New South Wales Supreme Court CITATION : Mactek v Tadiran [1999] NSWSC 228 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 20239/98 HEARING DATE(S) : 19 March 1999 JUDGMENT DATE : 24 March 1999 Mactek Pty Limited (Plaintiff) v PARTIES : Tadiran Ltd (First Defendant) Tadiran Batteries Ltd (Second Defendant) JUDGMENT OF : Master Malpass COUNSEL : P - Mr M B Duncan D - Ms E A Collins SOLICITORS : P - Bryan Killalea, Solicitor Ds - Marshall Marks Kennedy, Lawyers CATCHWORDS : Set aside process; stay of proceedings; inappropriate forum; exclusive jurisdiction clause ACTS CITED : Supreme Court Rules, Pt 2 Oceanic Sun Line Special Shipping v Fay 165 CLR 197 CASES CITED : Voth v Manildra Flour Mills P/L 171 CLR 538 Akai P/L v Peoples Insurance Co 141 ALR 374 DECISION : Dismissed - 6 - THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS 24 March 1999 20239/99 - Mactek Pty Limited v Tadiran Ltd & Anor JUDGMENT 1 These proceedings were commenced by Statement of Claim filed on 28 July 1998. There are two defendants. Both are corporations incorporated in the State of Israel. The process pleads an agreement for the supply of batteries. It alleges causes of action founded both in contract and tort. 2 In August 1998, the plaintiff purported to effect service of process in Israel. It is conceded that copies of the Statement of Claim were served on 25 August 1998. No appearance has been filed on behalf of the defendants. 3 The second defendant had earlier commenced proceedings in Israel (Tel Aviv Magistrates Court) against the plaintiff. Those proceedings were commenced by Statement of Claim filed on 31 December 1997 and a claim was made for moneys due for goods supplied pursuant to an agency agreement (this being the same agreement as is alleged in the Statement of Claim). This process was served on 20 January 1998. On 22 March 1998, the plaintiff filed a Notice of Motion seeking leave to defend those proceedings. The hearing of the Notice of Motion has been listed for 4 May 1999. 4 Two Notices of Motion have been filed. One was filed by the plaintiff on 22 January 1999. It seeks, inter alia, leave to proceed against the defendants. The other was filed in Court on 23 February 1999 by the defendants. It seeks, inter alia, an order that the Statement of Claim be set aside. Both Notices of Motion were listed for hearing on 19 March 1999. 5 The plaintiff relies on an affidavit sworn by Mr MacMahon (a director) and affidavits sworn by Mr Killalea (its solicitor). The defendants rely on two affidavits sworn by Mr Brand (their solicitor). A part of this material was the subject of objection and rejected. 6 After the commencement of the hearing, by consent, it was decided to proceed with the hearing of the defendants' Notice of Motion only. As it was not in dispute, service of the Statement of Claim was confirmed and the plaintiff's Notice of Motion was stood over generally (to abide the determination of the defendants' application). 7 The defendants put their case in a number of ways. There is a claim for relief under the Supreme Court Rules for the setting aside of the process on the basis that this Court is an inappropriate forum for the trial of the proceedings. There is a claim for a stay on the basis that there has been a submission to the exclusive jurisdiction of the Courts located in Tel Aviv - Yaffo. There is a claim for a stay on the basis that the plaintiff should not be permitted to litigate the same claim in different jurisdictions. 8 The plaintiff's claim for relief under the Rules was not made within the prescribed time. Accordingly, this relief can only be granted if an extension under Part 2 is first obtained. 9 The Court has a discretion to grant an extension of time. It is exercised having regard to the relevant circumstances of the case and so that justice is best served between the parties. In this case, three principal matters were agitated. Firstly, the merits of the claim for relief. Secondly, the delay and the explanation offered for delay. Thirdly, there was the matter of prejudice. 10 I shall first turn to the question of the merits of the claim for relief. 11 The proceedings brought in Israel are for the recovery of the price of goods allegedly sold and delivered by the second defendant to the plaintiff. The proceedings brought in this Court are for both breach of contract and tortious inducement of breach of contract. 12 It is common ground that the agency agreement contained the following exclusive jurisdiction clause:- "Governing Law: This Agreement shall be governed in all respects by the internal laws of the State of Israel and the courts located in Tel-Aviv - Yaffo shall have exclusive jurisdiction". 13 The case for the defendants places emphasis on this clause. Reliance is also placed on other circumstances (including an alleged submission to the Tel-Aviv Magistrates Court). 14 Counsel for the defendants has referred the Court to a number of authorities (including Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd & Anor (1990) 171 CLR 538 and Akai Pty Ltd v The People's Insurance Co Ltd 141 ALR 374). 15 There was no issue as to the relevant principles. The power of the Court to grant relief is discretionary. The Court will have regard to the relevant circumstances of the particular case before it. The power is to be exercised so that justice is best served between the parties. A defendant may be entitled to a stay if, inter alia, he persuades the Local Court that it is a clearly inappropriate forum for the determination of the dispute. The Court will give effect to the contractual arrangements made between the parties unless the circumstances of the case lead to a different conclusion. There is authority for the proposition that the discretion should be exercised by the granting of a stay unless strong cause for not doing so is shown by the plaintiff. There has to be an available foreign tribunal to whose jurisdiction the defendant is amenable. 16 The Court is confronted with a number of problems. There is paucity and lack of quality in the evidentiary material placed before it. There are questions touching upon the jurisdiction of a Master to grant some of the relief that has been sought. The power to grant a stay in the circumstances of this case involves an exercise of the inherent jurisdiction of the Court. I have voiced my concerns on this question. Neither side raises any question of jurisdiction. For present purposes, I shall proceed on the basis of an assumption of jurisdiction. 17 The plaintiff has made application to the Tel Aviv Magistrates Court for leave to defend the debt recovery action brought in that Court. Thereafter, attempts were made to resolve the dispute. The attempts proved to be fruitless. The defendants have now consented to the filing of Defences and Cross-Claims in those proceedings. 18 Because of the state of the evidence, the legal effect of what has been done in Israel is unclear. Whilst it may be that there has been a submission to jurisdiction of the Magistrates Court to deal with the debt recovery claim, I am not satisfied that there has been any submission to jurisdiction in relation to the causes of action propounded in these proceedings. Further, the evidence falls short of demonstrating that the applicable law ("the internal laws of the State of Israel") provides similar remedies and that the foreign Court has the jurisdiction to entertain any such remedies. 19 Whilst the scope of the submission clause is intended to be wide, the precise ambit of that width is far from clear. Minds may differ on that matter and it was not fully argued. 20 Whilst it may be said that the submission clause embraces a claim for damages founded upon repudiation of the agreement, I am not satisfied that it catches the claim in tort which is propounded in these proceedings. 21 The Court has been told that the plaintiff's claim is in the order of $105,000 and that the defendants' claim is in the order of about $65,000. These are not claims of an order justifying the transportation of a number of witnesses to a foreign country situated quite some distance away. 22 The evidence is sparse. It does appear that the goods were delivered to Australia from Israel. The Agency business was conducted in this State. There are allegations of breach (both in contract and tort) relevant to this State. It may be inferred that the proving of questions of breach and quantum will involve the calling of a number of witnesses and that many of them will be residents of New South Wales. 23 I am not satisfied that the defendants have demonstrated entitlement to any of the relief sought. I am not satisfied that this Court is an inappropriate forum in the relevant sense for the trial of the causes of action propounded in these proceedings. I am not satisfied that the defendants are entitled to a stay (be it on the basis of the submission clause or otherwise). The proceedings in Israel are not the same as those brought in this Court. The stay application was not brought until some months after the effecting of service. 24 If it be necessary to so find, I am satisfied that the plaintiff has discharged the requisite onus. 25 In the light of these findings, it is unnecessary to dwell on the question of extension of time. The claim for extension of time is doomed to failure because of the view taken as to the lack of merit in the application itself. For completeness, it may be added that, whilst any prejudice may be slight, the delay is considerable (some months) and such explanation as is offered for the delay falls short of being satisfactory. 26 I dismiss the Notice of Motion filed on 23 February 1999. The defendants are to pay the costs of the Notice of Motion. ********** Last Modified: 03/26/1999 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.