CATCHWORDS
PROCEDURE - Service of originating process - outside the jurisdiction - application to set aside order granting leave - whether respondent voluntarily submits to jurisdiction by making submissions for a stay - whether prima facie case of misleading and deceptive conduct arising under the Trade Practices Act 1974 and in contract - whether absence of Ministerial consent bar to proceeding
PROCEDURE - application for stay of proceedings - whether forum clearly inappropriate
Civil Jurisdiction and Judgments Act 1982 (Eng), s33
Foreign Judgements Act 1991 (Cth), ss7(4), 7(5), 11
Rules of the Federal Court of Australia, O8 r1, O8 r2(2), O9 r7, O10A r5
Rules of the Supreme Court of Western Australia, O10 r1(f)
Trade Practices Act 1974 (Cth), ss5(1), 5(3), 5(4), 52, 82, 87(1), 87(1A)
Abrook & ors v Paterson & ors (Branson J, 2 August 1995, unreported)
Akai Pty Limited v The People's Insurance Company Limited (1995) 8 ANZ Insurance Cases 61-254
Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50
Bank of America v Bank of New York (1995) ATPR 41-390
Bonython v Commonwealth of Australia [1951] AC 201
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Contender 1 Ltd v LEP International Pty Ltd (1988) 63 ALJR 26
Daarnhouwer & Co, Handelmaatschappij N V v Boulos [1968] 2 Lloyds Rep 259
Diamond v Bank of London and Montreal Ltd [1979] 1 QB 333
Dimskal Shipping Co SA v International Transport Workers Federaton [1992] 2 AC 152
Entores v Miles Far East Corp [ 1955] 2 QB 327
In re Dulles' Settlement (No 2) [1951] Ch 842
FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343
Felthouse v Bindly (1862) 11 CB(NS) 869; 142 ER 1037
Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078
Henry v Geoprosco International Ltd [1976] 1 QB 726
Harris v Taylor [1915] 2 KB 580
Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507
Laurie v Carroll (1958) 98 CLR 310
March v E & MH Stramare Pty Limited (1991) 171 CLR 506
Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] NSWLR 366
Merpro Montassa Limited v Conoco Specialty Products Inc (1991) 28 FCR 387
National Commercial Bank v Wimborne (1979) 11 NSWLR 156
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197
Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (1993) ATPR 41,665
Rein v Stein (1892) 66 LT 469
Siskina (Cargo) Owners v Distos Compania Naviera SA [1979] AC 210
State Government Insurance Corporation & Anor v Government Insurance Office of New South Wales & ors (1991) 101 ALR 259
State of Western Australia v Vetter Trittler Pty Ltd (in liq) (Receiver and Manager Appointed) (1991) 30 FCR 102
Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Williams & Glyn's Bank PLC v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438
Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514
Williams v The Society of Lloyds [1994] 1 VR 274
Yamaji v Westpac Banking Corporation (1993) 42 FCR 436
BANNERTON HOLDINGS PTY LTD (ACN 009 188 667) v SYDBANK SOENDERJYLLAND A/S
NO. WAG 133 OF 1993
JUSTICE R D NICHOLSON
PERTH
9 FEBRUARY 1996
IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO. WAG 133 OF 1993
B E T W E E N: BANNERTON HOLDINGS PTY LTD
ACN 009 188 667
Applicant
and
SYDBANK SOENDERJYLLAND A/S
Respondent
MINUTE OF ORDER
JUDGE MAKING ORDER: JUSTICE R D NICHOLSON
DATE OF ORDER: 9 FEBRUARY 1996
WHERE MADE: PERTH
THE COURT ORDERS THAT:
1. The motion dated 19 April 1995 be refused.
2. The respondent pay the applicant's costs on the motion.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY)
GENERAL DIVISION ) NO. WAG 133 OF 1993
B E T W E E N: BANNERTON HOLDINGS PTY LTD
ACN 009 188 667
Applicant
and
SYDBANK SOENDERJYLLAND A/S
Respondent
CORAM: JUSTICE R D NICHOLSON
DATE: 9 FEBRUARY 1996
PLACE: PERTH
REASONS FOR JUDGMENT
The respondent moves the Court to set aside the application and statement of claim; alternatively, to set aside the service of those documents; or alternatively, to discharge the leave given to the applicant by French J on 17 January 1994 to serve the respondent in Denmark. These applications are brought in reliance upon 09 r7 of the Rules of the Federal Court of Australia ("FCR") and are described as the respondent's first application. The respondent's second application is for a stay of proceedings.
In the main application the applicant seeks damages pursuant to s82 of the Trade Practices Act 1974 (Cth) ("TPA") in the sum of DKR799,887 with interest; alternatively, orders pursuant to s87 of the TPA voiding any security interest of the respondent over certain proceeds and requiring payment of the same amount to the applicant; damages for breach of contract with interest; and other appropriate relief.
There are two distinct claims in the statement of claim. The first alleges causes of action pursuant to the TPA ("the TPA Claims"); the second pleads a cause of action in contract ("the Contract Claim").
The TPA Claims assert that the applicant is a company incorporated in Australia which carries on the business of a property developer. The respondent is said to be a company incorporated under the law of Denmark carrying on the business of banking and being a foreign corporation within the meaning of s4 of the TPA. It is claimed that on or about 2 November 1990, Christiansen on behalf of the respondent orally represented to Mikkelsen on behalf of the applicant ("the Express Representation") that, upon the applicant forwarding to the respondent certain Eurobonds to the value of A$340,000 which the applicant then owned ("the Eurobonds"), the respondent would deal with the Eurobonds in accordance with instructions ("the Instructions") given to the respondent by Mikkelsen on behalf of the applicant. It is pleaded that the Instructions were that the respondent would:
(a) on behalf of the applicant, sell the Eurobonds;
(b) from the proceeds of the sale of the Eurobonds ("the Proceeds"):
(i) transfer A$175,000 (approximately DKR875,000) ("the Dollar Sum") to the applicant in Australia;
(ii)as to the balance, namely A$165,000 being approximately DKR825,000 ("the Kroner Balance"):
(A) deposit DKR600,000 into an interest bearing account in the applicant's name opened and held by the respondent bank in the name of the applicant ("the Applicant's Account");
(B) deposit the
remainder of the Kroner Balance of approximately DKR225,000 into an existing
account with the respondent ("the Poseidon Account") in the name of
Poseidon Management Alle Aps, a company incorporated in Denmark in which
Mikkelsen was a shareholder.
(c) upon certain share certificates evidencing ownership by Mikkelsen of shares in a number of Australian companies ("the Australian Share Certificates") being delivered to the respondent in Denmark, to transfer DKR225,000 from the Poseidon Account and credit that sum into "the Applicant's Account" and to pay the balance of the Applicant's Account together with any interest to the applicant in Australia at and upon the applicant's direction.
It is the applicant's case that the respondent complied with (b)(i) and (b)(ii)(B) but not otherwise with the Instructions so that the applicant suffered loss and damage and that the respondent refuses to remit the balance of proceeds to the applicant in Australia.
In particular it is pleaded that the Express Representation was made by Christiansen located in Copenhagen, Denmark in the course of a telephone conversation ("the Telephone Conversation"), with Mikkelsen, located in Perth, Western Australia. It is pleaded that in making the Express Representation Christiansen on behalf of the respondent made "the First Implied Representation" that the respondent intended to deal with the Eurobonds in accordance with the Instructions. In refraining from replying to a letter on or about 2 November 1990 from Mikkelsen to the respondent confirming the Instructions ("the Mikkelsen Letter"), it is claimed the respondent made "the Second Implied Representation" to the effect that it intended to deal with the Eurobonds and the Proceeds in accordance with the Instructions. "The Third Implied Representation" to the same effect was said to have been made at a meeting ("the Londahl Meeting") held at the respondent's offices in Copenhagen on or about 17 December 1990 between Londahl on behalf of the respondent and Mikkelsen on behalf of the applicant when Londahl produced the Mikkelsen Letter for the purpose of Mikkelsen signing a handwritten endorsement on the letter. It is claimed that the express and implied representations created "the Expectations of Disclosure" that the respondent would not depart from its intention to deal with the Eurobonds contrary to the Instructions without disclosure to the applicant.
It is further pleaded that, contrary to all the Representations and the Expectations, the respondent, inter alia, exercised or purported to exercise or obtain a security interest over the Proceeds in respect of borrowings from the respondent by Danish companies in which Mikkelsen was a shareholder. This, it is claimed, was done by the respondent obtaining from Mikkelsen "the 7 February Pledge" in relation to an account into which the respondent intended, without the knowledge or consent of the applicant, to place some or all of the Proceeds. Further it is claimed it was done by the respondent, on or about 14 March 1991, refusing to transfer $95,000 of the Dollar Sum to the applicant in Australia as directed by Mikkelsen on behalf of the applicant unless Mikkelsen signed a document purporting to acknowledge that the respondent had a security interest in the Kroner Balance to secure sums owing to the respondent by Poseidon ("the March Pledge").
It is pleaded that the respondent formed the intention to deal with the Eurobonds contrary to the Instructions but did not disclose such intention to the applicant until 14 March 1991 when it refused to transfer $95,000 of the Dollar Sum to the applicant. This leads to the ultimate pleading that the respondent so engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of s52 of the TPA.
The alternative claim in contract pleads that the parties reached an oral agreement on or about 2 November 1990 to the effect of the Instructions and that, in breach of the contract the respondent failed to draw DKR225,000 from the Poseidon Management account and credit that sum to the applicant's account and failed to pay the balance of the applicant's account and interest at and upon the applicant's direction.
Onus
In my opinion the applicant bears the onus on the first application and the respondent bears the onus on the second: Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564‑5. The reference to the onus on a subsequent application in Voth (supra) at 564 is, in my view, a reference which does not include a subsequent stay application: see at 565. So far as the first application is concerned, what must be shown in discharge of the onus is that there is a prima facie case on each cause of action but not on each particularised allegation: Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31 at 35; FCR O8 r2(2)(c).
Whether respondent voluntarily submits
For the applicant it is argued that in making submissions for a stay the respondent has accepted the jurisdiction of the Court and seeks to invoke its processes so as to persuade it that it should not exercise that jurisdiction. The argument is that the joining of those submissions with the application challenging the Court's jurisdiction constitutes either a voluntary submission to that jurisdiction or a waiver of the respondent's objection to the jurisdiction. That submission relies upon Henry v Geoprosco International Ltd [1976] 1 QB 726 where it was held that, in an action to enforce a judgment of the Supreme Court of Alberta in England, the earlier application by the defendants for a stay and also an application to set aside an order for service on forum non conveniens grounds were voluntary submissions to the jurisdiction of the Court although they played no subsequent part in the proceedings in the Supreme Court. It will be observed that the circumstances of that case are different from the present. In reaching its decision the Court of Appeal followed Harris v Taylor [1915] 2 KB 580, declined to follow In re Dulles' Settlement (No 2) [1951] Ch 842 and disapproved Daarnhouwer & Co, Handelmaatschappij N V v Boulos [1968] 2 Lloyds Rep 259 and a statement in Dicey & Morris, The Conflict of Laws, 9th ed (1973) at 996.
The case for the applicant also relies upon Rein v Stein (1892) 66 LT 469 at 471 where it was said by Cave J (with Williams J agreeing) that in order to establish a waiver of a right to object to jurisdiction it must be shown that the party alleged to have waived the objection has taken some step which is only necessary or only useful if the objection has been actually waived or if the objection has never been entertained at all. This statement was followed in Williams v The Society of Lloyds [1994] 1 VR 274 at 293 and National Commercial Bank v Wimborne (1979) 11 NSWLR 156.
The dicta in Rein was applied in Williams & Glyn's Bank PLC v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438 at 444. It is Williams (supra) upon which the case for the respondent relies. It was there held that a summons in an English action to enforce guarantees given by two Greek companies in which they had joined a stay application together with an application to set aside the proceedings for lack of jurisdiction did not have the consequence that they had waived their objection to jurisdiction and was in no way inconsistent with maintaining that objection. In re Dulles Settlement (No 2) (supra) at 850 per Denning LJ (as he then was), which had been the subject of contrary view in Henry (supra), was accepted by the House of Lords in Williams (supra) as apposite. Henry was not cited to the House.
There was good reason for that: the criticism to which the decision was subject led to considerable pressure for its reversal by legislation, and this was effected by s33 of the Civil Jurisdiction and Judgments Act 1982 (Eng): Dicey and Morris on The Conflict of Laws 11th ed (1987) at 443. Legislation to the same effect has been enacted in Australia and relevantly in the Foreign Judgments Act 1991 (Cth) s7(4) and (5). Section 7(5)(e) provides that, for the purposes of s7(3)(a)(i), a person does not voluntarily submit to the jurisdiction of a court by inviting the court in its discretion not to exercise its jurisdiction in the proceedings. This has the effect that the court in which a registered foreign judgement was made cannot be taken to have had jurisdiction by way of voluntary submission as a consequence of an entry of appearance or participation for those purposes. Section 11 makes a similar provision in relation to judgments which cannot be registered but in relation to which enforcement is sought. It was the invoking of the discretion of the court which the Court of Appeal in Henry (supra) regarded as inconsistent with continued objection to jurisdiction. This and other similar State enactments have been accepted as bringing to an end the effect of Henry (supra): P E Nygh, Conflict of Laws in Australia 5th ed (1991) at 119; E I Sykes and M C Pryles, Australian Private International Law 3rd ed (1991) at 115-6.
The legislative provisions do not have any effect beyond their stated purpose and so are not determinative of whether there has been a voluntary submission to the Court. On that matter Williams & Glyn's Bank (supra) is the relevant authority. It is a decision of the House of Lords and so is to be preferred as higher authority in any event if the ratio decidendi of Henry (supra) is properly to be understood as dealing with the same essential point. The reasoning in Williams & Glyn's Bank (see particularly the speech of Lord Fraser of Tullybelton at 443-4) accords with what was said by Caves J in Rein v Stein (supra) and by Denning LJ in Re Dulles' Settlement (supra). It also accords with the common sense notion that an appearance made under protest as to jurisdiction is inconsistent with the concept of voluntary submission or waiver of the right to object: cf Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078. The law is so understood in Dicey and Morris on The Conflict of Laws 12th ed (1993) vol 1 at 311-2. Nothing said by the High Court in Laurie v Carroll (1958) 98 CLR 310 supports a contrary conclusion.
Consequently, the applicant's argument that the respondent has voluntarily submitted to the jurisdiction cannot succeed. That resolution of law is consistent with the basis upon which the respondent appeared, namely by way of continuing objection to jurisdiction even when contending for the stay application.
(1) THE APPLICATION TO SET ASIDE
FCR O8 r2(2) provides that the Court may grant leave to serve originating process outside Australia where (a) the proceeding is one in relation to which the Court has jurisdiction; (b) it is one to which r1 applies; and (c) the applicant has a prima facie case. Order 8 rule 1 relevantly provides that the originating process may be served outside Australia where (a) the proceeding is founded on a cause of action arising in Australia; (ab) where the proceeding is for the enforcement of a contract or for damages in respect of the breach of a contract when the contract was made in Australia; (b) where the breach on which the action is founded is committed in Australia; (c) where the proceeding is founded on a breach, wherever occurring, of an Act and is brought in respect of, or for the recovery of, damage suffered wholly or partly in Australia; and (n) where the proceeding, so far as concerns the person to be served, falls partly within one of the paragraphs in O8 r1 and falls, as to the residue, within one or more of the other paragraphs. This is "exorbitant" jurisdiction so that O8 r1 must be strictly construed in favour of the respondent: Siskina (Cargo) Owners v Distos Compania Naviera SA [1979] AC 210 at 254-5; Contender 1 Ltd v LEP International Pty Ltd (1988) 63 ALJR 26 at 28-9.
The case for the applicant, broadly expressed, is that the Express Representation and the First Implied Representation, and hence also the Contract, were made in Australia during the Telephone Conversation. Further, that, properly considered in all their circumstances, the Second and Third Implied Representations and the failure to fulfil the Expectations of Disclosure occurred in Australia.
THE TPA CLAIMS
Legal characterisation of place of conduct
It is common ground that the respondent did not carry on business within Australia nor was ordinarily resident in Australia. One arguable basis of jurisdiction is that the Express Representation said to have been made during the Telephone Conversation was received in Australia. In Voth (supra) at 568 Mason CJ, Deane, Dawson and Gaudron JJ said:
"If a statement is directed from one place to another place where it is known or even anticipated that it will be received by the plaintiff there is no difficulty in saying that the statement was, in substance, made at the place to which it was directed, whether or not it is there acted upon. And the same would seem to be true if the statement is directed to a place from where it ought reasonably to be expected that it will be brought to the attention of the plaintiff, even if it is brought to attention in some third place. But in every case the place to be assigned to a statement initiated in one place and received in another is a matter to be determined by reference to the events and by asking, as laid down in Distillers, where, in substance, the act took place."
Those members of the court in Voth (supra) stated that in the circumstances of that case (a failure of an accountant practising in Missouri to advise of liability by an Australian company to a withholding tax requirement on interest due to it from a related United States company) could properly be described either as a failure to advise (ie. an omission) or a negligent misstatement of fact (ie. a positive act). They equated the failure to a positive statement that the tax was not payable. The members continued:
"When the case is approached on that basis it is clear that, in substance, the cause of complaint is the act of providing the professional accountancy services on an incorrect basis. The same is true if the matter is approached as an omission, for the omission takes its significance from that same act of providing those services. The act is in no way comparable to an act, such as that in Diamond and in The "Albaforth", which passes across space to be completed in some place different from the place where it was initiated. The act of providing accountancy services was an act complete in itself, or, if not complete in itself, one that was initiated and completed in the one place. That place was Missouri. The fundamental significance of that simple fact is not diminished merely because it may be possible, for the purpose of legal classification, to treat that act as equivalent to a statement that was received or acted upon in Australia. The act of the appellant giving the respondents their cause of complaint was committed in Missouri and thus the tort, if there was one, was committed in Missouri."
Applying this reasoning to the present case it is contended for the respondent that the Implied Representations and the failure to fulfil the Expectations of Disclosure all took place in Denmark. The submission is that the applicant's cause for complaint arose in Denmark either because of the alleged Implied Representations by the respondent or because of the alleged failure to disclose by the respondent. It is contended that each cause of action must be looked at separately. In the case of the alleged failure, it is submitted that it is consistent with the majority decision in Voth (supra) that the alleged failure occurred in Denmark. In the case of the Express Representation, it is submitted that jurisdiction cannot be made to depend upon the "accident" of the Telephone Conversation. Looking at all the circumstances it is said that it is not appropriate to assign Australia as the place of receipt in this instance. Even if the Express Representation was made here, no other aspect of the cause of action is said to have the necessary connection with Australian jurisdiction.
The case for the applicant relies upon Voth (supra) at 568 and also upon Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (1993) ATPR 41,665 at 41,671. In Paper Products (supra), French J accepted that the making of representations by telephone and facsimile communication by a company incorporated in the United Kingdom constituted conduct by it in Australia for the purposes of a claim for damages under s82 of the TPA. In so deciding French J relied upon Diamond v Bank of London and Montreal Ltd [1979] 1 QB 333 at 345-6 where Lord Denning said:
"It seems to me that in the case of fraudulent misrepresentation, when it is made by telephone or telex, as it was here, the tort is committed at the place where the message is received - wherever it is heard on the telephone by the receiver or tapped out by the telex machine in the receiver's office."
I accept that if the evidence shows a prima facie case in terms of the pleadings relating to the Express Representation and the First Implied Representation, the applicant has a strong case that in law that conduct occurred in Australia.
With regard to the remaining Representations and the failures to make disclosure in accordance with the Expectations of Disclosure ("the Failures of Disclosure"), the case for the applicant relies upon the statement of the majority in Voth (supra) at 567 that:
"It makes no sense to speak of the place of an omission. However, it is possible to speak of the place of the act or acts of the defendant in the context of which the omission assumes significance and to identify that place as the place of the `cause of complaint'"
In the identification of the place where the "cause of complaint" arose, it is common ground between the parties that if there is a failure to advise (ie an omission) that failure takes place where any such obligation to advise or speak arose. Given that the Express Representation and the First Implied Representation arguably occurred in Australia and that the applicant traded and had its principal office in Australia means that, on the applicant's case, the cause of complaint in respect of the Second and Third Implied Representations and the Failures of Disclosure took place in Australia. In my opinion, that is a tenable argument on the effect of the law.
Prima facie case
It is next contended for the respondent that on the facts of the case the applicant has not raised a prima facie case to support the TPA Claims. It is common ground that for a prima facie case to be made out there must be material before the court from which inferences are open which, if translated into findings of fact, would support the relief claimed: State of Western Australia v Vetter Trittler Pty Ltd (in liq) (Receiver and Manager Appointed) (1991) 30 FCR 102.
The respondent's case contends there is no prima facie case because of the following factors:
(a) the real cause of the applicant's complaint is that, allegedly, the March Pledge was executed when the applicant had "no reasonable alternative."
The case for the respondent contends that the real issue in the case against it is the efficacy of the March Pledge because all the alleged losses have been caused by the reliance by the respondent on the March Pledge. The effect of that pledge, the submission continues, is an issue which should be determined by reference to the proper law of that pledge: cf Dimskal Shipping Co SA v International Transport Workers Federaton [1992] 2 AC 152 at 167-9. Given that there is no express choice of law in the March Pledge but that it was made in Denmark, pledged money held in a Danish bank, secured debts owing to a Danish bank and dealt with the proceeds of Eurobonds, the system of law by reference to which the March Pledge was made or that with which the transaction has its closest and most real connection is said to be Danish law: Bonython v Commonwealth of Australia [1951] AC 201 at 219; Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 at 61; Akai Pty Limited v The People's Insurance Company Limited (1995) 8 ANZ Insurance Cases 61-254. Consequently it is said for the respondent that none of the provisions of FCR O8 r1 attract the jurisdiction of the Court.
Central to the issue of causation is par16 of the Statement of Claim in which it is pleaded that "but for" the Representations and the Expectations of Disclosure, the applicant would not have delivered the Eurobonds to the respondent, the respondent would not have obtained the Eurobonds and the respondent would not have been able to obtain the March Pledge. It is common ground that to determine causation, common sense notions must be applied: March v E & MH Stramare Pty Limited (1991) 171 CLR 506; Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514 at 525. For the respondent it is argued that if this is done it will be apparent that there is no causal link between the alleged misleading or deceptive conduct and the alleged loss because the alleged causal link is broken by the execution of the March Pledge by the applicant. The argument continues that the TPA Claims are not sustainable because it is not arguable that any loss or damage flowed from the Representations but rather were caused by the March Pledge. The respondent contends that to consider that there might be the necessary causal link would be to fall into the error described by Deane J in March (supra) at 523 where he said that "the mere fact that something constitutes an essential condition (in the "but for" sense) of an occurrence does not mean that, for the purposes of ascribing responsibility or fault, it is properly to be seen as a "cause" of that occurrence as a matter of either ordinary language or common sense."
For the applicant it is argued that, taking a commonsense approach, the March Pledge did not occasion the applicant to give its money to the respondent. What it did was to cause some money to go back to the applicant. The loss of which the applicant complains, it is contended, occurred before the March Pledge. The money was in Denmark because of the Express Representation and the applicant was denied the opportunity to bring it back because of the omissions on the part of the respondent. In my opinion this case for the applicant is open to argument on the pleadings. It is the case on the pleadings which must be met and not the case as the argument for the respondent would reformulate it.
(b) Christiansen did not make the Contract with Mikkelsen or any other agreement and did not have authority to do so.
In the affidavit evidence Mikkelsen deposes to the contents of the Telephone Conversation. Christiansen deposes that Mikkelsen's affidavit accords with his recollection of that conversation. However, in a handwritten addendum to his affidavit although he confirms the Telephone Conversation took place he cannot remember the exact date. He recalls the items mentioned in Mikkelsen's note were discussed but states he cannot remember the exact details or what was the conclusion of the conversation. In a later affidavit Christiansen further deposes that he cannot recall the exact terms of the Telephone Conversation but he did not recall making any agreement on behalf of the respondent during that conversation. He had taken the call because Rasmussen was not present. He had told Rasmussen that A$340,000 Eurobonds would be deposited with the respondent and that Mikkelsen would give written instructions concerning the manner in which the Eurobonds should be used. He stressed that the handwritten addition to his previous affidavit was vital.
For the respondent it is contended that this conflicting evidence fails to discharge the obligation on the applicant. In my opinion that cannot be the case in relation to this evidence. There is no denial of the Telephone Conversation having taken place. Indeed, Christiansen's evidence is open to being found to be consistent with it having taken place in the terms deposed to by Mikkelsen. It is for the Court to determine whether agreement was reached and, if so, on what terms. There is, however, a prima facie case that agreement was reached.
On the question of Christiansen's authority, it is not necessary that such authority be established for the respondent to be bound by the Express Representation and the First Implied Representation. There is in any event evidence that Christiansen was held out as having authority to deal on behalf of the respondent (see the affidavits of Rasmussen and Mikkelsen). Rasmussen's assertion of the absence of authority is arguably an assertion of a legal conclusion in view of his evidence that Christiansen had indicated the respondent's tacit acceptance of a request by Mikkelsen.
(c) the Mikkelsen Letter was not sent by facsimile to the respondent nor were the persons responsible for Mikkelsen's accounts aware of the contents of that letter until mid-December 1990. There is evidence which supports this contention.
Leonhardt, Settlement Manager of the respondent, deposes that he did not recall having received the Mikkelsen Letter. By the absence of a faxed paper copy, it is contended for the respondent that the letter was not sent by Mikkelsen nor received by the respondent.
Londahl, an employee of the respondent in charge of the Mikkelsen accounts, deposes he is unable to recall how the Mikkelsen letter came to be in the respondent's possession or that he saw it prior to the Londahl Meeting. He states it was not received by fax and does not bear any usual stamp of receipt. It is his belief that the Letter was produced by Mikkelsen at that meeting and then retained by him.
Rasmussen's affidavit is confirmatory of Londahl, including the fact that Rasmussen had no knowledge of the Mikkelsen Letter until after the 17 December Meeting and that the March Pledge was executed in the circumstances described by Londahl.
I do not therefore consider the applicant has a prima facie case on the issue of the delivery of the Mikkelsen Letter. However, that issue is not critical to the applicant's case which is open to being made out independently of that issue.
(d) In some of the meetings held between the respondent and Mikkelsen in late February 1991 and early March 1991, Mikkelsen did not allege that the respondent was not entitled to obtain the proceeds from the sale of the Eurobonds as security.
There is evidence in the Londahl affidavit to support this contention for the respondent. However, I do not consider it can have the effect of meaning that the applicant does not bring a prima facie case: it is evidence of subsequent conduct and, as such is not admissible for the construction of a written contract: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 348, 344 and 392; FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 at 350.
(e) neither Mikkelsen nor the applicant have answered the facts contained in the affidavits filed on behalf of the respondent.
In Merpro Montassa Limited v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390 Heerey J said that in the application of FCR O8, r2(2)(c) a court might draw inferences more readily in favour of an applicant, bearing in mind, amongst other things, that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a prima facie case at trial. Even with that principle in mind it is submitted for the respondent that there is no prima facie case here.
The test to be applied to the applicant's case is that expressed in Vittler (supra). It is not necessary that all points raised in the respondent's affidavit be answered. In my judgment, to the extent any such matters are not answered they do not have the consequence that the applicant does not have a prima facie case.
One such matter is the conflicting evidence of the content of minutes of the applicant's directors on 22 October 1990 and the authority which they gave to Mikkelsen in relation to the Eurobonds. The evidence does not explain how the second version of the minute came into the hands of the respondent or what was the effect of it having done so. The difference in the content of the minutes also opens up to the respondent an argument that it was misled by the minute into thinking it could retain monies and apply a security interest. None of that weakens the evidence brought by the applicant to support the contentions that there was the Express Representation and the First Implied Representation or that the other Representations were made or the Failures of Expectation occurred.
In my opinion the applicant has a prima facie case that a cause of action has arisen in Australia or that there is a breach of the Act committed in Australia such as would satisfy FCR O8 r1(a) or (b).
Ministerial consent
Section 5(1) of the TPA provides relevantly that s52 extends to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia. Section 5(3) provides that where a claim under s82 is made in a proceeding, a person is not entitled to rely at a hearing in respect of that proceeding on conduct to which, relevantly, s52 extends by virtue of s5(1) "except with the consent in writing of the Minister." Similarly, s5(4) provides that a person other than the Minister or the Commission is not entitled to make an application to the Court for an order under s87(1) or (1A) in a proceeding in respect of conduct to which, relevantly, s52 extends without such consent. No such consents were obtained in this case. It is therefore submitted on behalf of the respondent that there cannot be any prima facie case to support a grant of leave pursuant to FCR O8 as it is apparent that the respondent is a corporation not falling within s5(1).
In Tycoon (supra) it was held that the fact that a foreigner is before the court on one cause of action does not mean that other causes of action can be dealt with at the same time if they do not fulfil the requirements for jurisdiction.
In Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507 at 519-21 Sheppard J concluded that certain causes of action under the TPA must fail firstly, because no relevant Ministerial consent had been obtained and, secondly, because there was a strong case for saying that the foreign party, while engaging in relevant conduct, did so outside Australia and was not incorporated nor carried on business in Australia.
The construction of s5(3) and (4) was not argued before me. For the respondent reliance was placed on Yamaji v Westpac Banking Corporation (1993) 42 FCR 436 at 440 where Drummond J accepted that there was no reason why s5(3) should be drawn in language significantly different from s5(4) and held that s5(3) should be read as requiring Ministerial consent to be obtained prior to any hearing, final or interlocutory.
For the applicant it is contended that no Ministerial consent was required before the institution of this proceeding because all of the conduct occurred in Australia. I have already concluded that the applicant has a prima facie case to that effect. It is that conduct upon which the applicant's case relies.
Section 5(1) is directed to giving extra-territorial effect to the provisions of the TPA where a corporation incorporated in Australia or carrying on business within Australia engages in conduct "outside Australia". It is not the applicant's case that any conduct occurred outside Australia. In my opinion s5(1) is not applicable to the case brought for the applicant so that the absence of Ministerial consent is no bar to the hearing of the TPA Claims.
THE CONTRACT CLAIM
The case for the respondent on the Contract Claim repeats the assertion that there was no agreement because Christiansen did not have any authority to make any such agreement and, in fact, clearly stated that no conclusive agreement was made.
At the end of the Telephone Conversation Mikkelsen said that if he did not hear from Christiansen he would take it that "everything was running as we agreed". It is contended that an offeror may not arbitrarily impose contractual liability on an offeree merely by proclaiming that silence shall be deemed consent: Felthouse v Bindly (1862) 11 CB(NS) 869; 142 ER 1037.
Finally, it is contended that if there were any contractual obligations undertaken by the respondent they were materially changed by the grant of the March Pledge to the respondent and the real issue is the efficacy of that pledge. It is submitted that even if there were a contractual arrangement, the proper law of the Contract would be Danish so that, even on that analysis, the question should be determined under Danish law in Denmark.
In my opinion the applicant has a prima facie case for the Contract Claim and the earlier reasons concerning the arguable facts on the TPA Claims support that conclusion.
Jurisdiction exists either as accrued jurisdiction or as cross-vested jurisdiction pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s4(2) and the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) s4(1).
It is no obstacle to reliance upon the accrued jurisdiction of the Court that FCR O8 r1 does not expressly refer to proceedings based on such jurisdiction because once the Contract Claim is within the jurisdiction the claim itself clearly falls within paragraphs (a) and (ab) of the rule. In his reasons for granting leave to the applicant to serve the respondent overseas French J accepted there was accrued jurisdiction. It is the case that in relation to cross‑vesting no steps have been taken in accordance with FCR O10A r5 to invoke such reliance but that would not be necessary unless and until the applicant was required to rely upon that source of jurisdiction rather than the usual source of accrued jurisdiction - Abrook & ors v Paterson & ors (Branson J, 2 August 1995, unreported) at 11. Further, it is the law that in appropriate circumstances the requirement in FCR O10A r5(1)(a) may be dispensed with: State Government Insurance Corporation & Anor v Government Insurance Office of New South Wales & Ors (1991) 101 ALR 259 at 309-310.
Furthermore it is the applicant's case that the contract was made in Western Australia because it was an offer by Mikkelsen accepted by Christiansen over the telephone: Entores v Miles Far East Corp [ 1955] 2 QB 327 and Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] NSWLR 366 or, alternatively, a breach of the contract occurred in Western Australia because of a failure by the respondent to remit the funds to Western Australia in accordance with the terms of the contract: Rules of the Supreme Court of Western Australia O10 r1(f); Sykes and Pryles, Australian Private International Law 3rd ed (1991) at 38.
I conclude therefore that the applicant has discharged the onus of establishing that it is entitled to leave pursuant to FCR O8 r2(2) in respect of both the TPA Claims and the Contract Claim.
(2) THE STAY APPLICATION
It is argued in the alternative for the respondent that the action should be stayed on the ground that this Court is clearly an inappropriate forum: Voth (supra) at 564-5. In adopting that test the High Court expressly followed Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247-8 where he said:
"the power [to stay] should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff."
The case for the respondent contends firstly that it does not and did not at all material times carry on business within Australia. That, however, is not a factor making the forum clearly inappropriate where the allegation in the TPA Claims is that a foreign corporation not carrying on business in Australia engaged in proscribed conduct in this jurisdiction.
Secondly, it is argued that save for the Telephone Conversation, all of the conduct the subject of the proceedings occurred outside Australia and in Denmark. I have already found that there is a prima facie case that the Express Representation and the First Implied Representation occurred in Australia on the evidence of both the applicant and the respondent and that the omission or failure to fulfil the Expectations and the other Representations also took place in Australia.
Then it is said that the 7 February Pledge and the March Pledge were made in Denmark. I accept the contention for the applicant that neither of these goes to the substance of the applicant's claims and so not to the inappropriateness of the forum.
Next it is argued that the proper law of all the matters the subject of dispute is Danish law. I have already found the applicant has an arguable case that the proper law of the Contract is the law of Western Australia. In the case of the TPA Claims the onus lies on the respondent to establish that this Court is an inappropriate forum because Danish law is different from Australian law in this respect. No such evidence is brought by the respondent.
The case for the respondent then contends that all of its witnesses as well as Mikkelsen, the applicant's main witness, are ordinarily resident in Denmark. The applicant accepts the former to be the case. However, the applicant's witnesses live in Hawaii, United States of America and Perth. The inconvenience of the respondent's witnesses in travelling to Australia is no greater than the inconvenience which would be suffered by the applicant's witnesses in travelling to Denmark if jurisdiction were declined by this Court. There is no evidence that some of the respondent's witnesses may be unavailable to be called in Australia.
Reference is made to the evidence that all the conversations and correspondence between Mikkelsen and the respondent's offices were conducted in Danish. That is not a factor which can weigh significantly in making this forum clearly inappropriate.
It is the case that the respondent's witnesses will have to deal with proceedings conducted in English. The only evidence brought that this factor will be a difficulty is that of Deleuil an Australian solicitor acting for the respondent who deposes that the respondent's officers "have a limited ability to speak and understand English." The basis of his belief is not stated. The respondent's officers have filed affidavits in English and a number of the respondent's supporting affidavits contain translations of various documents from Danish into English. Undoubtedly there will be a burden involved in the translation of relevant material for the trial but, given that both parties speak and read Danish it is not clear why discovery could only be properly given upon translation of all documents into English.
There are further contentions for the respondent based upon arguments that the applicant will not be disadvantaged in that it may pursue its TPA Claims there and bring expert evidence as to any loss or damage allegedly suffered by the applicant. There are two difficulties with these contentions. Firstly they appear to be brought on an understanding that "there is nothing indicating that laws of any other jurisdiction would be more appropriate to apply in this dispute but Danish law." That is not the test approved by the High Court. In Oceanic Sun (supra) and Voth (supra) the High Court rejected the English "more appropriate forum" test for Australian law. In applying the clearly inappropriate test this Court need not find the existence of a more appropriate forum elsewhere nor is the judge in the forum chosen by the plaintiff required to evaluate and determine whether the other available forum is more appropriate. What must be decided is whether it would be oppressive or vexatious to continue the proceedings in the forum chosen by the plaintiff: cf L Marasinghe, "International Litigation: Choice of Forum" (1993) 23 University of Western Australia Law Review 264 at 271-2.
Secondly, the evidence relied upon for the respondent in support of the contentions on the remedies available in the alternative forum in Denmark is evidence of solicitors for the respondent, lacking independence. I accept the submission for the respondent that on this interlocutory application the evidence is nevertheless admissible and raises a prima facie position which is open to rebuttal on behalf of the applicant. Although the evidence is not rebutted I find it does not assist the respondent's case because it addresses considerations not relevant to the application of the test set down by the High Court of Australia in Voth (supra). Even if, contrary to that understanding, such considerations are relevant there is nothing in them which establishes the clear inappropriateness of this forum.
The argument for the respondent that the TPA Claims are devoid of merit and so should be disregarded in application of the clearly inappropriate forum test cannot be accepted in view of the earlier findings that such claims are arguable. This case is not that which was before the New South Wales Court of Appeal in Bank of America & Anor v Bank of New York & Anor (1995) ATPR 41-390, see at 40,338 and 40,340.
Finally the case for the respondent turns again to the March Pledge and contends that the general terms and conditions in the credit facility have the effect of a choice of law clause which justifies a stay. One such condition provides that disputes relating to the document may, if the respondent so wishes, be filed with the court in the jurisdiction where the respondent or its branch is domiciled and the respondent is also entitled to let such cases be dealt with and decided upon with lower courts irrespective of the amounts involved. It is not, however, the March Pledge which is the central feature of the case as the applicant wishes to bring it. Neither the TPA Claims nor the Contract Claim are to be determined by reference to the March Pledge. The condition referred to is not a mandatory provision. Hence it does not make the present proceeding oppressive or vexatious.
Weighing all the matters relied upon for the respondent in the case for a stay I do not consider they discharge the onus on the respondent of establishing that the continuation of the proceeding in this forum would be oppressive or vexatious to the respondent. I am unable to find therefore that the respondent has established that this is a clearly inappropriate forum.
For these reasons I would refuse the respondent's motion.
I certify that his and the preceding 24 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.
Associate:
Date:
APPEARANCES
Counsel for the Applicant: Mr M D Howard
Solicitors for the Applicant: Parker & Parker
Counsel for the Respondent: Mr B Dharmananda
Solicitors for the Respondent: Mallesons Stephen Jaques
Date of Hearing: 13 November 1995
Date of Judgment: 9 February 1996
