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  •   Notable Unreported Decision

Pacific Petroleum Corporation v Nauru Phosphate Corporation

 

[2002] QSC 389

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Pacific Petroleum Corporation v Nauru Phosphate Corporation [2002] QSC 389

PARTIES:

PACIFIC PETROLEUM CORPORATION
(plaintiff/respondent)
v
NAURU PHOSPHATE CORPORATION
(ARBN 074 478 571)
(defendant/applicant)

FILE NO/S:

S3879 of 2002

DIVISION:

Trial Division

DELIVERED ON:

26 November 2002

DELIVERED AT:

Brisbane

HEARING DATE:

9 August 2002

JUDGE:

Mullins J

ORDERS:

The  proceeding be stayed on the ground of forum non conveniens.

CATCHWORDS:

PROCEDURE – STAY OF PROCEEDINGS – forum non conveniens – action brought in Supreme Court of Queensland for balance of moneys owed – only factor in favour of proceeding continuing in Queensland is that the Court’s jurisdiction is invoked through regular service – neither plaintiff nor defendant nor the subject matter of the proceeding has any connection with Queensland – neither the law of Queensland nor the law of any Australian jurisdiction applies to the dispute – the courts of Palau or Nauru would have jurisdiction – defendant bears onus of showing that Queensland Court clearly inappropriate – clear case that continuing proceeding in Supreme Court of Queensland would be oppressive and vexatious – stay ordered

Service and Execution of Process Act 1992 (Cth)

UCPR, r 144

Adeang v Nauru Phosphate Royalties Trust (unreported, Sup Ct (Vic), 8 July 1992)

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Henry v Henry (1995) 185 CLR 571
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197
Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 539  

COUNSEL:

JH Davies for the plaintiff/respondent
MD Evans for the defendant/applicant

SOLICITORS:

McCullough Robertson for the plaintiff/respondent
Tobin King Lateef for the defendant/applicant

  1. MULLINS J:  On 1 May 2002, Pacific Petroleum Corporation, a corporation incorporated in the Republic of Palau (“the plaintiff”), filed a claim in the Supreme Court of Queensland against Nauru Phosphate Corporation, a Nauruan statutory corporation (“the defendant”) which is registered in Australia as a foreign company for:
  1. the balance owing by the defendant to the plaintiff for goods sold and delivered to the plaintiff at the defendant’s request;             
  1. interest on the amounts outstanding from time to time at the agreed rate of 1.5% per calendar month; and
  1. costs.
  1. In response to this claim, on 6 June 2002 the defendant filed a conditional notice of intention to defend pursuant to r 144 of the UCPR challenging the jurisdiction of this Court to hear the matter.  The defendant claimed that:
  1. the Supreme Court of Queensland did not have jurisdiction to entertain the plaintiff’s claim against the defendant;
  1. there was no, or alternatively no sufficient, jurisdictional nexus between the plaintiff’s claim and the Supreme Court of Queensland;
  1. neither the plaintiff nor the defendant was resident was Queensland;
  1. none of the agreements alleged in the statement of claim:-

(a)was made in Queensland;

(b)required performance in Queensland;

(c)was breached in Queensland;

  1. was subject to the laws of Queensland.
  1. In its application filed on 19 June 2002, the defendant sought an order declaring that the proceedings had not, for want of jurisdiction, been properly started and that service of the originating process be declared invalid for failure to comply with the provisions of the Service and Execution of Process Act 1992 (Cth), and the purported service be set aside.  In the alternative, if there were found to be valid service and jurisdiction, the defendant sought that the action be stayed permanently as being forum non conveniens.
  1. On the hearing of the application, however, the defendant conceded that service had been effected on its local agent in accordance with s 9 of the Service and Execution of Process Act 1992 (Cth) and it did not persist in its assertion that the court did not have jurisdiction. 
  1. The defendant therefore admits this Court’s jurisdiction to hear the proceeding, but claims that on the ground of forum non conveniens, this Court may permanently stay the matter before it, relying on Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 539, 564 (“Voth”).  See also Henry v Henry (1995) 185 CLR 571, 586-587 and CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 391.
  1. The majority of the Court in Voth comprehensively adopted the “clearly inappropriate forum test” which had been put forward by Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197, 247-248 (“Oceanic Sun”). 
  1. In Voth, Mason CJ and Deane, Dawson and Gaudron JJ at 564 referred to the judgment of Deane J in Oceanic Sun for the principle to be applied in applications for a stay on inappropriate forum grounds.  The relevant passage in Oceanic Sun is found at 247-248:

“In the light of the foregoing and at the cost of some repetition, it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds.  That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression.  The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him.  Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties.” (Emphasis added).

  1. In applying the principles enunciated by Deane J in Oceanic Sun, the majority judgment in Voth at 564-565 referred to the discussion by Lord Goff of Chieveley in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 477-478, 482-484 of relevant “connecting factors” and “a legitimate personal or juridical advantage” as providing valuable assistance.  The connecting factors that were referred to included factors affecting convenience or expense (such as availability of witnesses), the law governing the relevant transaction and the places where the parties respectively reside or carry on business.  Examples which were given by Lord Goff of personal or juridical advantages of the local court were damages awarded on a higher scale, a more complete procedure of discovery, a power to award interest or a more generous limitation period.  In that discussion Lord Goff expressed the view (at 482) that legitimate personal or juridical advantage was a relevant, but not a decisive consideration, the fundamental question being where the case may be tried suitably for the interests of all the parties and for the ends of justice.
  1. One of the relevant considerations is the prima facie right of a plaintiff to insist upon the exercise of the jurisdiction which he or she has regularly invoked (Voth at 566, 571), but that is merely one factor to be taken into account in determining whether the power to stay the proceeding should be exercised.
  1. In determining whether a stay of this proceeding should be granted or not, the defendant therefore bears the onus of showing that this Court is a clearly inappropriate forum, because to allow the proceeding in this Court to continue would be oppressive and vexatious.
  1. According to the amended statement of claim and the particulars provided by the plaintiff, the plaintiff and defendant had entered into a series of contracts between April 2000 and September 2001 for the supply by the plaintiff to the defendant of petroleum products to be delivered at Nauru.
  1. Where the contract is alleged to have been made orally, it is alleged to have been made by a natural person on behalf of the plaintiff in Palau and a natural person on behalf of the defendant in Nauru. The mode of communication was by the telephone. Where it is alleged that the agreement was in writing, in one instance the writing is alleged to have been a facsimile sent from an officer of the defendant in Nauru to an officer of the plaintiff in Palau and in another was an email sent from an officer of the defendant in Nauru to an officer of the plaintiff in Palau. It is alleged that all payments were to be made in US dollars. One of the agreements sued upon was alleged to have been made in December 2000 in that the plaintiff would arrange a ship from Singapore to deliver petroleum products to the defendant on condition that payment for the petroleum products would be made by the defendant to the plaintiff prior to the ship leaving Singapore and, if not, the defendant would pay any ship cancellation fees incurred by the plaintiff, if the delivery of petroleum products did not proceed by 19 December 2000. The plaintiff alleges that on 19 December 2000 the ship was cancelled as the defendant had not made the required payment to the plaintiff and ship cancellation charges of US$80,000 were incurred by the plaintiff.
  1. Mr Joseph Hiram who was the general manager of the defendant until 11 June 2001 swore an affidavit which was filed on 1 August 2002 in support of the defendant’s application for a stay. Mr Hiram was one of the persons on behalf of the defendant against whom it is alleged that he entered into agreements on behalf of the defendant with the plaintiff which are the subject of this proceeding. The plaintiff is suing for the sum of US$1,070,415.78 for balance outstanding and interest to 16 April 2002 and a further US$471.55 per day for interest. It appears that during the period June 2000 to 13 August 2001 the defendant did make some payments to the plaintiff on account of the supply of the petroleum products and what is sued for is the balance which the plaintiff claims is owing. Mr Hiram’s affidavit foreshadows a defence which will be pursued by the defendant that some of the fuel delivered by the plaintiff was defective and that, although the plaintiff made a deduction for defective fuel, the defendant considers that deduction to be inadequate and has had claims made against it and incurred costs as a result of the contaminated jet fuel. In addition, the defendant disputes the quantum of the cancellation fee for the supply from Singapore that did not proceed, claims for demurrage charges and the claims for interest.
  1. Although the defendant has been registered as a foreign company in Australia for over 30 years, its registered office in Australia is in Melbourne. Mr Hiram deposes to the fact that the defendant has no connection with the State of Queensland on the basis that it does not trade in Queensland, nor does it have any presence in Queensland. Mr Hiram also foreshadows that the defendant will need to call a number of witnesses (including himself) from Nauru in respect of the claims. It was not in issue on the hearing of this application that the law relating to the dealings between the parties the subject of the proceeding was not the law of Queensland or the law of any jurisdiction in Australia.
  1. A factual issue which arose on the hearing of this application was whether or not the defendant had a US dollar account at the Brisbane branch of the Westpac bank. Ms TJ Naylor, a solicitor employed by the plaintiff’s solicitors, deposes to being instructed by the Chief Executive Officer of the plaintiff company that the defendant has a US dollar account at the Brisbane branch of the Westpac bank which is used by the defendant through a process of wire transfer requests made by the defendant’s Melbourne office to the Bank of Melbourne which are then passed onto the Brisbane office of the Westpac bank to pay various vendors and suppliers. According to the affidavit of Mr Bruce Ward (who is the local agent of the defendant in Australia) that was filed by leave on 9 August 2002, the defendant has a bank account with the Bank of Melbourne in Melbourne and does not have any bank account in Queensland. In view of the particulars provided by the plaintiff of the payments alleged in the amended statement of claim to have been made by the defendant that each payment was made by the defendant by telegraphic transfer from the Bank of Melbourne in Australia to the plaintiff’s account at the Pacific Savings Limited via various other banks, it is likely that some payments from the defendant may have passed through the Brisbane branch of the Westpac Bank. That is a most tenuous connection with Queensland and has no relevance whatsoever to the matters in issue in the proceeding.
  1. The plaintiff relies on the fact that Air Nauru flies from Nauru to Brisbane on Tuesday and Thursday of each week and flies from Brisbane to Nauru on Monday and Wednesday of each week and that it would therefore not be inconvenient or expensive for representatives of the defendant to travel from Nauru to Brisbane. Ms Naylor asserts that she is instructed that executives employed by the defendant travelled to or through Brisbane several times a month on their way to the defendant’s office in Melbourne. This is put in issue by Mr Ward who swears that the chairman of the defendant has not travelled to Australia for 6 months and that the members of the board of the defendant do not do any travelling to Australia in their capacity as members of the board of the defendant and that, in any event, when travel is undertaken, the defendant has to pay for it. This dispute between the parties as to the relevant convenience or inconvenience for representatives of the defendant to travel from Nauru to Brisbane highlights the fact that the defendant’s witnesses have no connection with Queensland.
  1. The defendant suggests that the matters which are the subject of this proceeding are subject to the laws of either Palau or Nauru and either the courts of Palau or Nauru would be an appropriate jurisdiction. Mr Ward deposes to being advised by the legal adviser to the defendant that the Supreme Court of the Republic of Nauru has an unlimited civil jurisdiction and has jurisdiction to entertain the plaintiff’s action. My attention was drawn to the decision of Hayne J in Adeang v Nauru Phosphate Royalties Trust (unreported, Sup Ct (Vic), 8 July 1992) where a stay was ordered in an action by a Nauruan resident against a Nauruan government instrumentality on the basis that neither the action nor the parties had any connection with Australia and all its issues relating to liability would be governed by Nauruan law.  Reference was made in the course of that judgment to the fear of that plaintiff about whether he could mount a proceeding in Nauru because of Nauruan legislation which, on its face, suggested that he may need the consent of the Cabinet of the Republic to the institution of any such proceeding.  Whether that would apply to the plaintiff’s proceeding against the defendant was not pursued on this application in any detail.  Mr Ward’s evidence as to being advised that the Supreme Court of the Republic of Nauru had jurisdiction to entertain the plaintiff’s action was not controverted by any affidavit filed on behalf of the plaintiff.
  1. Apart from the plaintiff’s desire to preserve its choice of jurisdiction, the plaintiff has not suggested that there is an juridical advantage to it in litigating in Queensland, rather than the courts of either Palau or Nauru. The plaintiff has no connection with or presence in Queensland.
  1. What favours the proceeding continuing in Queensland is that this Court is seized of the jurisdiction, as a result of the regular service of the defendant of the claim and statement of claim. All connecting factors militate against the proceeding continuing in Queensland. This is a clear case where it would be oppressive and vexatious to the defendant for the proceeding to be pursued in this Court. The Supreme Court of Queensland is a clearly inappropriate forum. I will therefore order that the proceeding be stayed on the ground of forum non conveniens. It should follow that the plaintiff should pay the defendant’s cost of this application. I will hear submissions on the question of costs, however, before making any order as to costs.
Close

Editorial Notes

  • Published Case Name:

    Pacific Petroleum Corporation v Nauru Phosphate Corporation

  • Shortened Case Name:

    Pacific Petroleum Corporation v Nauru Phosphate Corporation

  • MNC:

    [2002] QSC 389

  • Court:

    QSC

  • Judge(s):

    Mullins J

  • Date:

    26 Nov 2002

  • White Star Case:

    Yes

Litigation History

No Litigation History

Appeal Status

No Status