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SFP Events Pty Ltd v Little Swamp II Inc[2024] QSC 132

SFP Events Pty Ltd v Little Swamp II Inc[2024] QSC 132

SUPREME COURT OF QUEENSLAND

CITATION:

SFP Events Pty Ltd v Little Swamp II, Inc & Anor [2024] QSC 132

PARTIES:

SFP EVENTS PTY LTD ACN 605 140 501

(applicant)

v

LITTLE SWAMP II, INC 2649015

(first respondent)

and

CREATIVE ARTISTS AGENCY, LLC

(second respondent)

FILE NO/S:

BS 2275/24

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

21 June 2024

DELIVERED AT:

Brisbane

HEARING DATE:

3 June 2024

JUDGE:

Treston J

ORDER:

  1. Pursuant to s 7 of the International Arbitration Act 1974 (Cth), the whole of the proceedings are stayed and the dispute between the parties is referred to arbitration.
  2. I will hear the parties as to costs.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – OFFER – REVOCATION – where the applicant, a Queensland-based event management company, initiated email communications with the first and second respondents, both of which were headquartered in the United States of America, for the purpose of hiring a musician to headline a music festival – where the applicant and first respondent engaged in correspondence regarding the appearance between September 2023 and January 2024 – where some terms had been agreed in principle – where the applicant paid a US$700,000 deposit to the first respondent’s trust account – where the first respondent provided to the applicant an image to be used for promotional purposes – where the first respondent sent the applicant an email with a link to what was described as the terms of the agreement between the parties – where that document contained terms which had not previously seen by the applicant, including an Arbitration clause – where the applicant executed the agreement – where the first respondent advised the applicant that the first respondent ‘need[s] to answer a couple of things they’ve asked before they can sign’ – where, on the same date, the applicant purported to withdraw its ‘offer’ – where the applicant commenced proceedings by way of originating application seeking a declaration that the offer it made was validly terminated, and that the first respondent return the US$700,000 deposit – whether, on the basis of the parties’ conduct, a concluded agreement had been reached by 29 January 2024

ARBITRATION – ARBITRATION AGREEMENT – ARBITRATION AGREEMENT AS GROUND FOR STAY OF COURT PROCEEDINGS – POWER OF COURT TO STAY – VALID ARBITRATION AGREEMENT – where  the second respondent submitted a demand for arbitration to JAMS in California seeking damages – where the first respondent submitted a demand for arbitration to JAMS seeking declarations that the dispute in the Australian lawsuit falls under the arbitration provision of the agreement – where the first and second respondents seek an order that the whole of the proceeding be stayed and the dispute between the parties be referred to arbitration – whether cl 24 of the contract executed by the applicant formed a separable, concluded arbitration agreement – whether, if there was a concluded arbitration agreement, the first respondent is also a party to that agreement on the basis that it is a party claiming ‘through or under’ the second respondent – whether the whole of the proceeding should be stayed and the dispute be referred to arbitration

International Arbitration Act 1974 (Cth), s 3, s 7

Uniform Civil Procedure Rules 1999 (Qld), r 16, r 117, r 124, r 125, r 126, r 127

A v B [2007] 1 Lloyds Report 237, cited

Bulkbuild Pty Ltd v Fortuna Well Pty Ltd [2019] QSC 173, cited

Courtney v Chalfen [2020] QCA 294, cited

CPB Contractors Pty Ltd v DEAL SRL [2021] NSWSC 820, cited

Degroma Trading Inc v Viva Energy Australia Pty Ltd [2019] FCA 649, cited

Fiona Trust & Holding Corporation v Privalow [2008] 1 Lloyd’s Report 254, cited

Geoscience Resource Recovery LLC v Central Petroleum LGD [2019] 2 Qd R 276, cited

Hamilton v Oades (1989) 166 CLR 486, cited

Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, cited

Henry v Henry (1996) 185 CLR 571, cited

Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514, cited

Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, cited

Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, cited

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

COUNSEL:

L Copley for the applicant

D Tay for the first respondent

AM Pomerenke KC for the second respondent

SOLICITORS:

Rooks Law for the applicant

Corrs Chambers Westgarth for the first respondent

DLA Piper for the second respondent

  1. [1]
    Before me are two interlocutory applications brought by the first and second respondents filed 18 April 2024.  Both interlocutory applications seek, in summary, the following orders:
    1. an order pursuant to r 16(f) of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) or r 127 UCPR setting aside service of the originating application;
    2. alternatively, an order under s 7 of the International Arbitration Act 1974 (Cth) (‘International Arbitration Act 1974’) staying the whole of the proceeding and referring the dispute between the parties to arbitration; or
    3. in the further alternative, an order that the proceeding be stayed pursuant to rr 16(g) or 127 UCPR, or in the exercise of the inherent jurisdiction of the court.
  2. [2]
    The applications were heard in the Civil List on 3 June 2024.

Background

  1. [3]
    John Fogerty is the former lead singer of Creedance Clearwater Revival.  The first respondent, Little Swamp II (‘Little Swamp’), is the commercial entity used by Mr Fogerty. The second respondent, Creative Artists Agency, LLC (‘CAA’) is Mr Fogerty’s talent agent.
  2. [4]
    Little Swamp is incorporated in California and has its principal place of business in California.   CAA is incorporated in Delaware although its headquarters are in Los Angeles, California.  Neither respondent has any operations, employees, servants or agents in Australia.  CAA acts as Mr Fogerty’s agent for the purpose of putting forward terms that are acceptable to Mr Fogerty and expressly has authority to negotiate with third parties on his behalf.
  3. [5]
    SFP Events Pty Ltd (‘SFP’) is an event management company that trades in Townsville.  In September 2023, Mr Anderson, the director of SFP, was organising a music festival that was to take place in Mackay on 30 and 31 March 2024.  Mr Anderson sent an email to Mr Kaiser of CAA to explore the possibility of Mr Fogerty performing as the headlining act at the festival.
  4. [6]
    The proceedings that are on foot pertain to commercial arrangements that took place between SFP, CAA and Little Swamp on behalf of Mr Fogerty.
  5. [7]
    For the purpose of the interlocutory applications:
    1. First, it is not necessary for me to make any findings about the contractual relationship between the parties, although, for reasons which will become apparent, the course of the contractual negotiations is of significance to the questions that I do have to decide; and
    2. Second, both Little Swamp and CAA appeared conditionally as issues arose regarding the service of the originating process upon them. 
  6. [8]
    Between September 2023 and mid-December 2023, SFP and CAA explored the possibility of Mr Fogerty travelling to Australia to headline the festival. The details of the email traffic between them pertaining to the issue does not need to be set out in any length prior to mid-December 2023.
  7. [9]
    Before descending into any of the detail of the relevant email traffic, it is worth recording that because emails were passing between USA and Australia, with the time difference being some 17 hours, the times and date on the emails are sometimes confusing, with replies sometimes seeming to be sent before the original email was. For that reason, and only where it is necessary to do so, I have adopted the agreed AEST times and dates for the emails I have referred to below.
  8. [10]
    On 19 December 2023, Mr Anderson on behalf of SFP sent an email to CAA attaching an offer for Mr Fogerty for an Australian Exclusive Show identified as $1.25 million[1] plus charter flights from Los Angeles, and other accommodation, transport and other terms.  The details of the terms were contained in a document entitled ‘NQ Licenced Events Formal Agent Offer’.  The payment terms included 50% payable prior to the announcement of the concert and the balance due no later than seven working days after the show.  The offer was due to expire on 31 December 2023.
  9. [11]
    The offer was not accepted but between early to mid-January 2024 the parties continued to exchange emails in relation to the possible appearance by Mr Fogerty at the music festival in March. 
  10. [12]
    By mid-January 2024, the music festival date was looming at only some 10 weeks away. 
  11. [13]
    Email exchanges between Mr Anderson on behalf of SFP and Mr Kaiser on behalf of CAA suggested some terms had been agreed in principle; for example, on 5 January 2024, an artist’s fee guarantee of US$900,000, and on 11 January 2024 a further US$500,000 for some air charter costs. No party suggests that these were binding terms on those dates.
  12. [14]
    On 11 January 2024, Mr Anderson emailed Mr Kaiser stating:

‘We would be happy to confirm the following:

$1.4 million all inclusive deposit for John Fogerty plus Accommodation in Australia for all party travelling members (roughly 24-28 people) including transfers to and from the venue and a Great barrier Reef trip.

  • $700K US deposit paid immediately before Announcing MONDAY US time and Art work approval before.

We would need the logo for John Fogerty and wording we could use around Creedence Clearwater revival today if possible to get our imagery over for approval in 24 hrs.’

  1. [15]
    Mr Kaiser responded shortly thereafter stating:

‘While we finalize this, I think we should proceed with wiring the deposit.  This is just to save time.  Of course, money stays at CAA and doesn’t go to the artist until the show plays out.  But we wont be able to announce until we have the deposit.  Sutty will send bank details asap.’

  1. [16]
    Mr Anderson responded, advising:

‘That’s fine, I can’t see an any issues doing that!  We will start this process today if I can get the details please  and I’ll come back to you with accomm options etc for everyone!’

  1. [17]
    Shortly thereafter, Mr Kaiser’s assistant emailed Mr Anderson attaching the invoice for the US$700,000 deposit which was to be remitted immediately and identifying the bank details.
  2. [18]
    Mr Anderson arranged for the transfer of the US$700,000 deposit on 12 January 2024, which funds arrived in CAA’s account on 17 January 2024.
  3. [19]
    Further emails were exchanged between 12 and 17 January 2024 pertaining to artwork and other advertising requirements.
  4. [20]
    On 17 January 2024, the deposit having been paid, CAA then provided SFP an image of Mr Fogerty to be used for promotional purposes, and on 18 January 2024 provided video footage for the same purpose.  Arrangements were made for Mr Fogerty to make his own social media post in relation to the event so that it coincided with the announcement made by the applicant of Mr Fogerty’s attendance at the festival.
  5. [21]
    Also on 17 January 2024, CAA sent an email acknowledging that the US$700,000 had been received into its account.
  6. [22]
    On the same date, CAA sent an email to Mr Anderson with a link to what CAA described as the terms of the agreement between the parties.  The email stated:

‘Please follow the link below to view the documents memorializing the terms of our agreement regarding the following engagement(s):  John Fogerty Mar 31, 2024 Dittmann Bull Pit – Bloomsbury, QLD, Australia (Booking No 950129).’ (my underlining)

  1. [23]
    That document contained numerous terms which had not previously been seen by Mr Anderson, including an Arbitration clause at cl 24.  Mr Anderson did not raise any objection to any of the terms, but equally he did not sign them on that date.
  2. [24]
    On or about 19 January 2024, Mr Fogerty was announced as the lead act for the festival to take place on 30 and 31 March 2024.  Tickets were advertised to go on sale at 8.00 am on 24 January 2024.
  3. [25]
    On 25 January 2024, SFP posted an advertisement tagging Mr Fogerty for the festival and posting that the tickets were on sale.
  4. [26]
    On 29 January 2024, the terms of the agreement were then signed by Mr Anderson affixing his signature electronically to it on behalf of SFP.  Having so affixed his signature electronically, he received an automated email which provided as follows:

‘You can open the final agreement to review its activity history or download a copy for reference.

Creative Artists Agency Touring had previously added you to this agreement for your information only.

The agreement is fully executed.  The sender of this agreement has control over the retention period for this agreement which determines the amount of time it will be available for download from Adobe Acrobat Sign.  Adobe recommends that you save a local copy of this fully-executed agreement for your records.’ (my underlining)

  1. [27]
    The agreement, which was sent to SFP on 17 January 2024 and ultimately executed by Mr Anderson on 29 January 2024, contained cl 24, which provided as follows:

‘This Agreement shall be construed in accordance with the laws of the State of California without regard to its application of choice of laws.  Any claim or dispute arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration in Los Angeles, California in accordance with the commercial rules and regulations then in effect of JAMS….’

  1. [28]
    On 30 January 2024, SFP emailed a copy of the contract signed by Mr Anderson to Bob Fogerty, Mr Fogerty’s brother, who assisted him with administration matters, requesting that Mr Fogerty sign and return it at his earliest convenience.
  2. [29]
    Following the execution of the terms by Mr Anderson on 29 January 2024, matters proceeded in preparation for the concert on 30 and 31 March 2024.  At this stage, the festival was now some eight weeks away. 
  3. [30]
    Two weeks later, on 13 February 2024, Mr Anderson emailed CAA asking:

‘For insurance purposes can I please have a copy of signed contract we did, I think the one I have is the pdf but doesn’t have our signatures on it sorry’ (my underlining) (errors in original)

  1. [31]
    A signed copy of the contract was returned to Mr Anderson two days later with the attached email:

‘Hey Regan see attached copy with your signature.

Do you need a fully executed signed by John’s team?

I will chase them if so.’

  1. [32]
    SFP advised that a signed copy was required and Mr Barbato on behalf of CAA said he would chase it up on his side.
  2. [33]
    Some issues then arose in relation to insurance and flights.  Mr Anderson advised CAA that the insurer was ‘on our back’ and that there was a need to book flights and arrange visas. Mr Barbato responded that he hoped to come back very soon with a signed copy of the agreement so that they could get flights and visas sorted.
  3. [34]
    The second US$700,000 was due for payment by 20 February 2024 but it was not paid at that time. 
  4. [35]
    On 21 February 2024 at 6.04 pm, Mr Anderson sent an email to Mr Barbato with the subject line ‘Copy of signed contract’ and the body of the email stating:

‘We have the payment due, really need a copy of signed contract for our bank to release the funds for us.

Could we see where this is at please as our banker is away tomorrow and monday and we dont wanna hold this up for you.’ (my underlining) (errors in original)

  1. [36]
    On 23 February 2024 at 3.37 am, Mr Barbato emailed Mr Anderson following up on some emails about flights.  He also responded at 3.39am to Mr Anderson’s email requesting a copy of the signed contract saying:

‘Working on this. Can you please come back in the other thread re flights?

Need to answer a couple of things they’ve asked before they can sign.’

  1. [37]
    Less than four hours later, at 7.18 am on 23 February 2024, SFP’s solicitor sent a letter by email to Mr Kaiser stating as follows:

‘3. On or about 17 January 2024, our client made an offer to Mr Fogerty (through Creative Arts Agency LLC (CAA)) by:

a. Sending CAA a signed agreement for Mr Fogerty to review and counter-sign;

b. Paying to CAA’s trust account, the sum of $700,000 USD, in anticipation of Mr Fogerty signing.

… our client:-

A. Withdraws the offer set out at 3 above.  For the avoidance of doubt, the offer is no longer acceptable by Mr Fogerty; and

B. Requires the immediate return / release of the $700,000 USD in the CAA trust account to it.’

  1. [38]
    By this email of 23 February 2024, SFP purported to withdraw the ‘offer’ which it had allegedly made on 17 January 2024.
  2. [39]
    Mr Kaiser’s response was swift.  No doubt sensing that trouble was on the way, he sent an email to Mr Anderson saying:

‘What the hell is going on?’.

  1. [40]
    At approximately 2.20 pm on 23 February 2024, Mr Kaiser sent an email to Mr Anderson which stated:

‘Signed contract page.  Let me know what you want to do here’

  1. [41]
    What followed was correspondence from SFP’s solicitors maintaining there was no concluded agreement between the parties.

A concluded agreement?

  1. [42]
    The hearing proceeded on the basis that I am not required to make any findings as to the point at which, if at all, any concluded contract was made between SFP and CAA on behalf of Little Swamp. However, for the purposes of deciding the matters which I am called upon to decide in relation to the interlocutory application, the submissions of each of the parties relevant to the contractual relationships are important.
  2. [43]
    While CAA and Little Swamp are separately represented, their interests are similar, and as such CAA took the principal conduct of the application. Unless stated otherwise, submissions attributed below to CAA were supported by Little Swamp.
  3. [44]
    CAA submits that objectively considering the events above, the likely conclusion is that the contractual arrangements were concluded by 29 January 2024 because:
    1. a contract had been sent to Mr Anderson for execution and he did in fact execute it.  An offer therefore had been made by CAA which Mr Anderson accepted on behalf of SFP;
    2. having accepted the offer, Mr Anderson received an automated email confirming that it was ‘the final agreement’ and that the agreement was ‘fully executed’ (even though CAA accepts that it had not at that stage in fact signed the document);
    3. the US$700,000 that had been paid was retained by CAA in trust;
    4. by the parties’ conduct, they both evinced an intention to be bound by the contractual arrangements including:
      1. (i)
        Mr Anderson referred on occasions to the signed contract which had been made; 
      2. (ii)
        Mr Anderson proceeded to carry out the terms of the agreement by seeking insurance as he was required to do under the contract’s terms; 
      3. (iii)
        flights were sought to be arranged; 
      4. (iv)
        Mr Anderson acknowledged that the second of the payments under the contract was ‘due’ in his email of 21 February 2024 and identified that he needed a copy of the signed contract in order for the bank to release funds so as to make that payment.  CAA submits that the payment would not have been ‘due’ unless the parties were contractually bound by the terms; and
      5. (v)
        CAA was using Mr Fogerty’s image and video footage to advertise its event which it would not have been entitled to do (without infringing Mr Fogerty’s intellectual property rights) unless it had a binding contract.
  4. [45]
    Whilst it is accepted that CAA (or Little Swamp) did not sign the contract until after Mr Anderson purported to withdraw his ‘offer’, CAA submits that the only objectively reasonable construction of the parties’ conduct, including its own and the applicant’s, was that both parties intended to be bound by the contractual terms at least on and from 29 January 2024 when Mr Anderson electronically signed the document.
  5. [46]
    CAA goes further and says, in fact, in terms of offer and acceptance, CAA made its offer on 17 January 2024 which was accepted by conduct by SFP, which conduct included the signing of the agreement, the payment of the first US$700,000 and the access to Mr Fogerty’s intellectual property (photos and videos).
  6. [47]
    SFP submits there was no binding contract entered into between the parties. SFP’s solicitor’s correspondence of 23 February 2024 asserted SFP had made an ‘offer’ on 17 January 2024 by sending CAA a signed offer for Mr Fogerty to review and sign, and paying US$700,000.
  7. [48]
    I pause here to note that no such ‘offer’ was sent on 17 January 2024. The signed terms were sent on 29 January, and the US$700,000 had been earlier paid on 12 January 2024. In oral submissions, it was contended that the ‘offer’ was the signed document of 29 January 2024, which was a ‘fulsome agreement’. No ‘offer’ of 17 January 2024 was ever identified at the hearing.
  8. [49]
    On behalf of SFP it is contended that whilst the negotiations were ‘quite advanced’, there was never a binding contractual relationship between the parties. SFP characterises its signing of the agreement as an offer which Little Swamp (or CAA) did not accept by signing the agreement.
  9. [50]
    SFP accepted that for its submissions it placed ‘great emphasis’ on the words contained in the email from Mr Barbato to Mr Anderson of 23 February 2024, being:

‘Need to answer a couple of things they’ve asked before they can sign.’

  1. [51]
    SFP maintains that this was an assertion by CAA and Little Swamp that they were not ready to agree to the terms of the contract and they did not consider themselves bound by it.  Further, SFP contends that the ‘things’ about which CAA had asked must have been ‘material things’ that mattered for contractual purposes, because if the ‘things’ were merely artistic things, then a reasonable person would conclude on the evidence that those ‘things’ had in fact already been agreed or a mechanism for their agreement was agreed, being that the Artist would ultimately have the final say.  Rather, SFP maintains that the ‘things’ must have been material terms, demonstrating that there was no concluded agreement prior to SFP’s purported withdrawal from the contractual arrangements on 23 February 2024. 
  2. [52]
    Further, SFP maintains that there is nothing in the evidence to suggest that CAA contacted it, by email, letter or otherwise, pointing out that SFP was contractually bound to pay a further US$700,000 but had neglected to do so.  This, it says, evidences that CAA did not consider either itself or SFP contractually bound.

The proceedings

  1. [53]
    SFP commenced a proceeding by way of originating application seeking relief including:
    1. a declaration that the offer made by SFP to Little Swamp was validly withdrawn by the email of 23 February 2024; and
    2. that CAA refund to the applicant the sum of US$700,000 paid to CAA’s trust account by or on behalf of SFP.
  2. [54]
    The originating application did not seek any personal money order against Little Swamp but instead sought the order against CAA.
  3. [55]
    On 22 March 2024, Mr Fogerty and Little Swamp submitted a demand for arbitration to Judicial Arbitration and Mediation Services, Inc (‘JAMS’) in California..  The claims made against SFP were for damages for:
    1. breach of contract;
    2. unjust enrichment; and
    3. violation of the California Civil Code § 3344 and of the common law right to ‘publicity and privacy’.
  4. [56]
    On 25 March 2024, CAA submitted a demand for arbitration to JAMS in California seeking declarations that the dispute in the Australian lawsuit falls under the arbitration provision of the agreement, that CAA is entitled to invoke the arbitration provision and, if SFP wanted to pursue any claims arising out of the agreement, it should do so in the arbitration.

Application for a stay under the International Arbitration Act 1974

  1. [57]
    The relevant arbitration clause is set out at [27] above.
  2. [58]
    CAA and Little Swamp seek an order that under s 7 of the International Arbitration Act 1974 (Cth) the whole of the proceeding be stayed and the dispute between the parties be referred to arbitration.
  3. [59]
    Section 7(2) of the International Arbitration Act 1974 provides:

‘(2) Subject to the Part, where:

  1. proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and
  1. the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;

on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.

  1. [60]
    Pursuant to s 7(4) for the purposes of, relevantly, s 7(2) above, a reference to a party includes a reference to a person claiming through or under a party. 
  2. [61]
    Section 3 of the International Arbitration Act 1974 defines an ‘arbitration agreement’ to mean an agreement in writing of the kind referred to in sub-article 1 of Article (II) of the (New York) Convention.  The Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration. 
  3. [62]
    The definition of ‘arbitration agreement’ picks up the relevant sub-articles of the Convention below, which provide:

‘1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

  1. The term ‘agreement in writing’ shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.’
  1. [63]
    Section 3(4) of the International Arbitration Act 1974 then provides:

‘For the avoidance of doubt and without limiting subsection (1), an agreement is in writing if:

  1. its content is recorded in any form whether or not the agreement or the contract to which it relates has been concluded orally, by conduct, or by other means; or
  1. it is contained in an electronic communication and the information in that communication is accessible so as to be usable for subsequent reference...’.
  1. [64]
    Section 3(1) of the International Arbitration Act 1974 defines ‘electronic communication’ to mean any communication made by means of data messages.  Further, ‘data message’ means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange, email, telegram, telex or telecopy.
  2. [65]
    CAA and Little Swamp submit that there was a mutual exchange of electronic communications comprising, at least, the communication from CAA to SFP on 17 January 2024 containing the link to the contract, which contract itself contained the arbitration agreement at cl 24, the communication back to CAA via the link when Mr Anderson signed the contract on 29 January 2024 and the email communication to Mr Anderson on 29 January 2024, copied to CAA, with a link to the ‘final agreement’ which was ‘fully executed’.
  3. [66]
    CAA and Little Swamp therefore contend that this exchange of electronic communications included cl 24 which was a separable, concluded arbitration agreement.
  4. [67]
    The respondents contend that it follows therefore that a mutual exchange of electronic communications will satisfy the definition of an arbitration agreement. Although SFP did not expressly accept that proposition, it did not contend to the contrary.
  5. [68]
    SFP accepts that there is some overlap between the question of whether there was a concluded agreement as a whole and whether there was a concluded and separable agreement arbitration agreement constituted by cl 24 of the document.  However, SFP contends that there is an important distinction between first, whether there was an agreement as a whole, as that dispute will encompass the entirety of the relationship between SFP and the respondents; and second, whether there was an arbitration agreement, which turns on whether the written terms of the document in fact formed a concluded agreement.  SFP contends that in signing and returning the document which CAA had forwarded to it, SFP offered to be bound by those terms, and Little Swamp failed to agree to that offer before it was withdrawn.

The doctrine of separability: was there a concluded arbitration agreement?

  1. [69]
    CAA submits that Mr Anderson’s signature on the terms of agreement signified agreement to a separable arbitration agreement as contained in cl 24.
  2. [70]
    The doctrine of separability is closely linked to the competence-competence principle, which pertains to the arbitrator’s competence to rule on his or her jurisdiction, including an objection with respect to the existence of the arbitration agreement itself.  As much is contained in s 16 of the International Arbitration Act 1974, which provides that the Model Law has force in Australia.  Article 16 of the Model Law provides:

‘(1)  The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.  For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.  A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. 

  1. A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence.  A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator.  A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.  The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.
  1. The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article either as a preliminary question or in an award on the merits.  If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court specified in article 6 to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.’
  1. [71]
    In Hancock Prospecting Pty Ltd v Rinehart,[2] the Full Court of the Federal Court of Australia cautioned against a rigid taxonomy of approach with respect to the application of s 7(2) of the International Arbitration Act 1974.[3] That caution included the avoidance of the use of labels such as ‘prima facie’ and ‘merits-based approaches’ towards the assessment of the existence of an arbitration agreement.  Nevertheless, the case demonstrates that the approach usually taken by the courts with respect to the question as to the existence of an arbitration agreement is more closely aligned with the prima facie approach.
  2. [72]
    In CPB Contractors Pty Ltd v DEAL S.R.L.,[4] Rees J observed, with reference to Hancock, that if there was no ‘sustainable argument’ that the matter or dispute could be characterised as falling within the agreement, then it should not be referred to arbitration, but Rees J went on to say:[5]

‘…the enquiry should not travel into the merits of the cases beyond determining whether the argument is sufficiently weak not to be sustainable; “That would be to usurp the role of the arbitrator.  The Court’s role in [section 7] is not to act as a court of summary disposal filtering the matters that are suitable for arbitration…”.’

  1. [73]
    The proper approach therefore, as observed by Rees J, is ‘the court should take a broad view characterising the dispute to assess whether it is the subject of the arbitration agreement, rather than engage substantially in the merits of the case.’[6]  In so concluding, Rees J followed the approach in Hancock at [148] and [390] where the court had endorsed the approach adopted by Colman J in A v B.[7] In that judgment,  his Honour said at [137]–[138]:

‘Whether the latter course is adopted may in many cases depend heavily on the extent to which the resolution of that issue will involve findings of fact which impact on substantive rights and obligations of the parties which are already an issue and whether in general the trial can be confined to a relatively circumscribed area of investigation or is likely to extend widely over the substantive matters in dispute between the parties.  If the latter is the case the appropriate tribunal to resolve the jurisdictional issues is more likely to be the arbitration tribunal, provided it has Kompetenz-Kompetenz.

The emphasis in modern international arbitration law is to maximise the arbitrators’ opportunity to determine their own jurisdiction:  see in particular the judgment of Thomas J in Vale Do Rio Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd [2000] 2 All ER (Comm) 70.’ (my emphasis)

  1. [74]
    On behalf of SFP, it was contended that this court should hear and determine the issue of whether there is a binding arbitration agreement primarily for two reasons.  First, the issue with respect to the existence of the arbitration agreement is a narrow one and can be determined by this court upon this application.  Second, the practical realities with respect to the arbitration before JAMS are such that it is preferable that this court should determine the question of jurisdiction.
  2. [75]
    I do not accept that this is the correct approach. As O'Callaghan J said in Degroma Trading Inc v Viva Energy Australia Pty Ltd,[8] the court is not required to decide whether the arbitration agreement exists, because the competence-competence principle is wide enough to permit the arbitral tribunal to decide any question of jurisdiction, including whether the arbitration agreement came into existence.[9]  Importantly, as found in Degroma ‘there is little prospect that the question of whether the arbitrator has jurisdiction can be determined separately from the question of whether the main agreement … binds the parties and, if so, what are its terms’.[10]  The same reasoning applies in the current circumstances.
  3. [76]
    CAA submits that Degroma’s case is materially indistinguishable from the current circumstance.  I agree.  That is because, as said by Lord Hoffman in Fiona Trust & Holding Corporation v Privalow,[11] the main agreement and the arbitration agreement are ‘bound up with each other’.
  4. [77]
    SFP does not contend for any separate attack upon the clause which constitutes the arbitration agreement.  Rather, SFP’s attack is, as the respondents submit, confined to whether the main agreement between the parties was concluded or not.  The court can in those circumstances be satisfied on a prima facie basis that there is a concluded separable arbitration agreement in the form of cl 24.
  5. [78]
    In the circumstances, the court should give effect to the competence-competence principle because to do so accords with the objects of the International Arbitration Act 1974.
  6. [79]
    A further matter which SFP contends ought to lead the court to the conclusion that there was no concluded, separable agreement for arbitration is the wording that is used by cl 24 and in particular, the words ‘commercial rules and regulations of JAMS’.  SFP submits that cl 24 ought to be read as if those words were the title of a specific document.  Specifically, it was submitted that the words should be read as if they appeared ‘Commercial Rules and Regulations of JAMS’.
  7. [80]
    That construction cannot be accepted because:  
    1. the words themselves are not capitalised in the way in which it is submitted; 
    2. the construction ignores the words which follow being ‘the commercial rules and regulations then in effect of JAMS’.  The words ‘then in effect’ plainly demonstrate that there does not need to be a document called ‘Commercial Rules and Regulations’ because the words demonstrate that it is whatever rules are in effect at the relevant time which must be taken into account, not some specific rules called ‘Commercial Rules and Regulations’;
    3. the rules which were ‘then in effect’ were in fact the ‘JAMS Comprehensive Arbitration Rules & Procedures – effective June 1, 2021’.  Clause 24 could properly be construed as incorporating those rules and procedures because they were the rules which were ‘then in effect’.
  8. [81]
    Even had I not decided that there was a concluded, separable arbitration agreement in accordance with the competence-competence principle, I would have so concluded on the basis of the merits in any event.  That is because I conclude that the document which was sent to Mr Anderson for his signature contained the concluded, separable arbitration agreement representing the respondents’ offer in relation to arbitration.  Mr Anderson accepted that offer by affixing his signature to the document and returning it.  It was not essential for CAA and Little Swamp to do the same for the purpose of reaching an agreement as to arbitration. 
  9. [82]
    The email of 23 February 2024 saying ‘need to answer a couple of things they’ve asked before they can sign’ could not sensibly be construed as being directed to the arbitration clause.  It is entirely equivocal and, in any event, inconsistent with the conduct of both of the parties up until that point which had demonstrated an intention to be bound by the agreement. 
  10. [83]
    Naturally, I do not find, and do not have to find, that the parties were so bound — that is ultimately a matter for the arbitrator — but I cannot conclude that those matters described as ‘practical considerations’ on behalf of SFP changed the conclusion which I have reached in relation to the separable, concluded arbitration agreement.
  11. [84]
    The final issue to consider in relation to the arbitration agreement is that which arises out of s 7(4) of the International Arbitration Act 1974 which provides that, relevantly for the purposes of s(7)2, ‘a reference to a party includes a reference to a person claiming through or under a party.’.
  12. [85]
    SFP accepts that if there is a binding arbitration agreement then Little Swamp is properly a party to that agreement.  The only issue that SFP raises is whether CAA is also a party to that agreement.
  13. [86]
    SFP accepts that the meaning of ‘through or under’ was considered in both Hancock’s case and in Tanning Research Laboratories Inc v O'Brien:[12]

‘…In other words, an essential element of the cause of action or defence must be or must have been vested in or exercisable by the party before the person claiming through or under the party can rely on the cause of action or ground of defence…’.

  1. [87]
    CAA submits that it is a party claiming through or under Little Swamp because of:
    1. firstly, the concluded, separable arbitration clause as between SFP and Little Swamp; and
    2. secondly, CAA’s status as a disclosed agent for Little Swamp with express immunity from liability under cl 22 of the main agreement between SFP and Little Swamp. 
  2. [88]
    SFP submits that neither of those circumstances evince an essential element of the defence must have been vested in or exercisable by Little Swamp before CAA can rely on the defence. 
  3. [89]
    It seems tolerably clear to me that Little Swamp’s defence puts in issue, amongst other things, some right or liability which is susceptible to settlement under the arbitration agreement as a discrete controversy in the way described by the majority of the High Court in Rinehart v Hancock Prospecting Pty Ltd & Ors.[13] The substance of the controversy between SFP and Little Swamp will be either the return of the US$700,000 (held in trust by CAA) or damages associated with SFP’s non-performance of the alleged agreement.  When described in this way, the controversy, it seems to me, is readily seen as one arising out of or relating to the terms which Mr Anderson signed on 29 January 2024 and therefore encompassed within the agreement to arbitrate contained in cl 24.[14][15]
  4. [90]
    Finally, in relation to the agreement to arbitrate contained in cl 24 of the contract, it is submitted by SFP that no issue of an arbitration agreement was ever discussed between the parties.  SFP submits therefore no meeting of the minds in relation to the contractual terms generally, but more specifically in relation to the arbitration clause.  Because CAA never executed the agreement itself before SFP withdrew from the negotiations, SFP contends it is not a term which binds them to participate in arbitration, and particularly arbitration in California. 
  5. [91]
    It is correct to say that no term like cl 24 is contained in any of the emails or correspondence between the parties prior to that time.  The first time the arbitration clause appeared in any document was when it is forwarded by CAA to SFP on 17 January 2024 and subsequently signed by SFP by 29 January 2024.  That does not mean that there may not have been a meeting of the minds on the issue of arbitration. The term was clearly contained in the document CAA sent to SFP on 17 January 2024. It was signed by SFP on 29 January 2024. Although not needing to decide the issue, there must be a good argument that the offer for arbitration made by CAA was accepted by SFP.

Conclusion as to an order under s 7 of the International Arbitration Act 1974

  1. [92]
    In the circumstances, I am satisfied that it is appropriate to make an order under s 7 of the International Arbitration Act 1974 (Cth) staying the whole of the proceeding and referring the dispute between the parties to arbitration.
  2. [93]
    Pursuant to s 7(2) the ‘matter’ that is to be referred to arbitration is the question of whether there is a valid and binding agreement that came into existence between SFP and Little Swamp.  That question is at the heart of the amended originating application filed on behalf of SFP which seeks:
    1. a declaration that the offer made by SFP to Little Swamp was validly withdrawn by SFP solicitor’s letter to CAA of 23 February 2024;
    2. that Little Swamp repay the sum of US$700,000 to SFP; and
    3. in the alternative, a declaration that CAA holds the sum of US$700,000 paid to it by the applicant on 12 January 2024 on trust for the applicant. 
  3. [94]
    Accordingly, the claim or dispute arising out of or relating to the agreement or the breach of it ought proceed by arbitration in Los Angeles, California in accordance with the commercial rules and regulations then in effect of JAMS.  There is no part of the proceeding which can be conducted separately to, or in parallel, with an arbitration, and accordingly it is appropriate that the whole of the proceedings be stayed and the parties should be directed to attend arbitration.

Stay on other grounds

  1. [95]
    Whilst the above conclusion is enough to determine the application, in the alternative, both respondents maintain that the court has the power to stay the proceedings pursuant to r 16(g) and r 127 UCPR, or in the court’s inherent jurisdiction.
  2. [96]
    Rule 16(g) UCPR provides:

‘16 Setting aside originating process

 The court may…

  (g) stay a proceeding; or …’.

  1. [97]
    Rule 127 UCPR provides:

‘127 Court’s discretion whether to assume jurisdiction

  1. On application by a person on whom an originating process has been served outside Australia, the court may dismiss or stay the proceeding or set aside service of the originating process.
  1. Without limiting subrule (1), the court may make an order under this rule if satisfied—
  1. (a)
    service of the originating process is not authorised by these rules; or
  2. (b)
    the court is an inappropriate forum for the trial of the proceeding; or
  3. (c)
    the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending the claim.’
  1. [98]
    Both respondents contend that in respect of r 127 UCPR the court may stay the proceeding in circumstances where the court is an inappropriate forum for the trial of the proceeding or alternatively, where the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending the claim.
  2. [99]
    CAA has a separate basis for a stay and that is that if, contrary to CAA’s primary submission, Little Swamp alone is entitled to a stay under s 7(2) of the International Arbitration Act, the proceedings against CAA should also be stayed in the exercise of the court’s discretion.[16] 
  3. [100]
    Dealing first with the expression, ‘inappropriate forum’, the parties accept that is a less emphatic expression than appeared under the former rule.  In Voth v Manildra Flour Mills Pty Ltd,[17] the former phrase, ‘clearly inappropriate forum’, was described as one where the continuation of the proceedings in that court 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’. [18]
  4. [101]
    Little Swamp described that the ultimate consideration is the prevention of injustice.  Specifically, Little Swamp contends:
    1. a court is not an ‘inappropriate forum’ merely because another is more appropriate;
    2. a local court will be a clearly inappropriate forum if continuation of the proceeding in that court would be oppressive or vexatious in the way I have described;
    3. the court should take into account the relevance of ‘connecting factors’ and a ‘legitimate personal or juridical advantage’ as described by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd,[19] although noting that those factors are relevant but not decisive considerations.
  5. [102]
    SPF contends that this court is not an inappropriate forum because:
    1. SFP is registered in Queensland and has its principal place of business here;
    2. the dispute concerns the existence of a contract which was to be wholly performed in Queensland; and
    3. each of the parties had engaged solicitors within the jurisdiction.
  6. [103]
    Secondly, SPF contends that with respect to the consideration regarding ‘legitimate personal or juridical advantage’:
    1. Whilst each of the respondents have filed requests for arbitration in California, neither of those processes have commenced.  In that regard, if the respondents fail in their applications here on the basis that there is no arbitration agreement, then those arbitration proceedings could not continue;
    2. There is no matter of juridical advantage for either of the respondents with respect to the enforcement of any judgment made by this court.  The ease of enforcement is a factor which goes to the consideration of SFP, and SFP has chosen to commence proceedings in Australia.  Accordingly, that factor is neutral at best;
    3. Although SFP accepts that there are causes of action unique to California, it submits that there is nothing to suggest that the respondents would be deprived of the opportunity to pursue those causes of action should the matters in issue in this proceeding be determined in this court.  Moreover, SFP contends that those causes of action do not appear to be claims arising from the agreement but rather are statutory causes of action. 
  7. [104]
    The question of prospects is difficult to assess because SFP has not pleaded its claim. Against that, I am conscious that the test is one akin to summary judgment and it would be most difficult to make such an assessment on the basis of the amended originating application and the limited affidavits. I could not conclude in favour of a stay based on rule 127(2)(c).
  8. [105]
    I am conscious however that the matters in rule 127(2) are not exhaustive and impose no limit on rule 127(1). Ultimately, it is a matter of assessing where, in the interests of justice, the dispute ought to proceed.
  9. [106]
    Although relatively finely balanced, in the circumstances I would have concluded that SFP’s proceedings ought to be stayed either because this court was an ‘inappropriate forum’ within rule 127(2)(b) or in the exercise of the court’s inherent jurisdiction because:
    1. If there is a contract on foot, then the terms of it require that it be governed by the law of California. That is a powerful consideration.
    2. If the laws of California apply, then there are material differences between Australian law and Californian law.  In particular, Australian law does not have an equivalent of the Californian Civil Code § 3344 or a common law right to publicity and privacy.  Similarly, there is no recognised Australian law for the cause of action of unjust enrichment of the kind sought to be advanced by Little Swamp.  Again, these are powerful considerations.
    3. Even if there is not a contract on foot on the terms signed by Mr Anderson, it is strongly arguable that there is a separable, arbitration agreement with which SFP has agreed and that arbitration ought to proceed.  If the Queensland court proceedings remained on foot there is a real prospect that that would be ‘seriously and unfairly burdensome, prejudicial or damaging’ in the way in which the High Court has described it in Henry v Henry[20] or at least ‘productive of serious and unjustified trouble and harassment’.[21]
    4. Both respondents are in California and the property the subject of the applicant’s trust claim, USD$700,000, is also in California.
    5. Whilst the applicant is in Queensland, it did transfer its monies to a trust account in California.  CAA submits that there is no particular injustice in leaving the applicant to pursue its remedy in the forum to which the money was transferred. I regard that factor as relatively neutral.
    6. The proceedings as currently constituted in Queensland cannot proceed by way of originating application.  The proceedings will have to be reconstituted by a claim and statement of claim.  Whilst that can be attended to without any particular difficulty, it means that the Queensland proceedings as currently constituted are not able to continue in their current form such that the mere  existence of them is a matter of some quite limited weight.

Setting aside service outside Australia

  1. [107]
    Although it is probably unnecessary for me to decide the question as to whether I would set aside service that had occurred outside Australia without leave, out of deference to the detailed submissions on the issue, I address the matter briefly.
  2. [108]
    The applicant commenced this proceeding by way of originating application on 26 February 2024.  The relief the applicant sought is summarised at paragraphs 53 and 54 above. Little Swamp and CAA then proceeded with their demands for arbitration.
  3. [109]
    On 27 March 2024, Justice Applegarth made an order pursuant to r 117 UCPR in relation to service.  Rule 117 provides:

‘117 Informal service

 If—

 (a) for any reason, a document is not served as required by this chapter but the document or a copy of it came into the possession of the person to be served; and

 (b) the court is satisfied on evidence before it that the document came into the person’s possession on or before a particular day;

 the court may, by order, decided that the possession of the document is service for these rules on the day it came into the person’s possession or another day stated in the order.’

  1. [110]
    In making this order, his Honour expressly did not decide that service was permitted under the rules.  His Honour said:

‘It is arguable that service was permitted under Part 7, Division 1, particularly r 125.  It is not necessary for me to decide that point, and I should not in the absence of the respondents who have chosen not to appear today and have made it clear that they do not accept the court’s jurisdiction.  The only issue is whether I ought to deem there to have been service pursuant to r 117.’ (my emphasis)

  1. [111]
    His Honour then made the order in accordance with r 117 expressly not deciding that service had in fact been allowed pursuant to r 125.
  2. [112]
    Since that time, the respondents have appeared in this court conditionally.
  3. [113]
    I deal first with the question of whether Little Swamp was validly served.
  4. [114]
    The structure of the rules is such that if the claim falls within r 125 of the UCPR, then service outside Australia is permitted as of right. Rule 126 applies where the question is whether the court might grant leave to allow for service of an originating process ‘if service is not allowed under r 125’.  Rule 127 operates whether or not service is authorised under the UCPR. It gives power to stay or dismiss the proceedings in the circumstances as set out above.
  5. [115]
    It is uncontroversial that SFP did not have the court’s leave pursuant to r 126 to serve its originating application outside Australia; therefore, unless service was permitted without leave pursuant to r 125, service against Little Swamp is liable to be set aside pursuant to either or both of r 127 or r 16(f) UCPR.
  6. [116]
    Rule 127 can operate in both circumstances, that is, whether or not service is authorised under the UCPR.  As much was made clear by Morrison JA in Courtney v Chalfen,[22] where his Honour said:[23]

‘[52] …  So much is clear from the fact that r 127(2)(a) permits an order staying a proceeding or setting aside service if the court is satisfied that service of the originating process is not authorised by the UCPR.  Then, r 127(2)(b) is cast as an alternative, applicable whether or not service is authorised under the UCPR.  Because r 127(2)(b) operates regardless of whether the proceedings are permitted to be served under the UCPR, it cannot be a relevant factor that leave could not have been obtained under r 126 UCPR.’ (my underlining)

  1. [117]
    It is contended by SFP that as against Little Swamp, service without leave was permitted against it pursuant to r 125(b) which provides:

‘125 When service allowed without leave

An originating process may be served outside Australia without leave in the following circumstances—

…

(b) if the claim is for the enforcement, rescission, dissolution, annulment, cancellation, rectification, interpretation or other treatment of, or for damages or other relief in respect of a breach of, a contract that—

  1. was made or entered into in Australia; or
  1. was made by or through an agent trading or residing within Australia; or
  1. was to be wholly or in part performed in Australia; or
  1. was by its terms or by implication to be governed by Australian law or to be enforceable or cognisable in an Australian court…’.
  1. [118]
    As against Little Swamp, SFP maintains that its claim is for the interpretation or other treatment of, or other relief in respect of a breach of contract that was to be wholly or in part performed in Australia. At first blush, that is a difficult argument to accept when the whole basis of SFP’s claim is that there is no contract on foot. However, SFP contends that its position is supported by the predecessor to the rule, which was r 124(1)(g) of the UCPR, which provided:

‘… (g) a proceeding relating to a contract that:

  1. made in Queensland; or
  1. made by one or more parties carrying on business or residing in Queensland; or
  1. made by or through an agent carrying on business or residing in Queensland on behalf of a principal carrying on business or residing outside of Queensland; or
  1. governed by the law of Queensland.’
  1. [119]
    That predecessor rule was dealt with in Geoscience Resource Recovery LLC v Central Petroleum LGD.[24]  There, in circumstances similar to the current circumstances, the plaintiff sought a declaration that it did not enter into, and was not bound by, a contract with the defendant.  The defendant was a Nevada corporation that had no presence in Queensland or elsewhere in Australia.  The proceedings, commenced by claim and statement of claim in Queensland, were served on it in the United States without leave of the Supreme Court of Queensland.
  2. [120]
    At first instance, the primary Judge refused to set aside the claim and statement of claim, holding that service was permitted without leave pursuant to r 124(1)(g)(ii) UCPR. The appeal against the primary Judge’s decision was dismissed, Gotterson JA concluding:

‘…there is no apparent logical reason why a service rule of this kind would discriminate between proceedings where there is no dispute as to whether an enforceable contract had been made, on the one hand; and one in which one party to a proceeding asserts that such a contract had been made and the other party denies that it had, on the other.’[25]

  1. [121]
    Second, his Honour described that it would be an exceptional requirement within the scope of the other limbs of the rule to require the existence of the contract to be undisputed and observed that such an interpretation would disrupt the consistent interpretation and application of the rule.[26]
  2. [122]
    Third, having regard to those first two considerations, Gotterson JA attributed to the word ‘made’ in r 124(1)(g)(ii), a limited role intending to require that the contract to which the proceeding relates must be one which at least one of the parties to the proceedings alleges was made.  His Honour described that the word ‘made’ did not have an additional, and significantly restricting, role of requiring that the making of a contract must be an undisputed anterior circumstance to the operation of the rule.[27]
  3. [123]
    In those circumstances, SFP contends that there is no material difference between r 125 and 124(1)(g) as existed in Geoscience’s case such as to compel a departure from the reasons of the Court of Appeal. 
  4. [124]
    On behalf of Little Swamp, Counsel contended, however, that there were substantial differences between the current rule and the one in Geoscience’s case.
  5. [125]
    The strongest of those reasons is that in the chapeau to the former r 124(1)(g), the words ‘a proceeding relating to a contract’ are different to the chapeau in the current r 125(b), which is a list of the forms of relief that can be sought in respect of a contract. Little Swamp submitted that the relief, being a claim for rescission, dissolution, annulment, cancellation, rectification and interpretation, has as its genus, relief in respect of an existing contract. Therefore, SFP’s claim, being premised on a ‘no contract’ basis, is not covered by the rule. As to this, I am unpersuaded that the different terminology in the chapeau of r 125(b) is intended to be, or is in fact, any more restrictive than the broader terminology in the former rule, ‘a proceeding relating to a contract’.  Merely because the new rule is more descriptive does not mean it is intended to be of narrower compass. SFP suggests that the words of rule 125(b) are of similarly broad compass to the preceding rule, and I accept that submission.
  6. [126]
    Even if I am wrong in relation to the breadth of chapeau, it seems to me that the other provisions of r 125(b) UCPR are in some respect now broader than they were under the preceding r 124(1)(g).  The former rule contained no provision equivalent to ‘was to be wholly or in part performed in Australia’.  Both the former and the current rule have similarity in relation to the requirements that the contract was firstly made in Queensland (or Australia), secondly made by parties residing or carrying on business in Queensland (or Australia) and thirdly governed by the law of Queensland (or Australia).  But the current rule incorporates a fourth consideration, being whether the contract was to be wholly or in part performed in Australia.  That is factually the case here where Mr Fogerty was to be performing in Australia, but it is important in the context of the words ‘other treatment of…a contract that…was to be performed…in Australia’ because it arguably captures the ‘declaration…(of) the offer’ sought in the amended originating application as SFP would characterise it. That is in effect the second basis that Little Swamp relies upon to distinguish Geoscience’s case, but in my view, it lends weight to the construction for which SFP contends. Rather, like Geoscience’s case, I find that it would disrupt the consistent interpretation and application of the rule to limit the rules’ scope to those cases where the existence of the contract was undisputed.
  7. [127]
    I would therefore have concluded that service on Little Swamp did not require the court’s leave, but rather service was permitted under r 125 UCPR.
  8. [128]
    As to the issue of service against CAA, SFP relied solely upon r 125(h)(i) to demonstrate that service upon CAA was authorised.  Rule 125(h) provides:

‘125 When service allowed without leave

An originating process may be served outside Australia without leave in the following circumstances—

…

  1. if a person outside Australia is—

(i) a necessary or proper party to a proceeding properly brought against another person served or to be served (whether within Australia or outside Australia) under any other provision of these rules…’ (my emphasis)

  1. [129]
    SFP contends that CAA is a necessary or proper party to the proceeding against Little Swamp because it was to CAA that the US$700,000 was paid, and so relief against that party is necessary. As much seems self-evident. Leave was not required to serve CAA under r 125(1)(h) UCPR.
  2. [130]
    Therefore, had I not otherwise been prepared to stay the proceedings, I would have concluded that SFP had not required leave to serve Little Swamp and CAA.

Orders

  1. [131]
    In the circumstances, I propose to make the orders in accordance with s 7 of the International Arbitration Act 1974 staying the whole of the proceeding and referring the matter to arbitration in California.
  2. [132]
    I will hear the parties as to costs.

Footnotes

[1]  It is not clear whether this sum is AUD or USD.

[2]  (2017) 257 FCR 442.

[3]  This judgment was later appealed to the High Court of Australia: (2019) 267 CLR 514. However, the findings of the Full Court of the Federal Court of Australia that are referenced here were undisturbed on appeal.

[4]  [2021] NSWSC 820.

[5]  Ibid at [55].

[6]  per Rees J at [55].

[7]  [2006] EWHC 2006 (Comm); [2007] 1 Lloyds Report 237.

[8]  [2019] FCA 649.

[9]  Ibid at [64].

[10]  Ibid at [65].

[11]  [2008] 1 Lloyd’s Report 254.

[12]  (1990) 169 CLR 332 at 342.

[13]  (2019) 267 CLR 514 at 541 [68] per Brennan and Dawson JJ.

[14]  Adopting the language.

[15]  Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332. At 351- 352.

[16] Bulkbuild Pty Ltd v Fortuna Well Pty Ltd [2019] QSC 173 at [31].

[17]  (1990) 171 CLR 538.

[18]  Ibid at 555 per Mason CJ, Deane, Dawson and Gaudron JJ.

[19]  [1987] AC 460 although noting that that discussion provides valuable assistance.

[20]  (1996) 185 CLR 571 at 576.

[21] Hamilton v Oades (1989) 166 CLR 486 at 502.

[22]  [2020] QCA 294.

[23]  Ibid at [52].

[24]  [2019] 2 Qd R 276.

[25]  Gotterson JA at [49].

[26]  Gotterson JA at [50].

[27]  Per Gotterson JA at [51].

Close

Editorial Notes

  • Published Case Name:

    SFP Events Pty Ltd v Little Swamp II, Inc & Anor

  • Shortened Case Name:

    SFP Events Pty Ltd v Little Swamp II Inc

  • MNC:

    [2024] QSC 132

  • Court:

    QSC

  • Judge(s):

    Treston J

  • Date:

    21 Jun 2024

  • 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.

Cases Cited

Case NameFull CitationFrequency
A v B [2007] 1 Lloyds Report 237
2 citations
Jump To
Cite 1 - [2007] 1 Lloyds Report 237
Cite 2 - [2007] 1 Lloyds Report 237
A v B [2006] EWHC 2006
1 citation
Jump To
Cite 1 - [2006] EWHC 2006
Bulkbuild Pty Ltd v Fortuna Well Pty Ltd [2019] QSC 173
2 citations
Jump To
Cite 1 - [2019] QSC 173
Cite 2 - [2019] QSC 173
Courtney v Chalfen [2020] QCA 294
2 citations
Jump To
Cite 1 - [2020] QCA 294
Cite 2 - [2020] QCA 294
CPB Contractors Pty Ltd v DEAL SRL [2021] NSWSC 820
2 citations
Jump To
Cite 1 - [2021] NSWSC 820
Cite 2 - [2021] NSWSC 820
Degroma Trading Inc v Viva Energy Australia Pty Ltd [2019] FCA 649
2 citations
Jump To
Cite 1 - [2019] FCA 649
Cite 2 - [2019] FCA 649
Geoscience Resource Recovery LLC v Central Petroleum Ltd[2019] 2 Qd R 276; [2018] QCA 216
2 citations
Jump To
Cite 1 - [2019] 2 Qd R 276
Cite 2 - [2019] 2 Qd R 276
Hamilton v Oades (1989) 166 CLR 486
2 citations
Jump To
Cite 1 - (1989) 166 CLR 486
Cite 2 - (1989) 166 CLR 486
Henry v Henry (1996) 185 CLR 571
2 citations
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Cite 1 - (1996) 185 CLR 571
Cite 2 - (1996) 185 CLR 571
Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514
3 citations
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Cite 1 - (2019) 267 CLR 514
Cite 2 - (2019) 267 CLR 514
Cite 3 - (2019) 267 CLR 514
Rinehart v Hancock Prospecting Pty Ltd (2017) 257 FCR 442
2 citations
Jump To
Cite 1 - (2017) 257 FCR 442
Cite 2 - (2017) 257 FCR 442
Spiliada Maritime Corporation v Cansulex Ltd (1987) AC 460
2 citations
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Cite 1 - (1987) AC 460
Cite 2 - (1987) AC 460
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
3 citations
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Cite 1 - (1990) 169 CLR 332
Cite 2 - (1990) 169 CLR 332
Cite 3 - (1990) 169 CLR 332
Vale Do Rio Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd (2000) 2 All ER (Comm) 70
1 citation
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Cite 1 - (2000) 2 All ER (Comm) 70
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
2 citations
Jump To
Cite 1 - (1990) 171 CLR 538
Cite 2 - (1990) 171 CLR 538

Cases Citing

Case NameFull CitationFrequency
SFP Events Pty Ltd v Little Swamp II Inc [No 2] [2024] QSC 1531 citation
1

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