District Court New South Wales Medium Neutral Citation: Bouffard v CDM Australasia Pty Limited [2021] NSWDC 124 Hearing dates: 25 March 2021 Date of orders: 15 April 2021 Decision date: 15 April 2021 Jurisdiction: Civil Before: Dicker SC DCJ Decision: (1) Judgment for the plaintiff against the defendant. (2) The parties are to bring in agreed short minutes of order reflecting the reasons of the court within 14 days. (3) In the event that the parties cannot agree on the appropriate orders, leave is granted to the parties to approach the Associate to Dicker DCJ to relist the matter on two business days' notice. Catchwords: CONTRACT – dispute resolution clause – whether plaintiff unable to sue on agreed contractual debt due to alleged failure to comply with dispute resolution clause procedure – stay not sought PRIVATE INTERNATIONAL LAW – dispute resolution clause – whether New South Wales a clearly inappropriate forum to determine the proceedings – effect of dispute resolution clause on analysis – proper construction of clause – rights of party in breach of contract to enforce clause Legislation Cited: District Court Act 1973 (NSW). Uniform Civil Procedure Rules 2005 (NSW) Civil Procedure Act 2005 (NSW) Cases Cited: AB v XY [2020] NSWDC 27 Aiton Australia Pty Ltd v Transfield Pty Ltd [1999] NSWSC 996; (1999) 153 FLR 236 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 ET-China.com International Holdings Ltd v Cheung [2019] NSWSC 1874 Foran v Wright (1989) 168 CLR 385; [1989] HCA 51 Global Partners Fund Limited v Babcock & Brown Ltd (in liquidation) [2010] NSWCA 196 Lavigne v Kumar [2020] NSWSC 1120 Lepcanfin Pty Ltd v Lepfin Pty Ltd [2020] NSWCA 155 Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 Qantas Airways Ltd v Rohrlach [2021] NSWCA 48 Sharjade Pty Ltd v The Commonwealth [2009] NSWCA 373 Category: Principal judgment Parties: Kirk Bouffard (Plaintiff) CDM Australasia Pty Limited (Defendant) Representation: Counsel: S Gaussen (Plaintiff) T Hall (Solicitor, Defendant) Solicitors: Hermann Legal (Plaintiff) Hall Partners (Defendant) File Number(s): 2020/00207288 Publication restriction: Nil Judgment 1. In these proceedings, the plaintiff, Mr Kirk Bouffard, sues the defendant, CDM Australasia Pty Ltd, for moneys loaned by him to the defendant in 2019. The defendant does not dispute that the moneys were lent by Mr Bouffard to it as claimed but asserts that Mr Bouffard is not able to commence proceedings in New South Wales in this court to recover the moneys. No cross-claim or stay application has been filed by the defendant. 2. In summary, the defendant submits: 1. That New South Wales is a clearly inappropriate forum to determine the claim; and 2. That a dispute resolution clause in the loan agreement between the parties prevents the commencement of proceedings in this court in New South Wales before a mediation takes place in the courts of Florida in the United States of America. 1. The plaintiff submits that the amount claimed is owing to him, and that there is no reason why judgment should not be given in his favour. It is submitted that there is no prohibition in the loan agreement between the parties to prevent the plaintiff commencing proceedings in this court in New South Wales. It is also submitted that the mediation procedure referred to was not mandatory or was sought by the plaintiff and not agreed to by the defendant. It is noted that the defendant has permitted the case to proceed to final hearing without seeking a stay relying on the dispute resolution clause in the loan agreement between the parties. The pleadings 1. The plaintiff commenced the proceedings by a Statement of Claim filed on 14 July 2020 in which he claimed the sum of US$75,151.44 together with interest on the basis of three lots of money loaned by him to the defendant in 2019. It is pleaded that the contract between the parties is recorded in a loan agreement dated 15 August 2019. 2. In a Defence filed on 21 August 2020, the defendant raised a number of defences including: 1. Objections to venue and to jurisdiction; 2. The plaintiff not complying with the dispute resolution procedures in the loan agreement; 3. That all disputes would be resolved by the courts of the State of Florida in the United States of America; and 4. Proceedings commenced in any other jurisdiction were a breach of the loan agreement and were liable to be dismissed in the place when commenced. 1. The plaintiff in final submissions submitted that inadequate particulars were provided in the Defence. In my view, the Defence adequately informs the plaintiff of the issues in dispute which were, in my view, consistent with the oral submissions made by the solicitor appearing for the defendant. 2. In a Reply filed on 2 September 2020, the plaintiff joins issue with the whole of the Defence and asserts that the District Court of New South Wales is an appropriate venue because the loan agreement does not preclude a party from commencing proceedings in the District Court of New South Wales even where a foreign law is applicable under the loan agreement. It is also submitted in the Reply that the plaintiff complied with any required dispute resolution procedures in the agreement or, in the alternative, was not required to issue a dispute notice before he commenced legal proceedings. Evidence relied upon by the plaintiff 1. The plaintiff read three affidavits in support of his claim: 1. Affidavit of Kirk Ian Bouffard affirmed 31 January 2021; 2. Affidavit of Adam Christopher Bowe sworn 22 March 2021; and 3. Affidavit of Adam Christopher Bowe sworn 24 March 2021. Background facts 1. The background facts were not, in substance, in dispute between the parties. Unless I indicate to the contrary, the facts which follow constitute my factual findings in the matter. 2. On 30 July 2019, the plaintiff, who was intended by officers of the defendant to become the General Manager of a café/restaurant which the defendant wished to establish in the Republic of Indonesia on the island of Bali, agreed to lend to the defendant the sum of US$35,425. This sum was transferred on the same date to the defendant. 3. At the time, the defendant was a corporation registered in New South Wales. Its registered office at the time was also in New South Wales. 4. On 13 August 2019, an agreement was made between the plaintiff and the defendant for the plaintiff to lend to the defendant the further sum of US$12,586. This amount was advanced by the plaintiff to the defendant on the same date. 5. On 15 August 2019, the plaintiff entered into an agreement with the defendant to lend to the defendant the further sum of US$27,140.44. That amount was advanced on that date by the plaintiff to the defendant. 6. On or around 15 August 2019, the various agreements to lend were consolidated into a third loan agreement dated 15 August 2019 ("the loan agreement"). This was prepared by the plaintiff. The defendant forwarded the loan agreement executed by it to the plaintiff on 18 August 2019. The plaintiff executed the loan agreement also on 18 August 2019 and returned an executed copy to a director of the defendant. The loan agreement accordingly became binding on the parties on this date. 7. Under Clause 4.1 of the loan agreement, the defendant borrower was obliged to repay to the plaintiff lender the principal amount outstanding on the "Repayment Date specified in Item 4 of the Schedule". The schedule to the loan agreement referred to the loan amount being US$75,240.44 and the borrower being the defendant. Item 3 of the schedule referred to the interest rate applicable as being 10% per annum. Item 4, which defined the Repayment Date, indicated that the loan amount plus interest accrued would be fully paid to the plaintiff in the following manner: 1. Loan 1 on 30 September 2019 in the sum of US$35,425; 2. Loan 2 on 13 October 2019 in the sum of US$12,586; and 3. Loan 3 on 15 October 2019 in the sum of US$27,140.44. 1. The first two loans plus the interest applicable on them were not repaid on the due dates. The third loan was also not repaid on 15 October 2019 in accordance with Clause 4.1 and the schedule to the loan agreement. 2. On 21 April 2020, solicitors for the plaintiff forwarded a letter to the defendant informing the defendant that they acted for the plaintiff. The letter referred to the loan agreement dated 15 August 2019 and stated that the letter was a dispute notice. It was not in issue in the proceedings that the letter constituted a dispute notice for the purposes of Clause 7.1 of the loan agreement. The letter referred to the background to the various loans and the failure by the defendant to repay the loans as required. A debt of the three loans plus outstanding interest was referred to. A demand for payment was made, and in the absence of payment, it was indicated that the plaintiff would commence legal proceedings for the recovery of the debt. 3. In paragraph 23 of his affidavit, Mr Bouffard states that he was terminated from his employment at the cafe owned by the defendant on around 14 February 2020. He refers to the dispute notice in paragraph 24 of his affidavit. In paragraph 25 of his affidavit, Mr Bouffard states that as at the date of affirming his affidavit, no part of the loan has been repaid to him and no interest has been paid to him. 4. The affidavit of Mr Bouffard does not refer to any response by the defendant to the dispute notice. 5. Mr Bouffard was cross-examined by the solicitor for the defendant. In his oral evidence, Mr Bouffard stated inter alia: 1. That following the forwarding of the 21 April 2020 dispute notice, multiple attempts were made by him to meet with representatives of the defendant; 2. The defendant never responded to attempts to meet with the plaintiff; 3. The defendant never responded to a request to mediate the dispute; 4. There was never a mediation in the state of Florida in the United States before proceedings were commenced by the plaintiff. It was agreed that proceedings were commenced in this court before any mediation occurred. 1. The solicitor for the defendant submitted that I should reject Mr Bouffard's evidence that multiple attempts were made by him to meet with representatives of the defendant following the issue of the dispute notice but there was no response. It was submitted that such evidence should have been in Mr Bouffard's affidavit and, accordingly, the court would give it little or no weight. I reject that submission. The defendant chose to rely on or tender no evidence at the hearing of the matter. The debt under the loan agreement was in essence not disputed. In my view, there is no good reason why I would not accept the oral evidence of Mr Bouffard in circumstances where this was the only evidence on the issue and I had not rejected his evidence. Overall, Mr Bouffard appeared to be an honest and straightforward witness. 2. As stated above, the proceedings were commenced in this court by the Statement of Claim filed on 14 July 2020. No doubt partly as a response to the Defence filed by the defendant, on 9 October 2020 the solicitor for the plaintiff sent an email to the solicitor for the defendant which provided as follows: "We refer to the pleadings. As set out, our client does not admit that it has not complied with any dispute resolution procedure. Nevertheless, without admissions and without prejudice to our client's rights, our client proposes a Florida based virtual mediation to be conducted through the Central Florida Mediation Group prior to the adjourned Pre-Trial Conference listed on 11 November 2020, and for each party to be liable to pay half the cost of the mediation. If this is acceptable to your client, please let us know by no later than 2pm on Friday, 16 October 2020 with a list of your client's available dates bearing in mind the difference in time zones." 1. It is not in dispute that the defendant did not accept the plaintiff's proposal for the mediation set out in the 9 October 2020 email or propose any other mediation or alternative dispute resolution in the nature of mediation between the parties. 2. The evidence establishes that the parties have since attempted an informal settlement conference as ordered by the court: Bowe affidavit dated 22 March 2021, paragraph 4. The matter was not resolved. It is not in dispute that as at the date of the final hearing, no part of the loan agreement or interest has been repaid by the defendant. Provisions of the loan agreement 1. It is necessary to refer to some of the more significant provisions of the loan agreement which was executed by the parties. As indicated above, the loan agreement was dated 15 August 2019 and was between the plaintiff and the defendant. Under the heading "Background", it was stated that the lender (the plaintiff) has agreed to make a loan to the borrower (the defendant) on the terms and conditions of the agreement. 2. Clause 3.1 of the loan agreement referred to equity participation by the plaintiff but the evidence establishes that this did not proceed. As indicated above, Clause 4.1 sets out the obligation on the defendant to repay to the plaintiff the principal amount outstanding on the various dates indicated in Item 4 of the schedule to the loan agreement. 3. Clause 6.2 and Clause 7 of the loan agreement provide as follows: "6.2 Governing law and jurisdiction (a) This agreement is governed by and construed under the law in the State of Florida, United States of America. (b) Any legal action in relation to this document against any party or its property may be brought in any court of competent jurisdiction in the State of Florida. c) Each party by execution of this document irrevocably, generally and unconditionally submits to the non-exclusive jurisdiction of any court specified in this provision in relation to both itself and its property. … 7. Dispute Resolution 7.1 Dispute A dispute relating to, or arising out of, this agreement (Dispute) exists when a party gives notice (Dispute Notice) to each other party: (a) stating that there is a Dispute; and (b) detailing the subject of the Dispute. 7.2 Procedure When a Dispute exists, the parties (or their nominees) will meet to discuss the resolution of the Dispute in good faith. If the parties: (a) resolve the Dispute, then the resolution will be set out in a statement signed by an authorised representative of each party; or (b) cannot resolve the Dispute within 10 (ten) Business Days (or other period as agreed in writing by the parties after the Dispute Notice has been given to all parties), the Dispute must be referred to mediation in accordance with, and subject to, Alternative Dispute Resolution, Florida Courts. All mediation proceedings are to be held at a place in the state of Florida agreed to in writing between the parties to the Dispute, and the costs shall be equally shared. 7.3 Application to court If there is no resolution of the Dispute within 30 (thirty) Business Days of mediation under clause 7.2, any party may commence legal proceedings in [sic] in relation to a matter that is the subject of a Dispute. 7.4 Continuing obligations The parties to this Deed must continue to perform their respective obligations under this Deed, except to the extent that the matter cannot be proceeded with until the Dispute has been determined (provided that a party has acted reasonably in relation to the Dispute)." 1. The dispute between the parties centred on the proper construction to be given to Clause 7 of the loan agreement. The reference to "Deed" in clause 7 is incorrect and must be seen in its context as a reference to the loan agreement. Legal principles applicable to a dispute resolution clause 1. The plaintiff relied on a decision of Justice Einstein in the New South Wales Supreme Court in Aiton Australia Pty Ltd v Transfield Pty Ltd [1999] NSWSC 996; (1999) 153 FLR 236. In paragraphs 42-45 of that decision Einstein J stated as follows: "42 There is no legislative basis for enforcing dispute resolution clauses otherwise than those which provide for arbitration: Commercial Arbitration Act 1984 (NSW). However, it is clear that if parties have entered into an agreement to conciliate or mediate their dispute, the Court may, in principle, make orders achieving the enforcement of that agreement as a precondition to commencement of proceedings in relation to the dispute: Hooper Bailie. 43 To achieve enforcement of such an agreement it is essential that the agreement is in the Scott v Avery form - that is, expressed as a condition precedent. Such a clause was seen not to offend the general tenet of law that it is not possible to oust the jurisdiction of the court as it acted, in effect, as a postponement of a party's right to commence legal proceedings until the arbitration was concluded, not as a prohibition against a party having such recourse: Scott v Avery [1856] EngR 810; (1856) 10 ER 1121. Further, as mentioned previously, the agreement is enforced, not by ordering the parties to comply with the dispute resolution procedures, but by forbidding them from using other procedures from which they have agreed to abstain until the end of the dispute resolution process. 44 The Court will not adjourn or stay proceedings pending alternative dispute resolution procedures being followed, if the procedures are not sufficiently detailed to be meaningfully enforced: Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709. 45 In Hooper Bailie, Giles J framed the test for enforcement in the following terms at 209: 'An agreement to conciliate or mediate is not to be likened ... to an agreement to agree. Nor is it an agreement to negotiate, or negotiate in good faith, perhaps necessarily lacking certainty and obliging a party to act contrary to its interests. Depending upon its express terms and any terms to be implied, it may require of the parties participation in the process by conduct of sufficient certainty for legal recognition of the agreement' [Emphasis added]" 1. In Aiton at [69] Einstein J set out a number of requirements in order for a mediation clause to avoid being held to be unenforceable. These include that the process established by the clause must be certain; the administrative processes for selecting a mediator and in determining the mediator's remuneration should be included in the clause and the clause should set out in detail the process of mediation to be followed. It is noted that in Aiton there was a notice of notion before the court seeking a stay of proceedings: see at [1]-[2]. 2. The principles stated by Einstein J have been referred to without criticism in numerous later authorities although the case has been distinguished in a number of cases. 3. It is to be noted that the clause in the current case, Clause 7, does not state in Clause 7.2 the position to apply where one party does not respond to attempts to meet to resolve a dispute. Clause 7.2 (b) does not clarify the position where there is no agreement as to the place to hold the mediation in Florida. Clause 7 also does not have an express prohibition on commencing proceedings unless the procedure in Clause 7.2 is followed. As stated, no stay has been sought by the defendant relying on Clause 7. 4. In Global Partners Fund Limited v Babcock & Brown Ltd (in liquidation) [2010] NSWCA 196, the Court of Appeal considered a contract with an exclusive jurisdiction clause. Spigelman CJ (with whom Giles and Tobias JJA agreed) stated as follows at paragraphs [60]-[61] and [67]-[68]. "60 Finally, in my opinion an exclusive jurisdiction clause should be interpreted in the same liberal manner as is authoritatively established with respect to arbitration clauses. The two kinds of clauses have frequently been treated as legally cognate and authorities on the scope of arbitration clauses are frequently cited in authorities on exclusive jurisdiction clauses. In both cases, all disputes which, as a matter of substance, arise from the contractual relationship between the parties are intended to be determined by the same tribunal. It is not appropriate to give general words in such a commercial context a narrow interpretation, with the consequence that some disputes which, in a practical sense, arise from the contractual relationship could be determined by courts or tribunals other than that to which the parties have agreed to submit their disputes. 61 The oft-quoted decision of Gleeson CJ in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, made with respect to an arbitration clause, is applicable to exclusive jurisdiction clauses. His Honour said (at 165): "When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have yet arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be construed narrowly. They are unlikely to have intended that different disputes should be resolved before different tribunals or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument." … 67 A significant purpose of an exclusive jurisdiction clause is to ensure that all disputes are determined in a coherent manner by a single jurisdiction. There is a clear commercial interest in minimising the possibility of a dispute being determined by multiple tribunals, with the consequent prospect of divergent findings. Furthermore, the parties, in advance, have determined that a particular jurisdiction is acceptable to them, both in terms of the speed and efficacy of its civil dispute resolution procedures and for the competence and skill of its judges and lawyers. A party to such a clause should be held to its contractual obligations, whether enforced by another party on a contractual basis or by means of the exercise of a discretion conferred upon the Court. 68 As is well known, all nations make exorbitant claims to jurisdiction – in common law systems, generally turning on service and in civil law systems, generally turning on citizenship or domicile, together with a range of additional possible linkages. The possibility that a multiplicity of jurisdictions would have some basis for hearing disputes by reason, for example, of the location of investments or investors, particularly where the contract was intended to operate on a global basis, could lead to delays in resolving matters and to inconsistencies in the outcomes of identical or cognate disputes. There is no basis for a narrow interpretation of an exclusive jurisdiction clause in the context of a contract intended to have international operation." 1. In the present case, it was accepted by the defendant in submissions that the clause in question was neither an arbitration clause nor an exclusive jurisdiction clause. However, Global Partners, above, provides some assistance in relation to the general approach to be taken in the construction of like clauses in a contract. 2. In Lepcanfin Pty Ltd v Lepfin Pty Ltd [2020] NSWCA 155, Bell P (with whom Payne and McCallum JJA agreed) considered at [78]-[94] the legal principles applicable to the construction of dispute resolution clauses. His Honour's statement of the principles may be summarised as follows: 1. A dispute resolution clause should be construed just as any other contract term should be construed, to seek to discover what the parties actually wanted and intended to agree to. The search is for the parties' intention, objectively ascertained; 2. The orthodox process of construction is to be followed. Thus, a dispute resolution clause, like any other clause of a commercial contract, must be construed by reference to the language used by the parties, the circumstances known to them and the commercial purpose or objects to be secured by the contract: at [80]; 3. A commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience; 4. Contextual considerations are also important. The context in which the dispute resolution clause is entered into is significant; 5. In the construction of a contract including a dispute resolution clause, a particular contractual clause or sub-clause must not be construed in isolation but as part of the contract as a whole: at [83]; 6. The same clause, or the same phrase in a particular clause, may not bear an identical meaning from case to case. Context may provide different meanings for identically worded clauses: at [84]. Dispute resolution clauses, including arbitration or exclusive jurisdiction clauses, must be given a broad and liberal construction. The agreement should not be construed narrowly: at [85]-[87]. There is a clear commercial interest in minimising the possibility of a dispute being determined by multiple tribunals: at [88]; 7. The process of contractual construction of dispute resolution clauses has not been overlaid by presumptions: at [91]. 1. The Global Partners decision was referred to with approval: at [88]. See also Qantas Airways Ltd v Rohrlach [2021] NSWCA 48 at [63]-[64] per Bell P (with whom Bathurst CJ agreed). 2. In the present case, the context in which the loan agreement dated 15 August 2019 was executed is relevant: 1. The plaintiff had already advanced two sums of money to the defendant which had not been repaid; 2. A third sum of money was agreed to be advanced; 3. The loan agreement dated 15 August 2019 was entered into in circumstances where the schedule to it contemplated that the repayment of the entire loan by the defendant would be made by 30 September 2019 (Loan 1), 13 October 2019 (Loan 2) and 15 October 2019 (Loan 3), all dates shortly after the agreement; 4. In paragraph 16 of Mr Bouffard's affidavit, he states that it was understood by the parties that the loans were to be on a short-term basis pending the opening of the defendant's Bali cafe. There is nothing in the wording of the loan agreement dated 15 August 2019 to indicate the contrary. In fact, the schedule of repayment dates supports this assertion. The dispute between the parties 1. Although initially raising numerous other points, the solicitor for the defendant did not dispute that the loan amount was owed by the defendant and had not been repaid by it. His submission was that the dispute resolution procedures in Clause 7 of the loan agreement had not been complied with by the plaintiff and therefore the plaintiff could not commence the current proceedings. In essence, it was submitted that the dispute resolution procedure set out in Clause 7 of the loan agreement had to be complied with before any proceedings could be commenced. It was submitted that this made New South Wales and this court a clearly inappropriate forum for the determination of the dispute between the parties. However, no cross-claim or stay application was brought or made by the defendant. 2. The plaintiff submitted first, that when read in its context, the dispute resolution clause in Clause 7 was not, on its proper construction, intended to prevent the plaintiff commencing proceedings in this court as it did. It was submitted that, in substance, the plaintiff had sought to comply with the dispute resolution procedures. It was submitted that at no stage did the defendant co-operate in achieving an attempt to settle the matter. Further, it was submitted that there was never any dispute that the amount was owing to it by the defendant. It was also submitted that there is nothing in Clause 7 which prohibits the commencement of proceedings in this court. In other words, it was said that Clauses 7.2-7.3 of the loan agreement were merely enabling or facilitative but not prohibitive. It was further submitted that even if there was a breach, the appropriate remedy was to seek a stay and no such stay had been sought at any stage by the defendant. 3. I note that there was no evidence that either party had terminated the loan agreement for breach. Clause 7.4 of the loan agreement required the parties to the agreement to "continue to perform their respective obligations under this Deed". It was submitted by the plaintiff that the general principle is that a party who is ready and able to perform his or her part of the contract could maintain an action against a party who refused or neglected to perform their part: Foran v Wright [1989] HCA 51; (1989) 168 CLR 385 at pages 396-397. 4. In relation to the defendant's right to bring a damages claim, no cross-claim has been brought. It was submitted that a party must show that it is ready, willing and able to perform its contractual obligations before a right to damages arises. I accept that submission: see Sharjade Pty Ltd v The Commonwealth [2009] NSWCA 373 at [122]; Lavigne v Kumar [2020] NSWSC 1120 at [122]-[124] per Darke J. Consideration Jurisdiction of this court 1. It was not in issue between the parties that this court has jurisdiction to determine the action brought by the plaintiff. The proceedings were an action by the plaintiff to recover moneys. Such an action falls within the jurisdiction of the court under s 44 of the District Court Act 1973 (NSW). The amount claimed is within the jurisdiction of the court. The defendant corporation, having been registered in New South Wales, is regarded as being present in this State. Further, by the filing of its Defence on 21 August 2020, the defendant is taken to have entered an appearance in the proceedings: Part 6.9(2) of the Uniform Civil Procedure Rules. Does the loan agreement confer exclusive jurisdiction on the courts of Florida in the United States of America? 1. It was accepted by the defendant that the terms of the loan agreement did not confer exclusive jurisdiction on the courts of Florida in the United States of America. Clause 6.2(b) of the loan agreement permits a party to bring proceedings in any court of competent jurisdiction in the State of Florida but does not indicate on the face of the clause or anywhere else in the loan agreement, that the courts of Florida have exclusive jurisdiction to determine any disputes between the parties. Express words would have been required to lead to this conclusion. Clause 6.2(c) of the loan agreement expressly refers to the "non-exclusive jurisdiction of any court specified in this provision." Is New South Wales a clearly inappropriate forum to determine the claim? 1. The solicitor for the defendant submitted that New South Wales was a clearly inappropriate forum to determine the proceedings. It is noted, however, that the defendant did not seek an order under Part 12.11 of the Uniform Civil Procedure Rules 2005 that the court declines to exercise jurisdiction in respect of the Statement of Claim or an order under s 67 of the Civil Procedure Act 2005 (NSW) seeking that the proceedings be permanently stayed on the ground that that the courts of New South Wales are clearly an inappropriate forum for the proceedings. Counsel for the plaintiff submitted that the failure to seek a stay was fatal to the defendant's submission. It was submitted: 1. The defendant is a corporation present in New South Wales; 2. By filing its Defence, the defendant has appeared in the proceedings; 3. Subject to the dispute resolution clause issue, the debt claimed is not in dispute; 4. The defendant has allowed the proceedings to continue to final trial without seeking a stay and therefore an order at the final hearing in the absence of an application was inappropriate. 1. In AB v XY [2020] NSWDC 27 I set out the applicable principles in paragraphs 25-43 as follows: "25. The general principles applicable on the application may be found in the following High Court cases: Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32; (1988) 165 CLR 197 at 247-248; Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 at 564-565; and Puttick v Tenon Limited [2008] HCA 54; (2008) 238 CLR 265 at 276-277 (where the test in Voth was confirmed). 26. In Voth v Manildra Flour Mills Pty Ltd, above, the majority of the High Court held at 564 that the principles to be applied in applications for a stay on inappropriate forum grounds are those stated by Deane J in Oceanic Sun Line Special Shipping Co Inc, above, at 247-248. 27. Those principles have been summarised and applied in a number of recent cases: Hardaker v Mana Island Resort (Fiji) Ltd [2018] NSWSC 1863, Michael Wilson & Partners Ltd v Emmott [2019] NSWSC 218, Photios v Photios [2019] NSWCA 158 and Bombardier Inc v Avwest Aircraft Pty Ltd [2020] WASCA 2. In the latter case, the Western Australian Court of Appeal stated in a joint judgment as follows at paragraphs 18-22: "18. In relation to the inappropriate forum issue, the question is whether the local court is a clearly inappropriate forum for the determination of the dispute, having regard to all of the circumstances of the case. A court will be a clearly inappropriate forum if the continuation of the proceedings in that court would be oppressive, in the sense of seriously and unfairly burdensome, prejudicial or damaging, or vexatious, in the sense that it would cause serious and unjustified trouble and harassment. 19. One circumstance which will always be relevant to the application of the clearly inappropriate forum test will be the availability of relief in a foreign court or tribunal. However, the question whether the local court is a clearly inappropriate forum does not turn 'upon an assessment of the comparative procedural or other claims of the foreign forum', or require the formation of subjective views about either the merits of that forum's legal system or the standards and impartiality of those who administer it. The question whether the local court is a clearly inappropriate forum focuses on the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum. That is, a court is not a clearly inappropriate forum merely because another one is more appropriate. 20. Similarly, whether the substantive law of the forum is applicable in the determination of the dispute which is the subject of the action is a significant factor in the exercise of the discretion to set aside service outside the jurisdiction, but it is not determinative. An Australian court cannot be a clearly inappropriate forum merely by virtue of the circumstance that the choice of law rules which apply in the forum require its courts to apply foreign law as the law governing the determination of the dispute. 21. Any legitimate personal or juridical advantage is also a relevant, but not decisive, consideration in determining whether the local court is a clearly inappropriate forum. 22. The determination of whether the local court is not a clearly inappropriate forum, in the sense of determining whether a trial in the local jurisdiction would not be productive of injustice, involves an evaluative judgment. The role of the primary judge in considering whether the local court is a clearly inappropriate jurisdiction is thus not merely to weigh all the factors, but to make a judgment as to whether a trial in the jurisdiction would be productive of injustice, in the sense described above at [18]." 28. In Puttick, above, the majority of the High Court stated as follows in paragraph 27: "In Voth v Manildra Flour Mills Pty Ltd, the Court held that a defendant will ordinarily be entitled to a permanent stay of proceedings instituted against it and regularly served upon it within the jurisdiction, if the defendant persuades the local court that, having regard to the circumstances of the particular case, and the availability of an alternative foreign forum to whose jurisdiction the defendant is amenable, the local court is a clearly inappropriate forum for determination of the dispute. The reasons of the plurality in Voth pointed out that the focus must be "upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum"." 29. The proceedings on their face here were properly commenced in this Court. 30. The question is whether New South Wales is a clearly inappropriate forum in which to permit the action to proceed. 31. There is no suggestion that leave was required to serve the defendant with the initiating process in these proceedings. If that were the case, the onus would rest on the plaintiff to establish that New South Wales was not clearly an inappropriate forum: Voth, above, at 564. 32. The acts relied upon by the plaintiff to support her claims were allegedly committed by the defendant in Greece, and thus the torts, if they were torts, were committed there. 33. Without deciding the matter finally, I assume for the purpose of deciding the application, that the defendant would only be liable if he were liable under the civil law of Greece: Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491; United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24 per Allsop P at [29]. There may be potential arguments in the proceedings as to whether all aspects of the law of Greece will apply to a civil action: Zhang at [74]-[76]. I do not decide that matter. However, it appears on the authorities that the substance of the law to be applied including if the matter were heard in New South Wales, in determining whether the plaintiff has established any civil claim for a civil wrong against the defendant will be the law of Greece. 34. That fact gives rise to the need for experts' reports if the matter was to proceed in New South Wales from experts as to Greek law. Cross-examination may be involved of such experts. That will increase the cost of any proceedings significantly if they remain in New South Wales. There was no evidence before me that the parties were persons of limited means. 35. The onus rests on the defendant/applicant to satisfy the court that New South Wales was clearly an inappropriate forum in which to permit the matter to proceed: Voth at 565. 36. The question whether the local court is a clearly inappropriate forum focuses upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum, here Greece: Voth at 565. 37. As was stated by the Court of Appeal in Photios v Photios, above, at [43] per Bell P (with whom Leeming and Gleeson JJA agreed), in Oceanic, above, Deane J at 243 referred to the prima facie right of a claimant to insist upon the exercise of competent jurisdiction, regularly invoked, with this prima facie right not to be lightly displaced or denied. The question is whether the hearing of the matter would be vexatious or oppressive or amount to an abuse of process. These terms have a particular meaning. The suggestion of a prima facie right of a claimant to insist upon the exercise of competent jurisdiction, however, does not add a further burden or hurdle to a defendant in establishing whether the local forum is a clearly inappropriate forum. 38. In McGregor v Potts [2005] NSWSC 1098; (2005) 68 NSWLR 109, Brereton J stated as follows in paragraph 43: "43. In his judgment, the learned Master correctly stated these principles. But in my respectful opinion, in acceding to the submissions made on behalf of Ms McGregor to the effect that the vexation and oppression claimed by the defendants was largely conjecture, and thus discounting it, he was led into error in the application of those principles. The Voth principles do not require proof of actual vexation or oppression; what they require is proof of a sufficient imbalance of the "connecting factors" that it can be said that the local forum is a "clearly inappropriate", as distinct from "less appropriate", one. Once that is established, the law presumes vexation and oppression will be occasioned to the foreign party by requiring it to litigate in a clearly inappropriate forum, without requiring proof of actual vexation or oppression." 39. In Oceanic, above, Deane J stated at 247 that "oppressive" in the context should be understood "as meaning seriously and unfairly burdensome, prejudicial or damaging while "vexatious" should be understood as meaning productive of serious and unjustified trouble and harassment": see Photios at [44]. As Brereton J stated in McGregor, actual vexation or oppression need not be proved. The question is whether the connecting factors show that the local forum is clearly inappropriate as distinct from less appropriate. If it is, the law presumes vexation and oppression will be occasioned by requiring the defendant to litigate in a clearly inappropriate forum. 40. Accordingly, the question in the present case is whether New South Wales is a clearly inappropriate forum for the determination of the dispute, having regard to all the circumstances of the case: Oceanic at 247, Voth at 564-5, Zhang, above, at [25]; Bombardier, above, at [18]. 41. The substantive law to be applied in the forum is a very significant factor in the exercise of the court's discretion, but the court should not focus upon that fact to the exclusion of all other matters: Voth, above, at 566. 42. An Australian court cannot be a clearly inappropriate forum merely by virtue of the circumstance that the choice of law rules which apply in the forum require the courts to apply a foreign law as the law governing the determination of the proceedings: Zhang at [81]; Bombardier at [20]. 43. In the court determining whether New South Wales is a clearly inappropriate forum, the court must be involved in an evaluative judgment considering all relevant factors and whether a continuation of the trial in New South Wales would produce vexation or oppression to the defendant." 1. In my view, New South Wales is not a clearly inappropriate forum for determining the present proceedings between the parties. All the circumstances must be taken into account. The factors leading me to this conclusion are as follows: 1. No application was brought by the defendant for a stay of the proceedings on the appropriate ground; 2. The defendant is present in the jurisdiction; 3. Leave was not required from the court to serve the defendant with the Statement of Claim; 4. There is no indication that the continuation of the proceedings in this court would be oppressive, in the sense of seriously and unfairly burdensome, prejudicial or damaging, or vexatious, to the defendant; 5. The fact that another possible court such as the courts of Florida may be more appropriate is not decisive; 6. There was no evidence in the present case that the law of Florida (see Clause 6.2(a) of the loan agreement) was different to the law of New South Wales. The defendant accepted that the court must assume that the law of both jurisdictions is the same in relation to the contractual issue before the court; 7. No reference was made to any legitimate personal or juridical advantage in another court; 8. The proceedings on their face were properly commenced in this court. The jurisdiction of this court on its face has been properly invoked. There is a prima facie right of a claimant to insist upon the exercise of competent jurisdiction; 9. The facts that the plaintiff is a US citizen and the claim is related to moneys advanced for a business in Bali are in my view not decisive factors; 10. The fact that there is a dispute under Clause 7 of the loan agreement as to its proper construction does not make in my view New South Wales a clearly inappropriate forum for determining the dispute between the parties. The dispute can be conveniently determined here. 1. I accept the plaintiff's submissions on this issue. The contractual debt 1. It was not in dispute that there was a contract between the parties, a debt was owed by the defendant as claimed and it has not been repaid. What law applies? 1. I have determined that this court does have jurisdiction to determine the dispute between the parties. In my view, the law of Florida applies in relation to the construction and determination of the dispute between the parties under the loan agreement: Clause 6.2(a) of the loan agreement. 2. Florida is a State in the United States of America. There was no evidence before the court as to the law of contract which applies in the State of Florida. The plaintiff submitted that the court should assume that the law of Florida is the same as the law of New South Wales for the purposes of the construction of the loan agreement. The defendant did not dispute that approach. 3. The general principle which applies is that there is a presumption that foreign law is the same as the law of the forum: Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 at [16], [45] and [116]. See also ET-China.com International Holdings Ltd v Cheung [2019] NSWSC 1874 at [60]. Accordingly, I assume that the law of the State of Florida is the same as the law of New South Wales. There was no evidence pointing to the contrary. The dispute resolution procedures 1. The defendant submitted that the plaintiff was required to comply with the dispute resolution procedures in Clause 7 of the loan agreement and it did not comply with them. The plaintiff submitted that it did comply with the procedures but if it did not, they were not mandatory. If they were mandatory, it is said that any remedy of the defendant was in damages, if available. 2. There was no dispute between the parties that the letter from the plaintiff's solicitors to the defendant dated 21 April 2020 which was in evidence, amounted to a Dispute Notice within Clause 7.1 of the loan agreement. In my view, that is clearly the case as the letter expressly states that it is a dispute notice in relation to the money said to be owing to the plaintiff. 3. Clause 7.2 of the loan agreement provides that when a dispute exists, "the parties (or their nominees) will meet to discuss the resolution of the Dispute in good faith". It was first submitted by the plaintiff that the evidence of Mr Bouffard establishes that he attempted to meet with representatives of the defendant without success. I accept that evidence as there was no evidence to the contrary and Mr Bouffard appeared to me to be an honest and impressive witness. I accordingly find that the plaintiff attempted to comply with Clause 7.2 and the defendant breached the loan agreement by failing to respond to the plaintiff's attempts to meet in relation to the dispute pursuant to Clause 7.2. There is no evidence that the defendant itself attempted to arrange such a meeting. Therefore, the defendant complains about a failure to comply with Clause 7 by the plaintiff in circumstances where the defendant's own conduct prevented the procedure set out occurring. 4. Alternatively, it was submitted by the plaintiff that there was no other temporal obligation under Clause 7.2 than for the parties to meet at the appropriate time after the Dispute Notice was forwarded. Having regard to the date of the Dispute Notice (21 April 2020), it was submitted that all that was required was for the parties to meet to attempt to resolve the dispute after early May 2020. It was submitted by the plaintiff that the attempt to resolve the dispute at the informal settlement conference referred to in paragraph 4 of Mr Bowe's affidavit sworn 22 March 2021, which was ordered by the court, complied with the plaintiff's obligation under clause 7.2 of the loan agreement. 5. I accept that alternative argument if the first argument is not accepted. In my view, there is nothing in Clause 7.2 which prevents a meeting being held after the commencement of proceedings in an attempt to resolve the dispute. The defendant refers to and relies upon Clause 7.3. In my view, Clause 7.3 of the loan agreement on its proper construction merely enables legal proceedings to be commenced by a party but does not expressly prohibit legal proceedings been commenced prior to any mediation between the parties. This is particularly the case where a money claim is not disputed. 6. A dispute resolution clause must be construed in its context having regard to the circumstances known to the parties when they entered into the agreement and the commercial purpose or objects to be secured by the contract. Like all commercial contracts, the loan agreement is to be construed so as to avoid making commercial nonsense or working commercial inconvenience. In the present case, it was contemplated by the parties that the loans would be repaid between 30 September 2019 and 15 October 2019: Clause 4.1 and Schedule Item 4 of the loan agreement. It has never been in dispute that the moneys were not repaid by this date by the defendant. When the Dispute Notice was issued by the solicitors for the plaintiff on 21 April 2020, no bona fide dispute was raised by the defendant that part of the moneys owed had been repaid or that there was some qualification to the obligation to repay other than the terms of Clause 7 relating to the dispute resolution procedure. At no stage has the defendant raised any issue in relation to its liability to repay the loan. 7. The defendant refers to the mandatory words used in Clause 7.2(b) in the requirement that the dispute "must be referred to mediation". To require such a mediation where there was no dispute between the parties that the moneys were repayable is in my view to adopt a construction of the loan agreement which would not further its commercial purpose but would create commercial inconvenience. The defendant submits that the defendant has lost a valuable right being the right for the matter to be considered at mediation. However, in my view the alleged right to go to mediation where there was no dispute that the amount was repayable is different to a right for example to go to arbitration where the amount is in dispute and the arbitrator will make a determination as to some or all of the legal rights of the parties. At all times, the plaintiff has pursued its rights under the loan agreement for the repayment of the sum owed. At all times, the defendant has not raised any issue as to the obligation to repay other than compliance with Clause 7. In my view, Clause 7, when read in the light of the whole of the loan agreement, does not create a mandatory procedure to be complied with where there is no dispute that the amount was repayable. 8. It is submitted that Clause 7.3 clearly indicates that it is only where no resolution of the dispute occurs under the mediation under Clause 7.2, that any party may commence legal proceedings in relation to the matter that is the subject of a dispute. I do not read in Clause 7 or any other provision of the loan agreement, a prohibition on a party commencing legal proceedings unless the terms of the mediation procedure under Clause 7.2 have been complied with. To do so where the amount claimed is not in dispute, would apply an uncommercial construction to the agreement. In my view, a reasonable business person would not have understood Clause 7.2 to prevent legal proceedings where the amount claimed was not in dispute unless the mediation procedure in Clause 7.2 was first complied with: Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 at [16]-[17]. The parties should be objectively assumed to have intended to produce a commercial result and one which makes commercial sense. Requiring such a procedure to be followed where the amount was not in dispute is inconsistent with those objectives. 9. I therefore accept the submission of counsel for the plaintiff that there is no prohibition in Clause 7 to a party commencing proceedings in a court with competent jurisdiction where the procedure in Clause 7.2 has not first been complied with in the present circumstances. 10. Further, if I am in error in my construction of the loan agreement, I consider that the email dated 9 October 2020, above, amounts in substance to compliance by the plaintiff with the obligation in Clause 7.2(b). The defendant submits that this email merely requested a mediation and did not refer the dispute to mediation as the clause requires. It is not in dispute that the defendant rejected the offer of a mediation. There is no evidence that the defendant itself referred the dispute to mediation. The defendant could itself refer the matter to mediation in Florida but did not do so. It gave no response to the plaintiff's attempts which appear to be a first step in attempting to invoke the Clause 7.2 procedure. 11. If I am in error in all of the above findings, and there was a breach by the plaintiff of Clauses 7.2-7.4 of the loan agreement then the question arises as to the effect of such a breach by the plaintiff. First, there is no evidence that any real loss was suffered by the defendant. The defendant itself was in continuing breach of the loan agreement by its failure to repay. There is also evidence that it did not respond to attempts by the plaintiff to meet to discuss the Dispute Notice. I accept Mr Bouffard's evidence as to this. In those circumstances, any breach by the plaintiff would potentially give rise at the maximum to an award of nominal damages. However, the principles stated in Sharjade, above, would appear to be against such a claim. Further, no order for a stay was sought by the defendant: cf in Aiton. No application was made to transfer the proceedings to the Supreme Court to seek an injunction. Determination 1. For the above reasons, in my view the various defences of the defendant should be rejected and judgment should be entered for the plaintiff for the amount claimed. It was agreed between the parties that the judgment amount should be given in Australian dollars converted from a US dollar amount as at the date of judgment. It is also noted that the interest rate on the loan is 10%: Clause 3.2(b) and Item 3 of the schedule. The parties should bring in agreed short minutes of order reflecting the amount of the judgment sum and the amount of the interest converted from US dollars to Australian dollars as at the date of judgment. 2. I will hear the parties as to costs. As the plaintiff has been successful in its claim, my preliminary view is that the defendant should pay the costs of the plaintiff of the proceedings as agreed or assessed. 3. Accordingly, the orders I make are as follows: 1. Judgment for the plaintiff against the defendant. 2. The parties are to bring in agreed short minutes of order reflecting the reasons of the court within 14 days. 3. In the event that the parties cannot agree on the appropriate orders, leave is granted to the parties to approach the Associate to Dicker DCJ to relist the matter on two business days' notice. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 April 2021