Willabrae Pty Ltd & Ors v Bridgestone Australia Limited
[2007] QDC 7
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- Willabrae Pty Ltd & Ors v Bridgestone Australia Limited[2007] QDC 7
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Willabrae Pty Ltd & Ors v Bridgestone Australia Limited[2007] QDC 7
Willabrae Pty Ltd & Ors v Bridgestone Australia Limited[2007] QDC 7
DISTRICT COURT OF QUEENSLAND
CITATION: | Willabrae Pty Ltd & Ors v Bridgestone Australia Limited [2007] QDC 007 |
PARTIES: | WILLABRAE PTY LTD (ACN 053 213 522) and WILLAMONT PTY LTD (ACN 053 213 657) Plaintiff AND CHRISTOPHER FRANCIS DUNNE, KRYSTINE JANET DUNNE and MARK OLIVER MORRISSEY Second Plaintiffs V BRIDGESTONE AUSTRALIA LIMITED (ACN 007 516 841) Defendant |
FILE NO/S: | 3399/06 |
DIVISION: | Applications Jurisdiction |
PROCEEDING: | Application in a proceeding |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 7 February 2007 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 5 February 2007 |
JUDGE: | Kingham DCJ |
ORDER: | 1. The Claim is stayed. 2.The Plaintiffs must pay the costs of and incidental to both this application and the claim. |
CATCHWORDS: | PRACTICE – stay of proceedings – whether court in South Australia the appropriate court to determine the matters in issue – Service and Execution of Process Act 1992 (Commonwealth) s.20. Service and Execution of Process Act 1992 (Commonwealth) Akai Pty Limited v The People’s Insurance Company Limited (1996) 188 CLR 418 – cited FAI General Insurance Co LTd v Ocean Marine Mutual Protection and Indemnity Association & Anor (1997) 41 NSWLR 559 – cited James N Kirby Pty Ltd v International Cargo Control Pty Ltd [2000] NSWSC 289 – cited McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 – cited Programmed Maintenance Services Limited v The Shell Company of Australia Ltd [2000] QDC 249 – cited Regi National Des Usines Renault SA v Ahang (2002) 76 ALJ 551 – cited Slater & Gordon Pty Ltd v Porteous [2005] VSC 398 – cited |
COUNSEL: | D. O'Sullivan for the Applicant/Defendant I. A. Erskine for the Respondent/Plaintiffs |
SOLICITORS: | TressCox Lawyers for the Applicant/Defendant Alex Mackay & Co for the Respondent/Plaintiffs |
- [1]Under franchise from Bridgestone Australia Limited, Willabrae Pty Ltd and Willamont Pty Ltd traded as the Bridgestone Tyre Centre, from premises on Lutwyche Road, Windsor. The companies’ directors, Mr & Mrs Dunne and Mr Morrissey, personally guaranteed performance of the franchisees’ obligations. For ease of reference both the companies and their directors will be referred to in these reasons as the franchisees, unless need dictates otherwise.
- [2]The business ceased trading after the Brisbane City Council gave notice it would resume the property from which it traded. Compensation has not been paid. There is, apparently, a dispute between the parties about whether some portion of it should be paid directly to Bridgestone in satisfaction of the companies’ trading debts to Bridgestone.
- [3]The franchisees have brought a claim for damages in this court. They say they were induced to enter into the franchise and associated security agreements by pre-contractual representations by Bridgestone employees about the profitability of the operation.
- [4]Bridgestone wishes to defend the damages claim and to recover the trading debts, whether by separate action or by way of set off to the damages claim. It says the District Court of South Australia is the appropriate forum both to recover the debt and to assert the damages claim. The franchise agreement contains a clause by which the parties submitted to the exclusive jurisdiction of the courts of South Australia and the South Australian division of the Federal Court of Australia. Relying on that clause and other factors, Bridgestone applies under the Service and Execution of Process Act 1992 (Commonwealth) (SEPA) for an order staying the Queensland proceedings.
- [5]The franchisees deny the clause applies to the damages claim and say this court is the appropriate forum. The parties do not agree upon the applicable principles in assessing the stay application nor upon the significance of the exclusive jurisdiction clause if, indeed, it does apply.
- [6]Alternatively, Bridgestone submits the damages claim exceeds this court’s monetary jurisdiction and seeks an order setting aside the proceedings for want of jurisdiction. This rests on an argument that, properly understood, the franchisees damages claim exceeds $250,000 (the monetary cap on this court’s jurisdiction) because their calculation of damages deducts compensation expected but not received from the Council. The franchisees do not accept their claim exceeds the court’s jurisdiction.
- [7]The questions raised by this application are:
The significance of the exclusive jurisdiction clause
What is the significance of the exclusive jurisdiction clause, if any, to the stay application?
Should the proceedings be stayed?
If not, does the claim exceed this Court’s jurisdiction and should it, therefore, be set aside?
- [8]Clause 14.7 of the franchise agreement provides:
14.17.1This agreement is governed by the laws in South Australia.
14.17.2Each party submits to the exclusive jurisdiction of the courts of South Australia and the South Australian division of the Federal Court of Australia, and the courts of appeal from them.
- [9]Although different views were expressed in written submissions, ultimately there was no contest that the clause survived the termination of the franchise agreement, in so far as it related to disputes about the agreement. This is consistent with long standing authority as to the effect on acquired rights of rescission of contract for breach (McDonald v Dennys Lascelles Ltd at 476-7).
- [10]Counsel for the franchisees did, however, maintain the clause had no relevance to these proceedings because they arise from alleged pre-contractual representations of a misleading nature, not to a dispute arising from the terms or operation of the franchise agreement itself.
- [11]The scope of the exclusive jurisdiction clause is not so limited by its terms. The dispute is closely connected with the franchise agreement. The representations are alleged to have led the franchisees to execute it. The franchisees seek an order that the agreement is either void or voidable. Courts have recognised the relevance of similar clauses in analogous circumstances. For example:
Allegedly misleading representations said to have preceded the contract of retainer of a law firm, Slater & Gordon Pty Ltd v Porteous; and
Material non-disclosure prior to execution of a contract of insurance, FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association & Anor.
I am satisfied clause 14.7 is relevant to the application for a stay.
- [12]As to its significance, both counsel referred to the tests applied at common law to applications for a stay based, respectively, on:
- (a)an exclusive jurisdiction clause in favour of the courts of another country – to give effect to the clause unless strong cause for not doing so is shown (Akai Pty Limited v The People’s Insurance Company Limited); and
- (b)the principle of forum non-conveniens – the clearly inappropriate forum test (Regi National Des Usines Renault SA v Ahang).
- [13]Counsel for Bridgestone submitted, rightly I believe, that neither test applied. Counsel for the franchisees asserted Bridgestone had to meet the “clearly inappropriate forum” test applied in applications based on the principle of forum non conveniens. The case cited in support of that proposition (James N Kirby Pty Ltd v International Cargo Control Pty Ltd) deals with a very different factual scenario and does not deal with an application under SEPA. I do not accept it is authority for the proposition made.
- [14]The application is not made at common law but pursuant to s 20 of SEPA. Care must be taken to apply s 20 according to its own requirements. Common law formulations of are not necessarily instructive or helpful, particularly so, in relation to the significance of an exclusive jurisdiction clause. At common law a clear distinction has been drawn between applications made on the basis of such a clause and applications relying on forum non conveniens. Different tests have been developed for each.
- [15]The same distinction has not been drawn by s 20 SEPA and there is only one relevant test, that established by the terms of the provision itself.
- [16]Section 20, relevantly, provides:
(3)The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters.
(4)The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include:
…(d)any agreement between the parties about the court or place in which the proceeding should be instituted…(emphasis added)
- [17]Section 20 recites a non-exhaustive list of matters the court must take into account in making its decision on an application for a stay. None is given any particular weight. Other matters not mentioned may be relevant in a particular case. It is plain from the clear wording of s 20(4) that the existence of an exclusive jurisdiction clause is a relevant but not a determinative factor (Programmed Maintenance Services Limited v The Shell Company of Australia Ltd). What is required is that the court is satisfied that:
A court of another State has jurisdiction to determine all matters in issue between the parties; and
Taking into account, at least, those matters specified in s 20(4), the court of that State is the appropriate court for the proceeding.
The stay application
- [18]There is no dispute the onus rests with the applicant for the stay. There is no contest that the District Court of South Australia has jurisdiction to determine the damages claim. Importantly, that court, unlike this court, also has jurisdiction to determine all matters in issue between the parties. While formal proceedings have not yet commenced, it is clear there are matters in issue relating to the franchisees’ trading debts to Bridgestone, including the quantum and how and when they should be paid.
- [19]I do not accept, as counsel for the franchisees submitted, that these issues are irrelevant unless proceedings have actually been commenced in another court. True it is that s 20(4)(f) refers to related or similar proceedings which have commenced. However that is one only of a non-exhaustive list of criterion. It is plain on its face that the purpose of the provision is to ensure disputes are determined in the most appropriate forum. The franchisees’ pleading alone cannot determine what matters are in issue.
- [20]Bridgestone wishes to set off the trading debts against the damages claim. While the precise quantum of the trading debts is in dispute, the parties agree they exceed this court’s jurisdiction. Bridgestone has not sought and the franchisees have not given their consent to the court entertaining proceedings in relation to them.
- [21]Counsel for Bridgestone questioned the sustainability of the damages claim insofar as it related to security documents executed prior to the alleged representations. This did not bear any significance to the stay application and there was no application to strike out that aspect of the claim. It is not necessary for me to address the issue further.
- [22]Both sides press issues of convenience. One will be inconvenienced and face increased costs regardless of the forum. It is not fanciful to infer from Bridgestone’s status as a publicly listed company that it would be in a better position than the franchisees to bear an increased financial burden. Yet there is no evidence on the issue and I have not weighed it in the balance.
- [23]There is a close nexus between the damages claim and Queensland. The representations were allegedly made here and the business traded here. However the franchisees submitted to courts located in South Australia with knowledge of those factors. This is an important factor. Coupled with this court’s incapacity, without consent, to deal with all matters that arise from the parties’ commercial relationship, clause 14.17 tips the scale in favour of a stay. I am satisfied that the District Court in South Australia is the appropriate forum to determine the matters in issue between the parties.
- [24]Given my decision on the application for a stay it is not necessary to decide the alternative application to set aside the claim for want of jurisdiction.
Orders
- [25]Whilst the application sought costs on an indemnity basis, at the hearing Bridgestone’s counsel handed up a proposed orders including the usual order for costs. At the hearing, neither counsel made any submissions on costs nor did either seek the opportunity to do so at another time. There is nothing in the material to justify any order other than the usual order as to costs.
- The Claim is stayed.
- The Plaintiffs must pay the costs of and incidental to both this application and the Claim.