Marc Rene Stammbach v MBD Energy Ltd ACN 117 957 383 [2014] NSWSC 807

Supreme Court New South Wales

Medium Neutral Citation: Marc Rene Stammbach v MBD Energy Ltd ACN 117 957 383 [2014] NSWSC 807 Hearing dates: Tuesday 17 June 2014 Decision date: 17 June 2014 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Proceedings transferred to the Supreme Court of Victoria Catchwords: CONFLICT OF LAWS - Jurisdiction - Cross-vesting - Transfer of proceedings Legislation Cited: (CTH) Corporations Act 2001, s 233 (NSW) Jurisdiction of Courts (Cross-Vesting) Act 1987, s 5(2)(b) Cases Cited: Bankinvest AG v Seabrook (1988) 14 NSWLR 711 BHP Billiton Ltd v Schultz (2004) 221 CLR 400 BioAg Pty Limited v Hickey [2007] NSWSC 296 British American Tobacco Australia Ltd v Gordon & Anor [2007] NSWSC 230 James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 McGregor v Potts (2005) 68 NSWLR 109 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 Category: Principal judgment Parties: Marc Rene Stammbach (Defendant/Applicant) Midwest BD Limited (Plaintiff/Respondent) Representation: Counsel: R M Foreman (Defendant/Applicant) J Hogan-Doran (Plaintiff/Respondent) Solicitors: Schweizer Kobras (Defendant/Applicant) Herbert Smith Freehills (Plaintiff/Respondent) File Number(s): 2013/ 332649

Judgment (ex tempore) 1HIS HONOUR: On 15 December 2006, the plaintiff Dr Marc Rene Stammbach and the defendant Midwest BD Limited entered into an executive service agreement in writing which recited that the defendant company had agreed to appoint the executive and the executive had agreed accept appointment as an employee of the company on the terms set out therein, and provided for the benefits to which the executive was entitled under the agreement. 2In describing the parties, the agreement specified the address of Dr Stammbach as an address in a suburb of Sydney in New South Wales, and the address of Midwest as an address in St Kilda Road, Melbourne in the State of Victoria. Clause 17 of the agreement provided as follows: 17.1 Governing law This agreement is governed by the laws of the state of Victoria 17.2 Jurisdiction The parties irrevocably submit to the exclusive/non-exclusive jurisdiction of the Courts of Victoria 17.3 Waiver Each of the parties irrevocably waives any objection to the venue of any legal process on the basis that the process has been brought in an inconvenient forum 3On 10 November 2011, Dr Stammbach issued a writ and statement of claim out of the Supreme Court of Victoria against Midwest claiming a sum of approximately $646,000 said to comprise amounts due to him under the agreement and additional amounts due under subsequent alleged agreements between the parties. A defence was filed, and particulars sought of the claim. On 2 April 2012, the Victorian proceedings were dismissed on procedural grounds: Dr Stammbach having not complied with an order to deliver particulars, but without prejudice to any right to bring fresh proceedings or to claim the same relief in fresh proceedings. A subsequent application to set aside that dismissal was unsuccessful. 4On 4 November 2013, Dr Stammbach and an associated company commenced these proceedings in this court by statement of claim in which the first plaintiff claimed the sum of $641,000 approximately, and the second plaintiff claimed an order pursuant to (CTH) Corporations Act 2001, s 233, that the defendant re-register certain shares held in the defendant by the second plaintiff. Evidence having been served to the effect that those shares had never been deregistered but continued to be held by the second plaintiff, its claim was discontinued on 27 March 2014. There remains on foot then only the first plaintiff's claim, which is substantially the same as the claim that was made in the Victorian proceedings. 5By notice of motion filed on 4 December 2013, the defendant seeks, relevantly, an order that the proceedings be transferred to the Supreme Court of Victoria pursuant to the (NSW) Jurisdiction of Courts (Cross-Vesting) Act 1987, s 5(2)(b)(iii). The Corporations claim having been discontinued, the Jurisdiction of the Courts (Cross-Vesting) Act is the appropriate basis under which to consider the application. While the differences are minor, one that may be of significance is that, whereas the Corporations Act confers a discretion to transfer proceedings where one of the grounds referred to in it is made out, the Jurisdiction of Courts (Cross-Vesting) Act mandates their transfer. 6I have previously summarised the applicable principles on an application of this kind in BioAg Pty Ltd v Hickey [2007] NSWSC 296, as follows: [6] By Notice of Motion filed on 13 March 2007, Mr Hickey seeks an order under (NSW) Jurisdiction of Courts (Cross-Vesting) Act s 5(2)(b)(iii) that the proceedings be transferred to the Supreme Court of Queensland. The ultimate question on such an application is which is the more appropriate forum. The sub-section in question provides that proceedings are to be transferred to the transferee court if it is "in the interests of justice" that they be heard and determined in that Court, and the transferor court is obliged to transfer the proceeding to the other court whenever it appears to be in the interests of justice so to do. For this purpose, it is both necessary and sufficient for the transferee court to be the "more appropriate" forum [BHP Billiton Ltd v Schultz (2004) 221 CLR 400 , 421 [14], 434-435 [63]]. An applicant for a transfer bears no burden of persuasion or onus of proof [BHP v Schultz, 437 [71]; Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 727], and no particular significance attends the plaintiff's original choice of forum [BHP v Schultz, 425-426 [26]-[27], 439 [77]]. [7] In identifying the "more appropriate forum", relevant considerations including the cost and efficiency of proceedings in the respective jurisdictions, and the connecting factors referred to by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 478 - including matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction [BHP v Schultz, 422 [18]]. Sometimes, consideration of relevant connecting factors will identify a "natural forum". Ordinarily, the residence of the defendant is more significant than that of the plaintiff to establish jurisdiction and this may count in identifying the natural forum [BHP v Schultz, 423 [19]; British American Tobacco Australia Ltd v Gordon & Anor [2007] NSWSC 230, [44]]. In James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357, Spigelman CJ said at (361 [7]): To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort. Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-Vesting) Act, where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of "appropriate court", although other factors may need to be assessed in the process of determining where the interests of justice lie. 7As indicated in that passage, it is both necessary and sufficient for the transferee court to be the more appropriate forum, and no particular significance attends the plaintiff's original choice of forum. The question is which is the more appropriate forum. 8In this case, as is usual, both parties have referred to a number of factors which may favour the forum for which that party contends. 9The defendant/applicant invokes the choice of law clause in clause 17.1, and the submission to jurisdiction in clause 17.2. In addition, reference is made to the history of litigation in Victoria and the location of the defendant in Victoria. 10Against that, the plaintiff/respondent points to the location of the plaintiff in NSW; the location of a potential material witness, also in NSW; and certain procedural advantages - including a preference for affidavit evidence, and the approach to discovery authorised by Practice Note SC Gen Equity 11 in this State, the chief among them. 11Initially, I thought that clause 17.3, set out above, might be a significant obstacle to the defendant's application. If, as at first sight appeared to be the case, it meant that no party could raise an objection on forum non conveniens grounds, it seemed difficult to see why that party should be allowed to raise an objection to the forum and contend for another forum on the basis of something which did not even amount to "clearly inappropriate forum" grounds. But on reflection, I think clause 17.3, read in the light of clauses 17.1 and 17.2, must be intended to refer to proceedings instituted in the Victorian Courts. So construed, it would have some work to do, as even an exclusive jurisdiction clause does not completely exclude the operation of the forum non conveniens doctrine. Moreover, it is disputable, and not necessary to resolve in these proceedings, whether clause 17.2 is an exclusive or non-exclusive jurisdiction clause. 12Further, if clause 17.3 were not read as contemplating only proceedings in the Victorian Courts, then it would preclude an objection on forum non conveniens grounds to proceedings instituted in Western Australia, Papua New Guinea, New Zealand, Norfolk Island, or for that matter Kazakhstan, and that, cannot have been the intention. Accordingly, clause 17.3 should be construed as referring to proceedings instituted in the Victorian Courts. 13Clause 17 taken as a whole then, indicates a contemplation of both parties to the contract that disputes under the contract certainly could, and probably would, be litigated in Victoria. 14I have elsewhere said that in this day and age, where travel is relatively straight forward, particularly between the Australian jurisdictions, and where technology facilitates the taking of evidence by remote means, that these questions ought to be resolved not so much on a head count of witnesses on location of document, but by the more principled approach to asking with which jurisdiction the dispute has the greater connection. 15To my mind, clause 17 provides the main indication of the jurisdiction with which this dispute is more closely connected. But it is reinforced by the history of litigation of this very dispute in Victoria: that the dispute has already been partly litigated there, but not to finality, is a further indication of the connection between the dispute and the Victorian jurisdiction. 16Some further connection is provided by the location of the defendant. While this is not a particularly weighty matter, the location of the defendant at common law is a fundamental element of establishing what court ordinarily has jurisdiction over the defendant. While legislation such as the (CTH) Service and Execution of Process Act 1992 and the cross vesting legislation makes this immaterial nowadays from a practical point of view, the court that would at common law have had jurisdiction over the defendant does provide some indication of what might be called the natural forum for the dispute. 17I do not regard such procedural differences as there may be between the rules of this Court and the rules of the Supreme Court of Victoria as material. Some might see a preference for oral evidence, if that really is the case in Victoria, as an advantage rather than a disadvantage. Others might see the availability of general discovery as of right, rather than the limitations under the Practice Note in this Division, as advantageous rather than disadvantageous. When evaluating the respective benefits of jurisdictions within Australia, it is, I think, invidious to descend to a comparison of the procedures of each court and assume that those applicable in the court presently hearing the matter are inherently superior. 18It may well be that the issues in the case are relatively narrow, and that the evidence on both sides is limited. It is a very early stage to foretell just what will transpire to be the issues at trial. Although in the context of a forum non conveniens application, in McGregor v Potts (2005) 68 NSWLR 109, I observed (at [51]) that it is inevitable that at the early stage of proceedings at which such questions must be determined it will often not be possible to say with accuracy how long the trial might take, nor precisely what witnesses will be called, nor what issues might go to trial and which might fall away, nor whether the case will even go to trial: All this is beside the point. If the local forum would be a clearly inappropriate one for a trial of all issues, it does not cease to be so just because there is a prospect some of those issues might fall away, or even that the whole case might be settled. The clearly inappropriate forum test contemplates a trial on all issues extant at the time the forum question is determined, and does not speculate that the case may narrow as it progresses. In an application of this type the Court proceeds on the assumption that the case will run to trial on all issues and evaluates the relative convenience of each forum on that assumption. It is therefore erroneous to discount as conjecture the difficulties which on that assumption may be occasioned to the foreign party, just because the extent of the vexation might be reduced if issues fall away, or the case settles. In short, the possibility that some or even all of the issues may be resolved does not affect the appropriateness of the forum. 19Because applications under the cross-vesting legislation do not depend on the "clearly inappropriate" test, but simply on a "more appropriate" test, the issues are not identical, but it seems to me that in that respect the same approach must apply, so that the Court considers the matter assuming that all the issues that are alive at the time when the transfer application is considered will run to trial. 20As I have said, one tends to look not so much for a head count of witnesses, although sometimes that will be important; nor even where the documents are located, although that too will sometimes be important; but on a more principled basis to identify the forum with which the dispute is more closely connected. For the reasons that I have given, but in particular that the parties have selected the law of Victoria as the governing law; that they have submitted, whether on an exclusive or non-exclusive basis does not matter, to the jurisdiction of the courts of Victoria; that the matter already has a litigious history in Victoria; and that the defendant is located in Victoria; the proper conclusion is that this dispute is more closely connected with Victoria than with NSW. 21I should observe that in doing so I do not purport to give contractual effect to the submission to jurisdiction clause. On this application, it is not a question of giving contractual effect to that clause, but simply of taking the agreement of the parties reflected in it as one amongst several factors that indicate some greater connection with Victoria than with NSW. 22According, the Court orders that: (1)Pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act, the proceedings be transferred to the Supreme Court of Victoria; and (2)The plaintiffs pay the defendant's costs of the motion.