Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment
  • {solid} Appeal Determined (QCA)

Central Petroleum Ltd v Geoscience Resource Recovery LLC

 

[2017] QSC 223

Reported at [2018] 2 Qd R 371

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Central Petroleum Limited  v Geoscience Resource Recovery LLC [2017] QSC 223

PARTIES:

CENTRAL PETROLEUM LIMITED (ACN 083 254 308)

(Plaintiff)

v

GEOSCIENCE RESOURCE RECOVERY LLC

(Defendant)

FILE NO/S:

SC No 12118 of 2016

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

12 October 2017

DELIVERED AT:

Brisbane

HEARING DATE:

15 September 2017

JUDGE:

Bowskill J

ORDERS:

The application is dismissed

CATCHWORDS:

PRIVATE INTERNATIONAL LAW – JURISDICTION – where the defendant commenced proceedings in the United States, in the District Court of Texas, seeking to enforce an alleged 2012 agreement with the plaintiff as well as other relief – where the plaintiff subsequently commenced proceedings in Queensland seeking a negative declaration that it did not enter into and is not bound by the alleged 2012 agreement – whether the Queensland proceeding is a “proceeding relating to a contract … made by 1 or more parties carrying on business or residing in Queensland” for the purposes of rule 124(1)(g) of the Uniform Civil Procedure Rules 1999, permitting service on the defendant outside Australia – whether this Court has jurisdiction in respect of the plaintiff’s claim

PRIVATE INTERNATIONAL LAW – RESTRAINT OF PROCEEDINGS – OF LOCAL PROCEEDINGS: CLEARLY INAPPROPRIATE FORUM – where there are proceedings in Texas and in Queensland, involving a common issue as to the existence of the alleged 2012 agreement – whether Queensland is a clearly inappropriate forum – whether the continuation of the Queensland proceedings would be vexatious or oppressive – where the proceedings have a connection with Queensland but also with Texas – where it is at least fairly arguable that Australian law would apply to determine the existence of the alleged 2012 agreement – where there is something that may be gained from the Queensland proceedings which cannot be gained from the Texas proceedings alone, namely a determination by an Australian court as to whether the Texas court has jurisdiction over the plaintiff in the international sense, which is an essential condition to enforceability of any Texas judgment in Australia

Uniform Civil Procedure Rules 1999 (Qld) rr 124(1)(g), 124(1)(x)

Foreign Judgments Act 1991 (Cth) ss 5, 11

Foreign Judgments Regulations 1992 (Cth) s 3 and schedule

Davies, Bell and Brereton, Nygh’s Conflict of Laws in Australia, 9th ed (2014)

Adams v Cape Industries plc [1990] 1 Ch 433

Armacel Pty Ltd v Smurfit Stone Container Corporation (2008) 248 ALR 573

Benefit Strategies Group Inc v Prider (2005) 91 SASR 544

Borch & Ors v Answer Products Inc & Ors [2000] QSC 379

Boss Group Ltd v Boss France SA [1997] 1 WLR 351

Castillon v P&O Ports Ltd [2008] 2 Qd R 219

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

de Santis v Russo [2002] 2 Qd R 230

DR Insurance Co v Central National Insurance Co of Omaha [1996] 1 Lloyds Reports 74

DSV Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar [1985] 1 WLR 490

Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078

Harris v Harris [1947] VLR 44

Henry v Henry (1996) 185 CLR 571

Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd (2015) 331 ALR 108

Jet Holdings Inc v Patel [1990] 1 QB 335

Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197

Puttick v Tenon Ltd (2008) 238 CLR 265

Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491

Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) Pty Ltd (1992) 34 FCR 287

Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237

Svendborg v Wansa [1997] 2 Lloyd’s Reports 183

Tana v Baxter (1986) 160 CLR 572

Telesto Investments Ltd v UBS AG (2013) 94 ACSR 29

Trina Solar (US) Inc v Jasmin Solar Pty Ltd (2017) 247 FCR 1

TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

Wong v Jani-King Franchising Inc [2014] QCA 76

COUNSEL:

B O’Donnell QC and D Butler for the plaintiff (respondent)

P Franco QC for the defendant (applicant)

SOLICITORS:

Allens Lawyers for the plaintiff

Clayton Utz for the defendant

Introduction

  1. Central Petroleum Limited is an Australian listed public company which carries on the business of oil and gas exploration and production in Australia.  Geoscience Resource Recovery LLC is an American company, based in Texas,[1] which carries on business as a consulting petroleum engineering firm.  In September 2011 Central and Geoscience entered into an agreement under which it was agreed that, among other things, Geoscience would assist Central in contacting and finding a farm-in partner[2] for Central’s petroleum tenements in Australia (the 2011 agreement).[3]  Pursuant to that agreement Geoscience introduced Central to a French business called Total and in November 2012 Central and one of its subsidiaries, Merlin Energy Pty Ltd, entered into an agreement with Total GLNG Australia. 
  2. Geoscience claims that it is entitled to commission, by way of a success fee, for introducing Total to Central, on the basis of a further agreement it contends was made with Central on 26 February 2012 (the 2012 agreement).  Central denies that it entered into the 2012 agreement.  There is a factual dispute as to whether an employee of Central, Mr Trevor Shortt, signed the 2012 agreement.  Mr Shortt says he did not.  The representative of Geoscience, Mr Niraj Pande, and his assistant, Mr William McGinnis, says he did.  No signed copy of the alleged agreement has been produced. Central says, even if it be found that Mr Shortt did sign the agreement, which he denies, he did not have actual or ostensible authority to bind Central to the 2012 agreement.  Central also relies upon the 2011 agreement, which provided that Central had no liability to pay any commission to Geoscience (cl 12) and under which Geoscience released and discharged Central in relation to any claim that Geoscience may make for payment of a commission (cl 26).
  3. Relevantly, the 2011 agreement provided that it was to be governed by and construed under the laws of Western Australia (cl 28).  The alleged 2012 agreement includes the statement that “[t]his agreement shall be governed by the laws of the state of Texas and any dispute will be resolved by suit either in Texas or California”.[4]
  4. In July 2015 Geoscience commenced a proceeding against Central in the US District Court of Harris County, Texas.  In the Texas proceeding Geoscience seeks to recover the success fee, by enforcing the alleged 2012 agreement, or alternatively on the basis of a quantum meruit; in the further alternative, Geoscience claims damages for fraudulent misrepresentation.  The amount of Geoscience’s claim is not articulated in its originating document, other than by reference to a claimed entitlement to receive the “industry-standard rate of 7% on the initial $48 million already received from Total … plus all additional exploration funds received and the industry-standard rate of 5% on all follow-on development funds received from Total” and “a 2% royalty from any production over the farm-out acreage”.[5]
  5. Central entered a “special appearance” to Geoscience’s petition, objecting to the jurisdiction of the Texas court.[6]     In November 2016 the District Court judge determined that court did have jurisdiction.  Central appealed this decision to the Court of Appeals.  The appeal was heard in May 2017, and the decision is reserved.[7]    There are further avenues of appeal/review potentially available, including a rehearing in the Court of Appeals, and then review by the Texas Supreme Court, subject to the grant of the equivalent of special leave.[8]
  6. Central commenced proceedings in this court in November 2016, later amended with leave in July 2017, seeking declaratory relief including to the effect that Central did not enter into, and is not bound by, the 2012 agreement.
  7. Geoscience filed a conditional notice of intention to defend this proceeding, challenging the jurisdiction of this court to entertain Central’s claim.  It has applied for orders setting aside Central’s claim, or alternatively that the proceedings be stayed, either permanently or at least temporarily, until the outcome of the Texas proceedings is known.  A further alternative, of adjourning this application until the US appeal court determines the question of jurisdiction, was proposed by Geoscience. 
  8. For the reasons set out below, I was not persuaded that it was appropriate to adjourn the hearing of Geoscience’s application.  Having heard the application, I find that this court does have jurisdiction in respect of Central’s claim and that it is neither necessary nor appropriate to stay these proceedings, permanently or temporarily.

Does this court have jurisdiction in respect of Central’s claim against Geoscience?

  1. Geoscience accepts that this court has jurisdiction if it was validly served with the claim.
  2. The fact of service, of both the original and the amended claim and statement of claim, is not in issue.  The controversy between the parties is whether Central’s claim falls within one of the grounds identified in r 124 of the Uniform Civil Procedure Rules 1999 (Qld) so as to justify service outside of Australia.
  3. Relevantly, r 124(1)(g)(ii) permits service on a person outside Australia of an originating process for “a proceeding relating to a contract … made by 1 or more parties carrying on business or residing in Queensland”.  Further, r 124(1)(x) permits service outside Australia of a proceeding falling at least in part within one (or more) of the paragraphs of r 124.[9]
  4. In determining whether r 124(1)(g) applies, the focus is on the nature of the claim which is made, involving an examination of the pleadings and any additional material relied on by the plaintiff; no assessment of the strength or otherwise of the plaintiff’s claim is required.[10]
  5. I accept that Central is a party “carrying on business or residing in Queensland”.  The dispute is as to whether Central’s proceeding is one “relating to a contract”.

Central’s pleaded claim

  1. In the amended statement of claim (filed 16 May 2017) Central pleads the 2011 agreement (at [3D]), which is undisputed.  The material terms of the 2011 agreement are pleaded (at [3E]) as including:[11]

“(c)  clause 1 which stated, relevantly, that GRR agreed to ‘assist [CPL] in contacting and finding entities to be a farm-in partner for [CPL’s] assets in Australia’;

  1.  clause 8 which stated, relevantly, that CPL would pay GRR a monthly fee of AUD$10,000 for performing the Services;
  1.  clause 9 which stated, relevantly, that the effective date of the agreement was 1 May 2011;
  1.  clause 10, which stated, relevantly, that the term of the agreement was from 1 May 2011 until 31 December 2011, at which time it automatically terminated, unless mutually agreed by the parties in writing;
  1.  clause 12, which stated, relevantly, that GRR could negotiate a commission fee with a potential farm-in partner, and that CPL would have no liability or obligation to pay any commission fee to GRR;
  1.  clause 23, headed ‘Ex Gratia Bonus for Outstanding Work’, which stated, relevantly, that CPL could, without obligation, make a non-binding ex gratia bonus payment to GRR for its Services and that such payment may follow the methodology / guidance referred to in clauses 24, 25 and 26;
  1.  clauses 24 and 25, which provided a methodology / guidance for determining the amount of any ex gratia bonus payment that might be paid by CPL pursuant to clause 23;
  1.  clause 26 which stated, relevantly, that there was no obligation on CPL to pay any bonus payment, and that ‘GRR shall not make demand, have a claim and completely releases and discharges [CPL] and any of its subsidiaries, directors, officers, employees or agents from any and all actual or potential claims, liability, litigation, arbitration, or adjudication for payment of any and all bonus payments or commission fees and any other similar type of payment’;

(k) clause 27(i), headed, relevantly, ‘Complete Agreement’, which stated, relevantly, that the agreement constituted the ‘final, complete and exclusive agreement of the parties’; and

(l)  clause 28, headed ‘Governing Law and Jurisdiction’, which stated, relevantly, that the agreement was governed by and construed under the laws of Western Australia.”

  1. Central next pleads that Geoscience introduced Total to Central as a prospective farm-in partner, an introduction that fell within the meaning of “Services” in the 2011 agreement and which was carried out by Geoscience pursuant to the 2011 agreement (at [3F] and [3G]). 
  2. Central pleads that the parties agreed, in writing or by their conduct, that the 2011 agreement would continue in effect until about 13 April 2012 (based, in part, on Geoscience continuing to issue invoices for the monthly fee, and expenses, beyond the expiry date of 31 December 2011) (at [3H] and [3I]). 
  3. The agreement Central and Merlin Energy entered into with Total in November 2012 is pleaded at [3J].   Central pleads that the 2011 agreement governed whether a fee or other sum was payable by Central to Geoscience in relation to the Total agreement, and that pursuant to the terms of the 2011 agreement (clauses 12 and 23 to 26 in particular) Central was and is not liable to pay a fee or other sum to Geoscience in relation to the Total agreement (at [3K] and [3L]).
  4. Central pleads the allegations made by Geoscience in relation to the alleged 2012 agreement, under which Geoscience contends it is entitled to be paid a “success fee” in relation to the Total agreement (referring to the court document dated 4 December 2015 filed with the District Court of Harris County in Texas) (at [3M]).  Central then pleads that the alleged agreement was never entered into by Central and that if it was signed by Mr Shortt (which is denied), he did not have authority from Central to bind it to the alleged 2012 agreement, and accordingly no fee or other sum is payable to Geoscience under any such agreement, nor are any other damages payable by Central to Geoscience for not paying the fee (at [10A] to [10E]).
  5. Finally, Central pleads that by clause 26 of the 2011 agreement Geoscience released and discharged Central from paying Geoscience “bonus payments or commission fees and any other similar type of payment”, and relies on that to deny any liability to Geoscience (at [28] and [29]).
  6. Central seeks the following by way of declaratory relief:
    1. a declaration that Central did not enter into, and is not bound by, the alleged 2012 agreement;
    2. a declaration that Central is not liable to pay a fee, or any other sum to Geoscience in relation to the Total agreement; and
    3. a declaration that Central is not liable to pay any damages to Geoscience by reason that it has not paid a fee or other sum to Geoscience in relation to the Total agreement.
  7. In addition to the pleading, I have regard to the fact that in the Texas proceedings Geoscience positively asserts the existence of the alleged 2012 agreement, and seeks to enforce it against Central.

Is Central’s claim a proceeding relating to a contract?

  1. It was not disputed that the words “relating to a contract” are to be understood in a wide sense.[12] 
  2. However, Geoscience submits the proceeding “does not relate to a contract made by the parties as the claim is premised on the allegation that the parties did not make a contract”.[13]  In support of that submission Geoscience relies on Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078, in which it was held that a claim for a declaration that no contract was entered into was not a claim “brought to … affect a contract” (at 1084).  Geoscience submits that the reference in Central’s pleading to the 2011 agreement is “of historical interest only”, and that no relief is sought in relation to the 2011 contract.  As such, the proceeding cannot be described as “relating to” the 2011 contract.
  3. Central submits that the proceeding is one relating to both the 2011 agreement and the alleged 2012 agreement.  Central submits that the 2011 agreement forms a significant part of its pleading, including that the introduction of Total to Central by Geoscience took place during and pursuant to the 2011 agreement, and that it is the 2011 agreement that governs whether – or, as contended by Central, not – a commission is payable to Geoscience in relation to the Total agreement.  In this respect, it is said that part of the relief sought by Central relies on the terms of the 2011 agreement.  
  4. In relation to the alleged 2012 agreement, Central submits its claim is also one “relating to” a contract, even though its contention is that there was no 2012 agreement.  Central relies on authorities in which it has been held that a proceeding is one “relating to a contract” where the plaintiff denies the existence of a contract which the defendant says exists,[14] including Boss Group Ltd v Boss France SA [1997] 1 WLR 351.
  5. Boss Group v Boss France SA concerned the meaning of the phrase “matters relating to a contract” in article 5(1) of the Brussels Convention on jurisdiction, incorporated into English law under the Civil Jurisdiction and Judgments Act 1982.  The Court of Appeal (comprising Russell, Saville and Otton LJJ) said it was “well settled that it is no answer to a claim for jurisdiction under this article that the respondent is asserting that no contract ever came into existence”, referring to Effer v Kantner [1982] ECR 825 (at 974).  Lord Justice Saville, delivering the reasons of the Court, observed at 356 that:

“There is a lively dispute between the parties as to whether there is a contract between them under which the defendants are the exclusive distributors for the plaintiffs in France.  It is true that the plaintiffs, who seek to sue here, are asserting that no such contract exists, but equally the defendants are asserting the contrary.  In my judgment, the fact that it is this way round does not make the Article inapplicable.  Article 5(1) is not confined to actions to enforce a contract or to obtain recompense for its breach, but refers generally to ‘matters relating to a contract’.

… in a case such as the present, the plaintiffs establish a ‘good arguable case’ that there is a matter relating to a contract by relying on the fact that this is what the defendants are contending against them.”

  1. The Boss Group decision was referred to with approval by Clyde LJ in Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 at 182, his Honour noting that “[o]nce there is a dispute as to the existence of a contract the performance of which the one party is seeking to enforce or for the non-performance of which he is seeking a remedy, then it should not matter whether procedurally it is the defendant or the plaintiff who raises the issue of the existence of the contract”.
  2. In both Boss Group and Kleinwort Benson, Finnish Marine is listed amongst the cases cited or referred to in argument; but is not mentioned in either court’s decision.   It was referred to in DR Insurance Co v Central National Insurance Co of Omaha [1996] 1 Lloyds Reports 74, but expressly not followed, it being held in that case that the policy which underlies the equivalent English rule is to enable all disputes about the existence or effect of contractual rights and liabilities falling within the scope of [the rule] to be brought before the English courts (at 79-80).
  3. In Finnish Marine there was apparently no opposing contention as to the existence of a contract;[15] whereas in Boss Group the contradiction inherent in the defendant seeking to assert that there is a contract that the plaintiff has broken (in the foreign proceedings) whilst simultaneously contending the contrary (on the basis of the plaintiff’s claim for a negative declaration) in the domestic proceedings was a matter taken into account in the reasoning process.  As Saville LJ said, “[o]nce one has removed the self-contradictory stance taken up by the defendants, it seems to me that it is self-evident that there are matters ‘relating to a contract’ between the parties”.[16]
  4. The English authorities, Boss Group and Kleinwort Benson, are persuasive, and consistent with the High Court’s approach in Tana v Baxter (1986) 160 CLR 572 at 580, as to the width of meaning of the equivalent phrase, “otherwise affecting such contract”, as including practical as well as legal effects.  In the face of the positive assertion as to the existence of the alleged 2012 agreement by Geoscience in the Texas proceeding, Central’s claim for a negative declaration in the proceeding in this court will have practical as well as legal effects on the legal relationship between the parties in so far as it concerns the 2011 agreement and the alleged 2012 agreement.  Finnish Marine has not been followed in England, and I am not persuaded that its reasoning ought to be applied here.  There are good policy reasons why this dispute ought to be permitted to be litigated in an Australian court, given that (as discussed below):  (i) it is strongly arguable Australian law is the proper law to be applied to determine whether the 2012 agreement was entered into; and (ii) the need for an Australian court to determine for itself whether the Texas court has jurisdiction, in the international sense, over Central (which in the present case involves a determination whether Central entered into the 2012 agreement).
  5. I am satisfied Central’s claim is one relating to the 2011 agreement and also one relating to the alleged 2012 agreement.  It therefore falls within the scope of r 124(1)(g)(ii) of the UCPR and, having been served on Geoscience, is within the jurisdiction of this court to determine.
  6. For completeness, I note that even if a different view had been taken in relation to the alleged 2012 agreement, the proceeding would still properly be described as one relating, in part, to the 2011 agreement, and therefore, having regard to r 124(1)(x), be one falling within the scope of r 124(1)(g)(ii).
  7. I turn to consider the next part of Geoscience’s application, which is that the proceeding, even if found to be within jurisdiction, should be stayed, either permanently or at least temporarily.

Should the proceedings be stayed, having regard to the Texas proceedings?

Relevant principles

  1. In Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554 the majority (Mason CJ, Deane, Dawson and Gaudron JJ) summarised some of the fundamental principles to be drawn from Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197:

“First, a plaintiff who has regularly invoked the jurisdiction of a court has a prima facie right to insist upon its exercise.  Secondly, the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case.  Thirdly, the mere fact that the balance of convenience favours another jurisdiction or that some other jurisdiction would provide a more appropriate forum does not justify the dismissal of the action or the grant of a stay.  Finally, the jurisdiction to grant a stay or dismiss the action is to be exercised ‘with great care’ or ‘extreme caution’.”

  1. The test is whether Queensland is a clearly inappropriate forum.  The onus is on the defendant, here Geoscience, to satisfy this court that it is so inappropriate a forum for the determination of the proceedings that their continuation would be productive of injustice, because it would be oppressive (in the sense of seriously and unfairly burdensome, prejudicial or damaging) or vexatious (in the sense of productive of serious and unjustified trouble and harassment) to it.[17]   It is not a question of striking a balance between competing considerations.  The focus is upon the inappropriateness of the local court, not the appropriateness or comparative appropriateness of the foreign court.[18]
  2. In Henry v Henry (1996) 185 CLR 571, a case, like this one, in which there were already foreign proceedings on foot, Dawson, Gaudron, McHugh and Gummow JJ said, at 591:

“It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue.  And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.

It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed.  However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or, vexatious, in the sense of ‘productive of serious and unjustified trouble and harassment’.  And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation.”[19]

  1. Central emphasised that, although the question whether the 2012 agreement was entered into is common to both the Texas proceeding and the proceeding in this court, the Texas proceeding also involves issues going beyond that (the quantum meruit claim, and the misrepresentation claim).   In this regard, Central relies on CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 in which, at 400-401 the majority said:

“In cases such as the present, where different issues are involved in the local and foreign proceedings, albeit that the different proceedings arise out of the same sub-stratum of fact, the question is not whether the Australian court is a clearly inappropriate forum for the litigation of the issues involved in the Australian proceedings.  Rather, the question must be whether, having regard to the controversy as a whole, the Australian proceedings are vexatious or oppressive in the Voth sense of those terms, namely, that they are ‘productive of serious and unjustified trouble and harassment’ or ‘seriously and unfairly burdensome, prejudicial or damaging’.”

  1. Their honours had earlier, at 393-394, observed, by reference to previous authorities:

“…that the mere co-existence of proceedings in different countries does not constitute vexation or oppression.  In particular, Peruvian Guano establishes that ‘double litigation [which] has no other element of oppression than this, that an action is going on simultaneously abroad, which will give other or additional remedies beyond those attainable in [the domestic forum]’ does not amount to vexation or oppression.

More recently, in Bank of Tokyo Ltd v Karoon, Robert Goff LJ pointed out, correctly, in our view, although without specific reference to underlying equitable principle, that foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings.  On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Co, if ‘complete relief’ is available in the local proceedings.”[20]

  1. In Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 at [461] the Victorian Court of Appeal said, after referring to TS Production at 443 (per Finkelstein J) and 448 (per Gordon J) and accepting as correct the principle that the existence of simultaneous proceedings alone does not establish vexation and oppression, that something more is needed:

“These passages support the view that the focus of the inquiry as to whether proceedings are vexatious or oppressive is not primarily on the additional expense and cost to the defendant, but rather on whether the bringing of a second proceeding in respect of the same controversy is unnecessary, ‘unjustified’ or ‘unfair’.  The authorities indicate that what is to be established in evidence is not primarily that the duplication of proceedings will lead to additional cost, expense, or harassment, but rather that there is nothing to be gained from the parallel proceeding; alternatively, that complete relief is available in a single proceeding.  If there is a legitimate advantage that can be gained, the fact that the defendant will suffer additional cost and harassment is easily outweighed.  The authorities show that what is required is not a straightforward balancing exercise that weighs the cost and harassment incurred by an applicant (and presumably their ability to bear that cost and harassment) against the advantage gained by the party bringing the proceeding.  Rather, as follows from the majority’s reasoning in CSR, the balance is skewed heavily in favour of allowing a party to proceed when there is something substantial that may be gained in the foreign proceedings and is skewed heavily against so allowing when there is not.”[21]

  1. Central submits that there is something to be gained by the local proceedings in this court, which is a determination by an Australian court of whether the 2012 contract was entered into which it submits will be critical to whether any determination of a Texas court in Geoscience’s favour would be enforceable in Australia.  I will address this further below.
  2. In submitting that the continuation of both sets of proceedings would be vexatious and oppressive to it Geoscience emphasises that the Texas proceedings were commenced first, the stage those proceedings have reached, the connection of the dispute with Texas, the location of witnesses, the law it submits would apply to determine the issue whether the 2012 agreement was entered into and “the difference in the size of the parties”.[22] 
  3. Central, on the other hand, contends that there are a number of reasons why it would not be concluded that Queensland is an inappropriate forum, including that the dispute has a significant connection to Queensland, the Texas proceedings have not progressed beyond a challenge to jurisdiction, Queensland law governs the dispute as to the existence of the 2012 agreement, and that there is real doubt that any Texas judgment would be recognised in Queensland.[23]

Connection with Queensland

  1. I accept that the dispute has a connection with Queensland, since Central has its registered office and its principal place of business in Queensland, and the underlying subject matter of the dispute concerns petroleum tenements located in Queensland (as well as in the Northern Territory).   That is not to deny the connection with Texas, given that is where Geoscience is based, where two of the primary witnesses for Geoscience (Mr Pande and Mr McGinnis) are located, and where it appears the contentious meetings (in particular, the meeting at which Geoscience alleges Mr Shortt signed the 2012 agreement) took place.  But this is not a balancing exercise.

The applicable law

  1. In deciding whether the local forum is clearly inappropriate, the extent to which the law of that forum is applicable in resolving the rights and liabilities of the parties is a material consideration.  Gaudron J observed, in Oceanic Sun Line (at 266), that the selected forum should not be seen as an inappropriate forum if it is fairly arguable that the substantive law of the forum is applicable in the determination of the rights and interests of the parties.[24]
  2. Geoscience devoted a significant proportion of its written submissions to this issue, arguing that the “weight of authority” favours the view that the dispute as to whether the parties entered into the 2012 agreement will be determined by the proper law of the alleged agreement, which is Texas law, given the governing law clause in the alleged 2012 agreement.[25]
  3. Central contends that it is, at the least, fairly arguable that the issue will be decided by Queensland law, relying upon a decision earlier this year of the Full Federal Court in Trina Solar (US) Inc v Jasmin Solar Pty Ltd (2017) 247 FCR 1.   That submission must be accepted, in light of this decision.  At first instance[26] Edelman J (then of the Federal Court) referred to the “absurdity” of applying the proper law of a disputed contract to determine whether a person is bound by that contract, observing (at [86]) that:

“The basal reason why a person is bound by the proper law contained in a contract is because that person has manifested a consent to be bound.  The question of whether a person has manifested consent to be bound cannot be governed by matters contained within the very contract about which the person disputes having manifested agreement…”

  1. As Edelman J noted at [89] the Australian authority on this point is limited, but includes Brennan J (at 225) and Gaudron J (at 260) in Oceanic Sun Line observing, albeit by way of obiter in that case, that the law of the forum applies to determine questions as to the existence of a contract.
  2. On appeal, all members of the Full Federal Court reached the same view.[27]  Greenwood J considered that the observations of Brennan J and Gaudron J in Oceanic Sun Line “must inform the answer to the question”, notwithstanding academic writing supporting the notion that the putative proper law applies to questions of whether the parties have reached consensus ad idem (which is what Geoscience emphasises in its submissions).   Beach J (with whom Dowsett J agreed) saw no good reason not to follow the obiter observations of Brennan and Gaudron JJ (at [134]) and observed, at [130], that:

“… it is counter-intuitive to suggest that the choice of law to assess consensus ad idem should be that set out in an agreement that an entity says it is not a party to because there was no consensus ad idem.  That would be to assume what was to be proved.  As his Honour [Edelman J at first instance at [7]] described it:  ‘a party cannot pick itself up by the bootstraps provision when there has been no determination that it binds the other party’”,

and at [149] that:

“[t]he rationale for applying the putative proper law of the contract is that it accords with the intent of the parties, but that is the very matter in issue in the present context.”

  1. On this application I do not need to reach a final determination on the relevant law that governs whether the parties entered into the 2012 agreement.   But, quite clearly, having regard to the Full Federal Court’s decision in Trina Solar, it is reasonably (indeed, strongly) arguable that Queensland law applies, which is a very significant factor in favour of refusing a stay.[28]

Stage the Texas proceedings have reached

  1. It seems a significant amount of work has been undertaken in relation to the Texas proceeding, but that has not progressed beyond the question of the jurisdiction of the Texas court (although there may be some overlap, in a practical sense). 
  2. The appeal by Central against the ruling that the Texas court has jurisdiction was heard in May 2017.   Mr Gunn, an independent Texas lawyer who has provided an expert report, outlines the available processes for review, beyond the Court of Appeals’ decision that is currently reserved, and estimated timeframes (acknowledging that such estimates are necessarily conjectural).  Mr Gunn says the present appeal may not be determined until the end of this year, or perhaps next year; and if subsequent reviews are undertaken, the appeal is “almost certain to last into 2018 and could easily last into 2019”.  Once the issue of jurisdiction, which is the subject of the appeal, is resolved, assuming that is favourable to Geoscience, there may be a delay of 9 to 12 months before the trial commences.[29]  Mr McDougald, Geoscience’s Texas lawyer, says the timeline estimates in Mr Gunn’s report are “pessimistic, although not unreasonable”.[30] 
  3. In contrast, in so far as this proceeding is concerned, Central submits it concerns a relatively narrow point; in respect of which there are only three relevant witnesses (Mr Shortt, Mr Pande and Mr McGinnis); which could be dealt with reasonably quickly with the benefit of case management in this court, and that there is merit in doing that for the reasons outlined below, in relation to the question of the enforceability of any Texas judgment in Australia.   Central also submits that Geoscience could advance by way of counterclaim all the causes of action it sues on in the Texas proceeding (although potential issues with limitation periods were alluded to by counsel for Geoscience[31]). 
  4. Mr Pande of Geoscience says that if the issue of the jurisdiction of the Texas courts is resolved in Geoscience’s favour, Geoscience will continue to prosecute the Texas proceedings, even if its present application to set aside, or stay, the Queensland proceedings is unsuccessful.  Mr Pande says that while he is “concerned by the prospect of two proceedings being run in separate jurisdictions (given matters such as the duplication of legal costs, the added stresses of litigation, the possibility of conflicting judgments and the incentives that each side would then have to ensure that one proceeding is determined first)”, he is committed to the pursuit of the Texas proceedings.[32]
  5. As against that, for reasons explained further below, in dealing with the issue of the enforceability in Australia of any judgment of a Texas court against Central, Central argues that it is in the interests of the parties to know at an early stage whether or not any such judgment would be recognised or enforceable in Australia – a matter Central submits can only be determined by an Australian court – because if it would not, that may determine whether Central participates, on the merits, in the Texas proceedings.  It is to that issue that I turn next.

Enforceability of any judgment against Central in the Texas proceedings

  1. The enforceability of any judgment Geoscience may obtain against Central in the Texas proceedings took on particular significance at the hearing of this application, because of the issue raised at paragraphs [37]-[40] above and paragraph [60] below.
  2. The Foreign Judgments Act 1991 (Cth) makes provision for the enforcement of certain foreign judgments in Australia, but that does not extend to judgments of any courts of the United States of America,[33] the recognition and enforcement of which is therefore governed by the common law principles.
  3. As summarised in Nygh’s Conflict of Laws at [40.2]:[34]

“To entitle a foreign judgment to recognition at common law, four conditions must be satisfied:  (a) the foreign court must have exercised a jurisdiction that Australian courts recognise; (b) the foreign judgment must be final and conclusive; (c) there must be an identity of parties; and (d) if based on a judgment in personam, the judgment must be for a fixed debt.”

  1. The term “jurisdiction” in the first condition does not refer to the jurisdiction of the foreign court under its own rules, but “jurisdiction in the international sense”, by which is meant a competence that is recognised under Australian law.[35]  Jurisdiction in this sense can arise in one of two ways:  first, by the presence or residence of the defendant in the jurisdiction of the foreign court (in a practical sense, here, by service on the defendant while present in that jurisdiction) or, second, by the voluntary submission by the defendant to that jurisdiction.[36]
  2. The authorities clearly support the proposition that it is for an Australian court to determine this question – it is not bound by the determination as to jurisdiction by a foreign court.[37]  The principle was articulated in clear terms by Staughton LJ in Jet Holdings Inc v Patel [1990] 1 QB 335 at 344:

“Where the objection to enforcement is based on jurisdiction – that is rule 43[38] – it is to my mind plain that the foreign court’s decision on its own jurisdiction is neither conclusive nor relevant.  If the foreign court had no jurisdiction in the eyes of English law, any conclusion it may have reached as to its own jurisdiction is of no value.  To put it bluntly, if not vulgarly, the foreign court cannot haul itself up by its own bootstraps.”[39]

  1. There is no dispute that Central was not served in the United States; it was served in Australia.  As to the second basis, Central submits that the only argument that could be made that Central has submitted to the jurisdiction of the Texas court depends on the clause as to jurisdiction in the alleged 2012 agreement. Central submits that there is no other basis on which it could be said to have submitted, by its actions, to the Texas courts’ jurisdiction.  Central’s involvement in the Texas proceeding to date has been limited to challenging the jurisdiction of the Texas court.[40] Counsel for Geoscience confirmed that it was not being contended by Geoscience that in any steps taken by Central in relation to the Texas proceeding, it had gone beyond that.[41]
  2. However, what Geoscience did contend is that, having entered (in effect) a conditional appearance, and challenging the jurisdiction of the Texas court, once that issue is decided by the Texas court, Central is bound by the finding as to jurisdiction reached by that court.  That is, that an issue estoppel arises, as to the issue of the jurisdiction of the Texas court.  Geoscience relies on the decision of Jacobson J in Armacel Pty Ltd v Smurfit Stone Container Corporation (2008) 248 ALR 573 for this proposition.
  3. Central submits that applying to the foreign court to protest its jurisdiction cannot amount to submission to the foreign court’s jurisdiction, and says that s 11 of the Foreign Judgments Act 1991 is decisive on that point.  Section 11 provides, in relation to judgments of foreign courts to which part 2 of the Act does not apply, including judgments of United States courts, that the foreign court:

“is not taken to have had jurisdiction to give the judgment merely because the judgment debtor:

  1.  entered an appearance in proceedings in the court; or
  1.  participated in proceedings in the court only to such extent as was necessary;

for the purpose only of one or more of the following:

  1.  contesting the jurisdiction of the court;
  1.  inviting the court in its discretion not to exercise its jurisdiction in the proceedings.”
  1. I accept Central’s submission in this respect.  For the following reasons, I do not accept that Armacel is authority for the contrary proposition contended by Geoscience.
  2. In Armacel the parties had entered into a technology licence agreement, under which Armacel licensed Smurfit to use an industrial process in the United States.  Smurfit commenced proceedings in a US District Court, seeking negative declaratory relief that it had no remaining obligations under the agreement.   Armacel brought a motion for the dismissal of the proceeding on the ground of want of jurisdiction, based on a clause in the agreement which Armacel contended was an exclusive jurisdiction clause, under which Smurfit agreed to submit to the exclusive jurisdiction of New South Wales.  The US court dismissed Armacel’s motion, holding that the clause provided for the selection of New South Wales as a non-exclusive forum.   In the meantime, one month after the US proceedings were commenced, Armacel commenced proceedings in the Federal Court of Australia against Smurfit, claiming damages for misleading and deceptive conduct, and breach of the licensing agreement.  Smurfit applied to stay those proceedings, on the basis, inter alia, that the decision of the US District Court was a final and conclusive one on the merits, giving rise to an issue estoppel precluding Armacel from contending that the jurisdiction clause was exclusive.
  3. Jacobson J found that the US District Court’s decision was a final and conclusive one, on the merits, in respect of the same question – the construction of the jurisdiction clause in the licensing agreement – and as such it gave rise to an issue estoppel, barring Armacel from contending that the relevant clause was an exclusive jurisdiction clause.  His Honour accepted, consistent with previous authority,[42] that a decision given in an interlocutory context can nonetheless be final for this purpose. That much is uncontroversial.  What is controversial, for present purposes, is whether a foreign court’s decision as to it having jurisdiction is binding on a local court.
  4. In order to understand the parameters of Armacel it is necessary to delve further into two decisions referred to by Jacobson J.  The first is DSV Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar [1985] 1 WLR 490 (The Sennar).   In that case Lord Diplock stated the principle that “issue estoppel can be created by the judgment of a foreign court if that court is recognised in English private international law as being a court of competent Jurisdiction” (at 493).  That phrase, “court of competent jurisdiction” is repeated a number of times throughout the reasons of Lord Diplock and Lord Brandon (with both of whom the other Lords agreed).  It was accepted in that case that the foreign court (the District Court of Rotterdam, and the Dutch Court of Appeal) was a court of competent jurisdiction, recognised by English law, by virtue of the arrest of a sister ship of The Sennar in Rotterdam waters.[43]  That being the case, the decision of the Dutch court, summarised by Lord Diplock (at 494) as:

“[u]pon the particular set of facts on which the dealers relied in the Dutch action their only claim against the shipowners is for breach of the contract of carriage which, as a result of the Sudanese Jurisdiction clause that it contains, is enforceable in the courts of the Sudan and nowhere else,”

being a final and conclusive judgment, on the merits, between the same parties, as to the effect of the jurisdiction clause in the contract of carriage, created an issue estoppel on that issue.  The controversial issue determined by the House of Lords in this context was that it was a decision “on the merits” as used in the context of the doctrine of issue estoppel (at 499 per Lord Brandon).

  1. The Sennar is consistent with the authorities referred in the footnote to paragraph [59] above, for the principle that it is for the local court to determine for itself the foreign court had jurisdiction in the international sense.  That was uncontroversial in The Sennar, because of the arrest of the ship in the foreign waters.
  2. The second case is Desert Sun Loan Corp v Hill [1996] 2 All ER 847.  In that case Desert Sun issued proceedings in Arizona against a limited partnership for money due under a promissory note, and against certain of the partners, including Hill, as guarantors.  Hill did not defend the proceedings.  Desert Sun obtained judgment against all the defendants, including Hill, as to the latter on the basis of acceptance of service of the proceedings on Hill’s behalf by an Arizona attorney.  When Hill became aware of the judgment against him personally, he applied to the Arizona court to set aside the judgment, on the basis that he had not authorised the attorney to accept service on his behalf.  His application failed.  Desert Sun sought to enforce the judgment against Hill in England, and claimed that Hill was barred by the Arizona court’s ruling (on his application to set aside the judgment) from raising the same issue in England.  
  3. Evans LJ said that, as a matter of principle, he would be prepared to hold that “an issue estoppel could arise from an interlocutory judgment of a foreign court on a procedural, ie non-substantive, issue, where the following conditions were fulfilled:  (1) there was express submission of the procedural or jurisdictional issue to the foreign court; (2) the specific issue of fact was raised before and decided by the court; and (3) the need for ‘caution’ recognised by Lord Reid in Carl-Zeiss is carefully borne in mind” (at 858).  But his Honour said it was not sufficiently clear that the specific issue which arose in the English proceedings was identified and decided against the defendant in the foreign court, and therefore no issue estoppel arose (at 860).  Stuart-Smith LJ reached the same conclusion (at 863).  Both Evans LJ and Stuart-Smith LJ seem to have proceeded on the basis that the Arizona court was a court of competent jurisdiction because it had found that Mr Hill had voluntarily submitted “to its jurisdiction to decide whether it has substantive jurisdiction or not” (at 856f and 863f).
  4. Roch LJ agreed with Evans LJ that Desert Sun could not rely on issue estoppel (because it was not precisely the same issue); but also expressed reservations about whether, in any event, issue estoppel could arise based on the foreign court’s decision that a defendant had voluntarily submitted to its jurisdiction, referring to the principle that, in deciding whether a foreign court was one of competent jurisdiction, the English court applies the English rules of the conflict of laws not the law of the foreign court.  In that context, Roch LJ said at 861:

“Where the defendant challenges the jurisdiction of the foreign court and appears before that court for that purpose, but for that purpose only, then s 33 of the Civil Jurisdiction and Judgments Act 1982 provides that he shall not be regarded as having submitted to the jurisdiction by reason only of the fact that he appeared in the foreign proceedings for that purpose.  Thus the attempts by Mr Hill to have the judgment of 2 January 1992 set aside by the courts of Arizona on the basis that the courts of Arizona did not have jurisdiction over him do not amount to a voluntary appearance conferring jurisdiction ex post facto on those courts.”

  1. The approach reflected in Roche LJ’s reasoning was also taken in the later Court of Appeal decision of Svendborg v Wansa [1997] 2 Lloyd’s Reports 183 at 188, where Staughton LJ (Waite and Aldous LJJ agreeing) said that a protest against the jurisdiction of a foreign court cannot be treated as a submission to the jurisdiction of the foreign court to decide the issue of jurisdiction. 
  2. The authors of Nygh’s observe, at [40.16], that it had for a long time been a vexed question whether an appearance entered to protest the jurisdiction of the foreign court could amount to a submission if the protest was unsuccessful.[44]   But the matter is now settled in Australia by s 11 of the Foreign Judgments Act 1991,[45] under which neither contesting the foreign court’s jurisdiction nor asking the foreign court to decline jurisdiction amounts to a voluntary submission in itself.[46]  The contrary approach, of Evans LJ in Desert Sun, has been the subject of academic criticism,[47] inter alia because it deprives provisions such as s 33 of the Civil Jurisdiction and Judgments Act 1982  (the UK equivalent of s 11 of the Foreign Judgments Act) of a substantial part of its effect. 
  3. Jacobson J in Armacel referred to the need for caution in the application of the doctrine of issue estoppel, especially where the estoppel is said to arise from a judgment of a foreign court, and in an interlocutory context (at [63]), but said:

“[64] Nevertheless, in Desert Sun Loan, Evans LJ stated (at 858) that an issue estoppel can arise from an interlocutory judgment of a foreign court on a procedural issue where there has been an express submission of the procedural or jurisdictional issue to the foreign court and the specific issue of fact has been raised and decided by that court.

[65] The Sennar is also authority for that proposition as was accepted by Holmes JA in Castillon: at [54].”

  1. As already discussed, The Sennar is authority for that proposition, but only where the foreign court is accepted to be a court of competent jurisdiction in the eyes of the local court.  The reasons of Holmes JA in Castillon do not suggest otherwise.[48]  In Armacel at [82] Jacobson J adopted with approval the point made by Lord Diplock in The Sennar that “if the issue has already been determined by a court of competent jurisdiction, issue estoppel operates regardless of whether the local court would regard the reasoning of the foreign judgment as open to criticism”.[49]
  2. The reasons of McPherson JA in de Santis v Russo [2002] 2 Qd R 230 at [11] also make this point clear:  a conditional appearance limited to the purpose of contesting the jurisdiction or even participation in the proceedings only to the extent necessary for that purpose, does not involve a voluntary submission to the jurisdiction.
  3. Although it is not expressly articulated in the reasons in Armacel, it is to be inferred (from [6], [11], [57], [66] and [81]-[82]) that there was no challenge by Armacel to the jurisdiction of the US District Court per se; as opposed to a request for discretionary refusal to exercise that court’s jurisdiction, on the basis that the parties, under the jurisdiction clause in the licensing agreement, had agreed to submit their dispute exclusively to the jurisdiction of New South Wales.  In those circumstances, Armacel was a case, like The Sennar, where the foreign court was accepted to have had jurisdiction, in the international sense.   In fact, as is clear from [66] of Armacel, Jacobson J regarded the case before him as indistinguishable from The Sennar.
  4. I accept the submission for Central that the law is correctly stated in Nygh’s, that an Australian court must make its own decision as to whether, under Australian law, it recognises the jurisdiction of the foreign court.  I do not accept that Central, by protesting the jurisdiction of the Texas court, and participating in the process for that purpose, can be taken to have submitted to the jurisdiction of the Texas court.  Such a conclusion is contrary to s 11 of the Foreign Judgments Act, and the authorities referred to above.  I do not accept that Armacel supports a contrary view.  It follows that the finding of the Texas District Court (or Court of Appeals) as to its jurisdiction over Central is not binding on Central, in proceedings in Australia, and does not give rise to an issue estoppel. 
  5. I also accept the submission that the question whether an Australian court would find that the Texas court has jurisdiction over Central will, in this case, turn on whether or not an Australian court finds that Central entered into the alleged 2012 agreement.  If an Australian court holds that Central did enter into and is bound by the 2012 agreement, the clause as to jurisdiction in that agreement would be sufficient to amount to a submission to the Texas jurisdiction, which would lead the Australian court to recognise the jurisdiction of the Texas courts and therefore the judgment of that court could be enforced in Australia.  But if the Australian court holds that Central did not enter into the 2012 agreement, there is presently (unless and until Central participates on the merits in the Texas proceeding, as opposed to merely protesting the jurisdiction of the Texas court) no other basis to find Central has submitted to the Texas jurisdiction, and any judgment of the Texas court would not be enforceable.
  6. Although Geoscience says it doubts Central would not voluntarily satisfy any Texas judgment against it, Central’s clear position on this application is that it may well take that position.  The assets owned by Central (and its subsidiaries) are all located in Australia; Central does not own any assets outside of Australia.[50]  Mr White, the group general counsel and company secretary of Central, deposes that in the event Geoscience seeks to enforce any judgment it obtains in the Texas proceedings against Central’s assets in Australia, Central “may oppose such enforcement if there are grounds to do so”, as that may be appropriate to protect the interests of Central’s shareholders.[51]

Conclusion as to whether this court is a clearly inappropriate forum

  1. It is unnecessary in the circumstances to say more about the other matters referred to by the parties in their respective submissions.
  2. I am not persuaded that Queensland is a clearly inappropriate forum for the dispute, given that:  (i) it is reasonably arguable Queensland law will apply to the question whether the 2012 agreement was entered into, and (ii) it will be necessary for an Australian court to determine that question, favourably to Geoscience, before any judgment against Central in the Texas proceedings would be enforceable against Central in Australia, where its assets are located.  I am not persuaded that the Queensland proceedings are vexatious or oppressive in the Voth sense, since that is something substantial that may be gained from the local proceeding.

Should a temporary stay be granted?

  1. An alternative proposed by Geoscience was to temporarily stay these proceedings, pending the determination of the Texas proceedings.  The relevant principles guiding the exercise of the court’s discretion are set out in the reasons of Lockhart J in Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) Pty Ltd (1992) 34 FCR 287 at 290-291.
  2. Having regard to the matters already discussed, and the matters outlined below, I am not persuaded that it is desirable that the Texas proceedings should proceed to their conclusion first, before the Queensland proceeding.

Adjournment

  1. A further alternative proposed by Geoscience was to adjourn the hearing of its application, pending the determination of the appeal on the question of jurisdiction of the Texas court.  I was satisfied that was not an appropriate course to adopt, given that:
    1. even if the Texas Court of Appeals decides the Texas District Court does have jurisdiction over Central, it will remain necessary for this court, an Australian court, to determine for itself whether the Texas court has jurisdiction, in the international sense, over Central, before any judgment of the Texas court would be enforced in Australia;
    2. in a practical sense, the determination of that question may affect the decision Central makes as to whether it actively defends the Texas proceeding on its merits or not (involving as that does the incurring of significant costs) – because if an Australian court has determined, by holding that Central did not enter into the 2012 agreement, that the Texas court does not have jurisdiction in the international sense, Central may well decide not to voluntarily contest the Texas proceeding on its merits, because that in itself would constitute submission to the jurisdiction, providing a basis for enforcement of any judgment in Australia;[52]
    3. if the outcome of the local proceeding is a finding that Central did not enter into, and is not bound by the 2012 agreement, it is in both parties’ interests to know that, because if there is no likelihood of any judgment against Central in the Texas proceedings being enforceable in Australia, it may be that the whole proceedings are a waste of time and money[53] (as already noted, although Geoscience does not accept that Central would not voluntarily meet any judgment of the Texas court against it, that was certainly Central’s position on this application); and
    4. it is in the interests of the administration of justice that the question of the enforceability of any Texas judgment be determined in a timely way by an Australian court, given the potential lengthy periods of time before the Texas proceedings may be finalised.[54]

Proposed undertaking

  1. At the hearing of the application counsel for Geoscience raised the possibility of an undertaking being given by Geoscience not to rely on any step taken by Central in defending the Texas proceeding on the merits, as a possible answer to one of Central’s arguments against the grant of the requested stay.   Subsequent to the hearing, with the agreement of Central, Geoscience provided a proposed form of undertaking and both parties were given leave to make written submissions about the significance or otherwise of it.[55]
  2. The proposed undertaking by Geoscience is that:

“it will not, either in the Queensland proceedings or in any Australian proceedings to enforce any judgment obtained in the Texas proceeding, rely on any step or steps taken by or on behalf of [Central]:

  1.  on or after the date of [the order staying the Queensland proceedings until the conclusion of the Texas proceedings]; and
  1.  in order to defend the Texas proceedings on non-jurisdictional grounds;

as comprising a submission to jurisdiction in the Texas proceedings”.

  1. Geoscience describes this as the “price for a stay” and in essence submits that if accepted the undertaking would resolve the dilemma as to whether Central substantively defends the Texas proceeding – because Central could do so, without risking its argument against the enforceability of any Texas judgment against it in Australia.  Central submits the proposed undertaking does not assist, and questions whether it would be of legal effect in any event.
  2. I am not persuaded that the proposed undertaking provides any support for Geoscience’s stay application, or any answer to the matters raised by Central against it, including the practical considerations referred to in paragraph [84] above.  Although it is not necessary for me to decide, I do consider it questionable whether the proposed undertaking could be legally effective, as it seems to me that if Central defended the Texas proceeding on the merits, regardless of whether Geoscience relied on that, Central would, as a matter of law, have submitted to the jurisdiction of the Texas court.  I any event, I would not regard it as appropriate to accept such an undertaking, over objection both as to its practical and potential legal effect, by Central, the party directly affected by it. 
  3. I have determined the application on its merits.  I am satisfied this court has jurisdiction in respect of Central’s proceeding and I am not satisfied Queensland is a clearly inappropriate forum for the dispute.  In those circumstances, there is no basis on which to afford Geoscience the indulgence of providing an undertaking as the “price” for a stay.  The foundation for the grant of one has not been made out by it. 

Conclusion and orders

  1. For the foregoing reasons Geoscience’s application is dismissed.  I will hear the parties as to costs, although I would anticipate that costs ought to follow the event.
  2. When the matter was before Bond J on 24 April 2017 for review, the parties were in agreement that, but for Geoscience’s objection to jurisdiction, this is an appropriate matter to be placed on the commercial list.  The parties are directed to confer with a view to agreeing upon an appropriate order for that to occur, and directions for the progress of the matter towards trial in a timely and efficient manner.

Footnotes

[1]  Pande (15 September 2017) at [2].

[2]  As explained by the parties, a farm-in partner is a third party who is willing to advance money for the exploration and development of resource tenement(s) in exchange for an interest in the underlying tenement(s). 

[3]  Deane (26 May 2017) at exhibits p 39.  The tenements comprise an application for an exploration permit for petroleum in the Northern Territory and three authorities to prospect for petroleum in Queensland:  White (17 July 2017) at [19]-[25].

[4]  Deane (26 May 2017), unsigned copy of the alleged 2012 agreement, at exhibits p 146.

[5]  Deane (26 May 2017), plaintiff’s original petition in the District Court of Harris County, Texas, at exhibits pp 1-19.

[6]  Deane (26 May 2017) at exhibits p 21 and following.

[7]  Deane (9 June 2017) at [3].

[8]  McDougald (26 May 2017) at [6]-[25]; Gunn (15 August 2017), at [55] and [59]-[62] of Mr Gunn’s report.

[9] Borch & Ors v Answer Products Inc & Ors [2000] QSC 379 at [28].

[10] Borch & Ors v Answer Products Inc & Ors [2000] QSC 379 at [9] (referring to Agar v Hyde (2000) 74 ALJR 1219 at p 1229) and [10].

[11]  References to GRR are to Geoscience; and references to CPL are to Central.

[12]  See, by analogy, Tana v Baxter (1986) 160 CLR 572 at 580 per Gibbs CJ, Mason, Deane and Dawson JJ, Brennan J agreeing at 582, in relation to the phrase “otherwise affecting” a contract in s 11(1)(b) of the Service and Execution of Process Act 1901 (Cth) (reflecting the wording of the former RSC O 11 r 1(2)(d) and the wording of the equivalent rule in other Australian jurisdictions).  See also, in relation to the phrase “relating to” more generally, Oceanic Life Ltd v Chief Commissioner of Stamp Duties (1999) 168 ALR 211 at [56] per Fitzgerald JA.

[13]  Geoscience’s submissions at [29].

[14]  Central’s submissions at [48]-[53].

[15]  In addition to a summons seeking to set aside service on it abroad, the defendant had also brought a summons seeking a stay on the basis of an arbitration clause in the putative contract, but sought to withdraw that summons at the hearing:  Finnish Marine at 1081 and 1084.

[16] Boss Group at 357.  See also Youell v La Reunion Aerienne [2008] EWHC 2493; [2009] 1 All ER (Comm) 301 at [17], where Tomlinson J observed that the decision of the Court of Appeal in Boss Group “shows that the English market establishes a good arguable case that there is a matter relating to a contract by relying on the fact that that is what the French market is contending against it in Paris”.

[17] Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247-8 per Deane J; Voth at 564-565; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at [78]; Puttick v Tenon Ltd (2008) 238 CLR 265 at [27]-[29].

[18] Regie Nationale Renault at [78]; Voth at 565.

[19]  References omitted, emphasis added.

[20]  References omitted, emphasis added.  See also TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433 at [21] per Finkelstein J and at [50] and [55]-[59] per Gordon J (on the Federal Court, as her Honour then was), with whom Stone J agreed.

[21]  References omitted, emphasis added.

[22]  Geoscience’s written submissions dated 8 June 2017 at [82]; T 1-6 (where Geoscience is described as “quite a small company”, compared with Central, which is a publicly listed company) and 1-56.

[23]  Central’s written submissions dated 6 September 2017 at [60] and following.

[24]  Adopted with approval in Voth at 566 per Mason CJ, Deane, Dawson and Gaudron JJ.

[25]  Geoscience’s written submissions, dated 8 June 2017, at [33]-[63].

[26] Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd (2015) 331 ALR 108.

[27]  Greenwood J at [43] and [46], Beach J at [121], [127]-[136] and [149], with whom Dowsett J agreed at [1].

[28] Voth at 566.

[29]  Gunn (15 August 2017) at [57]-[71] of Mr Gunn’s report.

[30]  McDougald (15 September 2017) at [11].

[31]  T 1-6.

[32]  Pande (15 September 2017) at [5].

[33]  See s 5 of the Foreign Judgments Act 1991 (Cth) and s 3 and the schedule to the Foreign Judgments Regulations 1992 (Cth); Jani-King Franchising Inc v Jason [2013] QSC 155 at [4] per Martin J; see also Davies, Bell and Brereton, Nygh’s Conflict of Laws in Australia, 9th ed (2014) at [41.6].

[34]  By reference to Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at [18] per Bleby J (Vanstone and Anderson JJ agreeing); see also Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583 at [146]-[147] per Sackar J.

[35] Doe v Howard [2015] VSC 75 at [57] per J Forrest J; Nygh’s Conflict of Laws in Australia at [40.4].

[36] Nygh’s Conflict of Laws in Australia at [40.5].

[37]  See Nygh’s Conflict of Laws in Australia at [40.45]; Harris v Harris [1947] VLR 44 at 48-49; Jet Holdings Inc v Patel [1990] 1 QB 335 at 343-344 per Staughton LJ (Nichols LJ agreeing); Adams v Cape Industries plc [1990] Ch 433 at 550; Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at [18] per Bleby J (Vanstone and Anderson JJ agreeing); Telesto Investments Ltd v UBS AG (2013) 94 ACSR 29 at [261] per Sackar J; see also de Santis v Russo [2002] 2 Qd R 230 at [9] per McPherson JA; and Wong v Jani-King Franchising Inc [2014] QCA 76 at [20] per Holmes JA (as her Honour then was).

[38]  A reference to rule 43(1) in Dicey & Morris, The Conflict of Laws, 11th ed (1987), that “[a] foreign judgment is impeachable if the courts of the foreign country did not, in the circumstances of the case, have jurisdiction to give that judgment in the view of English law in accordance with the principles set out in rules 37 to 41 inclusive…”.

[39]  Emphasis added.

[40]  White (17 July 2017) at [108] and White (14 September 2017) at [5]; Gunn (15 August 2017) at [52] and [82] of Mr Gunn’s report.

[41]  T 1-64.29.

[42] Castillon v P&O Ports Ltd [2008] 2 Qd R 219 at [49]-[57] per Holmes JA (as her Honour then was); see also DSV Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar [1985] 1 WLR 490 (The Sennar) at 499-500.

[43] The Sennar at 493E, 494F, 497-498A, 499C.

[44]  Referring to Henry v Geopresco International Ltd [1976] QB 726, the relevant discussion in which appears at 745-748.

[45]  And in England, by s 33 of the Civil Jurisdiction and Judgments Act 1982, which similarly provides that a person shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that they appeared (conditionally or otherwise) in the proceedings, relevantly, to contest the jurisdiction of the court or to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country.  See http://www.legislation.gov.uk/ukpga/1982/27/section/33.

[46]  This was also made clear by McPherson JA (with whom Thomas JA and Cullinane J agreed) in de Santis v Russo [2002] 2 Qd R 230 at 235, by reference to the similarly worded s 7(5) of the Foreign Judgments Act (as to when a person will be taken to have voluntarily submitted to the jurisdiction of the foreign court), where his Honour said:  “A conditional appearance limited to the purpose of contesting the jurisdiction or even participation in the proceedings only to the extent necessary for that purpose does not now, even if it may be at common law, involve a voluntary submission to the jurisdiction”.

[47]  See, for example, Dicey, Morris and Collins on The Conflict of Laws, 15th ed, at [14-035]; and Briggs and Rees, Civil Jurisdiction and Judgments, 3rd ed, at pp 469-470.

[48]  And in Wong v Jani-King Franchising Inc [2014] QCA 76 at [20] Holmes JA made comments consistent with the principle that the question of whether the foreign court had jurisdiction is one to be determined according to Queensland’s jurisdictional rules, observing that the (in that case) Dallas court’s conclusion “was simply a matter of history”, and affirming the primary judgment’s description of the Dallas court’s finding as important, but not resolving the issue of jurisdiction.

[49]  Underlining added.  See also Telesto Investments Ltd v UBS AG (2012) 262 FLR 119, decision of Ward J, at [130] (referring to this part of Armacel) and also at [218] (where reference is made to the same, or in substance the same, controversy being litigated in two separate sets of proceedings in two different countries each of which has jurisdiction with respect to the same matter).  Contrary to the submissions on behalf of Geoscience this Telesto decision does not support the point it seeks to advance, that by contesting the jurisdiction of a foreign court, a defendant submits to the jurisdiction of the foreign court on the question of jurisdiction:  cf T 1-43 and 1-52 to 1-53.  In a later Telesto decision, Telesto Investments Ltd v UBS AG (2013) 94 ACSR 29, a decision of Sackar J, his Honour referred with approval to Armacel, as authority for the proposition that an issue estoppel can arise from a foreign judgment (at [209]-[210]), but also referred to, and applied, the principle that in order for a judgment of a foreign court to be recognised in an Australian court, the local court must be satisfied, under its law, that the foreign court had jurisdiction in the international sense (at [260]-[262] and following).  So Sackar J did not rely on Armacel as authority for the proposition that the foreign judgment can give rise to an issue estoppel as to the issue of whether it has jurisdiction over the defendant, since that is a matter for the local court to determine.

[50]  White (17 July 2017) at [17].

[51]  White (14 September 2017) at [7] and [8].

[52]  T 1-20 to 1-21.  See Adams v Cape Industries plc [1990] 1 Ch 433 at 560; see also Nygh’s Conflict of Laws at [40.13] (a non-resident defendant who was served outside the jurisdiction of the foreign court, but appears to argue the merits of the case, thereby submits to the jurisdiction of that court), cf [40.16]; and Dicey, Morris and Collins on The Conflict of Laws at [14-069]-[14-070].

[53]  T 1-39.

[54]  In this regard, I would comment that although Geoscience foreshadows a counter-claim, to raise in the Queensland proceeding the issues it relies on in the Texas proceeding, there may be a real benefit in the determination of the existence of the 2012 agreement as a separate question under r 483 of the Uniform Civil Procedure Rules 1999 (Qld).

[55]  See correspondence from the solicitor for Geoscience dated 3 October 2017 enclosing the proposed undertaking (marked as exhibit 1) and further written submissions on behalf of each of Geoscience and Central, dated 9 October 2017.

Close

Editorial Notes

  • Published Case Name:

    Central Petroleum Limited v Geoscience Resource Recovery LLC

  • Shortened Case Name:

    Central Petroleum Ltd v Geoscience Resource Recovery LLC

  • Reported Citation:

    [2018] 2 Qd R 371

  • MNC:

    [2017] QSC 223

  • Court:

    QSC

  • Judge(s):

    Bowskill J

  • Date:

    12 Oct 2017

  • Selected for Reporting:

    Editor's Note

Litigation History

Event Citation or File Date Notes
Primary Judgment [2017] QSC 223 [2018] 2 Qd R 371 12 Oct 2017 Defendant's application that the claim be set aside; or that the proceeding be stayed; or that the statement of claim be struck out dismissed: Bowskill J.
Notice of Appeal Filed File Number: Appeal 11706/17 08 Nov 2017 -
Appeal Determined (QCA) [2018] QCA 216 14 Sep 2018 Appeal dismissed: Gotterson and McMurdo JJA and Mullins J.

Appeal Status

{solid} Appeal Determined (QCA)