District Court New South Wales Medium Neutral Citation: Goh, Ambrosini & Hollingsworth v BPH Energy Limited & Grandbridge Limited [2019] NSWDC 559 Hearing dates: 4 October 2019 Date of orders: 11 October 2019 Decision date: 11 October 2019 Jurisdiction: Civil Before: Strathdee DCJ Decision: (1) The proceedings be stayed pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth). (2) The plaintiffs to pay the defendants' costs as agreed or assessed. (3) Liberty to the parties to approach my associate within 21 days if an alternative costs order is sought. Catchwords: COURTS AND JUDICIAL SYSTEM – jurisdiction – cross-vesting – exclusive jurisdiction clause PRACTICE AND PROCEDURE – jurisdiction – defendant's notice of motion seeking orders to stay proceedings JURISDICTION – courts and judges – cross-vesting – exclusive jurisdiction clause – test for determining the most appropriate court Legislation Cited: Corporations Act 2001 (Cth) Service and Execution of Process Act 1992 (Cth) Cases Cited: Asciano Services v Australian Rail Track Corp [2008] NSWSC 652 Bagsfirst Global Pty Limited v Global Brands (Football) Pty Limited [2010] NSWSC 988 BioAg Pty Ltd v Garry Joseph Hickey [2007] NSWSC 296 Patrick Badges Pty Limited v Commonwealth [2002] NSWSC 221 Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 139 FLR 54 St George Bank Limited v McTaggart [2003] 2 Qd R 568 Taurus Funds Management Pty Ltd v Aurox Resources Ltd [2010] NSWSC 1223 Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538 Category: Procedural and other rulings Parties: Hock Goh, Deborah Ambrosini and Kevin Hollingsworth (Plaintiffs) BPH Energy Ltd (First Defendant) Grandbridge Ltd (Second Defendant) Representation: Counsel: Mr J Pokoney (Solicitor) (Plaintiffs) Mr P Santucci (Defendants) Solicitors: Mills Oakley Lawyers (Plaintiff) Ensign Legal (Defendants) File Number(s): 2019/00227022 Publication restriction: None Judgment 1. By way of Notice of Motion filed on 20 August 2019 the first and second defendants in the proceedings and applicants on the motion seek that the proceedings be stayed pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth) ('SEPA'), and seek costs for the motion. 2. The first, second and third plaintiffs, the respondents on the motion, oppose the orders sought in the motion. BACKGROUND 1. The first and second plaintiffs are former directors of the first defendant, BPH Energy Limited ('BPH'). The first plaintiff, Hock Goh ('Goh'), was a director of the first defendant from 2 November 2007 to 29 April 2015. The second plaintiff, Deborah Ambrosini ('Ambrosini'), was a director of the first defendant from 27 August 2009 to 2 February 2015. 2. The third plaintiff, Kevin Hollingsworth ('Hollingsworth'), was a director of the second defendant, Grandbridge Limited ('Grandbridge'), from 31 August 1999 to 26 November 2016. Ambrosini was also a director of the second defendant from 2 April 2012 to 23 November 2016. 3. The first and second defendants are 'related entities' as is defined in s 9 of the Corporations Act 2001 (Cth). Mr David Breeze ('Breeze') is the current Managing Director of the First and Second Defendants. 4. BPH's registered address and principal place of business address is listed as North Perth, Western Australia. BPH has previously held alternative addresses, however all locations have been within Western Australia. 5. Grandbridge's registered address and principal place of business address is also listed as North Perth, Western Australia. Grandbridge previously held a registered address and principal place of business address in Melbourne from 1999 to 2000, before moving to Western Australia. All other addresses of Grandbridge have been within Western Australia. 6. During their tenure as director for either the first or second defendant, each of the first, second and third plaintiffs entered into a Board of Directors Services Agreement ('Services Agreement') with the first or second defendant. The Services Agreements set out the duties and remuneration of each plaintiff in their role as director of the first or second defendant. 7. Each of the Services Agreements also include the following clause: '9. Governing Law. The parties agree this agreement shall be governed by and construed in accordance with the law from time to time in the State of Western Australia and the parties agree to submit to the non-exclusive jurisdiction of the courts of Western Australia and the courts which hear appeals therefrom.' 1. By way of Statement of Claim filed in the District Court of New South Wales on 22 July 2019, the first, second, and third plaintiffs are claiming damages for the first and second defendants' alleged failure to remunerate each plaintiff pursuant to the aforementioned Services Agreements. 2. A Defence has not been filed by the first and/or second defendants. 3. The applicants read the Affidavits of David Leslie Breeze sworn 13 August 2019 (Exhibit 1) and 12 September 2019 (Exhibit 2) and the respondents read the Affidavit of Peter Hodges sworn 27 August 2019 (Exhibit A). Both parties provided detailed and helpful written submissions on the motion and supplemented those submissions orally. ISSUES 1. Section 20 of the SEPA provides: '20 Stay of proceedings This section does not apply in relation to a proceeding in which the Supreme Court of a State is the court of issue. The person served may apply to the court of issue for an order staying the proceedings. The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters. The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include: (a)the places of residence of the parties and of the witnesses likely to be called in the proceeding; and (b)the place where the subject matter of the proceeding is situated; and (c)the financial circumstances of the parties, so far as the court is aware of them; and (d)any agreement between the parties about the court or place in which the proceeding should be instituted; and (e)the law that would be most appropriate to apply in the proceeding; and (f)whether a related or similar proceeding has been commenced against the person served or another person; but do not include the fact that the proceeding was commenced in the place of issue. (5) The court's order may be made subject to such conditions as the court considers just and appropriate in order to facilitate determination of the matter in issue without delay or undue expense.' 1. Whilst it was not explicit in the text of the notice of motion, in their written and oral submissions, the applicants nominated the District Court of Western Australia as the appropriate court for the proceedings. 2. The applicants bear the onus of satisfying this court that the District Court of Western Australia is the appropriate court, and in order to do so, must present a 'clear and compelling basis for the relief sought' (see Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 139 FLR 54 at 58). However, it is clear from s 20(4) of the SEPA that the fact that the proceedings have been commenced in the District Court of New South Wales is not a factor that the court is to take into account, and thus this court should not begin its determination with any presumption in favour of either jurisdiction. FACTORS IDENTIFIED IN S20(4) OF THE SEPA The places of residence of the parties and of the witnesses likely to be called in the proceeding, and the place where the subject matter of the proceeding is situated 1. The applicants submitted that the residence of the majority of the parties and the subject matter of the dispute are matters which point to the District Court of Western Australia as the appropriate court to determine the matters in issue between the parties. 2. The applicants submitted that the defendant companies conduct their business in Western Australia, which was supported by company searches included in the Affidavit of David Leslie Breeze sworn 13 August 2019 (Exhibit 1). 3. The applicants submitted that Ambrosini signed her affidavit in support of the proceedings giving a Perth address. They further submitted that the residence of the Hollingsworth in Melbourne should be considered a neutral factor, and not a factor in support of this court being the appropriate court to hear the matter. 4. The applicants drew my attention to the circumstance that whilst Goh maintains his address in Millers Point, New South Wales, he also maintains an address in Beijing, China. The applicant submitted that the way the respondent characterised the Goh's residence in New South Wales (as being here to visit his son and grandchild) indicated that the address was merely used for visitation, not for permanent residence. 5. The applicants submitted that the issues in dispute between the parties relate to the conduct of the plaintiffs in respect to the two Western Australian defendant companies and thus the subject matter of the dispute points in favour of Western Australia. 6. The respondents submitted that the first plaintiff has a significant connection to this jurisdiction and that the second and third plaintiffs ordinarily reside on the east coast of Australia. The respondents submitted that both factors point to New South Wales as the appropriate jurisdiction, or rather, do not point to a Western Australian court as the appropriate forum. 7. The respondents highlighted that the proceedings concern an action for the recovery of directors' fees and thus no significant issue of location arises in the context of those proceedings. 8. The respondents submitted that Goh maintains an address in Millers Point, New South Wales since the birth of his grandson in June 2019, and holds a NSW Drivers Licence and a bank account and motor vehicle in Sydney, which was supported by the affidavit of Peter Hodges sworn 27 August 2019 (Exhibit A). On the Statement of Claim, Goh's address is listed as Millers Point, New South Wales. 9. The respondents submitted that whilst owning a property in Western Australia, Ambrosini ordinarily resides in Victoria, and often travels to Sydney for work commitments, which was supported by the affidavit of Peter Hodges sworn 27 August 2019 (Exhibit A). I note that on the Statement of Claim, Ambrosini's address is listed as North Perth, Western Australia. 10. The respondents also submitted that Hollingsworth is a resident of Victoria which was also supported by the affidavit of Peter Hodges (Exhibit A). On the Statement of Claim, Hollingsworth's address is listed as Glen Iris, Victoria. 11. Whilst relying on the connection of Goh to the present jurisdiction, and on Ambrosini and Hollingsworths' closer proximity to New South Wales than to Western Australia, the respondents submit that the residence of the parties has limited weight in the courts determination. 12. The respondents relied on the authority of BioAg Pty Ltd v Garry Joseph Hickey [2007] NSWSC 296, in which Brereton J said at [14]: 'Ultimately, I think the natural forum for proceedings, particularly in this day and age of electronic communication and interstate travel, usually falls to be determined by more principled issues than where the preponderance of the witnesses reside.' 1. The respondents also cited Taurus Funds Management Pty Ltd v Aurox Resources Ltd [2010] NSWSC 1223, at [45] in which Einstein J, citing BioAg Pty Ltd, said: '… given the relative ease of interstate travel and electronic communication, an application for transfer ought not to be decided by a superficial tallying of where potential witnesses reside.' 1. Clearly, the defendant companies being situated in Western Australia and that the subject of the proceedings, the alleged harm caused, occurred in Western Australia points to the District Court of Western Australia being the appropriate court. 2. I accept the respondents' submissions that Goh's address, when he is in Australia, is in New South Wales. I accept that Ambrosini and Hollingsworth are residents of the east coast of Australia and that relative ease and convenience does point to New South Wales. 3. However, I also accept the respondents' submissions that 'in this day and age of electronic communication and interstate travel' (see BioAg Pty Ltd v Garry Joseph Hickey (supra) at [14]), there are more persuasive factors to be considered in my determination than the residence of the parties. The financial circumstances of the parties, so far as the court is aware of them 1. Neither the applicants nor respondents made significant submissions in regards to the financial circumstances of the parties. 2. The applicants did submit generally that the applicants would incur further costs if the proceedings were to remain in New South Wales as they have engaged solicitors in Western Australia who do not have offices in New South Wales. 3. In the context of these proceedings, I consider the financial circumstances of the parties as relatively insignificant in my determination of whether or not to stay the proceedings. Any agreement between the parties about the court or place in which the proceeding should be instituted 1. The applicants submitted that Clause 9 of each of the Services Agreements amounted to an agreement between the parties about the court or place in which proceedings concerning the Services Agreements should be instituted. 2. The relevant part of Clause 9 reads: '… the parties agree to submit to the non-exclusive jurisdiction of the courts of Western Australia and the courts which hear appeals therefrom.' 1. Clause 9 of the Services Agreements amount to a non-exclusive jurisdiction clause. 2. The applicants relied on two authorities to support their submission: Patrick Badges Pty Limited v Commonwealth [2002] NSWSC 221 and Asciano Services v Australian Rail Track Corp [2008] NSWSC 652. I note that in both proceedings, each contract included an exclusive jurisdiction clause. However, in Asciano Services (supra), Palmer J, referring to the decision of Howie J in Patrick Badges, said relevantly at [18]-[19]: '[18] However, regardless of whether a proper law and jurisdiction clause confers exclusive jurisdiction it carries great weight in determining the appropriate forum in a cross vesting application because it records a term of the bargain between the parties that litigation arising from their agreement will be resolved in accordance with the substantive law of a specified forum and by the courts of that forum: see, for example, per Howie J in Patrick Badges Pty Limited v Commonwealth [2002] NSWSC 221, at [23]. Particularly persuasive is the weight of such a clause in a contract between commercial parties well able to protect their respective interests. [19] … Whether or not clause 21.2 confers exclusive jurisdiction on the South Australian courts, the parties themselves have given a strong indication in that clause of where and under what law their disputes should be tried, regardless of the inconveniences which may be occasioned to either or both of them.' 1. Whilst both of those cases consider the cross-vesting powers of the Supreme Court of New South Wales, the test that is applied is the 'more appropriate court' test, which is similar to the test to be applied under s 20(3) of the SEPA. The above paragraphs of Asciano Services (supra) were applied in Taurus Funds Management v Aurox Resources (supra) at [38], in which a non-exclusive jurisdiction clause included in a contract was considered a 'critical and decisive factor in determining that the Supreme Court of New South Wales is a more appropriate forum than the Supreme Court of Western Australia.' 2. The respondents rely on the authority of Bagsfirst Global Pty Limited v Global Brands (Football) Pty Limited [2010] NSWSC 988 (and in particular, p23-27 of the judgment of McDougall J) to support their submission that the applicants' reliance on the non-exclusive jurisdiction agreement included in Clause 9 should be rejected. I note that Bagsfirst Global considered the forum non conveniens test set out in Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538 which requires an applicant for a stay of proceedings in favour of another jurisdiction to satisfy the court that the court in which the proceedings were initiated is a 'clearly inappropriate forum'. 3. It is explicit in the text of s 20(3) and (4) of the SEPA that the test to be applied by this court is not the 'clearly inappropriate forum' test, but instead the court must make a determination of which court 'has the most real and substantial connection [with the proceedings], and which can therefore be regarded as the natural forum' (see St George Bank Ltd v McTaggart (supra) at [9]-[10]), having regard to the matters set out in s 20(4)(a)-(f). 4. As such, the authority of Bagsfirst Global (supra) is significantly less persuasive than the authorities relied on by the applicants used to support their submission that the non-exclusive jurisdiction agreement included in Clause 9 of the Services Agreement amounts to some agreement between the parties about the court or place in which the proceedings should be instituted. 5. While I accept that the non-exclusive jurisdiction clause is not binding on the parties, I consider it a matter that should be given significant weight. Of the matters identified by the applicants, I consider most persuasive the non-exclusive jurisdiction clause included in the Services Agreements between the plaintiffs and the relevant defendant, particularly in the context of no real connection of these proceedings to the jurisdiction in which they were commenced. The law that would be most appropriate to apply in the proceedings 1. The applicants submit that the law applicable in the proceedings is the law of Western Australia. The applicants relied on Clause 9 of the Services Agreements, the relevant part of which reads: '9. Governing Law. The parties agree this agreement shall be governed by and construed in accordance with the law from time to time in the State of Western Australia …' 1. The respondents submit that the plaintiffs seek recovery of fees payable under the terms of the Services Agreements. The respondents, citing McDougall J in Bagsfirst Global Pty Limited (supra), submit that there are no 'peculiar features or complexities' of the laws of Western Australia that 'render it markedly different' of those to New South Wales. I accept that submission. Whether a related or similar proceeding has been commenced against the person served or another person 1. There have been more than 10 related proceedings in the District Court of Western Australia for statutory demands and defamation as between these parties and others. Whilst most of those proceedings have resolved, there still remains some further determinations that will need to be made by the courts of Western Australia. 2. Whilst the outcome of those proceedings will not likely affect the outcome of these proceedings, it does to my mind bear some influence on my decision as to 'related or similar proceedings'. LIMITATION PERIOD 1. Section 20(4) of the SEPA specifies those matters which this court must consider, which I have done above. However, these factors are not expressed to be exhaustive. As identified in St George Bank Limited v McTaggart [2003] 2 Qd R 568 McPherson JA at 572 [11]: 'In view of the presence of the word 'include', I do not consider it would be correct to regard the provisions of s 20(4) as a complete code of the factors to be considered in deciding an application under s 20(3) to stay proceedings.' 1. I note that Counsel for the respondents identified that a limitation argument may be made by the defendants should the matter be stayed in New South Wales and the plaintiffs were to initiate fresh proceedings in Western Australia. The effect of a stay of proceedings in New South Wales therefore could cause possible prejudice to the plaintiffs in the proceedings. This would have a considerable impact on my decision on whether or not to stay the proceedings and whether the District Court of Western Australia has jurisdiction to determine all the matters in issue between the parties and is the appropriate court to determine those matters. 2. Counsel for the applicants indicated that should the Notice of Motion be successful and the plaintiffs seek to commence proceedings in a Western Australian Court, the defendants would not rely on any limitation arguments that arose after the date of the plaintiffs' commencement of the proceedings in the District Court of New South Wales, 22 July 2019. 3. I am therefore satisfied that the limitation point will not cause any prejudice to the plaintiffs should this court stay the proceedings. 4. Based on all of the above, I am of the view that the most appropriate court to determine the proceedings is the District Court of Western Australia and therefore I will grant prayer 1 sought in the Notice of Motion. ORDERS 1. I make the following orders: 1. The proceedings be stayed pursuant to s 20 of the Service and Execution of Process Act 1992 (Cth). 2. The plaintiffs to pay the defendants' costs as agreed or assessed. 3. Liberty to the parties to approach my associate within 21 days if an alternative costs order is sought. ************ 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: 11 October 2019