FEDERAL COURT OF AUSTRALIA

practice and procedure -  whether clause in contract ousted jurisdiction of Federal Court of Australia - whether “courts of that State” includes Federal Court of Australia - claims under ss 45 and 52 of Trade Practices Act 1974 (Cth) - forum non conveniens

WORDS AND PHRASES - “courts of that State”

Trade Practices Act 1974 (Cth) s 52 and Part IV

AUSTRALIA COUNTRY CINEMAS PTY LTD v BYA PTY LIMITED & ORS

NO. TG 7 of 1998

JUDGE:          HEEREY J

DATE:            5 JUNE 1998

PLACE:          HOBART

THE COURT ORDERS THAT:

1.         The respondents’ motion by notice dated 2 June 1998 be dismissed.

2.         The respondents pay the applicant’s costs of the motion.

Note:                Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

The respondents have brought a notice of motion seeking:

“That insofar as these proceedings seek specific performance of or damages for breach of contract of an agreement between the applicant and the first named respondent, dated 23 July 1997, they be set aside on the grounds that the proceedings have been brought in breach of clause 9 thereof.”

The agreement referred to is one between the applicant and the first named respondent only.  In general terms it deals with a proposed cinema complex development at Glenorchy in Tasmania.  The applicant is said to have certain exclusivity rights conferred by the agreement.  No statement of claim has yet been filed but from the amended application and what I was told by counsel for the applicant it seems the essential complaint will be that all the respondents entered into negotiations with Village Road Show and ultimately reached an agreement with that company to develop the same complex.  Village Road Show is a competitor of the applicant.

The applicant will rely on the terms of the agreement and also allege misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth)and also a breach of s 45 of that Act.  The applicant alleges that Village Road Show is dominant in the Tasmanian cinema market and the agreement between it and the respondents will have the effect of substantially lessening competition in that market.

Against that background, cl 9 of the agreement reads:

“9.  This Deed shall be governed by and construed in accordance with the laws of the State of Tasmania and the parties submit to the exclusive jurisdiction of the Courts of that State and any courts to hear appeals therefrom.”

An initial question of construction arises: does the expression, “courts of that State” (ie, Tasmania) mean courts established under the law of the State of Tasmania or does it extend to include any court sitting with jurisdiction in Tasmania, such as the Federal Court of Australia?

In my opinion the latter, although perhaps not the most immediately obvious grammatical construction, is to be preferred as being more consistent with the intention of the parties that can be inferred from the circumstances.  The applicant is incorporated in New South Wales.  It is a subsidiary of an American corporation.  The complex is in Tasmania.  The parties must be taken to have had in contemplation at the date of the agreement that there might well be issues arising out of planning approvals, building and the like.  Therefore it is understandable that as a matter of convenience the parties would want any disputes to be resolved at hearings within Tasmania and to exclude the possible jurisdiction of either State or Federal Courts outside Tasmania and, a fortiori, outside Australia.  Therefore, in my opinion, the clause does not prevent the present proceeding being brought.  Moreover, in the event of any ambiguity ouster of jurisdiction clauses should be construed in a way that does not deny jurisdiction which a Court would otherwise have and which one of the parties seeks to invoke. 

I should add that in any event, were the matter to become a question of a discretionary stay on the grounds of forum non conveniens, it would be most inconvenient to have the dispute between the parties partly being dealt with in the Supreme Court of Tasmania and partly in the Federal Court because the claim under Pt IV of the Trade Practices Act is within the exclusive jurisdiction of the latter court.  In those circumstances, it is highly likely that the Supreme Court would, in any event, cross-vest the remainder of the litigation to this Court.  Such an order could not be prevented by a private agreement of the parties so the motion is dismissed.

The respondents’ motion by notice dated 2 June 1998 is dismissed. 

I order that the respondents pay the applicant’s costs of the motion.

Associate:

Dated:              19 June 1998