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2020 | OriginalPaper | Chapter

Australia: Inconsistencies in the Treatment of Optional Choice of Court Agreements

Author : Brooke Marshall

Published in: Optional Choice of Court Agreements in Private International Law

Publisher: Springer International Publishing

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Abstract

Optional choice of court agreements, referred to in Australia as “non-exclusive jurisdiction agreements”, feature in Australian court decisions. A clear distinction is drawn between exclusive choice of court agreements, on the one hand, and optional agreements, on the other. The principles applicable to exclusive agreements and the policies informing them are, however, better developed than those applicable to optional agreements. This chapter argues that the legal treatment of optional agreements under Australian law is deficient in multiple ways. Chief among them is that optional agreements nominating forum courts and optional agreements nominating foreign courts are treated inconsistently: in only one published case in which a forum court was nominated in an optional agreement has an Australian court stayed its proceedings. In no published case in which a foreign court was nominated in an optional agreement has an Australian court stayed its proceedings. There is also a marked difference in how judges perceive parties’ intentions in concluding an optional agreement in intra-national as compared with international cases. In the former, an optional agreement is said to be “a strong indication” by the parties as to where litigation should occur; in the latter, it is said not to indicate any “preference” as to where litigation should occur.

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previous chapter Optional Choice of Court Agreements in Private International Law: General Report

next chapter Belgium: Optional Choice of Court Agreements, Legal Uncertainty Despite a Modern Legal Framework

Or “non-exclusive jurisdiction clauses”.

See further Sect. 2.1.

“Ordinarily a decision of the Court of Appeal of England and Wales on a common law question not affected by statutory interpretation or constitutional or other considerations special to Australia ought be followed unless there is some sound basis for concluding that it was erroneous”: Independent Trustee Services Ltd v Morris (2010) 79 NSWLR 425, 430 (Bryson AJ).

This chapter does not deal with implied or tacit choice of court agreements which, in some countries, refer to the situation whereby the defendant enters an unconditional appearance in proceedings commenced by the claimant.

Huddart Parker Ltd v The Ship Mill Hill [1950] HCA 43, (1950) 81 CLR 502, 508–509; Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496, [47]; Bell (2003), p. 277.

Otherwise referred to as “exclusive jurisdiction clauses” or “agreements”.

ACE Insurance v Moose Enterprise Ltd [2009] NSWSC 724, [53].

See Bell (2003), pp. 13, 122, and 128.

The exception to this test is where proceedings are on foot in both the forum and the foreign nominated court involving the same parties but different issues: see below note 106 and accompanying text.

Keyes (2009), p. 202.

Technically, the law controls the enforcement of the agreement, rather than the parties’ freedom to reach the agreement.

British South Africa Co v Companhia de Moçambique [1893] AC 602 (HL).

Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577.

Akai Pty Ltd v The People’s Insurance Company Ltd (1996) 188 CLR 418, 445.

International Arbitration Act 1974 (Cth), s 7(2). Martin CJ recently observed, “While there is an obvious tension between an agreement to confer exclusive jurisdiction upon a court or courts and an arbitration agreement, there is no such tension between an arbitration agreement and an agreement to submit to the non-exclusive jurisdiction of the courts”: Fitzpatrick v Emerald Grain Pty Ltd [2017] WASC 206, [77]. His Honour explained that the purpose of the optional agreement is a residual one: it is to give the nominated court jurisdiction “to supervise the performance of their arbitration agreement and enforce the terms of any award made … and, perhaps, [to make] … provision for the possibility that there may be disputes which do not fall within the scope of their arbitration agreement”: at [78].

Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth) sch 1, cl 21.

Section 52 of the Insurance Contracts Act 1984 (Cth) prevents parties to insurance contracts from excluding, restricting or modifying the application of the Act to the prejudice of the insured. This includes where parties do so via an exclusive choice of court agreement which obliges the insured to bring disputes before a foreign court: Akai Pty Ltd v The People’s Insurance Co Ltd (1996) 188 CLR 418, 447–448. The Act does not protect reinsureds: Insurance Contracts Act 1984 (Cth), s 9(1)(a).

Carriage of Goods by Sea Act 1991 (Cth) ss 11(2)(b), (c): “An agreement … has no effect so far as it purports to … preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory”. See Forrest (2009), p. 504; Dampskibsselskabet Nordon A/S v Gladstone Civil Pty Ltd [2013] FCAFC 107, [71].

Australian Securities and Investments Commission Act 2001 (Cth) s 12BF, 12BH(1)(k); Competition and Consumer Act 2010 (Cth), sch 1, s 23(3),(4) both of which are discussed further below at text to notes 229–238.

See text to notes 239–240 below.

Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth) sch 1, cl 21(2)(a).

Carriage of Goods by Sea Act 1991 (Cth) ss 11(2)(b), (c).

Keyes (2014), pp. 15, 18, and 23.

See generally Keyes (2011).

[2017] FamCA 879 [39], [51]. See Henry v Henry (1995) 185 CLR 571.

Costigan v Costigan [2017] FamCA 879, [43].

Ibid, [52].

Agreement between the Government of Australia and the Government of New Zealand on Trans-Tasman Proceedings and Regulatory Enforcement, signed 24 July 2008 [2013] ATS 32 (entered into force 11 October 2013). See generally Mortensen (2014), pp. 113, 113–114, 120, and 131–134.

Contracts involving consumers and employees are excluded from the scope of the Act: Trans-Tasman Proceedings Act 2010 (Cth) ss 20(3)(b)–(c).

See Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155, [26]; Service and Execution of Process Act 1992 (Cth) s 20; Trans-Tasman Proceedings Act 2010 (Cth) s 19.

The Trans-Tasman Proceedings Act 2010 (Cth) s 20 and the Hague Convention s 3 b) differ in an important respect: the Hague Convention’s presumption that an agreement will be exclusive unless the parties have provided otherwise is not reflected in the Act.

The Convention excludes contracts to which consumers or employees are party from its scope: art 2(1).

See art 2(2) of the Hague Convention for a list of exclusions.

Melissa-Jane Ford, A/g Principal Legal Officer, Private International Law and Commercial Policy Unit, Australian Government Attorney-General’s Department, “Update on the Implementation of the Hague Choice of Court Convention and Negotiations on the Draft Hague Judgments Convention on the Recognition and Enforcement of Judgments in Civil and Commercial Matters” (Speech delivered at the University of Sydney Law School, “Commercial Issues in Private International Law” Conference, 16 February 2018). See further National Interest Analysis: Australia’s Accession to the Convention on Choice of Court Agreements [2016] ATNIA 7, [21].

cf. choice of court agreements in intra-national cases which fall outside the scope of the Convention: Hague Convention, arts 1(1), 25(2); Hartley and Dogauchi (2010), paragraphs 261–262.

The Hague Convention may also impact the recognition and enforcement in Australia of foreign judgments rendered by courts whose jurisdiction was based on an optional choice of court agreement. That will be the case if Australia chooses to extend the Convention’s provisions governing recognition and enforcement to judgments rendered by courts which had jurisdiction under an optional agreement by making a reciprocal declaration under art 22 of the Convention.

Discussed at text to notes 66–79.

Mortensen (2009), p. 231; Marshall and Keyes (2017), p. 275. For examples, see Marshall (2019), pp. 97–100.

Art 3(b).

Text to notes 66–79.

Text to notes 82–117.

Keyes (2014), p. 23.

Mortensen et al. (2015), p. 72.

Keyes (2009), p. 181 (observing that “Australian courts are much more likely to retain jurisdiction where the parties have agreed to litigate in a foreign court, than they are to retain jurisdiction in the face of an effective agreement to arbitrate.”).

Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) [2010] NSWCA 196, (2010) 79 ACSR 383, [60] (Spigelman CJ with whom Giles and Tobias JJA agreed).

[2013] NSWSC 503, 94 ACSR 29, [269]–[272].

Compare Deutsche Bank AG v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725; [2010] 1 WLR 1023, [105] with Mills (2018), pp. 99 and 151–152 (observing at 99 that an optional jurisdiction agreement “merely preserves a flexible choice of forum at the time commencing litigation, and is not incompatible with ensuring that only a single forum will, in the end, hear all related claims”).

Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, 165.

Text to note 2.

Australia’s other mainland territory, Jervis Bay, and its seven external territories are not discussed here.

Though it is less clear whether the common law applies residually to these questions in Trans-Tasman cases. The Trans-Tasman Proceedings Act 2010 (Cth), s 20(3)(a) contains a definition of an exclusive choice of court agreement and an optional agreement is anything which falls outside that definition: s19(2)(d). In Re Douglas Webber Events Pty Ltd (2014) 291 FLR 173, Brereton J did not engage in any choice of law analysis to determine the proper law applicable to the character of a jurisdiction clause described as “non-exclusive”, simply treating it as non-exclusive for the purposes of the Act: at [27], [41]. Nor did Judge Anderson engage in any choice of law analysis to determine the proper law applicable to the character of a jurisdiction clause governed by the Act and described as “exclusive” in Australian Gourmet Pastes Pty Ltd v Endeavour Packaging Pty Ltd [2016] VCC 455, [15]–[27]. On appeal, Tate JA, with whom Santamaria and Beach JJA agreed, did not do so either: Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155.

Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652, [16]–[17].

Trans-Tasman Proceedings Act 2010 (Cth) s 19(2)(d).

Text to notes 28–30. See Marshall and Keyes (2017), pp. 249–250 and 253–254.

Uniform Civil Procedure Rules 2005 (NSW) r 11.6 (as amended in 2016) which provides in (1) that the forum court “may dismiss or stay the proceeding or set aside service of the originating process”, on application of the person served outside Australia if (2)(b) “the court is an inappropriate forum for the trial of the proceeding”.

Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 7.04(1)(2)(b), which is in materially identical terms to UCPR (NSW) r 11.6.

Court Procedures Rules 2006 (ACT) r 6504(2)(b).

Supreme Court Rules 2000 (Tas) r 147C(2)(b).

Supreme Court Civil Rules 2006 (SA) r 40C(2)(b). The rules in all these jurisdictions were recently amended “to give effect to harmonized rules approved by the Council of Chief Justices”: Douglas and Bath (2017), p. 160. For criticism, see Dickinson (2019), pp. 30–54.

The wording in r 11.6 (2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) is identical to an earlier version of the rule which the High Court of Australia assimilated to the Voth principle: Renault v Zhang (2002) 210 CLR 491, 503. For analysis of judgments in Renault v Zhang on this point, see Keyes (2014), pp. 28–29.

See e.g. Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5. On the cross-vesting scheme generally, see Keyes (2011), pp. 20 and 26.

Service and Execution of Process Act 1992 (Cth) s 20(3), (4)(d).

Faxtech Pty Ltd v ITL Optronics Ltd [2011] FCA 1320, [5]. See also Trina Solar (US) Inc v Jasmin Solar Pty Ltd [2017] FCAFC 6, (2017) 247 FCR 1, [37], [128] (which concerned an arbitration agreement).

Hoerter (Trading as CF Mumm) v Hanover Caoutchouc, Gutta Percha & Telegraph Works (1893) 10 TLR 103 (CA), 104 (Lord Esher, Master of the Rolls); Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562, [21]; Faxtech Pty Ltd v ITL Optronics Ltd [2011] FCA 1320, [5]; Proactive Building Solutions v MacKenzie Keck Pty Ltd [2013] NSWSC 1500, [16]–[17].

Davies et al. (2014), para 7.63. See e.g. Re Bulong Nickel Pty Ltd [2002] WASC 126, (2002) 42 ACSR 52, [35].

Akai Pty Ltd v The People’s Insurance Co Ltd (1996) 188 CLR 418, 425; Marshall and Keyes (2017), p. 251.

FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117, 126; Marshall and Keyes (2017), p. 251.

ACE Insurance v Moose Enterprise Ltd [2009] NSWSC 724, [33].

As opposed to the mandatory word “shall” which has been held to “be apposite to create the language of obligation”: British Aerospace PLC v Dee Howard Co [1993] 1 Lloyd’s Rep 368, 375 (Waller J). See ACE Insurance v Moose Enterprise Pty Ltd [2009] NSWSC 724, [33].

FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117, 126.

Faxtech Pty Ltd v ITL Optronics Ltd [2011] FCA 1320, [12]–[14].

Faxtech Pty Ltd v ITL Optronics Ltd [2011] FCA 1320, [4].

FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117, 127 (though observing that “the clause may have been intended only to put beyond doubt the existing jurisdiction” (Giles CJ)); ACE Insurance v Moose Enterprise Pty Ltd [2009] NSWSC 724, [33].

e.g. Uniform Civil Procedure Rules 2005 (NSW) sch 6 item (b)(iii).

e.g. Uniform Civil Procedure Rules 2005 (NSW) sch 6 item (b)(iv).

British Aerospace PLC v Dee Howard Co [1993] 1 Lloyd’s Rep 368, 374 (Waller J). See also Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd [2016] 1 All ER (Comm) 417, 436, [64] (Christopher Clarke LJ).

Sinochem International Oil (London) Co Ltd v Mobil Sales and Supply Corp [2000] 1 Lloyd’s Rep 670, 676 (Rix J). See also British Aerospace v Dee Howard [1993] 1 Lloyd’s Rep 368, 375.

Marshall and Keyes (2017), p. 252.

Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562, [25].

Section 2.1.

The effect of optional choice of court agreements in Trans-Tasman cases is discussed briefly below in Sect. 3.

See Re Bulong Nickel Pty Ltd [2002] WASC 126, (2002) 42 ACSR 52, [35] (where the court applied Australian law to determine the effect of an asymmetric choice of court agreement (which the court characterized as optional) designating New York courts in the anchor limb.)

Flaherty v Girgis [1987] HCA 17, (1987) 162 CLR 574, 599 (Brennan J).

e.g. Federal Court Rules 2011 (Cth) r 10.42 item 19; Uniform Civil Procedure Rules 1999 (Qld), r 124(1)(i); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 7.02(k), Court Procedures Rules 2006 (ACT) r 6502(k).

Dickinson (2015), passim; cf. Bell (2003), p. 305.

Laurie v Carroll (1958) CLR 310 (HCA) 323. See Dickinson (2015), pp. 14, 37, and 66.

Ibid. See Keyes (2015), p. 225; Dickinson (2015), pp. 21–22 and 66.

See e.g. Federal Court Rules 2011 (Cth) rules 10.42 item 19, 10.45–10.49.

Mondial Trading Pty Ltd v Interocean Marine Transport Inc (1985) 60 ALJR 277, (1985) 65 ALR 155, [20].

Compare with Dickinson who remarks that “New sub-para. (k) replaces old sub-para. (h), but (in excluding reference to an agreement to submit) is arguably narrower.” (2019), p. 34 text in fn 136 of Dickinson’s chapter.

The former version of the rule, for example in the State of New South Wales, clearly encompassed optional jurisdiction agreements on its terms: sch 6 item (h) provided that originating process may be served outside Australia “if the proceedings are proceedings in respect of which the person to be served has submitted or agreed to submit to the jurisdiction of the court” (my emphasis).

e.g. Uniform Civil Procedure Rules 2005 (NSW) sch 6 item (k).

Compare with Keyes (2015), p. 238.

e.g. Centrebet Pty Ltd v Baasland [2013] NTSC 59.

See Centrebet Pty Ltd v Baasland [2013] NTSC 59, [158]–[163]. The court’s willingness to consider the defendant’s request to stay the Northern Territory proceedings on forum non conveniens grounds, despite the parties’ contractual waiver to that course, may be explained by the fact that the Norwegian defendant had no legal representation and not entered an appearance: see [132].

But see Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592 (2008) 248 ALR 573, [122].

See Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, adopting at 564 the reasoning of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 247; affirmed in Puttick v Tenon Ltd [2008] HCA 54, 238 CLR 265, [28]–[30], [38]. For a discussion of the development of the test, see Thomson et al. (2015), pp. 631–632.

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 248 (Deane J) applied to cases involving optional choice of court agreements in e.g. Centrebet Pty Ltd v Baasland [2013] NTSC 59, [158].

Fawcett (2001), p. 245.

100

Spiliada Maritime Co v Cansulex Ltd [1987] AC 460 (HL) 476, 477–478 (Lord Goff) (my emphasis). See generally in this volume, Merrett and Carruthers, “United Kingdom: Giving Effect to Optional Choice of Court Agreements: Interpretation, Operation and Enforcement”.

101

Deutsche Bank AG and another v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023, [64].

102

See Deutsche Bank AG v Sebastian Holdings Inc [2009] EWHC 3069 (Comm Ct), [21] (Burton J) (“an application for a stay can be considered in a non-exclusive jurisdiction case, where there is no FNC [forum non conveniens] waiver clause. The significant factor is that there is no breach of contract involved in the party seeking to persuade the chosen court to decline jurisdiction”); a conclusion untouched by the decision on appeal: Sebastian Holdings Inc v Deutsche Bank AG [2010] EWCA Civ 998.

103

Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592, (2008) 248 ALR 573, [6], [82]–[83], [95]–[97].

104

Henry v Henry (1995) 185 CLR 571, 591.

105

Centrebet Pty Ltd v Baasland [2013] NTSC 59; Thomson et al. (2015), p. 650.

106

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 400–401 (my emphasis).

107

Akai Pty Ltd v The People’s Insurance Company Ltd (1996) 188 CLR 418, 425.

108

Telesto Investments Ltd v UBS AG [2012] NSWSC 44, (2012) 262 FLR 119, [204]; Green v Australian Industrial Investment Ltd (1989) 25 FCR 532, (1989) 90 ALR 500, 512 cf. Trans-Tasman Proceedings Act 2010 (Cth) s 19(2)(d).

109

Keyes (2009), p. 202.

110

Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [24] (concerning a clause that was described as non-exclusive); Garnett (2013), p. 147.

111

See above note 106 and accompanying text.

112

e.g. Autotrop Sdn Bhd v Powercrank Batteries Pty Ltd [2006] VSC 401.

113

Henry v Henry (1995) 185 CLR 571, 591.

114

French J described the two sets of proceedings as “related” at 502 though they were in fact parallel: they involved the same parties and the same legal issue or controversy, namely whether Australian Industrial Investment Ltd and two of its directors made fraudulent or misleading representations: Green v Australian Industrial Investment Ltd (1989) 25 FCR 532, (1989) 90 ALR 500. See Henry v Henry (1995) 185 CLR 571, 590 where Dawson, Gaudron, McHugh and Gummow JJ drew a distinction between related and parallel proceedings.

115

(1989) 25 FCR 532, (1989) 90 ALR 500, 503, 511–512. See further text to note 120. The High Court in Voth v Manildra Flour Mills Pty Ltd criticised French J in Green v Australian Industrial Investment Ltd for having “placed too much weight upon the notion that a proceeding regularly invoked [in Australia] provides a prima facie right to have the proceeding continue in that forum”: (1990) 171 CLR 538, 566.

116

This point was made more fully above at text to notes 99–102.

117

Text to note 131.

118

Section 1.1.

119

This applies both to international cases governed by the common law and to Trans-Tasman cases that involve consumers or employees, those categories of party being excluded from the scope of the Trans-Tasman Proceedings Act 2010 (Cth): ss 20(3)(b)–(c).

120

See e.g. Green v Australian Industrial Investment Ltd (1989) 25 FCR 532, (1989) 90 ALR 500, 503, 511–512. This is also a factor to which Australian courts have given weight in deciding whether to stay forum proceedings to enforce exclusive foreign choice of court agreements: e.g. Vautin v BY Winddown Inc (No 2) [2016] FCA 1235, [23], [55]; Commonwealth Bank of Australia v White [1999] 2 VR 681, [11], [89] (a case in which Mr White successfully alleged that the insertion of English exclusive jurisdiction and choice of law agreements in a new underwriting agreement which he was asked to execute 5 years after the original agreement, were inserted for the very purpose of avoiding Australian legislation protecting consumers from misleading and deceptive conduct).

121

So much can be deduced from Sackar J’s decision to stay permanently forum proceedings in light of a Singaporean judgment rendered by a Singaporean court with jurisdiction under an asymmetric choice of court agreement: Telesto Investments Ltd v UBS AG [2013] NSWSC 503, [280], [286]. Although the clause was asymmetric (see Sect. 4 below), Sackar J described the clause as an agreement by “the parties … to submit to the non-exclusive jurisdiction of Singapore”.

122

Knight v Adventure Associates Pty Ltd [1991] NSWSC 861, [14], [32], [39]–[40]. But see Benson v Rational Entertainment Enterprises Ltd[2015] NSWSC 906 [132]. The relevance of the exclusive choice of court agreement was not reagitated on appeal: Benson v Rational Entertainment Enterprises Ltd [2018] NSWCA 111 [37].

123

Quinlan v Safe International Försäkrings AB [2005] FCA 1362, (2006) 14 ANZ Ins Cas ¶ 61-693, [46], [49], [53]. But see Gonzalez v Agoda Company Pte Ltd[2017] NSWSC 1133, discussed in Keyes (2019), p. 285.

124

See text to notes 229–238 below.

125

Alstom Ltd v Sirakas (No 2) [2012] NSWSC 64, [1], [103] (obiter).

126

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 564–565 referring to Spiliada Maritime Co v Cansulex Ltd [1987] AC 460 (HL) 476, 477–478, 482–484 (Lord Goff).

127

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 564–565 referring to Spiliada Maritime Co v Cansulex Ltd [1987] AC 460 (HL) 476, 477–478, 482–484 (Lord Goff).

128

Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [22].

129

Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592, (2008) 248 ALR 573, [98].

130

Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [35].

131

See Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [35]; Green v Australian Industrial Investment Ltd (1989) 25 FCR 532, (1989) 90 ALR 500; Autotrop Sdn Bhd v Powercrank Batteries Pty Ltd [2006] VSC 401, [27]–[33]; Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562, [29] (obiter).

132

Henry v Henry (1995) 185 CLR 571, 592–593. See further Mortensen et al. (2015), p. 106.

133

Henry v Henry (1995) 185 CLR 571, 592–593.

134

ACE Insurance v Moose Enterprise Ltd [2009] NSWSC 724, [53]. Breach of an exclusive choice of court agreement appears to give rise to a right to damages under Australian law, although an Australian court has not yet awarded them: Commonwealth Bank v White [No 2 of 2004] [2004] VSC 268, [5] (obiter); Garnett (2013), pp. 148–149. See also Compagnie des Messageries Maritime v Wilson (1954) 94 CLR 577, 587 (Fullagar J) (obiter) (a case concerning choice of court agreement nominating two courts, albeit within one country). The dicta as to the availability of damages is consistent with English law: Starlight Shipping Co v Allianz Marine Aviation Versicherungs AG [2014] EWCA Civ 1010. On damages and exclusive choice of court agreements, see generally Dinelli (2015).

135

See Davies et al. (2014), para 7.61 (“A non-exclusive jurisdiction clause says nothing as to the parties’ collective attitude to litigation in a forum other than that nominated.”).

136

See Raphael (2008), paras 9.12, 14.03–14.11; Deutsche Bank AG and another v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023, [105]; Fawcett (2001), p. 256.

137

As explained in the section “Agreement in Favour of the Courts of the Forum”, an optional choice of court agreement nominating the courts of the forum, coupled with service of process on the defendant, gives the court personal jurisdiction.

138

Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592, (2008) 248 ALR 573, [123]–[126]; CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 393.

139

See CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 373. On anti-suit injunctions in aid of legal rights, see Douglas (2017), pp. 71–73.

140

Bell (2003), p. 306.

141

This argument was developed in the section “Agreement in Favour of the Courts of the Forum” above, in arguing that an optional choice of court agreement cannot properly be a waiver of the right to contest jurisdiction.

142

Bell (2003), p. 306.

143

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 397.

144

See Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592, (2008) 248 ALR 573, [123], [126].

145

Text to notes 97–99.

146

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 393.

147

See Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, [442]; Douglas (2017), p. 75.

148

Compare CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 395 with Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, [480]–[481].

149

Douglas (2017), pp. 76–77.

150

Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592 (2008) 248 ALR 573, [125].

151

Douglas (2017), p. 78.

152

On equitable damages, see Douglas (2017), p. 94.

153

Section “No Contractual Claim to Damages”.

154

Douglas (2017), pp. 79–89.

155

This is perhaps unsurprising, given that there appears to be no English case in which “an anti-enforcement injunction has been granted simply on the basis that the proceedings sought to be restrained were commenced in breach of an exclusive jurisdiction or arbitration clause.”: Ecobank Transnational Inc v Tanoh [2015] EWCA Civ 1309, [118] (Christopher Clarke LJ with whom the Chancellor, Sir Terence Etherton, and Patten LJ agreed).

156

See the quote of Bryson AJ in Independent Trustee Services Ltd v Morris (2010) 79 NSWLR 425, 430 extracted above at note 3.

157

See Ecobank Transnational Inc v Tanoh [2015] EWCA Civ 1309, [118], [130], [134].

158

See Foreign Judgments Act 1991 (Cth), s 7(1)(a)(iv); Emanuel v Symon [1908] 1 KB 302, 309 referred to with approval in e.g. de Santis v Russo [2001] QCA 457, [2002] 2 Qd R 230, [9].

159

s 7(4)(b).

160

Section “Forum Versus Foreign Agreements: A Tale of Inconsistency”.

161

Plantagenet Wines Pty Ltd v Lion Nathan Wine Group Australia Ltd [2006] FCA 247, 229 ALR 327, [39]–[44].

162

Schmidt v Won [1998] 3 VR 435, 453–454, 455; McEntee v Connor (1994) 4 Tas R 18, 24.

163

Plantagenet Wines Pty Ltd v Lion Nathan Wine Group Australia Ltd [2006] FCA 247, 229 ALR 327, [42].

164

BHP Billiton Ltd v Schultz [2004] HCA 61, (2004) 221 CLR 400, [175].

165

BHP Billiton Ltd v Schultz [2004] HCA 61, (2004) 221 CLR 400, [14], [175]. See Keyes (2014), p. 27.

166

Keyes (2014), p. 27.

167

BHP Billiton Ltd v Schultz [2004] HCA 61, (2004) 221 CLR 400, [14]. See also Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 730.

168

Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] NSWSC 466, [27] (optional agreement nominating another Australian court; transfer ordered).

169

Monash IVF Pty Ltd v Burmeister (No 2) [2017] NSWSC 903, [19], [24]–[25] (optional agreement nominating the court of the forum; transfer refused). See also Balescope Pty Ltd v Pegasus Leasing Ltd (1994) 63 SASR 51, 58 (optional agreement nominating the court of the forum; appeal against the decision to refuse a transfer dismissed).

170

Open Universities Australia Pty Ltd v TAFE Commission [2017] VSC 617, [6]–[7], [19], [23] (optional agreement nominating another Australian court; transfer refused); Santos Ltd v Helix Energy Services Pty Ltd [2009] VSC 282, (2009) 28 VR 595 (optional agreement nominating another Australian court; transfer refused). But see Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] NSWSC 466, [27] (optional agreement nominating another Australian court; transfer ordered).

171

Plantagenet Wines Pty Ltd v Lion Nathan Wine Group Australia Ltd [2006] FCA 247, 229 ALR 327, [59] (optional agreement nominating another Australian court; transfer refused).

172

Plantagenet Wines Pty Ltd v Lion Nathan Wine Group Australia Ltd [2006] FCA 247, 229 ALR 327, [82].

173

Anderson Formrite Pty Ltd v Baulderstone Hornibrook Pty Ltd (2004) 206 ALR 614, [2004] WASC 115, [15].

174

[2010] NSWSC 1223, [35]–[39].

175

Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652, [5], [18], [19], [22] (Palmer J). The quote is at [19]. See also Patrick Badges Pty Ltd v Commonwealth [2002] NSWSC 221, [14] (obiter—the court in that case ultimately did characterize the derogation agreement as exclusive) (Howie J).

176

Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [24] (McDougall J).

177

See Sect. 4 below.

178

Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 719, 729–730.

179

(My emphasis). See also Service and Execution of Process Act 1992 (Cth) s 20(3).

180

Service and Execution of Process Act 1992 (Cth) s 20(4)(d).

181

s 19(2)(d).

182

Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155, [26].

183

St George Bank Ltd v McTaggart [2003] QCA 59, [2003] 2 Qd R 568, [9] (emphasis in original). See further Keyes (2014), pp. 27–28.

184

[1987] AC 460, 477. The English test is discussed further in the section “Agreement in Favour of the Courts of the Forum” above.

185

Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155, [88], footnote 71 (Tate JA with whom Santamaria and Beach JJA agreed).

186

See the section “Agreement in Favour of the Courts of the Forum” above.

187

Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER 97, 107–108, 112–114, 117, 121–122. See Marshall and Keyes (2017), pp. 254–255.

188

Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER 97, 108 considered in Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496, [48]–[49] (a case concerning an exclusive choice of court agreement nominating a foreign court).

189

Mortensen et al. (2015), p. 97.

190

The “Eleftheria” [1970] P 94, 99; Akai Pty Ltd v The People’s Insurance Company Ltd (1996) 188 CLR 418, 428–429, 444–445; Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496, [43]; Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) [2010] NSWCA 196, (2010) 79 ACSR 383, [88]–[89] (Spigelman CJ with whom Giles and Tobias JJA agreed).

191

i.e. the agreement is rendered unenforceable by legislation embodying Australia’s internationally mandatory rules: Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577.

192

i.e. enforcing the agreement is likely to mean that Australia’s internationally mandatory rules will be not applied by the foreign court: Akai Pty Ltd v The People’s Insurance Company Ltd (1996) 188 CLR 418, 445.

193

Akai Pty Ltd v The People’s Insurance Company Ltd (1996) 188 CLR 418, 428–429 (Dawson and McHugh JJ), 445 (Toohey, Gaudron and Gummow JJ). See further Marshall and Keyes (2017), pp. 263–265.

194

See Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496, [47].

195

See Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562, [29].

196

In practice, the test differs because the public policy of the forum will be considered a strong reason not to enforce an exclusive agreement nominating foreign courts, whereas, the public policy of the forum/fora, from which an exclusive agreement nominating the courts of the forum derogates, will not be considered a strong reason not to enforce an exclusive agreement nominating forum courts.

197

s 20(1)(b).

198

Trans-Tasman Proceedings Act 2010 (Cth) s 20(1)(a).

199

Ibid s 20(2), (2A); Hague Convention, arts 5–6. Dickinson has argued that s 20 of the Trans-Tasman Proceedings Act should be extended to all exclusive choice of court agreements nominating foreign courts: (2014a), p. 176.

200

Trans-Tasman Proceedings Act 2010 (Cth) s 19(1)(b), (2)(d). See Re Douglas Webber Events Pty Ltd (2014) 291 FLR 173, [41].

201

See cases cited in notes 168–175.

202

Service and Execution of Process Act 1992 (Cth) s 20(4)(d). For criticism, see Keyes (2014), pp. 40–41; Dickinson (2014b), p. 282.

203

Text to note 173.

204

See e.g. Techtronic Industries Pty Ltd v Mitre 10 Australia Ltd [2008] NSWSC 740, [5]–[15] (relying exclusively on the factors identified in James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357, 379 (none of which refers to a choice of court agreement) despite counsel for the party seeking to resist the transfer having pointed to the relevance of the optional derogation agreement.)

205

Cass civ, 1ère, 26.9.2012, Madame X v Banque Privée Edmond de Rothschild, No 11-26.022 discussed in e.g. Keyes and Marshall (2015), pp. 366–370; Fentiman (2013), p. 24; in this volume, Mailhé, “France: A Game of Asymmetries, Optional and Asymmetrical Choice of Court Agreements under French Case Law”.

206

Marshall (2019), pp. 101–102.

207

Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 719; Telesto Investments Ltd v UBS AG [2013] NSWSC 503, 94 ACSR 29, [5]; Reinsurance Australia Corporation Ltd v HIH Casualty & General Insurance Ltd (in liq) [2003] FCA 56, (2003) 254 ALR 29, [339]; Venter v Ilona MY Ltd [2012] NSWSC 1029, [28]; Re Bulong Nickel Pty Ltd [2002] WASC 126, (2002) 42 ACSR 52, [34]–[35].

208

Telesto Investments Ltd v UBS AG [2013] NSWSC 503, 94 ACSR 29, [5]. It should be noted that Mr Tyne, the sole beneficial owner of Telesto Investments Ltd, was involved in his capacity as trustee of the Argot Unit Trust in related proceedings in the Federal Court: Tyne v UBS AG (No 2) (2017) 250 FCR 341 reversed by Tyne v UBS AG (No 2) [2017] FCAFC 5, (2017) 250 FCR 341 but reinstated by UBS AG v Tyne [2018] HCA 45, [8], [60] (Kiefel CJ, Bell and Keane JJ), [61] (Gageler J), in dissent: [83], [124] (Nettle and Edelman JJ), [135], [170] (Gordon J).

209

[2003] FCA 56, (2003) 254 ALR 29, [339], [341], [343]–[346]; Garnett (2013), p. 137.

210

Reinsurance Australia Corporation Ltd v HIH Casualty & General Insurance Ltd (in liq) [2003] FCA 56, (2003) 254 ALR 29, [339].

211

Reinsurance Australia Corporation Ltd v HIH Casualty & General Insurance Ltd (in liq) [2003] FCA 56, (2003) 254 ALR 29, [343], [349]. (The quote is at [343].)

212

[2012] NSWSC 1029.

213

[2012] NSWSC 1029, [28]: “Bochum shall be the place of jurisdiction. However, MD engineering [the ship-hoist manufacturer] shall be entitled to also take legal action against the Customer [the ship-owners] in the court which is competent for their commercial residence”.

214

Rogers A-JA also described the Rothschild clause in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 as “exclusive”: at 720.

215

Venter v Ilona MY Ltd [2012] NSWSC 1029, [29], [46].

216

Telesto Investments Ltd v UBS AG [2013] NSWSC 503, 94 ACSR 29, [5].

217

Telesto Investments Ltd v UBS AG [2013] NSWSC 503, 94 ACSR 29, [262]–[266], [272] (although the court here was concerned with the question of whether that party had “submitted” to the foreign proceedings for the purposes of establishing whether the foreign court exercised international jurisdiction, such that an Australia court would recognize and enforce the foreign judgment).

218

[2014] QCA 102.

219

Marks v Australia and New Zealand Banking Group Ltd [2014] QCA 102, [31].

220

(1988) 165 CLR 197, 205: “any action against the Carrier must be brought only before the courts of Athens Greece to the jurisdiction of which the Passenger submits himself formally excluding the jurisdiction of all and other court or courts of any other country or countries which court or courts otherwise would have been competent to deal with such action.” (my emphasis).

221

Compare with Yeo (2005), p. 316 (using this term to describe a Rothschild clause).

222

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 205, 207–208, 229, 256, 261.

223

[2017] FCAFC 224, [53]: “You agree that any claim asserted in any legal proceeding by you against Valve shall be commenced and maintained exclusively in any state or federal court located in King County, Washington, … and you hereby consent to the exclusive jurisdiction of such courts.” (my emphasis). See also [55]. A similar clause appears in Facebook’s standard terms and conditions, which the Supreme Court of Canada recently refused to enforce. The clause provides: “You will resolve any claim, cause of action or dispute (claim) you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County …You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for purpose of litigating all such claims”: Douez v Facebook Inc 2017 SCC 33, [8] (my emphasis). For a discussion of this case, see in this volume Saumier, “Choice of Court Agreements in Common Law Canada”.

224

Marks v Australia and New Zealand Banking Group Ltd [2014] QCA 102, [34] (Gotterson JA with whom Muir JA and Daubney J agreed).

225

Marks v Australia and New Zealand Banking Group Ltd [2014] QCA 102, [34]–[35].

226

Text to note 219.

227

[2014] QCA 102.

228

The clause is set out above at text to note 219.

229

Australian Securities and Investments Commission Act 2001 (Cth) s 12BF(1).

230

Australian Securities and Investments Commission Act 2001 (Cth) s 12BF(1), (3). A consumer contract is “a contract at least one of the parties to which is an individual whose acquisition of what is supplied under the contract is wholly or predominantly an acquisition for personal, domestic or household use or consumption.”

231

Australian Securities and Investments Commission Act 2001 (Cth) s 12BF(1), (4). Small business contracts are those to which at least one party at the time the contract is entered into employs fewer than 20 persons on a regular and systematic basis (s 12BF(4)(a), (5)) and the upfront contract price does not exceed AUD$300,000 (s 4(b)(i)) or the contract has a duration of more than 12 months and the upfront contract price does not exceed AUD$1,000,000 (s 4(b)(ii)).

232

Australian Securities and Investments Commission Act 2001 (Cth) s 12BG(1). See generally ACC v CLA Trading Pty Ltd [2016] FCA 377, (2016) ATPR 43,055, 43,057-6–43,057-13.

233

Australian Securities and Investments Commission Act 2001 (Cth) s 12BH(1)(k).

234

The same argument can be made in respect of exclusive choice of court agreements: Marshall and Keyes (2017), p. 265.

235

See Paciocco v ANZ Banking Group Ltd [2016] HCA 28, (2016) 258 CLR 525, 618 (Keane J with whom French CJ and Kiefel J agreed).

236

Bälz and Stompfe (2017), p. 158 (my translation).

237

Fentiman (2013), p. 24.

238

Competition and Consumer Act 2010 (Cth), sch 1, s 23(3), (4). Although this provision is yet to be tested before an Australian court, the legislation is unambiguous.

239

Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth) sch 1, cl 21(2).

240

Insurance Contracts Act 1984 (Cth), s 52; Akai Pty Ltd v The People’s Insurance Co Ltd (1996) 188 CLR 418, 447–448.

241

See the section “Forum Versus Foreign Agreements: A Tale of Inconsistency”.

242

Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652, [19].

243

Bagsfirst Global Pty Ltd v Global Brands (Football) Pty Ltd [2010] NSWSC 988, [24].

244

See note 204 above.

245

See text to notes 46–48 above.

246

FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 559, 567 (a case concerning an exclusive choice of court agreement).

Section 2.

Sections 2.3–3.

Section 2.4.

Compare Keyes (2014), pp. 27 and 41 with Dickinson (2014b), p. 287 (although Dickinson does not comment on the law applicable in international cases: see p. 276).

251

See Deutsche Bank AG and another v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023, [105] (where Toulson LJ observed that such an agreement is conceivable).

252

Section “Agreement in Favour of Foreign Courts”.

253

Fentiman (2015), para 2.67.

254

Section 3.

255

Art 1(1). On the limited effect the Convention will have on optional agreements, see text to notes 38–39.

256

See Keyes (2014), p. 41.

257

See Sect. 1.1.

258

For a fuller discussion of these issues, see Marshall and Keyes (2017), pp. 272–273.

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Title: Australia: Inconsistencies in the Treatment of Optional Choice of Court Agreements
Author: Brooke Marshall
Publisher: Springer International Publishing
Book: Optional Choice of Court Agreements in Private International Law
Print ISBN: 978-3-030-23913-8

Electronic ISBN: 978-3-030-23914-5

Copyright Year: 2020
DOI: https://doi.org/10.1007/978-3-030-23914-5_2