DrillTec v Campbell [2002] NSWSC 1173

New South Wales Supreme Court

CITATION : DrillTec v Campbell [2002] NSWSC 1173 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 50006/02 HEARING DATE(S) : 05/09/02, 18,19 November 2002 JUDGMENT DATE : 10 December 2002

PARTIES : DrillTec Gut GmbH Grossbohr-und Umwelttechnik v Allan Stuart Campbell JUDGMENT OF : Acting Justice Macready at 1

NC Hutley SC & S Pritchard for plaintiff COUNSEL : MD Young for defendant RG Forster SC for Lucas Group Clayton Utz for plaintiff SOLICITORS : Minter Ellison for defendant Boyd House & Partners for Lucas Group CATCHWORDS : Guarantee and indemnity. Application to strike out paragraphs of defence - construction of agreement - whether common surety agreement was concluded rather than a guarantee on first demand - abuse of process - partial invalidity. - International Law. Forum non conveniens - coincidence of issues - breach of exclusive jurisdiction clause - submission to jurisdiction by commencement of proceedings. Cross claim stayed so matter could be resolved in German court. Lumley General Insurance Ltd v Oceanfast Marine Pty Ltd [2000] NSWSC 1178 Regie National Des Usines Renault SA and Renault Automobiles SA v Zhang (2002) 187 ALR 1 CASES CITED : Henry v Henry (1996) 185 CLR FAI General Insurance Company Ltd v Ocean Marine Mutual Protection & Indemnity Association Ltd (1997) 41 NSWLR National Commercial Bank v Wimborne (1979) 11 NSWLR DECISION : Paragraphs 67 & 68

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

Acting Justice Macready

Tuesday 10 December 2002

50006/2002 DRILLTEC GMBH GROSSBOHR-UND-UMWELTTECHNIK v ALLAN STUART CAMPBELL JUDGMENT 1 His Honour: There are before me the hearing of three notices of motion. The first in point of time is a motion filed on 10 July 2002 by the plaintiff. That motion seeks summary judgment against the defendant and dismissal of the first cross-claim to the extent that that cross-claim is brought by the defendant against the plaintiff. The balance of the relief on the motion is not pressed. The second is by the plaintiff on 23 July 2002 which claims a series of relief in respect of the second cross-claim. In essence the claim is for a stay of that cross-claim on the basis of forum non conveniens. Only the relief in paragraph 3 is now pressed. The third motion is one brought by the defendant filed on 30 August 2002 in which the defendant seeks to amend its first cross-claim. 2 At the commencement of the second days hearing the plaintiff abandoned the hearing of the claim for summary judgement and instead it sought dismissal of various defences propounded by the defendant. The amended motion was filed on 18 November. The motions have been heard together with the evidence in one as evidence in the other. Although the defendant's motion to amend it's first cross-claim should logically be the first determined it is necessary to hear all motions together in order to see whether the matters that are raised by the amendment will give rise to a relevant defence that may be propounded at the present time. The nature of the proceedings 3 The plaintiff sues the defendant to recover the sum of Euro 766,937.82. The claim is based upon a guarantee given by the defendant dated 8 June 2001. It was given as part of a settlement of disputes between the plaintiff and a number of companies compendiously described in the pleadings as the Lucas Group. Some of those companies and the plaintiff became involved in a joint venture that carried out construction work drilling tunnels in Hong Kong. 4 The agreement of 8 June 2001 is referred to as a settlement agreement. The agreement is in German and was entered into in Germany as a result of discussions to resolve differences between the parties. The parties were both represented by their German lawyers. There are a number of provisions in the agreement. The one upon which the plaintiff sues in these proceedings is clause 7. That is in the following terms: -- "Mr Allan Campbell hereby accepts for Drilltec's above-mentioned claims against Lucas an irrevocable, absolute guarantee for a maximum amount of being DEM1,500,000 which is effective for an unlimited period of time and becomes payable at first call. Drilltec undertakes not to call Mr Campbell's guarantee before 01.10.2001, should the above-mentioned claims not have been paid by Lucas by that date." 5 Mr Campbell, the defendant, is the chairman of directors of AJ Lucas Group Ltd the public company which heads the various Lucas companies. 6 Another clause in the agreement to which reference will be made is clause 12. That is in the following terms: -- "This agreement is exclusively subject to German law. The place of jurisdiction for all disputes shall be Munich, Germany, for both parties." 7 The agreement provided for the future hire of equipment to complete projects and the hire agreement which applied also contained a jurisdiction clause in the following terms: "14. Place of fulfilment and jurisdiction 14.1 The place of fulfilment is -- at the lessors option -- 07751 Munchen. The place of fulfilment for payments shall always be Munchen, Germany. 14.2 The place of jurisdiction for all disputes, including any dispute concerning the formation and validity of the contractual relationship, and particularly claims arising from bills exchange or cheques, shall be Munchen, Germany for both parties. 14.3 German law will be solely applicable." 8 It appears that clause 12 governs jurisdiction between the companies who are parties to the settlement agreement but does not bind Mr Campbell in his personal capacity. I will return to this aspect later but it is clear that it is for this reason that the plaintiff has sued on the guarantee in New South Wales. 9 In his further amended defence filed on 5 September 2002 the defendant raises the following matters of defence: