By Dispute Resolution Partner, Tom Griffith, and Senior
Associate, Lisa Farrand
The New South Wales Supreme Court has recently
decided that an Australian company that simultaneously brought a
breach of contract claim in New South Wales and Germany against a
Cayman Islands company, a German company and a UK company, should
have the New South Wales action stayed on the basis that New South
Wales was a clearly inappropriate forum for the resolution of the
dispute. Dispute Resolution Partner, Tom Griffith, and Senior
Associate, Lisa Farrand explain the decision.
The facts of this case are redolent of a university choice of
law exam question. The plaintiff was Kim Michael Productions Pty
Ltd (KMP), a business operating in the
entertainment industry and the defendants were TI Cayman, TI
Germany and Tanjong UK, one of whose businesses is the operation of
a tropical islands themed resort (the Resort) in
Germany near Berlin.
KMP's claim related to production costs alleged to have
been incurred in developing a proposed show to be performed at the
Resort. One of KMP's allegations was that it was a term of
the alleged contract that the funds payable to it for producing the
show would be paid into a New South Wales bank account. On the
defendants' forum challenge, KMP successfully argued that
the defendants' failure to pay the funds constituted a
breach of the contract that occurred in New South Wales, and that
therefore the New South Wales Supreme Court had jurisdiction to
hear and determine the dispute. On that basis, it was held that KMP
could serve the defendants that were located outside of Australia
in compliance with the relevant rules of court of the New South
Wales Supreme Court.
The Court (Justice Howie) observed that the contractual term
that required payment into a New South Wales bank account
constituted only a tenuous connection with New South Wales, and
that this was relevant to the determination of the second aspect of
the defendants' forum challenge – namely that New
South Wales was a "clearly inappropriate forum".
On the same day that the proceedings were filed in the New South
Wales Supreme Court, KMP brought proceedings in Germany against the
same parties and involving the same subject matter. Justice Howie
identified that the relevant test was whether the local proceedings
were "productive of serious and unjustified trouble and
harassment" or were "seriously and unfairly burdensome,
prejudicial or damaging".
In concluding that the test was satisfied, Justice Howie took
into consideration the following factors:
the parallel proceedings in Germany
the proper law of the alleged contract was that of Germany
matters of convenience such as the location of documents and
the tenuous connection with New South Wales constituted by the
late asserted failure to pay an interim invoice into a New South
Wales bank account.
Justice Howie noted that the conduct relied upon in support of
the repudiation (which was the central claim in the proceedings)
occurred almost entirely outside of New South Wales with persons
who were and still are outside New South Wales, as a result of the
contract that entirely occurred outside the state, where the
contract was operating under foreign law and concerned the
plaintiff performing its contractual obligations outside the
Justice Howie concluded that the proceedings were prima facie
vexatious because of the proceedings already under way in Germany.
More than that, Justice Howie stated that he was "thoroughly
convinced" that the local proceedings were "productive of
serious and unjustified trouble and harassment" or were
"seriously and unfairly burdensome, prejudicial or
damaging" and that accordingly, New South Wales was a clearly
inappropriate forum for the determination of the dispute.
Piper Alderman Partner, Tom Griffith acted for the defendants in
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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