD.
in [The Albaforth"(77)].
Gleeson C.J. also noted that there was a further dimension to the case Mason C.J.
Deane J.
arising out of the circumstance that it involved an exercise of the Dawson J.
Supreme Courts extended, assumed or exorbitant jurisdiction in Gaudron J.
that the respondents were given leave to serve the writ out of the
jurisdiction. However, it did not become material for his Honour to
explore this matter because the appellant did not contend before the
Court of Appeal that there was any material difference between the test
to be applied in considering his application for a stay of proceedings
based upon considerations of forum non conveniens and that to be
applied in considering his application .directed at setting aside the grant
of leave to serve out of the jurisdiction.
For somewhat similar reasons, McHugh J.A. considered that the
appellant had failed to establish that the Supreme Court of New South
Wales is so inappropriate or unsuitable for determining the action that
it would work a serious injustice (78) on the appellant in the sense
explained by Deane J. in Oceanic Sun (79). His Honour noted that the
primary judge had found that the institution of the proceedings in New
South Wales gave the respondents two legitimate or juridical advantages
which they would not have if the action was heard in Missouri. His
Honour was of the view that neither New South Wales nor Missouri was
the exclusive natural forum.
Kirby P., dissenting, made plain his personal preference for the
Spiliada test but accepted the appropriate test to be that stated by Deane
J. in Oceanic. Acknowledging that sensitivity to what is clearly
inappropriate will necessarily differ from one judge to another, his
Honour held that, on the facts of this case, it was clearly inappropriate
that the respondent be permitted to invoke the jurisdiction of the
Supreme Court of New South Wales.
(77) 11984] 2 Lloyds Rep. 91. (79) (1988) 165 C.L.R. 197.
(78) (1989) 15 N.S.W.L.R., at
p. 540.
190
552 HIGH COURT [1990.
H. C. OF A. The issue in this Court
1990.
The appellant's case in this Court is that Oceanic Sun should be
VOTH reconsidered, that the approach accepted in Spiliada should be adopted on
v.
MANILDRA
the stay application and that in any event that approach should be adopted
FLOUR in applications for leave to serve originating process outside the
MILLS
PTY. LTD.
jurisdiction and in applications to set aside service so made. Alternatively,
the appellant submits that, even on the clearly inappropriate forum" test,
Mason CJ. the appellant is entitled to a stay.
Deane J.
Dawson J. The absence of a clear majority in Oceanic Sun for the adoption of a
Gaudron J.
particular principle or a set of particular principles governing the grant or
refusal of a stay led Wilson and Toohey JJ. To observe (80): ~
It is apparent that the decision of the Court, while resolving the
immediate dispute between the parties, does not yield a precise and
'authoritative statement of the principles that should be applied in
dealing with an application to stay proceedings. That statement must
await another day.-
Since their Honours made that statement, applications for a stay have
continued to come before the courts, at least three of them reaching an
intermediate court of appeal: see Wallace, Conflict of Laws, Annual
Survey of Australian Law 1989, p. 197, n. 39. Although the courts in these
cases have applied the clearly inappropriate forum test, the application
of that test has given rise to disagreement and disconformity, particularly
in cases where leave has been granted to serve originating process outside
the jurisdiction: compare, e.g., the judgment of the Full Court of the_
Supreme Court of Western Australia m Freckmann v. Pengendar Timur
Sdn Bhd (81) with that of Gleeson C.J. in the Court of Appeal in this case.
In these circumstances it has become desirable that we reconsider the
problem generally and, to enable that reconsideration to take place, the
matter has been fully argued. Moreover, die divergence of opinion
manifest in Oceanic Sun makes it important that this Court by its decision
in this case enunciate
Authoritatively the principles and criteria to be applied by
Australian courts in future cases. With that end in view, we have
put aside individual differences of emphasis in order to participate in this
majority judgment! "
191
171 C.L.R.1 OF AUSTRALIA. 553
majority reasoning in Oceanic Sun. According to the appellant's H. C. OF A.
1990.
argument, Maritime Insurance rested simply on an acceptance of what
Sir Gorell Barnes P. had said in Logan v. Bank of Scotland (No. 2] (82), VOTH
V.
as elaborated by Warrington J. in Egbert v. Short (83). The appellant MANILDRA
further submits that Logan has been discarded in England in the course FLOUR
MILLS
of the reformulation of the relevant principles undertaken by the House PTY. LTD.
of Lords, beginning with The Atlantic Star" (841. continuing through
MacShannon and The Abidin Dover (85) and ending, for the time Mason C.J.
Deane J.
being at any rate, with Spiliada. Dawson J.
Gaudnxi J.
It must be acknowledged that the judgment of Griffith C.J. (with whom
Barton, OConnor and Higgins JJ. agreed) in Maritime Insurance
proceeded upon an acceptance of Logan which itself reflected the
principles established by the course of judicial decisions in England in
the nineteenth century. It must also be acknowledged that the approach
for which Logan stands as authority is, as the appellant contends, no
longer received doctrine in England. However, in Australia, the authority
of Maritime Insurance has not been undermined by any comparable
development. Indeed, Gibbs J. in Cope Allman (Australia) Ltd. v.
Celermajer (86) applied Maritime Insurance and, in refusing a stay,
observed:
However, the question that I am bound to pose to myself is not
simply, Which is the more convenient forum? The principles to
be applied in such a case as this were laid down by the High Court
in Maritime Insurance Co. Ltd. v Geelong Harbor Trust
Commissioners (87). At p. 198 Sir Samuel Griffith, whose
judgment was concurred in by the other members of the court, said:
I will read one or two passages from the judgment of the President,
Sir Gorell Barnes, in which the other members of the Court of
Appeal concurred, in Logan v. Bank of Scotland [No. 2). He said:
The court should, on the one hand, see clearly that in stopping an
action it does not do injustice, and, on the other hand, I think the
court ought to interfere whenever there is such vexation and
oppression that the defendant who objects to the exercise of the
jurisdiction would be subjected to such injustice (1 interpolate
there the words supplied by Warrington J. in Egbert v. Short) in
defending the action that he ought not to be sued in the court in 4
which the action is brought, to which injustice he would not be
subjected if the action were brought in another accessible and
competent court,
192
554 HIGH COURT [1990.
H. C. OF Before I may decline to exercise jurisdiction and deny to the
A. plaintiff its prima facie right to proceed in this Court I must be
1990.
satisfied that there would be something amounting to vexation,
VOTH
V.
oppression or injustice to the defendants. I am not so satisfied.
MANILDRA True it is that, prior to Oceanic Sun, there were some decisions at first
FLOUR
MILLS
instance in which judges applied the English cases. Nonetheless, it
PTY. LTD. remains correct to say that Gibbs J.s judgment has been generally
considered to reflect what the law of Australia was before Oceanic Sun.
Mason CJ.
Deane J. There may, however, have been a different understanding in Victoria as
Dawson I.
Caudron J. a result of the decision of Hudson J. in Lewis Construction Co. Pty. Ltd.
v. Tichauer S.A. (89), where his Honour applied the more appropriate
forum test in refusing an application to set aside service outside the
jurisdiction.
Of course, it is a rather artificial and arid exercise to look at Maritime
Insurance, a decision now eighty-two years old, in isolation, for the
purpose of deciding whether it should be overruled or discarded so that
we can start with a clean slate. The concepts referred to in the judgment
of Griffith C.J. and in the judgment of Sir Gorell Barnes P. in Logan were
examined in Oceanic Sun, as well as in the English cases, with a view to
ascertaining whether those concepts disclosed a set of sound legal
principles or would enable such a set of principles to be evolved.
Unfortunately, that examination has generated a sharp divergence of
opinion.
193
171 C.L.R.1 OF AUSTRALIA. 555
the one hand and Deane and Gaudron JJ. on the other hand may be shortly H. C. OF A.
1990.
summarized.
(1) There was a difference of opinion about the content of the VOTH
adjectives oppressive and vexatious. Brennan J. considered that they V.
MANILDRA
should be understood in the rather strict sense stated by Lord Kilbrandon FLOUR
in The Atlantic Star {91). However, Deane J. agreed with the caution MILLS
PTY. LTD.
uttered by Lord Wilberforce in The Atlantic Star (92), against
construing oppressive and vexatious too rigidly in the context of Mason CJ.
Deane J.
dismissing or staving an action on inappropriate forum grounds. His Dawson J.
Honour said that oppressive' should, in this context, be understood as Gaudron J.
194
556 HIGH COURT [1990.
(99) (1886) 11 P.D. 176. (4) (1988) 165 C.L.R., at pp. 247
(1) [19061 1 K.B. 141, at pp. 150, 248.
151. (5) (1988) 165 C.L.R., at p. 248.
(2) [19361 1 K.B. 382, at p. 398. (6) (1988) 165 C.L.R., at p. 266.
(3) (1988) 165 C.L.R., at p. 233.
195
171 C.L.R.] OF AUSTRALIA. 557
action in the selected forum though the subject-matter of the action and H. c. OF A.
1990.
the parties have little connexion with that forum and the defendant may
be put to great expense and inconvenience in contesting the action in that VoTH
V.
forum. On the application of traditional principles, a stay would be MANILDRA
refused in such a case, notwithstanding that the selected forum was a FLOUR
MILLS
clearly inappropriate forum. Since the traditional test is apt to produce PTY. LTD.
such an extreme result, the clearly inappropriate forum test is to be
preferred to the traditional test. In this respect, it is significant that the Mason C.J.
Deane J.
traditional test is no longer applied in the United Kingdom, New Zealand, Dawson J.
Gaudron J.
Canada or the United States.
197
171 C.L.R.J OF AUSTRALIA. 559
legislative scheme providing for limited benefits and compensation for all H. C. OF A.
1990.
road accident victims from public funds.
In contrast, a conclusion that some suggested foreign tribunal is, in the VOTH
judgment of the local court, the appropriate or more appropriate forum V.
MANILDRA
necessarily involves assumptions or findings about the comparative FLOUR
claims of the competing foreign tribunal, including the standards and MILLS
PTY. LTD.
impartiality of its members. Thus, Lord Goff recognized in Spiliada (12)
that one factor to be considered in determining whether a stay should be Mason C.J.
Deane J.
granted under the Spiliada test can be the fact, if established objectively Dawson J.
by cogent evidence that the plaintiff will not obtain justice in the foreign Gaudroni.
(12) [19871 A.C., at p. 478. (15) (1988) 165 C.L.R., at pp. 252-
(13) (1988) 165 C.L.R., at p. 41. 253.
(14) (1988) 165 C.L.R., at pp. 40-
44.
198
560 HIGH COURT [1990.
and competent forum is more appropriate is to acknowledge that a court can
decline to perform its obligation to exercise jurisdiction even though it is an
appropriate or not inappropriate court. That PROPOSITION is by no means easy to
sustain as a matter of legal FLOUR principle, though we acknowledge that the
argument deriving from obligation to exercise jurisdiction has less force in its
application
to cases falling within the extended jurisdiction where the plaintiff is
required to obtain leave to serve outside the jurisdiction. The court then has a
discretion to exercise and in exercising that discretion it may have regard to
appropriate forum considerations.
Deane J. also examined the policy considerations (16) and found them
to be persuasive but not compelling. There is no point in repeating that
examination on this occasion. It is, however, necessary to deal with two
specific arguments advanced by the appellant.
The appellant argues that, as judicial comity has replaced judicial
chauvinism {The Abidin Dover (17)), the interests of justice are .best
served by staying an action in the selected forum so that it may proceed
in the more appropriate forum. But this argument has little force. In
deciding whether to grant or refuse a stay, the court does not, indeed
cannot, evaluate the justice or relative merits of the substantive laws of
the available forums (including the chosen forum). Consequently, the
argument rests on a limited notion of the interests of justice arising from
balance of convenience factors which, though relevant, have never been
regarded as decisive.
It has been urged that the Spiliada approach has been adopted not only
in the United Kingdom but elsewhere and that for this reason we should
embrace it. No doubt, if Spiliada were to enunciate a principle which
commanded general acceptance among other countries, it would
obviously be desirable in the interests of international comity that this
Court, in common with the courts of other countries, should adopt a
uniform approach. However, we are not persuaded that there exists any
real international consensus favoring a particular solution to the question.
Nor are we persuaded that any consensus exists among countries of the
common law world. For present purposes it will be sufficient to refer to
the approach taken by the Supreme Court of the United States, for this
aspect of the appellant's case centered very largely on the principles
sanctioned and applied in the decisions of that Court. Before doing so, we
should mention that the Supreme Court of Canada has not yet had
occasion to consider Spiliada. However, in
(16) (1988) 165 C.L.R., at pp. 253- (17) (1984] A.C., at p. 411.
255.
199
171 C.L.R.] OF AUSTRALIA. 561
200
562 HIGH COURT [1990.
H. C. OF A. instance dismissed the defendant's notice of motion and that decision was
1990.
affirmed by the New South Wales Court of Appeal. Neither in the Court
VOTH of Appeal nor in this Court did the defendant pursue the arguments
MANILORA
directed to the setting aside of the statement of claim or its service so the
FLOUR case was argued in both courts on the footing that the applicable test was
MILLS
PTY. LTD.
that relevant to a case where proceedings had been regularly commenced
by service which was no longer challenged. The explanation for that may
Mason CJ. have been a perception that, in circumstances where the Court was
Deane J.
Dawson J. informed in argument that the defendant company through an agent,
Gaudron J.
J.M.A. tours, carries on business in Australia and carried on business in
Australia", the defendant could, in the particular circumstances, have
been regularly served at the office of its agent which was within the
jurisdiction of the Supreme Court of New South Wales: see Oceanic Sun
(25). In that context, the Court dealt with the case on the basis upon which
it was argued, namely, that the fact that service had been effected outside
the jurisdiction was not significant for the purposes of resolving the
appeal (26).
The appellant points to a line of authority, in England tracing back to
1892, in which the courts, when dealing with questions of service outside
the jurisdiction, directed their attention to the forum conveniens and thus
applied a more appropriate forum test, similar or analogous to that
expressed in Spiliada. Thus, in Strauss and Co. v. Goldschmid (27) Fry L
J. asserted that: the convenience of the action being tried here or in the
foreign country must... be considered. Subsequently, in Rosier v.
Hilbery (28) Pollock M.R., speaking with reference to the grant of leave
to serve out of the jurisdiction, said:
The jurisdiction is discretionary, and there is no question that in
deciding whether or not it will exercise its discretion the Court pays
attention to a great number of matters, in particular it would pay
attention to what is the forum conveniens. It would have regard to
what is the substance of the matter that has to be decided. If regard
is to be had to the forum conveniens I can imagine no forum less
convenient than the Court of this country.
Later, when the St. Pierre oppressive and vexatious test was still
applied to stay applications, Edmund Davies LJ. observed in Baroda v.
Wildenstein (29) that in some areas of the law forum conveniens was a
factor likely to be of decisive importance. He gave
(25) (1988) 165 C.L.R., at pp. 199, (27) (1892) 8 T.L.R. 512, at p. 513.
202,221. (28) II925J Ch. 250, at p. 259.
(26) (1988) 165 C.L.R., at pp. 256- (29) [1972] 2 Q.B. 283, at p. 294.
257.
201
171 C.L.R.] OF AUSTRALIA. 563
as an illustration cases in which leave was sought to serve originating H. C. OF A.
1990.
process outside the jurisdiction.
Much the same approach has been evident in Australia. In Lewis VOTH
Construction (30), Hudson J., in refusing an application to set aside V.
MANILDRA
service outside the jurisdiction of originating process, applied a more FLOUR
appropriate forum test, founding his decision on more than balance of MILLS
PTY. LTD.
convenience considerations (31). The case was one in which the plaintiff,
a Victorian company, sued the defendant, a French company, for Mason CJ.
Deane J.
damages for breach of a contract made in Victoria for the supply of Dawson J.
Gaudron J.
cranes to be manufactured by the defendant in France and shipped to
Melbourne. The contract provided that the Commercial Court of Lyon
was to have exclusive jurisdiction in case of litigation. Hudson J. said
(32):
To compel the plaintiff to resort to the latter tribunal would, I think,
be likely to result in a positive injustice, having regard to what
would be involved, whereas I think no such result would be likely
as against the defendant if it were compelled to contest the case
here.
His Honour referred, inter alia, to The Fehmarn" (33) and continued
(32):
Lord Denning, in [that] case, (34) said he preferred to look to see
with what country the dispute was most closely concerned, and he
came to the conclusion that the dispute was one that properly
belongs for its determination to the courts of this country. So in the
present case I have arrived at the conclusion that the questions to be
litigated in this action are much more closely concerned with
Victoria than with France and that the action is one which properly
belongs to the courts of this State.
202
564 HIGH COURT [1990.
. ofthe chosen forum and those questions must necessarily be resolved by recourse
to the principles governing the latter question.
In any event, the procedure whereby leave is a condition
precedent to service outside the jurisdiction is of diminishing
importance. In the Supreme Courts of New South Wales, Victoria,
Queensland, Tasmania and the Northern Territory leave is no
longer uniformly required as a preliminary to the service of
originating process outside the jurisdiction: see Supreme Court
Rules 1970 (N.S.W.), Pt 10; Rules of the Supreme Court 1986
(Viet.), O. 7; Rules of the Supreme Court 1900 (Q.), O. 11; Rules of
the Supreme Court 1965 (Tas.), O. 11; Supreme Court Rules 1987
(N.T.), O. 7; cf. Supreme Court Rules 1987 (S.A.), r. 18; Rules of
the Supreme Court 1971 (W.A.), O. 10; Rules of the Supreme Court
of the Australian Capital Territory (Cth), O. 12; High Court Rules,
O. 10; Federal Court Rules, O. 8.
In the present case, the Court has before it an application to set
aside service effected pursuant to an ex parte grant of leave to serve
outside the jurisdiction. Where a case falls within a category in
which the legislature has seen fit to allow service outside the
jurisdiction if, but only if, the leave of a court is first obtained, that
court should not grant leave unless it is positively persuaded that it
should do so. Plainly, it should not be so persuaded unless the
plaintiff satisfies it that the case is of the relevant category and that
the proceedings would not be subsequently stayed as an abuse of
process on forum non conveniens grounds or for some other reason.
In such a case the onus should remain on the plaintiff on a
subsequent application to set aside the service outside the
jurisdiction. Otherwise, the ex parte order for service outside the
jurisdiction, if onus of proof were to prove decisive, would confer an
enduring advantage upon a plaintiff notwithstanding that the
expanded evidence on a contested application to set aside service
indicated that the applicant had not been entitled to that ex parte
order.
203
171 C.L.R.] OF AUSTRALIA. 565
204
566 HIGH COURT [1990.
H. C. OF A. Investment Ltd. (39) placed too much weight upon the notion that a
1990.
proceeding regularly invoked provides a prima facie right to have the
VOTH proceeding continue in that forum. That is not to deny that, in deciding
V.
MANILORA
whether it has been established that the chosen forum is clearly
FLOUR inappropriate, the extent to which the law of the forum is applicable in
MILLS
Pry. LTD.
resolving the rights and liabilities of the parties is a material
consideration. In this respect Gaudron J. stated in Oceanic Sun (40), as a
Mason CJ. qualification to her endorsement of the view of Deane J., that the selected
Deane J.
Dawson J. forum should not be seen as an inappropriate forum if it is fairly arguable
Gaudron J.
that the substantive law of the forum is applicable in the determination of
the rights and liabilities of the parties. We agree with Gaudron J. that the
substantive law of the forum is a very significant factor in the exercise of
the courts discretion, but the court should not focus upon that factor to
the exclusion of all others.
205
171 C.L.R.J OF AUSTRALIA. 567
It was held in Jackson v. Spittall (44), that the question whether a cause H.C.OF A.
1990.
of action is to be classified as local or foreign is to be answered by
ascertaining the place of the act on the part of the defendant which gives VOTH
the plaintiff his cause of complaint. It may sometimes be that the cause v.
MANILDRA
of complaint is the failure or refusal of the defendant to do some FLOUR
particular thing in other words, an omission. It makes no sense to speak MILLS
PTY. LTD.
of the place of an omission. However, it is possible to speak of the place
of the act or acts of the defendant in the context of which the omission Mason CJ.
Deane J.
assumes significance and to identify that place as the place of the cause Dawson J.
of complaint. That is what was done by Goddard L.J. in George Monro Gaudron J.
Ltd. v. American Cyanamid and Chemical Corp. (45), where the failure to
warn as to the nature of goods was treated as an aspect of their sale. Sale
took place outside the jurisdiction and accordingly, in the view of his
Lordship, the tort was committed outside the jurisdiction.
The authority of Jackson v. Spittall was expressly affirmed in Distillers
(46). In the latter case Lord Pearson said (47) that the right approach is ...
to look back over the series of events ... and ask ... where in substance did
this cause of action arise? This approach can be traced to what was said r*\
by Winn J. in Cordova Land Co. Ltd. v. Victor Brothers Inc. (48). And that
approach was later expressly approved, although in a slightly different
legal context, in Metall & Rohstojf v. Donaldson Inc. (49).
The approach formulated in Distillers does no more than lay down an
approach by which there is to be ascertained, in a commonsense way, that
which is required by Jackson v. Spittall, namely, the place of the act on
the part of the defendant which gives the plaintiff his cause of complaint.
That approach has particular point if, as was the case in Distillers, it is
necessary to ascribe a place to an omission for the purpose of determining
where, if at all, a tort was committed.
One thing that is clear from Jackson v. Spittall and from Distillers is
that it is some act of the defendant, and not its consequences, that must be
the focus of attention. Thus, in Distillers the act of ingestion of the drug
Distaval by the plaintiff's mother was ignored, the place of that act being
treated like the place of the happening of damage, as one that might have
been quite fortuitous.
In some cases an act passes across space or time before it is completed.
Communicating by letter, telephone, telex and the like
206
568 HIGH COURT 11990.
H. C. OF A. provide examples. In Diamond v. Bank of London & Montreal (50) Lord
1990.
Denning M.R. stated that a representation or a statement effected by
VOTH telephone or telex takes place where the message is received wherever
V.
MANILDRA
it is heard on the telephone by the receiver or tapped out by the telex
FLOUR machine in the receiver's office. In the view of Stephenson L.J. the
MILLS
PTY. LTD.
situation was like the publication of a defamation or the act charged as an
offence in Director of Public Prosecutions v. Stonehouse (51) in that
Mason CJ. although initiated outside the country it operates on persons and property
Deane J.
Dawson J. in this country (52).
Caudron J.
In The Albaforthit was said by Ackner LJ. (53) and by Robert Goff
LJ. (54) that it had been held in Diamond that the substance of the tort of
negligent misstatement is committed where the statement is received and
acted upon. That is accurate so far as it reflects the facts considered in that
case. But there is not and cannot be any such general rule, for a statement
may be received in one place and acted upon in another. And The
Albaforth provides no .basis for a conclusion that it is the place where
the statement is acted upon which determines the place at which the
statement was made. That place may have no connexion at all with the
place where the statement was initiated or the place where it was
completed. And the place where it is acted upon may be entirely fortuitous.
If a statement is directed from one place to another place where it is
known or even anticipated that it will be received by the plaintiff, there is
no difficulty in saying that the statement was, in substance, made at the
place to which it was directed, whether or not it is there acted upon. And
the same would seem to be true if the statement is directed to a place from
where it ought reasonably to be expected that it will be brought to the
attention of the plaintiff, even if it is brought to attention in some third
place. But in every case the place to be assigned to a statement initiated in
one place and received in another is a matter to be determined by reference
to the events and by asking, as laid down in Distillers, where, in substance,
the act took place.
The present case is one that may properly be described either as a
failure to advise (i.e., an omission) or as a negligent misstatement of fact
(i.e., a positive act). Strictly, the complaint is one of negligent omission,
namely, failure to do various things, including failure to draw the attention
of M.M.C. and the members of the Manildra
(50) I1979J Q.B. 333, at p. 346. (53) [198412 Lloyds Rep., at p. 92.
(51) [19781 A.C. 55. (54) [1984] 2 Lloyds Rep., at p. 96.
(52) [1979) Q.B., at pp. 349-350.
207
171 C.L.R.] OF AUSTRALIA. 569
(55) (1981) 150 C.L.R. 225. (56) (1870) L.R. 6 Q.B., at p. 28.
208
570 HIGH COURT [1990.
H. C. OF A. features significantly in the respondents damages claim, it is merely a
1990.
circumstance bearing on the question whether damage was suffered and,
VOTH if so, its quantum. It does not, in any relevant sense, determine the liability
V.
MANILORA
of the appellant for that damage or the quantum of recoverable damage.
FLOUR The proceedings have been conducted on the basis that the law of the place
MILLS where the tort was committed has a significant bearing upon the
PTY. LTD.
determination of the dispute between the parties. In the light of what has
Mason CJ. been said it is more accurate to say that it is fundamental.
Deane J.
Dawson J. In this situation, we have little doubt that Missouri is the more
Gaudron J.
appropriate forum but it does not necessarily follow that New South Wales
is a clearly inappropriate forum. The respondents are resident here and
New South Wales law is relevant on the question of damage. Furthermore,
as Lord Templeman remarked in Spiliada (57), the question is pre-
eminently one for the trial judge, an appeal should be rare and an appellate
court should be slow to intervene. Here the Court of Appeal, by majority,
re-exercised the discretion because the primary judge had, through no fault
of his own, applied the wrong principle. Hence this Court should be
extremely reluctant to interfere with the Court of Appeals decision on this
point, the more so because the Court of Appeal applied the correct test.
However, the decision of that Court, reached by a majority, proceeded
on the view, with which we disagree, that the wrong complained of was
not a foreign tort committed in Missouri and that, accordingly, the action
had a substantial connexion with the law of New South Wales. As that
judgment was based upon a conclusion which we consider to have been
mistaken and as the connexion with the law of New South Wales is slight,
it is necessary to exercise the discretion afresh upon the correct view of
the proper law.
We turn therefore to consider the factors relevant in the present appeal
to the exercise of the discretion whether or not to order that the action be
stayed. In favor of a stay are the considerations that: the action has a
substantial connexion with the law of Missouri; the relevant acts and
omissions took place predominantly in Missouri; the appellant resides and
works in Missouri and the professional standards of accountants in
Missouri will therefore be relevant to his liability, if any; in large part the
damage which the appellant was alleged to have caused was referable to
United States taxation law; and the greater part of the evidence in any trial
of the action would be found in Missouri.
209
171 C.L.R.] OF AUSTRALIA. 571
On the other hand, the plaintiffs in the action are residents of New H. C OF A.
1990.
South Wales and may therefore reasonably point to the advantages to them
in practical terms of bringing an action in the local courts; the transactions VOTH
V.
concerned have some connexion with New South Wales and with MANILDRA
Australian revenue laws; and, to a large extent at least, the damage was FLOUR
MILLS
suffered in New South Wales. PTY. LTD.
However, these last considerations are natural consequences and incidents
of residence in a particular jurisdiction and, as such, are merely different Mason CJ.
Deane J.
aspects of the right of any plaintiff to bring an action in the courts of the Dawson J.
Gaudron J.
jurisdiction wherein he or she resides.
That is a legitimate personal or juridical advantage which is acknowledged
by the prima facie right of a plaintiff to insist upon the exercise of a
jurisdiction which he or she has regularly invoked, but beyond that it has
little weight. More importantly, the plaintiffs in this case point to three
further legitimate juridical advantages.
First, it is said that an effective limitation bar exists in Missouri, through
which the appellant could, if he wished, successfully resist the action.
.Secondly, there is evidence that, in proceedings of this kind in Missouri,
the costs awarded in favor of a successful plaintiff may not include
attorneys fees. Finally, there is evidence that the rules as to the awarding
of damages by way of interest are less advantageous to a plaintiff in
Missouri than in the Supreme Court of New South Wales.
Conclusion
The first of these advantages was the subject of an undertaking by the
appellant, both in the Court of Appeal and in this Court, when special
leave to appeal was granted. Accordingly, it may be made a condition of
any order staying the action. The second and third advantages, while
doubtless significant to the respondent plaintiffs, are of diminished
importance in the overall task of the court exercising the discretion based
upon the competing connexions of the respective forums with the subject-
matter of the proceedings. They are not sufficient to resist the conclusion
to which the other considerations irresistibly point, that New South Wales
is clearly an inappropriate forum in which to permit the action to proceed.
In those circumstances, no purpose is served in considering as a
separate matter the appellants contention that service out of the
jurisdiction should be set aside.
We would allow the appeal, set aside the order made by the Court of
Appeal and order that the action be stayed, on condition that the appellant,
in any proceedings which the respondents bring
572 HIGH COURT (1990.
in Missouri concerning the subject-matter of these proceedings, undertakes not to
plead any defence based upon any statute or
other law relating to the limitation of actions, provided the MANODRA respondents
commence their proceedings in Missouri within three
months of this order.
The majority judgment states the test to be applied
by Australian courts in deciding applications for leave to serve
originating process ex juris, applications to set aside the service of
originating process ex juris and applications to stay proceedings on the
grounds that the selected forum ought not exercise its jurisdiction. In
Oceanic Sun Line Special Shipping Co. Inc. v. Fay (58), I expressed my
preferred view on this question. The judgments in Oceanic Sun were
divergent and it is not possible to identify a majority which favored one
or other of the tests advanced in the respective judgments. But all available
Justices have sat in the present case to consider these tests anew, and the .
majority have decided to put aside individual differences of emphasis in
order that this Court perform one of its important duties, namely, to
enunciate authoritatively the principles and criteria to be applied by
Australian courts in future cases. As I think it is more important that a
test be authoritatively settled than that I adhere to the test I prefer, and as
any such test is judge-made law, I add my acceptance of the test proposed
by the majority. It is unnecessary to consider whether the performance of
the institutional duty of enunciating the law authoritatively should prevail
when Justices* individual views diverge on questions of the true
construction of the Constitution or perhaps on questions of the true
construction of a statute, for that is not the present case. I therefore join in
the decision that the clearly inappropriate test be adopted for the
determination of applications of the three classes mentioned. It does not
follow that that test necessarily applies to the determination of an
application for an injunction to restrain a party from prosecuting before a
foreign tribunal a proceeding which, it is argued, ought be tried before a
domestic tribunal: see Bank of Tokyo Ltd. v. Karoon (C.A.) (59); South
Carolina Co. v. Assurantie N.V. (60).
Although I agree with the majority as to the test which should be
applied in determining this case, I respectfully dissent from the result of
its application. To determine the outcome of this appeal, it is necessary
to appreciate the nature of the claims which the
(58) (1988) 165 C.L.R. 197. (60) [19871 A.C. 24, at pp. 44-45.
(59) 119871 A.C. 45, at p. 63.
211
171 C.L.R.1 OF AUSTRALIA. 573
respondent plaintiffs have made, albeit the nature of the claims does not H. C. OF A.
1990.
appear with clarity from the language of the amended statement of claim.
The allegations therein contained were expanded in a document provided VOTH
to the Court of Appeal entitled Explanation of Losses Claimed by the v.
MANILDRA
Second Named Plaintiff (that is, Honan Investments Pty. Ltd.). The FLOUR
MILLS
nature of the claims made by the plaintiffs can be derived from the
PTY. LTD.
formulation of the claims in the amended statement of claim and in the
Explanation of Losses. Brennan i.
212
574 HIGH COURT [1990.
Interest on that sum from the date of payment. These amounts were claimed as loss
suffered by Manildra Flour. It was conceded that this part of Manildra Flours
damage should be treated as having BEEN SUFFERED IN THE United States of America. These
amounts were said by counsel for the plaintiffs before the Court of Appeal to be a
PAYMENT TO reimburse M.M.C. for a payment made by M.M.C.
213
171 C.L.R.J OF AUSTRALIA. 575
applicable to [Honan Investments] over the period from 31 H.C.OFA. March
1978 to 30 September 1985.
(Item 3) $185,955 Of the exempt income received in 1979
to 1983 $404,249 was offset against losses incurred by [Manildra Flour]. Had
such losses not been so offset but made available to other companies in the
group pursuant to s. 80G of FLOUR the Income Tax Assessment Act die group
taxation liability would have been reduced by $185,955. This amount would
Pty Lm
' otherwise have been available to [Honan Investments] in a similar
fashion to the sum referred to in Item 1.
214
576 HIGH COURT [1990.
H. C. OF A. occurred; (ii) the last ingredient occurred; or (iii) the act of the defendant
1990.
which gave the plaintiff a cause of complaint occurred. The third
VOTH proposition was adopted as the test. In Distillers Co. the act which
V.
MANILDRA
determined the location of the tort was not the manufacture of the product;
FLOUR the negligence, if any, consisted in a failure to give a warning to the
MILLS consumer of the danger of taking Distaval in the first three months of
PTY. LTD.
pregnancy. That act (or omission) took place in New South Wales.
Brennan J. Similarly, in George Monro Ltd. v. American Cyanamid and Chemical
Corp. (62), du Parcq L.J. proposed the test: Where was the wrongful act,
from which the damage flows, in fact done? In each case, it is necessary
to look at the damage which the plaintiff seeks to recover and then,
looking back along the claim of causation, to ascertain the act or omission
of the defendant which was the substantial cause of that damage: see
Distillers Co. v. Thompson (63); Castree v. Squibb Ltd (64). Here, the act
(or omission) which gave Manildra Flour its cause of complaint with
respect to the payment made to reimburse the first category of loss
consists simply in Voths (or D.H.S.s) negligence in auditing M.M.C.s
accounts or in advising M.M.C. of its liability. Assuming that those acts
or omissions can found a liability to Manildra Flour, they occurred in
Missouri.
However, the first category of loss is a comparatively small part of the
total amounts claimed in the action. All of Honan Investments claims
and some of Manildra Flours claims are for losses, allegedly
irrecoverable, of income tax paid and tax benefits foregone which the
respective plaintiffs would not have suffered had they been advised of
M.M.C.s liability to pay withholding tax to I.R.S. which, had it been
paid, would have made the net interest paid by M.M.C. to Manildra Flour
exempt income under the Income Tax Assessment Act 1936 (Cth). At all
events, that is the essence of the allegations in the amended statement of
claim. These losses were suffered in Australia. Assuming that the
respective plaintiffs are entitled to recover these losses from Voth, what
was Voths act or omission (it is unnecessary to consider D.H.S.
separately) which gave the respective plaintiffs their cause of
complaint?
The statement of claim pleads that Voth knew or ought reasonably to
have known that the plaintiffs would have relied on the defendants audit
of the accounts of M.M.C. in the carrying on of their business in Australia,
including the preparation of returns
215
171 C.L.R.] OF AUSTRALIA. 577
required to be lodged under the Income Tax Assessment Act 1936, H- A- the
declaration of income properly assessable under such Act and the claiming of
deductions properly allowable thereunder and further that the plaintiffs relied on
the reports, opinions and advices provided by Voth and on the audited accounts of
M.M.C. in the preparation of the consolidated accounts of the Group and in the
lodgment with the Federal Commissioner of Taxation of income tax __________
returns for each company in the Group, including the first and Brennan J. second
named plaintiffs and in the calculation of the assessable income of each company in
the Group and the calculation of allowable deductions properly claimed by each of
such companies.
It was alleged that Voth was under a duty to each of the plaintiffs to
exercise all reasonable care skill diligence and competence as auditors of
M.M.C. in and about the preparation and auditing of the accounts of
M.M.C. and in and about the preparation and provision of reports,
opinions and advice to M.M.C. and in and about the preparation and
provision of accurate accounts of M.M.C. and accurate reports, opinions
and advices concerning the accounts of
It should be noted that the plaintiffs claims in the second category of
loss are not founded on a duty of care owed to but on a duty of care owed
to the plaintiffs. Yet the losses claimed by the plaintiffs are losses flowing
immediately from assessments to tax apparently founded on returns by
them or by other companies in the Manildra group (other than M.M.C.).
Assumedly, the returns were mistakenly compiled in ignorance of the true
position as to M.M.C.s liability to I.R.S. to pay withholding tax. The
losses which the plaintiffs seek to recover were incurred in direct
consequence of the mistake made by the plaintiffs in ignorance of the true
position.
Once the plaintiffs claims in the second category are seen to depend on
a mistake made by them, the act or omission by Voth which gave the
plaintiffs their cause of complaint must be identified as the act or
omission which induced them to make the mistake. That is, either Voths
failure to inform the plaintiffs of M.M.C.s liability to I.R.S. to pay
withholding tax or his failure to inform the plaintiffs of the error in the
erroneous accounts prepared for M.M.C. which Voth knew the plaintiffs
would receive and rely on. If the losses in the second category are to be
sheeted home to Voth, the breach of the duty which Voth owed to the
plaintiffs must be found to consist in his failure to communicate to them
the true position as to M.M.C.s liability to I.R.S. to pay withholding tax.
Where did that failure occur?
The alleged causes of action now under consideration are different
from those causes of action where a loss is caused to the
216
578 HIGH COURT [1990.
H.C.OFA. person or property of a plaintiff without any action on his part. These
1990.
causes of action, like those arising from negligence in spoken or written
VOTH words, arise (if at all) directly from the plaintiff's own action. As Lord
V.
MANILDRA
Oliver said in Caparo Industries Pic. v. Dickman (65):
FLOUR The damage which may be occasioned by the spoken or written
Muxs word is not inherent. It lies always in the reliance by somebody upon
PTY. LTD. the accuracy of that which the word communicates and the loss or
damage consequential upon that person having adopted a course of
Brennan J.
action upon the faith of it."
See also San Sebastian Pty. Ltd. v. The Minister (66). In a case of negligent
misrepresentation, the plaintiff is induced to act to his detriment in
mistaken reliance on what has been carelessly represented; in a case of a
negligent failure to advise, the plaintiff is induced to act to his detriment in
ignorance of a fact which the defendant has carelessly failed to
communicate. Here, the relevant negligence is not Voth's alleged
carelessness in auditing M.M.C.'s accounts but in the communication of
the results of that audit to the plaintiffs or in Voth's failure to communicate
to the plaintiffs a correction of the results of the audit so as to reveal
M.M.C.*s liability to I.R.S. to pay withholding tax. A distinction between
work carelessly done and the communication of the results of the work was
drawn by Lord Templeman in reference to a valuation report in Smith v.
Bush (67):
My Lords this confuses the valuers report with the work which the
valuer carries out in order to make his report. The valuer owed a duty
to exercise reasonable skill and care in his inspection and valuation.
If he had been careful in his work, he would not have made a
negligent misstatement' in his report."
(65) [19901 A.C. 605, at p. 635. (67) [19901 A.C. 831, at p. 848.
(66) (1986) 162 C.L.R. 340, at (68) [19791 Q.B. 333, at p. 346.
pp. 353,366.
217
171 C.L.R.] OF AUSTRALIA. 579
from which it was sent. Logically, it seems to me, the same H.C.OFA. applies
to a negligent misrepresentation by telephone or by 199- telex. It is committed
where it is received and acted upon.
I would respectfully agree with this analysis except in cases where v. the
misrepresentation is acted on in a place different from the place where it is received.
The act of a defendant which sets in train MILLS consequences resulting in damage is
complete once the plaintiffs mistake is induced. In my opinion, a misrepresentation
is made Brennan J. when, and therefore where, it is received. Lord Dennings
identification of the place of reception of a misrepresentation as the locality of a tort
in which damage flows from a plaintiffs being induced to act to his detriment was
subsequently applied in The Albaforth " (69), per Ackner L.J.: see also Annagas
Ltd. v.
Mundogas S.A. (70); cf. Metall & Rohstoff v. Donaldson Inc. (71), where
the Court of Appeal seems to hold that the tort of inducing breach of
contract may occur where the contract is breached.
In this case, the plaintiffs were resident in Australia. They were
induced in Australia to prepare the relevant mistaken returns of income.
Voths alleged misrepresentation to them of M.M.C.s position or his
alleged failure to communicate to them the truth as to M.M.C.s liability
to I.R.S. to pay withholding tax occurred in Australia, albeit the error
which caused Voth to breach the duty of care owed to the plaintiffs
consisted in an error made by him in Missouri. It was not that error which
caused the second category of alleged losses; it was Voths conduct in
breach of his duty to the plaintiffs which induced them to act to their
detriment. That conduct, whether it consisted in a communication of false
advice to the plaintiffs or a failure to correct false advice, occurred in
New South Wales. If the action be heard in New South Wales, the law of
that State will exclusively govern claims in the second category.
New South Wales is the natural forum for the determination of the
dispute as to the claims in the second category: see The Albaforth"{72).
Although the location of the defendants conduct which is alleged to have
caused the loss in the first category is Missouri, that loss is of much lesser
amount and significance than the losses alleged in the second category.
The location of the defendants conduct allegedly causing losses in the
second category is of greater importance in determining the defendants
motion to set aside service of the statement of claim.
The Supreme Court of New South Wales has jurisdiction to try the
plaintiffs action. The plaintiffs chief causes of action arose in
(69) (1984] 2 Lloyds Rep. 91, at (71) [1990J Q.B. 391, at p. 449.
p. 92. (72) [198412 Lloyds Rep., at
(70) [ 19861 A.C. 717, at p. 740. pp. 94,96.
218
580 HIGH COURT [1990.
H. C. OF A. New South Wales and are governed by New South Wales law. In
1990.
these circumstances, the Supreme Court of New South Wales is not
VOTH only an appropriate forum; it is the appropriate forum for hearing
V.
MANILDRA
and determining those causes of action.
FLOUR As the Supreme Court is not an inappropriate tribunal to hear
MILLS
PTY. LTD.
and determine the action, I would dismiss the appeal.
(73) (1988) 165 C.L.R. 197, at (74) 11987) A.C. 460, at p. 464.
p. 220. (75) U987J A.C., at p.465.
219
171 C.L.R.] OF AUSTRALIA. 581
asserting a different test for each situation. Once there has been a challenge to the
exercise of jurisdiction by the local court, the issues are the same, no matter what
form of application is used to bring the matter before the court. In the end, however
the principle is expressed, the matter turns on either the appropriateness or
inappropriateness of the selected forum. That is not to say that the
onus of proof will necessarily be resolved in the same way; that is a
matter to which I will turn later in these reasons.
But, once all that has been said, if it is sought now to arrive at an
authoritative statement of principle, a basic aspect of the judicial process
is exposed. A judge who has written in dissent on a particular matter
should have no difficulty in accepting the view of the majority and loyally
applying that view unless and until a different majority view should
prevail. But when a judge has written in dissent and the matter is re-
argued before the court, different considerations arise. The doctrine of
stare decisis may have the consequence that the earlier decision is not
disturbed: see the discussion in John v. Federal Commissioner of
Taxation (76). But if that is not to be and the judge is persuaded that his
earlier expression of opinion was in error, he must say so. If he is not so
persuaded, he should not abandon his earlier views, just for the sake of
uniformity. That is not to say that a joint judgment may not properly
reflect an accommodation of ideas and approaches in reaching an end
result which is essentially shared by all who participate in the judgment.
But that is a different thing; no dissent on basic principle is involved.
Speaking of dissenting and concurring opinions, Charles Evans Hughes
wrote in The Supreme Court of the United States (1936), pp. 67-68:
When unanimity can be obtained without sacrifice of conviction,
it strongly commends the decision to public confidence. But
unanimity which is merely formal, which is recorded at the expense
of strong, conflicting views, is not desirable in a court of last resort,
whatever may be the effect upon public opinion at the time. This is
so because what must ultimately sustain the court in public
confidence is the character and independence of the judges. They
are not there simply to decide cases, but to decide them as they think
they should be decided, and while it may be regrettable that they
cannot always agree, it is better that their independence should be
maintained and recognized than that unanimity should be secured
through its sacrifice.
220
582 HIGH COURT [1990.
H. C. OF A. What Hughes CJ. said must apply with at least equal force when a
1990.
judge has earlier expressed a dissenting view and is not persuaded that the
VOTH view was in error. Whether I should adhere to the view expressed in
V. Oceanic Sun, that a stay will be granted on the ground of forum non
MANILDRA
FLOUR conveniens if the court is satisfied that there is some other available forum
MILLS which is clearly the more appropriate forum for the trial of the action,
PTY. LTD.
depends on the persuasiveness of the clearly inappropriate forum as the
Toohey J. appropriate test. That test commends itself to the majority in the
disposition of this appeal. But the various tests that have been canvassed
in decisions of the courts and in academic writings are not mere glosses;
they reveal qualitative differences in their approach.
So to state the dilemma would suggest that the choice is between the
test adopted by Deane J. and (largely) by Gaudron J. in Oceanic Sun, and
that which Wilson J. and I thought should be followed. And in reality that
is the position. The view expressed by Brennan J. in Oceanic Sun (77),
that the formulation by Scott L.J. in St. Pierre v. South American Stores
(Gath & Chaves) Ltd, (78), is, and should remain, the law of this country
and oppressive and vexatious should be understood according to their
ordinary meaning was not a view shared by any other member of the
Court.
It is, unfortunately, necessary to go over some of the ground that was
trodden in Oceanic Sun but I shall try to avoid merely repeating what was
said in that case. One matter which does warrant further consideration
because it lies at the very heart of the problem is the juridical theory
according to which a court, properly seized of a matter, may decline to
exercise its jurisdiction. Scott L J. in St. Pierre came dose to expressing
such a theory when he said (78):
(T)he defendant must satisfy the Court that the continuance of the
action would work an injustice because it would be oppressive or
vexatious to him or would be an abuse of the process of the Court in
some other way.
The same idea was expressed by Lord Simon of Glaisdale in The "Atlantic
Star (79) when he said:
(A) plaintiff who founds jurisdiction will not be denied a hearing
unless he is misusing the forensic process so as to perpetrate
injustice.
Such statements carry with them the notion that a plaintiff has some
sort of vested right to an exercise of the jurisdiction invoked, which will
not be denied unless there is something oppressive or
(77) (1988) 165 C.L.R., at pp. 239- (78) (193611 K.B. 382, at p. 398.
240. (79) U974J A.C. 436, at p. 471.
221
171 C.L.R.1 OF AUSTRALIA. 583
(80) [19741 A.C., at pp. 477-478. (84) [1906] 1 K.B. 141, at p. 150.
(81) (1988) 165 C.L.R., at p. 242. (85) [1907] 2 Ch. 205, at p. 213.
(82) (1908) 6C.L.R. 194. (86) (1908) 6 C.L.R., at p. 199.
(83) (1908) 6 C.L.R., at p. 198. (87) (1908) 6 C.L.R., at p. 201.
222
584 HIGH COURT 11990.
H. C. OF A. Under these circumstances can it be said that injustice will not be
1990. done to the respondents by staying this action and compelling them
to go somewhere else, quite as great as that done to the appellants by
VOTH
V.
allowing the respondents to proceed with the action?
MANILDRA Although the judgments in St. Pierre refer with approval to Logan, the
FLOUR
MILLS approach taken in the latter case to the notions of oppression and vexation
PTY. LTD. was more expansive than the approach taken in the former. Indeed, in
Toohey J.
Logan the judgment of the Resident of the Court of Appeal, Sir Gorell
Barnes, is in terms not unlike the doctrine of forum non conveniens. For
instance, the President, with whose judgment the other members of the
Court of Appeal agreed, said (88):
Yet it seems to me clear that the inconvenience of trying a case in a
particular tribunal may be such as practically to work a serious
injustice upon a defendant and be vexatious. This would probably
not be so if the difference of trying in one country rather than in
another were merely measured by some extra expense; but where the
difficulty for the defendant of trying in the country in which the
action is brought is such that it is impracticable to properly try the
case by reason of the difficulty of procuring the attendance of busy
men as witnesses, and keeping them during a long trial, and of having
to deal with masses of books, documents, and papers which are not
in the country where the action is brought, and of dealing with law
foreign to the tribunal, it appears to me that a case of vexation in
some circumstances may be made out if the plaintiff chooses to sue
in that country rather than in that where everybody is and where all
the witnesses and material for the trial are.
And the same is true of Maritime Insurance. The question there was not
whether Victoria was an inappropriate forum but whether Natal was more
appropriate. Significantly, one of the grounds of appeal to the High Court
(89) was:
That the proper and more convenient Court to try the plaintiffs*
alleged cause of action is the Court of Natal, South Africa, where
such alleged cause of action arose.
The principles espoused in Logan are no longer acceptable in England
because of the developments which culminated in Spiliada. And, although
Maritime Insurance was decided in 1908, it does not seem to have been
followed or indeed mentioned in any reported Australian decision until
Cope Allman (Australia) Ltd. v. Celermajer (90), a case of service out of
the jurisdiction. Gibbs J. spoke (91) of the principles to be applied as being
those laid down in
223
171 C.L.R.] OF AUSTRALIA. 585
Maritime Insurance. But his Honour's conclusions were couched in the H. C. OF A.
1990.
language of St. Pierre when he said (92):
Before I may decline to exercise jurisdiction and deny to the VOTH
plaintiff its prima facie right to proceed in this Court I must be v.
satisfied that there would be something amounting to vexation, MANILDRA
oppression or injustice to the defendants." FLOUR
MILLS
Cope Allman concerned service out of the Australian Capital Territory; PTY. LTD.
the parties and matters in dispute were essentially associated with New Toohey J.
South Wales. A real question arises as to the applicability of rules of
private international law as between the States and Territories of this
country: see Breavington v. Godleman (93). But that question does not
arise in this appeal.
Following Cope Allman, Maritime Insurance was considered in
Garseabo Nominees Pty. Ltd. v. Taub Pty. Ltd. (94) though Yeldham J.
followed MacShannon v. Rockware Glass Ltd. (95); was applied in
Ranger Uranium Mines Pty. Ltd. v. B.T.R. Trading (Qld) Pty. Ltd. (96);
and was followed in Kimberley N.Z.I. Finance Ltd. v. Ferguson (97),
though by that time Oceanic Sun had been decided by this Court. It was
of course referred to in Oceanic Sun and by the Court of Appeal in the
instant case, now reported as Voth v. Manildra Flour Mills Pty. Ltd. (98).
And see also Reese Bros Plastics Ltd. v. Hamon-Sobelco Australia Pty.
Ltd. (99). It is a matter of some interest that Maritime Insurance is not
mentioned in any of the standard Australian texts on conflict of laws. In
all the circumstances, there are real difficulties in putting forward
Maritime Insurance as having established accepted principles in this
country where a stay of process served out of the jurisdiction is sought.
Certainly, in Lewis Construction Co. Pty. Ltd. v. Tichauer S.A. (1),
Hudson J. applied the more appropriate forum test in refusing to set aside
an order for leave to serve out of the jurisdiction. No reference is made in
his Honours judgment to Maritime Insurance.
A review of the Australian authorities before the decision of this Court
in Oceanic Sun does not yield any clear-cut approach to staying
proceedings, to granting leave to serve out of the jurisdiction or to setting
aside orders for service out of the jurisdiction. On the other hand, it is
possible to trace the
224
586 HIGH COURT [1990.
H. C. OF A. development of English law, culminating in the. adoption of the rule of
1990.
forum non conveniens in Spiliada: see Oceanic Sun (2).
VOTH While the approach taken by Scott L J. in St. Pierre is at odds with the
MANILDRA
approach taken in Spiliada, it does offer an explanation which may be
FLOUR comprehended readily enough. It requires that the action sought to be
MILLS stayed be oppressive or vexatious to the defendant or an abuse of the
PTY. LTD.
process of the court in some other way. But that explanation is no longer
Toobey J. acceptable, at least not in the undiluted form in which it was expressed in
that case. The notion of forum non conveniens looks more broadly at the
situation before the court. It recognizes that in the modem world,
particularly in the modem commercial world, there may be more than one
forum available to a plaintiff. To borrow a passage from Professor Pryles,
Judicial Darkness on the Oceanic Sun, Australian Law Journal, vol. 62
(1988), 774, at pp. 790-791:
there is often a range of possibilities available to a plaintiff as far
as the situs for the institution of litigation is concerned. In these
circumstances, and in the context of an international dispute, it by
no means follows that a plaintiff should have an unrestricted right to
choose the venue of an action. Considerations of fairness and equity
require that a defendant should be able to challenge the venue
selected by the plaintiff, even assuming the court is competent under
its own jurisdictional rules. It is here that the principle of forum non
conveniens has an important role to play
(2) (1988) 165 C.L.R., at pp. 209- (4) [1987J A.C. at p. 477.
213. (5) [19781 A.C. 795.
(3) |19781 A.C., at p. 812.
225
171 C.L.R.] OF AUSTRALIA. 587
that there will be a broad consensus among major common law H. C. OF A.
jurisdictions. 1990.
226
588 HIGH COURT [1990.
H. C. OF A. is a rule of court in those terms (see, for instance, the Rules of the Supreme
1990.
Court 1965 (U.K.), O. 11, r. 4(2)), or not; such an injunction is
VOTH necessarily implicit in the discretionary power to grant leave: Oceanic
v.
MANILDRA
Sun (13). Whether the case is a proper one for service out of the
FLOUR jurisdiction includes the question of forum non conveniens: see Oceanic
MILLS Sun (13). It would include the clearly inappropriate forum test or whatever
PTY. LTD.
test was thought to be applicable where a stay of proceedings is sought.
Toohey J. As to onus on such an application for leave, the burden is, quite simply,
the obverse of that applicable where a stay is sought of proceedings started
... as of right: Spiliada (14). The reason is that the courts traditionally
have seen service outside the jurisdiction as prima facie an interference
with the exclusive jurisdiction of the sovereignty of the foreign country
where service is to be effected: Scott L.J. in George Monro Ltd. v.
American Cyanamid and Chemical Corp. (15); see also Mackender v.
Feldia A.G. (16).
When a court is asked to set aside an order giving leave to serve
outside the jurisdiction or to stay proceedings resulting from such an
order, where does the onus lie? It ought not depend upon the form of order
sought; in most cases the defendant seeks both a stay of proceedings and
an order setting aside leave to serve outside the jurisdiction. This is such
a case. It has been said:
In practice the matters relevant to the exercise of discretion are
likely to be considered in depth on an application by the defendant
to set aside the order granting leave to serve ex juris (or in an
application to confirm service made without leave in New South
Wales and the Federal Court) rather than in the original ex parte
application to obtain leave. (Sykes and Pryles, Australian Private
International Law, 2nd ed. (1987), p. 35)
This may well be true but, as already noted, the operation of the relevant
test is a matter with which a court should deal on an application for leave
to serve out of the jurisdiction. In other words, a court, faced with an
application for leave to serve out of the jurisdiction, should ask, not only
whether the case falls within a prescribed category, but also whether
service is warranted having regard to the prevailing test for staying such
proceedings. The jurisdiction of the court is then properly invoked:
Oceanic Sun (17).
The imposition of a different onus, depending on whether service was
effected within the jurisdiction, effected outside the jurisdiction
(13) (1988) 165 CL.R.,at p. 216. (16) 11967) 2 Q.B. 590, at p. 599.
(14) 119871 A.C., at p. 481. (17) (1988) 165 C.L.R., at p. 215.
(15) U944J K.B. 432, at p. 437.
227
171 C.L.R.] OF AUSTRALIA. 589
with leave or effected outside the jurisdiction without leave, gives rise to H. C. OF A.
1950.
undue complications in the law. It must be remembered too that, in terms
of the doctrine of forum non conveniens, a defendant who persuades the VOTH
court that another forum is clearly a more appropriate forum for the v.
MANILDRA
disposition of the action may be met with the argument that the interests FLOUR
MILLS
of the parties and the ends of justice will nevertheless best be served by PTY. LTD.
refusing a stay: Oceanic Sun (18). It is here that the notion of a legitimate
personal or juridical advantage in the other forum may be prayed in aid by TooheyJ.
the plaintiff. In other words, a shifting onus is involved. Symmetry in the
law may not be an end in itself but, equally, confusing complications are
to be avoided if possible. Once it is accepted that the test for staying
proceedings is the same, whether service was effected within or outside
the jurisdiction (and for this purpose it does not matter whether the test is
forum non conveniens or clearly inappropriate forum), and that a court
faced with an application for leave to serve out of the jurisdiction must
consider the implications of the appropriate test, it is reasonable that the
onus lie on the defendant to obtain a stay of proceedings or an order setting
aside leave to serve. Certainly there is no justification for placing the onus
by reference to the particular relief sought.
To what has just been said, I would add this qualification. The question
of onus may be resolved by rules of court. By way of example, Pt 10, r. 6A
of the Supreme Court Rules 1970 (N.S.W.), a rule which came into force
after the decision at first instance in the present case, provides for the
setting aside of process served outside Australia without leave. The onus
is clearly on the defendant to show that the Supreme Court of New South
Wales is an inappropriate forum for the trial of the proceedings: r. 6A(2)(b).
Likewise, under the Rules of the Supreme Court of Victoria, where service
may now be effected out of the jurisdiction without leave in certain
circumstances, the defendant may apply to set aside service of the writ or
stay the proceedings on the ground that Victoria is not a convenient forum
for the trial of the proceeding: r. 7.05(2)(b). Such rules represent a departure
from the traditional approach to interference with the jurisdiction of a
foreign country mentioned earlier in these reasons. It would be anomalous
if a defendant served out of the jurisdiction without leave bore the onus of
setting aside service but a plaintiff who had obtained leave to serve out of
the jurisdiction continued to carry the onus if service was challenged. The
notion that, unless the onus remains on the plaintiff who has obtained an
ex parte order for service out of the jurisdiction, the
228
590 HIGH COURT [1990.
have an enduring advantage sits rather uncomfortably with the onus placed
Plaintiff
by the rules of court referred to in this paragraph. That may say no more than that
this area of the has not been noted for its clarity or certainty.
The question of onus is not unimportant where the onus lies on defendant, whether by
reason of the common law or rules of
court, and the doctrine of forum non conveniens is applicable, it will
not be easy for a defendant to obtain a stay of proceedings or an order setting aside
service out of the jurisdiction. As is clear, the search is for the more appropriate
forum, a search which does not require a comparison of the merits and demerits of
the alternative forum, except perhaps where legitimate personal or juridical
advantage comes into play: see Oceanic Sun (19fT It follows from what has been
said in these reasons that I am impenitent in adhering to the view which Wilson J.
and I expressed in Oceanic Sun; thus the doctrine of forum non conveniens should
determine whether, in the present case, there should be a stay of proceedings. It is
necessary then to determine the application of that doctrine to the facts. I would begin
the search for the appropriate forum by asking, as Wilson J. and I did in Oceanic Sun
(20), with which forum has the action the most real and substantial connexion. In this
regard I agree with the judgment of Mason C.J., Deane, Dawson and Gaudron JJ.
that the respondents complaint is that the appellant provided professional
accountancy services on an incorrect basis. Whether that be viewed as a positive act
or a negligent omission, the cause of complaint was committed in Missouri, even
though some of the damage was sustained in New South Wales. It is unnecessary to
repeat what the joint judgment says in that regard. And although the joint judgment
has approached the determination of the appeal by concluding that New South Wales
is clearly an inappropriate forum in which to permit the action to proceed, the reasons
which lead to that conclusion point also to Missouri as the more appropriate forum.
Again, it is unnecessary to do more than adopt the reasons of Mason C.J., Deane,
Dawson and Gaudron JJ. in that regard.
I would therefore allow the appeal and order a stay of proceedings. I
agree with the orders proposed.
(19) (1988) 165 C.L.R., at pp. 219- (20) (1988) 165 C.L.R., at p. 217.
220.
229
171 C.L.R.J OF AUSTRALIA. 591
(i) the appeal to that Court be allowed with costs: H-c 0F A '
--------------------- 1990.
(iii) the orders made by Clarke J. on 13 November w"' 1986 be set aside;
the action be stayed on condition that the FLOUR appellant, in any proceedings which the
respondents brine in Missouri concerning the ___________
subject-matter of these proceedings undertakes
not to plead any defence based upon "tiny statute or other law relating
to the limitation of actions, provided the respondents commence their
proceedings in Missouri withinthree months of this order; and '
*
(iii) the respondents pay the appellants costs of the proceedings before Clarke J.
Solicitors for the appellant, Mallesons Stephen Jaques.
Solicitors "for the respondents, Baker & McKenzie.
R.A.S.
230