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Queensland Judgments
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RCD Holdings Ltd v LT Game International (Australia) Ltd

 

[2020] QSC 318

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

RCD Holdings Ltd & Anor v LT Game International (Australia) Ltd [2020] QSC 318

PARTIES:

RCD HOLDINGS LTD

(ACN 147 814 822)

(plaintiff/respondent)

EPAYMENT SOLUTIONS PTY LTD

(ACN 093 788 231)

(plaintiff/respondent)

v

LT GAME INTERNATIONAL (AUSTRALIA) LTD

(ACN 164 307 944)

(defendant/applicant)

FILE NO:

BS No 3299 of 2020

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

2 November 2020

DELIVERED AT:

Brisbane

HEARING DATE:

28 September 2020

JUDGE:

Davis J

ORDER:

  1. The claim is dismissed.
  2. The plaintiffs pay the defendant’s costs of the claim including the application to be assessed on the standard basis.

CATCHWORDS:

PRIVATE INTERNATIONAL LAW – RESTRAINT OF PROCEEDINGS – FOREIGN JURISDICTION CLAUSES – GENERALLY – where the plaintiffs commenced proceedings for breach of contract – where the contract contains an exclusive jurisdiction clause which states that any dispute or issue, including any alleged breach by any party, shall be heard, determined and resolved by an action commenced in Macau – where the defendant applies to dismiss the claim based on the exclusive jurisdiction clause – where the clause does not exclude the jurisdiction of this court – whether the law of Macau is the governing law of the contract – whether the discretion should be exercised to stay or dismiss the claim which was brought contrary to the contractual agreement

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the contract contained an exclusive jurisdiction clause – where there are no proper discretionary bases to allow the proceedings to be litigated in Queensland contrary to the contractual clause – whether the claim ought to be stayed or dismissed

Uniform Civil Procedure Rules 1999, r 16, r 144

Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418, followed

Australian Health & Nutrition Association Ltd & Anor v Hive Marketing Group Pty Ltd & Anor (2019) 99 NSWLR 419, followed

Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, cited

S&W Berisford plc v New Hampshire Insurance Co [1990] 2 QB 631, cited

British Aerospace plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368, followed

Byrnes v Kendle (2011) 243 CLR 253, cited

Callwood v Callwood [1960] AC 659, cited

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

Compagnie D’Armement Maritime S.A. v Compagnie Tunisienne de Navigation S.A. v [1971] AC 572, cited

FAI General Insurance Co Ltd v Ocean Marine Mutual Protections and Indemnity Association & Anor (1997) 41 NSWLR 117, cited

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, cited

Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) & Ors (2010) 79 ACSR 383, cited

Huddart Parker Ltd v The Ship Mill Hill (1950) 81 CLR 502, cited

Incitec Ltd v Alkimos Shipping Corp & Anor (2004) 138 FCR 496, followed

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, applied

Murakami v Wiryadi (2010) 268 ALR 377, cited

Oceanic Sunline Special Shipping Company Inc v Fay (1988) 165 CLR 197, cited

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, cited

Regie Nationale des Usines Renault SA & Zhang (2002) 210 CLR 491, cited

Star Shipping AS v China National Foreign Trade Transportation Corp (The Star Texas) [1993] 2 Lloyd’s Rep 445, cited

The Eleftheria [1970] P 94, not followed

COUNSEL:

D Farrands for the plaintiffs/respondent

L Clark for the defendant/applicant

SOLICITORS:

Aptum Legal for the plaintiffs/respondent

Thomson Geer for the defendant/applicant

  1. [1]
    The plaintiffs, ePayment Solutions Pty Ltd (EPS) and RCD Holdings Ltd (RCD),[1] in their contract with the defendant, LT Game International (Australia) Ltd (LT), agreed that any dispute between them would be litigated in Macau.[2]  However, when a dispute did arise they commenced proceedings in this court.  LT entered a conditional appearance[3] and now applies to strike out the claim, or alternatively, to have it stayed[4] as being commenced in this court contrary to the contract.

Background

  1. [2]
    LT is a company incorporated in the Virgin Islands and registered in Australia as a foreign company.
  2. [3]
    On 13 August 2013, the parties entered into a written agreement (the contract).  The contract was signed in Australia on behalf of each company.
  3. [4]
    The contract establishes a scheme to promote a computer betting game called “Knockout Baccarat” (KOB).  It is unnecessary for present purposes to explain the details of the game or how it works.
  4. [5]
    EPS owns the intellectual property in KOB and has licensed the other plaintiff, RCD, to promote and on-license the product throughout the world.  LT is licensed to develop and manufacture gaming terminals which can be used to enable patrons of casinos to participate in electronic gambling games.
  5. [6]
    Recital D to the contract explains the purpose of the agreement in these terms:

“D. EPS and RCD wish to have KOB implemented on the LT multi player platform and to be available to offer those side bets on LT’s player terminals. RCD will then license Casino Operators using the LT terminal system to offer KOB to players. LT is willing to implement KOB on their platform and do so on the following terms and conditions.”

  1. [7]
    Melbourne Crown Casino is identified in the contract as one where KOB will be played.[5]  However:
    1. (a)
      The scheme is clearly to be targeted at casinos throughout the world.[6]
    2. (b)
      KOB has already been approved by the Nevada Gaming Commission in Nevada, United States of America for use in casinos in that state.
    3. (c)
      KOB is contemplated to be operated at Kam Pek Paradise and Waldo Casinos in Macau.[7] 
  2. [8]
    Various obligations fall upon LT to develop and install software but it is unnecessary for present purposes to descend into the details of those provisions.  Importantly, clause 10 of the contract provides as follows:

10. Governing Law

Any dispute or issue arising hereunder, including any alleged breach by any party, shall be heard, determined and resolved by an action commenced in Macau. The English language will be used in all documents.”

  1. [9]
    On 29 August 2017, by letter of that date, EPS alleged breaches of the contract by LT.  It is unnecessary to analyse what is alleged.  In broad terms, it concerned the way the system had been implemented at Crown Casino in Melbourne.
  2. [10]
    On 24 March 2020, the claim was filed.
  3. [11]
    On 22 June 2020, a conditional notice of intention to defend was filed.[8]
  4. [12]
    The present application was filed on 3 July 2020.[9]

The position of the respective parties

  1. [13]
    LT wishes to hold EPS and RCD to their bargain which, it submits, is that the dispute  should be heard in the courts of Macau.  EPS and RCD submit that, as a matter of discretion, no order should be made preventing the current proceedings continuing in this court.
  2. [14]
    Many cases have considered provisions such as clause 10.  Ultimately, the effect of such a clause will depend upon the proper construction of the particular clause.  However, a distinction has been drawn in the authorities between a “non-exclusive jurisdiction clause” and an “exclusive jurisdiction clause”.  The former is no more than an agreement to submit to the jurisdiction of the court specified in the contract if a party commences proceedings there.  The latter constitutes a contractual obligation to litigate only in the nominated court.[10]
  3. [15]
    LT submits, and each of the plaintiffs concede, that clause 10 is an exclusive jurisdiction clause.  A clause such as clause 10 does not exclude the jurisdiction of this court.[11]  LT does not contend otherwise but submits that it should be able to enforce clause 10 by orders, either striking out or staying the proceedings commenced in this court.  The real issues are:
    1. (a)
      what are the relevant considerations in determining whether or not to curtail the proceedings brought contrary to the exclusive jurisdiction clause; and
    2. (b)
      what is the result here of consideration of those factors?
  4. [16]
    Both parties submitted that a relevant factor was the governing law of the contract.  LT submitted that the governing law was that of Macau but each of the plaintiffs submitted that the governing law is that of Australia.

The governing law of the contract

  1. [17]
    Parties may agree as to the law which governs their contract.
  2. [18]
    Clause 10 is headed “Governing Law”.  What follows is not a clause which expressly specifies the governing law of the contract.  Clause 10 is silent on that topic but nominates the courts of Macau as the exclusive jurisdiction for determining disputes.
  3. [19]
    Mr Clark, counsel for LT, submitted that:
    1. (a)
      the heading was part of the clause for the purposes of construing it; and
    2. (b)
      when the contract is construed as a whole, clause 10 manifests the intention of the parties that the governing law is that of Macau.
  4. [20]
    Mr Farrands, counsel for each of the plaintiffs, submitted that:
    1. (a)
      The heading to clause 10 is at odds with the text which follows.  In other words, the heading suggests that the clause deals with the governing law of the contract, but it does not.  Therefore, Mr Farrands argues, it is of no assistance in the construction of the clause.
    2. (b)
      Clause 10 does not nominate Macau as the governing law.
    3. (c)
      Other factors lead to the conclusion that the governing law is that of Australia.
  5. [21]
    There are principles of construction which are common to contracts, statutes and other legal instruments, namely that the text is interpreted in the context of the entire document (sometimes with the aid of extraneous material) and its purpose.[12]  As explained by the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd,[13] when interpreting a commercial agreement the text, circumstances and commercial purposes or objects are considered against a consideration of what a reasonable business person may have intended by the terms of the contract.[14] 
  6. [22]
    Here, Mr Farrands initially submitted that there were no facts beyond the terms of the contract which were relevant to construing it to determine whether the parties had agreed on the governing law.[15]  He submitted that, from the terms of the contract it can be seen that performance would largely be achieved in Australia, particularly in the Crown Casino, Melbourne.
  7. [23]
    Later, Mr Farrands pointed to an extrinsic fact that he submitted was relevant to the construction of clause 10.  The law in Macau is different to the law in Australia.  The law in Macau is that damages flow to a party who has failed to perform “with fault” which is ascertained by relevance to “the standard of care of a cautious and reasonable man”.[16]
  8. [24]
    It is not in contest that the contract was signed in Australia.  Whether performance will be effected predominantly in Australia will largely depend upon the terms of the contract.  As later explained, Macau has a properly functioning and sophisticated legal system for the resolution of commercial disputes.  The fact that the law of Macau is such that proof of liability for damages might be more difficult than under the law in Australia is not a significant consideration in favour of construing clause 10 of the contract in the way submitted by the plaintiffs.  There may be good commercial reasons why the parties would wish to limit liability in that way.
  9. [25]
    Whether a contract specifies a particular country’s legal system to be the proper law of their contract, is ultimately a question of construction.  However, in Oceanic Sunline Special Shipping Company Inc v Fay,[17] Brennan J (as his Honour then was) said:  “A submission to the exclusive jurisdiction of the tribunals of a particular country is an indicium of the parties’ intention the law of that country is to be the proper law of their contract”.[18]  A similar observation was made by Toohey, Gaudron and Gummow JJ in Akai Pty Ltd v People’s Insurance Co Ltd.[19]
  10. [26]
    As already observed, the contract contemplates performance across the world but in three specified places:  Melbourne, Nevada (USA) and Macau.  It is understandable, in those circumstances, that the parties might choose the legal system of one of those three countries as governing the contract and specifying the courts of any one of those countries to be the forum for litigating any dispute.  There appears to be no logical reason why the parties would intend that disputes would be litigated in the courts of one of those places but upon the law of some other place.
  11. [27]
    The heading to clause 10 suggests that the clause is intended to deal with the governing law of the contract.  Against that heading, the courts of Macau are exclusively nominated.  The clause should be interpreted as manifesting an intention that disputes will be determined in Macau by application of the law of Macau.
  12. [28]
    If a contract does not specify the county whose law governs it, the principles of the common law apply to choose the governing law.[20]  The aim is to identify the system of law with which the contract has the closest connection.[21]  That, though, becomes a hypothetical and artificial exercise given that I have determined that the parties have agreed as to the governing law.  There is no need to rule on the respective parties’ submissions on the topic.

Some factual matters

The courts of Macau

  1. [29]
    The law of a foreign jurisdiction is, to the extent that it is relevant, a fact which should be proved and is usually proved by expert opinion evidence.[22]  Ricardo Morgado Igreja is a lawyer admitted to practise in the courts of Macau and practices as a solicitor there.  He swore an affidavit exhibiting an opinion as to various aspects of the law of Macau and the operation of its courts. 
  2. [30]
    Mr Igreja’s affidavit was read by LT.  Neither EPS nor RCD:
    1. (a)
      challenged Mr Igreja’s expertise to give the opinions which he did; or
    2. (b)
      otherwise objected to his evidence; or
    3. (c)
      produced any evidence to challenge his opinions.
  3. [31]
    Mr Igreja’s opinion was:
    1. (a)
      Macau is a Special Administrative Region (SAR) of the People’s Republic of China;
    2. (b)
      previously Macau was a colony of Portugal;
    3. (c)
      before being declared an SAR, Macau operated a civil law system broadly based on Portuguese law;
    4. (d)
      that system largely remained after Macau became an SAR;
    5. (e)
      the Macau Judicial Base Court has jurisdiction to hear the dispute;
    6. (f)
      the Macau Civil Procedure Code would apply to the dispute;
    7. (g)
      Macau law recognises damages as a remedy for breach of contract; and
    8. (h)
      the official languages in Macau are Chinese and Portuguese but documents in any language, including English,[23] may be filed and relied upon, although interpreters will then be required.
  4. [32]
    From the unchallenged evidence of Mr Igreja, I conclude:
    1. (a)
      the remedy sought in the current claim (damages for breach of contract) is available through the courts in Macau;
    2. (b)
      the court system in Macau has the capability to deal with the claim; and
    3. (c)
      conducting the case in Macau can be done as contemplated by clause 10, in particular, clause 10 provides that court documents will be in English and the evidence is that documents in the English language are accepted by the courts in Macau.

COVID19

  1. [33]
    The plaintiffs point to the pandemic and submit “the administration of justice may be affected if the exclusive jurisdiction clause is enforced given that the COVID19 pandemic currently prevents the plaintiffs from commencing proceedings in Macau”.[24]  There is no evidence to support that submission.  What evidence there is suggests that it is wrong.  Mr Igreja is, as already observed, a lawyer in practice in Macau.  He is obviously not the only lawyer in practice there.  There is a legal profession in Macau and there is nothing to suggest that representatives of the plaintiffs have to be present in Macau for lawyers retained by them to commence proceedings.
  2. [34]
    The submission goes on to assert that witnesses could not travel from Australia to Macau because of the pandemic.  That may be true now.  However, there is no evidence of the impact of COVID19 in Macau, what restrictions are being experienced now, what restrictions are likely to be experienced in the future nor how long those restrictions may persist.  There is also no evidence as to when a trial of proceedings commenced now in Macau might be heard. 
  3. [35]
    Mr Clark conceded that I could take judicial notice of the fact of the pandemic and of the fact that the pandemic is presently restricting international travel.[25]  That was a proper and sensible concession.  However, he submitted that there was no evidence upon which I could draw any conclusion that proceedings in Macau would be frustrated by the pandemic.  I accept that submission.

Inconvenience to witnesses

  1. [36]
    Mr Farrands submits that witnesses who are presently situated in Australia would have to travel to Macau for any trial.  That, Mr Farrands submits, causes logistical difficulties and also inconvenience to those witnesses. 
  2. [37]
    Mr Clark submitted that there was no evidence to support the plaintiff’s submission.  He says that there are no witnesses identified or any particulars of the evidence they would give.[26]
  3. [38]
    Contrary to Mr Clark’s submissions, there is evidence, even at this early stage in the proceedings, from which an inference can be drawn that it is likely that witnesses will be required to travel from Australia to Macau.  The plaintiffs’ complaints were articulated in the letter from EPS dated 29 August 2017.[27]  Many of the complaints concern LT’s performance in relation to Crown Casino.  Clauses 28 to 33 of the claim make detailed allegations about LT’s performance at the Crown Casino Hotel in Melbourne.  It is, contrary to Mr Clark’s submissions, easy to draw an inference that there will be Australian witnesses relevant to that issue at least.
  4. [39]
    Having said that though, there is no direct evidence as to what witnesses the plaintiffs would call who are resident in Australia, nor is there any evidence of witnesses who may be overseas and who they might call if the proceedings were conducted here.

Miscellaneous factual matters

  1. [40]
    Mr Farrands identified a number of factual matters said to support his clients’ defence of the application.  Most of these are conceded.  The real issue is as to the effect of the facts upon the exercise of discretion.  However, some facts are contested.
  2. [41]
    The plaintiffs asserted:

“(h) Mr Feng signed the Agreement in Melbourne, Australia on behalf of the defendant;”[28]

  1. [42]
    Mr Feng did not sign the agreement.  It was signed by Mr Feng’s agent in Melbourne.
  2. [43]
    The plaintiffs say:

“(i) the principal activities undertaken under the Agreement were conducted in Australia, in particular, the pilot testing of the KOB product at Crown Casino in Victoria, Australia;”[29]

  1. [44]
    There is contest about that.  Mr Feng in his affidavit said that LT’s performance of the agreement primarily occurred in the United States or in Macau.  It is impossible to resolve that dispute, although it probably does not matter because it is clear that there was performance of the contract in Crown Casino in Melbourne and witnesses from Melbourne will no doubt be required to give evidence, either in Australia or in Macau. 
  2. [45]
    The plaintiffs assert:

“(k) as far as the plaintiffs are aware, the defendants employed staff who resided in Australia to perform maintenance and provide on-site support — those staff issued invoices in AUD inclusive of GST.  The only KOB product launch was in Melbourne at Crown Casino;”[30]

  1. [46]
    That is contested by LT to the extent that Mr Feng swears that he does not employ any staff residing in Australia.  Mr Feng’s evidence is the only direct evidence on the topic and ought to be accepted.
  2. [47]
    The plaintiffs also submitted:

“(l) although the defendant was required to launch the KOB product in casinos it controlled in Macau, this never eventuated;”[31]

  1. [48]
    Mr Feng’s evidence is that LT did launch KOB in casinos in Macau.  That is contrary to Mr Brown’s evidence.  Neither witness was called for cross-examination and it is therefore impossible to resolve that dispute.

The plaintiffs’ submissions

  1. [49]
    For reasons later explained, the starting position is that the plaintiffs have agreed to litigate in Macau and should be bound by that agreement unless there are circumstances to the contrary such that the agreement ought not be enforced.  It is also the case that the onus of proving that the agreement ought not be enforced is upon the plaintiffs.  It is, therefore, appropriate to look at the factors which the plaintiffs say should allow them to continue the proceedings here.
  2. [50]
    Firstly, there is a list of specific factual matters.  Putting aside those that are not made out by the evidence, they are:

“(a) the KOB product was wholly developed by the second plaintiff in Queensland, Australia;

  1. (b)
    the patents for the KOB product are all registered in Queensland, Australia;
  1. (c)
    all graphics and mathematical modelling work for the KOB product would have been performed in Australia under the commercial agreement struck between the parties;
  1. (d)
    the initial BMM Compliance report for the KOB product dated 14 December 2012 was prepared in Victoria, Australia;
  1. (e)
    the Agreement was negotiated in Melbourne, Australia with Mr Brown (Director of the plaintiffs), Mr Feng (Director of the defendant) and Bryan John Jenkins (LT Game Melbourne representative) meeting at Crown Casino, Melbourne;
  1. (f)
    Mr Brown only met Mr Feng in Macau once at a gaming exhibition in 2008, five year prior to the Agreement being signed;
  1. (g)
    Mr Brown signed the Agreement in Queensland, Australia on behalf of the plaintiffs …
  1. (i)
    the principal activities undertaken under the Agreement were conducted in Australia, in particular, the pilot testing of the KOB product at Crown Casino in Victoria, Australia;
  1. (j)
    the plaintiffs were told and believed by Mr Shen that the technicians who installed and prepared a ‘fix’ to the problems with the LT Game platform were based in Melbourne and employed by LT Game …
  1. (l)
    although the defendant was required to launch the KOB product in casinos it controlled in Macau, this never eventuated;[32] and
  1. (m)
    the currency of the Agreement is AUD — the initial payment and support and maintenance fees paid by the plaintiffs, and the licensing fees paid by Crown Casino, were in AUD.”[33]
  1. [51]
    Given those factors, the plaintiffs submit that “having to litigate in Macau, rather than Australia, plainly will cause great expense and inconvenience to it and to third parties who will be called to give evidence for the plaintiffs”.
  2. [52]
    The plaintiffs rely on a submission that the governing law is that of Australia.  That can be ignored as I have found to the contrary.
  3. [53]
    The plaintiffs submit that none of the parties have any connection to Macau and all are really associated with Australia.
  4. [54]
    The plaintiffs also make two submissions about what they call “procedural advantages”.  In particular:
    1. (a)
      LT “may be seeking a perceived procedural advantage by the application to effectively move the claim to Macau”;
    2. (b)
      no disadvantage will be suffered by LT in litigating the action in Australia; and
    3. (c)
      on the assumption that parties and witnesses cannot appear physically in Macau because of the COVID19 pandemic, it is more desirable to have a trial in Australia where all parties are present rather than by video link.
  5. [55]
    The plaintiffs question whether there “are impediments to a foreign corporation seeking to recover in Macau courts”.  There is no evidence that there is such an impediment.  Mr Igreja suggests to the contrary.

Principles concerning the exercise of discretion

  1. [56]
    Clause 10 of the contract represents an arm’s length agreement reached between commercial entities specifying:
    1. (a)
      the only place where any litigation is to be conducted; and
    2. (b)
      the law which applies in those proceedings.
  2. [57]
    It is hardly surprising that the starting point as explained in Akai Pty Ltd v People’s Insurance Co Ltd[34] is a “firm disposition in favour of maintaining the bargain unless strong reasons be adduced against a stay, it being the law that the parties who have made a contract should be kept to it”.[35]  Similar sentiments have been expressed in other decisions of the High Court such as Oceanic Sunline Special Shipping Company Inc v Fay[36] and Huddart Parker Ltd v The Ship Mill Hill[37] and in decisions of intermediate courts of appeal such as Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) & Ors[38] and Australian Health & Nutrition Association Ltd & Anor v Hive Marketing Group Pty Ltd & Anor.[39]
  3. [58]
    Where the present parties differ is in relation to the circumstances that are relevant to the discretion to grant or not grant a stay of proceedings brought in breach of an exclusive jurisdiction clause.  The plaintiffs rely upon what Brandon J said in The Eleftheria:[40]

“In exercising its discretion, the court should take into account all the circumstances of the particular case. In particular, but without prejudice to [the above], the following matters, where they arise, may properly be regarded: (a) In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign courts. (b) Whether the law of the foreign court applies and, if so, whether it differs from English law in any material respects. (c) With what country either party is connected, and how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would: (i) be deprived of security for their claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial.”[41]

  1. [59]
    In both England and in Australia, doubts have been cast as to whether considerations of inconvenience and procedural disadvantages attaching to the nominated jurisdiction are relevant considerations, at least when they are factors which should have been known at the time the exclusive jurisdiction clause was agreed.[42]
  2. [60]
    A recent decision of the New South Wales Court of Appeal has considered the issue.  In Australian Health & Nutrition Association Ltd & Anor v Hive Marketing Group Pty Ltd & Anor,[43] Bell P wrote a judgment with whom Bathurst CJ and Leeming JA, while writing separate reasons, agreed with the President on the principles relevant to the current application before me.
  3. [61]
    Bell P followed a statement by Allsop J in Incitec Ltd v Alkimos Shipping Corp & Anor[44] and a statement of principle by Waller J in British Aerospace plc v Dee Howard Co.[45]  Those statements are as follows:

Waller J:

“It seems to me on the language of the clause that I am considering here, it simply should not be open to DHC to start arguing about the relative merits of fighting an action in Texas as compared with fighting an action in London, where the factors relied on would have been eminently foreseeable at the time that they entered into the contract … it seems to me that the inconvenience for witnesses, the location of the documents, the timing of a trial, and all such like matters, are aspects which they are simply precluded from raising.”[46]

Allsop J:

“[49] … To the extent that the operation of the exclusive jurisdiction clause causes financial or forensic inconvenience to the party which bound itself to the clause, that, of itself, is to be seen as only the direct consequence of the bargain entered and, generally, can be set to one side…”[47]

  1. [62]
    Of these passages, Bell P said:

“These observations, with which I agree, diverge to a certain extent from Brandon J’s identification in The Eleftheria at 100 of factors of geographical connection, relative convenience and expense of trial and governing law as relevant considerations in cases involving the enforcement of exclusive jurisdiction clauses. To the extent of that difference, the views expressed by Allsop J in Incitec and Waller J in British Aerospace are, in my opinion, to be preferred. See also Global Partners at [91]; Mobis at [37]; Euromark Ltd v Smash Enterprises Pty Ltd [2013] EWHC 1627 at [17]; Vinmar at [72] and [112].”[48]

  1. [63]
    The adoption of the statement of principle by Waller J in British Aerospace and Allsop J in Incitec is not inconsistent with any decision of the High Court.  Bell P’s approach is, in my view, consistent with statements in Akai.  There is no Queensland authority which is inconsistent with his Honour’s approach, nor any case from any intermediate court of appeal.  I can identify no reason why I would not follow a unanimous recent judgment of the New South Wales Court of Appeal.[49]  I accept that the relevant principles are those stated by Waller J and Allsop J and endorsed in Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd by Bell P and the other members of the court.
  2. [64]
    However, my judgment in the present case does not ultimately depend upon whether issues of inconvenience are or are not relevant considerations. 
  3. [65]
    When the parties here contracted, they must be taken to have considered the commercial wisdom of agreeing in terms of clause 10.  There is an apparent lack of logic in, on the one hand, starting from the proposition that the parties are bound by their agreement, but then exercising the discretion to effectively relieve one of the parties from the obligation by taking into account factors which were in existence and could have been taken into account by the parties (to not agree to clause 10) should they have understood it commercially appropriate to do so.  Consequently, even if such considerations are strictly relevant, they can hardly be weighty in the exercise of discretion where one party seeks to deny the other the benefit of the covenant.
  4. [66]
    Here, the exclusive jurisdiction clause nominates the law of Macau to govern the contract and the courts of Macau to hear disputes.  True it is that the parties, and the subject matter of the agreement has a connection with the system of law of Australia.  The contract was signed in Australia but it was signed containing clause 10.  The contract is clearly contemplated to be at least partially performed in Australia.  That, though, is evident from the terms of the contract itself; but the contract contains clause 10. 
  5. [67]
    Once it is accepted that the contract was contemplated to be at least partially performed in Australia, it must be inferred that the parties either foresaw or could foresee that a breach may occur in Australia and therefore witnesses to the breach may be resident in Australia.  The parties still, though, thought it appropriate to include clause 10 in the agreement and agree to litigate any dispute in Macau pursuant to the laws of Macau.
  6. [68]
    As already observed, the plaintiffs submit that LT is probably seeking some procedural or other advantage by litigating any dispute in Macau.  If that is so, then it is doing nothing more than taking the benefit of the commercial bargain that it negotiated. 
  7. [69]
    There is nothing to suggest that the plaintiffs cannot obtain proper remedies in the courts of Macau according to the law of Macau.  The evidence shows that damages (the remedy sought here) is available there and there is a functioning legal system to hear the dispute.  There is no evidence that litigation in Macau, according to the laws of Macau, will frustrate the plaintiffs in their pursuit of a proper remedy.
  8. [70]
    One unknown consideration is the impact of the COVID19 pandemic.  As already observed, there is little, if any, evidence at all as to the impact of the pandemic upon any litigation in Macau.  I can imagine that if the pandemic developed so as to effectively prevent, or unduly frustrate the plaintiffs in litigating in Macau, then that would be a discretionary consideration (to be taken into account with any other relevant considerations) in favour of allowing the plaintiffs to litigate here.  The present application does not determine substantive rights.  If, after the dismissal of these proceedings, the plaintiffs simply recommence the proceedings here, they would no doubt be faced with an application to stay the fresh proceedings on the basis that they were an abuse of process.  However, if circumstances changed materially, the plaintiffs would not be barred from recommencing proceedings here and arguing that the discretion ought not be exercised in favour of granting a stay or dismissing the second proceedings.  Mr Clark properly conceded this.[50]
  9. [71]
    In my view, LT should not be denied the right to enforce clause 10.

The appropriate remedy

  1. [72]
    As already observed, LT seeks a dismissal of the claim or alternatively a stay against its further prosecution.  Mr Farrands accepts that the court has jurisdiction to make either order but submits that if LT prevails, the proceedings ought to be only stayed, not dismissed.
  2. [73]
    Mr Clark conceded that, as a matter of principle, without any hearing on the merits of the claim, any subsequent claim is not res judicata, no issue estoppel arises and neither does any Anshun[51] estoppel.  Mr Clark, obviously on instructions, quite properly stated that his client would not plead the dismissed claim in bar of any proceedings in Macau.[52]
  3. [74]
    The prospects of there being a change in circumstances such as to justify revisiting the exercise of discretion are highly speculative.  In my view, there is no utility in keeping the claim here alive.  It should be dismissed.

Costs

  1. [75]
    Both parties accepted that costs ought to follow the event.  I agree.

Orders

  1. [76]
    I make the following orders:
  1. The claim is dismissed.
  2. The plaintiffs pay the defendant’s costs of the claim including the application to be assessed on the standard basis.

Footnotes

[1]  I will refer to the plaintiffs jointly as “the plaintiffs”.

[2]  Contract dated 13 August 2013, clause 10.

[3] Uniform Civil Procedure Rules 1999, s 144(2).

[4] Uniform Civil Procedure Rules 1999, s 16.

[5]  See Recital A and clauses 2.1 and 2.3.

[6]  Recital C and see references to “casinos” and “casino operators”; Recital A, C, D and clauses 1.2 and 2.2.

[7]  See clause 2.4.

[8] Uniform Civil Procedure Rules 1999, r 144.

[9] Uniform Civil Procedure Rules 1999, r 16.

[10] Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577 at 587 as explained in FAI General Insurance Co Ltd v Ocean Marine Mutual Protections and Indemnity Association & Anor (1997) 41 NSWLR 117 at 121.

[11] Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 at 428 and 445.

[12] Byrnes v Kendle (2011) 243 CLR 253 at 282-291, [95]-[116].

[13]  (2015) 256 CLR 104.

[14]  At 116, [47].

[15]  T 1-8, line 10; consideration of common law principles determining the relevant governing law only come into play if the parties have not agreed; Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 at 441-442.

[16] Macau Civil Code, Article 787 was explained by Ricardo Morgado Igreja, solicitor of the firm Jorge Neto Valente, Macau.  Mr Farrands’ submission is at T 1-53, lines 13-16.

[17]  (1988) 165 CLR 197.

[18]  At pages 224-225 and see Compagnie D’Armement Maritime S.A. v Compagnie Tunisienne de Navigation S.A. [1971] AC 572 at 584, 590, 596 and see Star Shipping AS v China National Foreign Trade Transportation Corp (The Star Texas) [1993] 2 Lloyd’s Rep 445 at 447-448.

[19]  (1996) 188 CLR 418 at 441-442.

[20] Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 at 442.

[21]  See the discussion in Nygh’s Conflict of Laws in Australia, 10th edition, paragraphs 19.28 to 19.38.

[22] Callwood v Callwood [1960] AC 659 at 681, Regie Nationale des Usines Renault SA & Zhang (2002) 210 CLR 491 at 517, [66] and see also Murakami v Wiryadi (2010) 268 ALR 377 at 406, [150].

[23]  This is relevant to clause 10 of the contract.

[24]  Plaintiff’s outline of submissions, paragraph 41.

[25]  T 1-28 to T 1-29.

[26]  T 1-30.

[27]  Affidavit of Anthony James Conaghan, exhibit AJC4.

[28]  Plaintiff’s outline of submissions, paragraph 26(h).

[29]  Plaintiff’s outline of submissions, paragraph 26(i).

[30]  Plaintiff’s outline of submissions, paragraph 26(k).

[31]  Plaintiff’s outline of submissions, paragraph 26(l).

[32]  This is in dispute.

[33]  Plaintiffs’ outline of submissions, paragraph 26.

[34]  (1996) 188 CLR 418.

[35]  At 445.

[36]  (1988) 165 CLR 197 at 259.

[37]  (1950) 81 CLR 502 at 508-509.

[38]  (2010) 79 ACSR 383 at 402-403, [88]-[89].

[39]  (2019) 99 NSWLR 419 at 438, [78].

[40]  [1970] P 94.

[41]  At 100.

[42]  In England see British Aerospace plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368 at 376 and S&W Berisford plc v New Hampshire Insurance Co [1990] 2 QB 631 at 638. In Australian see Incitec Ltd v Alkimos Shipping Corp (2004) 138 FCR 496 at 506 and Australian Health & Nutrition Association Ltd & Anor v Hive Marketing Group Pty Ltd & Anor (2019) 99 NSWLR 419.

[43]  (2019) 99 NSWLR 419.

[44]  (2004) 138 FCR 496.

[45]  [1993] 1 Lloyd’s Rep 368.

[46]  At 376.

[47]  At 506, [49].

[48]  At 445, [103].

[49] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-152, [135] following Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492.

[50]  T 1-56 and 1-57.

[51] Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.

[52]  T 1-47 and T 1-48.

Close

Editorial Notes

  • Published Case Name:

    RCD Holdings Ltd & Anor v LT Game International (Australia) Ltd

  • Shortened Case Name:

    RCD Holdings Ltd v LT Game International (Australia) Ltd

  • MNC:

    [2020] QSC 318

  • Court:

    QSC

  • Judge(s):

    Davis J

  • Date:

    02 Nov 2020

  • Selected for Reporting:

    Editor's Note

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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