Appellant (Defendant/Plaintiff by counterclaim) v Respondent(Plaintiff/Defendant by counterclaim)

PRACTICE AND PROCEDURE - Stay of proceedings - Proceedings against respondent instituted by appellant's holding company in France pursuant to exclusive jurisdiction clause - Whether Victoria clearly inappropriate forum - Principles to be applied - Supreme Court of Victoria not an inappropriate forum - No error in exercise of discretion of Associate Justice.

PRACTICE AND PROCEDURE - Whether stay or adjournment of proceedings appropriate - Whether Associate Justice applied correct principles - No error in exercise of discretion of Associate Justice.

**1 Bogart Lingerie Limited ('Bogart') is a German family-owned business based in Hong Kong. It manufactures lingerie, men's underwear and swimwear for international premium brands including Victoria's Secret, Calvin Klein and Tommy Hilfiger.

2 In October 2010, January 2011 and June 2011 Steadmark Pty Ltd t/a The Lingerie Company of Australia ('LCA') placed orders with Bogart for 39,900, 19,440 and 22,000 pieces of lingerie respectively. These orders are described in LCA's Amended Defence and Counterclaim dated 23 March 2012 ('AD & CC') as "the first Bogart contract", "the second Bogart contract" and "the third Bogart contract".

3 LCA refused to pay for the goods, citing quality problems, and on 16 November 2011 Bogart commenced this proceeding claiming the unpaid price of the goods shipped to LCA in the sum of USD $401,431.04 plus interest.

4 Bogart entered an unconditional appearance on 30 November 2011 and the following interlocutory steps have been taken:**

(a) 22 December 2011 - LCA filed a defence and counterclaim;

(b) 9 February 2013 - Randall AsJ made orders which required, inter alia, that both parties file pleadings and make discovery;

(c) 23 March 2012 - LCA filed and served the AD & CC;

(d) 23 April 2012 - LCA demanded $100,000 from Bogart by way of security for costs "up to and including mediation";

(e) 24 May 2012 - Bogart was ordered by consent to pay $60,000 by way of security for costs "up to and including mediation";

(f) 25 July 2012 - Bogart filed a reply and defence to counterclaim;

(g) 25 July 2012 - LCA filed a reply to Bogart's defence to counterclaim;

(h) 31 July 2012 - Bogart made discovery to LCA; and

**5 It should be noted that by the AD & CC filed on 23 March 2012 pursuant to an order of Mukhtar AsJ made on 9 February 2012, LCA by its counterclaim seeks declaratory relief and damages for breach of contract. From the brief particulars of loss and damage it appears that the damages claimed by LCA exceeds $2 million. Paragraph E of the prayer for relief is in the usual form and seeks "[s]uch or further orders as the Court considers appropriate". It is also relevant to note that LCA pleads and relies on the Fair Trading Act 1994 (Vic) ('FTA'), the Goods Act 1958 (Vic) and the Trade Practices Act 1994 (Cth) and the Australian Consumer Law (together 'ACL').

6 On 30 August 2012, Simone Perele S.A. ('Simone Perele'), a company incorporated in France and the holding company of LCA, commenced proceedings against Bogart in the District Court of Nanterre in France. That proceeding relates to disputes as to goods delivered by Bogart to Simone Perele in Europe. LCA is not a party to the proceeding in France.

7 The terms of the contract(s) between Bogart and LCA incorporated by reference clause 10.4 of a contract between Bogart and LCA's parent, Simone Perele, titled "Simone Perele - Specifications for finished Product Suppliers" ('Specifications'). That clause reads:**

10.4 Disputes

According to our Conditions of Purchase, the District Court of Nanterre (FRANCE) shall be solely competent so (sic) settle disputes.

**8 On 10 October 2012, LCA asserted for the first time its rights under clause 10.4.

9 On 1 November 2012, LCA filed a summons seeking a permanent stay of this proceeding. The summons was amended twice. The further amended summons, dated 4 March 2013, set out the relief sought by LCA before Daly AsJ. This is the relevant summons for the purposes of this appeal. The application was heard by Daly AsJ on 4 and 26 March 2013 and her Honour gave judgment and published reasons on 8 May 2013 ('Judgment').

10 By notice of appeal dated 20 May 2013, the appellant (LCA) appeals from the order of Daly AsJ dismissing its application for a permanent or temporary stay of these proceedings.**

11 LCA's stay application was based on the following grounds:

(a) the existence of the exclusive jurisdiction clause requiring the dispute to be litigated in the District Court of Nanterre, France;

(b) forum non conveniens, on the basis that Victoria is a clearly inappropriate forum because:

(i) the French proceedings concern related legal and factual issues;

(ii) the District Court of Nanterre is able to resolve the entirety of the legal and factual controversy between the parties;

(iii) neither proceeding is well advanced;

(iv) LCA undertook to pay Bogart's reasonable costs thrown away and offer security for Bogart's costs in prosecuting its claim in France; and

(v) there was a closer connection with France than Victoria;

(c) the matter be temporarily stood over or stayed to enable the French proceeding to be determined first.

12 The primary issues for determination were as follows:

(a) whether clause 10.4 of the Specifications is an exclusive jurisdiction clause;

(b) if so, whether clause 10.4 had been incorporated into the contracts;

(c) if yes to (a) and (b) above, whether LCA is entitled to have this proceeding stayed (either permanently or temporarily) upon the basis that Victoria is a clearly inappropriate forum, or upon some other discretionary grounds.

13 In respect of these issues, her Honour made the following findings:

(a) clause 10.4 is an exclusive jurisdiction clause;[1]

(b) the exclusive jurisdiction clause has been incorporated into the contracts between LCA and Bogart;[2]

(c) LCA's conduct in bringing a counterclaim against Bogart in this proceeding amounted to a binding election and a waiver of its rights to rely upon the exclusive jurisdiction clause thereby precluding it from relying on the clause;[3] and

(d) Victoria is not a clearly inappropriate forum and there are no other discretionary grounds upon which LCA is entitled to have this proceeding stayed either permanently or temporarily.[4]

**14 No cross-appeal has been brought or notice of contention served by Bogart.

15 Accordingly, the only issues in this appeal are whether LCA's conduct (whether through election or waiver) in this proceeding precluded it from relying on the exclusive jurisdiction clause and whether the appellant is entitled to have the proceeding stayed on forum non conveniens grounds or some other discretionary basis.

16 LCA's grounds of appeal deal with the following three issues:**

(a) whether LCA's conduct in this proceeding prior to issuing the stay application precluded it from relying on the exclusive jurisdiction clause;

(b) whether her Honour erred in exercising a discretion not to grant a permanent stay on the basis of forum non conveniens; and

(c) whether her Honour erred in exercising a discretion not to temporarily stay or stand the matter over.

17 The appellant submits that her Honour erred in the following four respects:

(a) her Honour erred in finding that LCA had made a binding election in issuing its counterclaim in this proceeding and therefore LCA is precluded from now relying on the exclusive jurisdiction clause;

(b) her Honour erred in finding that LCA had waived its right to rely on the exclusive jurisdiction clause by issuing its counterclaim in this proceeding;

(c) her Honour erred in exercising a discretion not to stay the proceeding on forum non conveniens grounds; and

(d) her Honour erred in applying the wrong principles in connection with the Court's power to control its own processes to temporarily stay or stand a matter over.

**18 Her Honour found that by bringing a counterclaim against Bogart, LCA had made a binding election between its rights under the exclusive jurisdiction clause and its right to pursue its claim against the respondent in this proceeding.[5]

19 LCA submitted that her Honour's finding that there was a binding election is contrary to authority and wrong.

20 The gravamen of LCA's submission was that according to the authorities, the selection of the forum for dispute resolution is not a choice between inconsistent rights. Therefore defending and/or issuing proceedings in a particular forum in the face of an agreement providing for exclusive jurisdiction elsewhere does not amount to an election between inconsistent rights because such an action does not presuppose the non-existence of, and therefore extinguish the rights under, the exclusive jurisdiction clause.

21 Bogart submitted that her Honour's finding was correct. It was submitted that there was no direct authority on point and reliance should not be placed on the cases dealing with arbitration clauses which were not only different in nature and effect but also distinguishable on the facts.

22 The concept of election involves a deliberate choice between alternative and inconsistent rights.[6] In Sargent v ASL Developments Ltd,[7] Mason J observed:**

A person is said to have a right of election when events occur which enable him to exercise alternative and inconsistent rights, ie when he has the right to determine an estate or terminate a contract for breach of covenant or contract and the alternative right to insist on the continuation of the estate or the performance of the contract. It matters not whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach - in each instance the alternative right to insist on performance creates a right of election.[8]

23 Similarly, in Commonwealth v Verwayen ('Verwayen'),[9] Brennan J observed:

[e]lection consists in a choice between rights which the person making the election knows he possesses and which are alternative and inconsistent rights.

24 The selection of the method of dispute resolution is not necessarily between inconsistent rights because both may be enjoyed without necessarily extinguishing the other.[10] In ACD Tridon Inc v Tridon Australia ('Tridon'), Austin J said:

In the present case the defendants had a choice to insist on arbitration or to allow their disputes with Tridon to be determined curially. The making of that choice would not involve an election between inconsistent rights. It would simply involve selecting one or two procedures for the adjudication of the dispute.[11]

**25 Tridon concerned a dispute about company management and shares and involved an arbitration clause contained in a distribution agreement binding on the parties. Arbitration between the parties had been commenced in 2000, gone dormant in 2001, and was revived in 2002.

26 In Tridon, the plaintiff commenced proceedings in the Supreme Court of New South Wales on 29 November 2001. Austin J observed[12] that on the first return date on 4 December 2001, whilst the defendants consented to directions, a director of the first defendant also foreshadowed a stay application. At a subsequent interlocutory hearing on 29 January 2002, the first defendant and its director (who had since been joined as a third defendant) gave undertakings not to deal with the disputed shares. Austin J inferred that the purpose of the undertaking was "to forestall an application for interlocutory injunctions".[13] The plaintiff contended that in consenting to directions and giving the undertakings the defendants had accepted the appropriateness of the Court dealing with its claims.

27 Austin J rejected that contention. His Honour observed[14] that "the defendants did not, prior to the hearing of the stay applications, make any unequivocal or final choice between alternative procedures" within the meaning of election given by Brennan J (dissenting) in Verwayen.[15]

28 This reasoning has been applied in a number of subsequent decisions including the decision of the Victorian Court of Appeal in Zhang v Shanghai Wool ('Zhang')[16] and the decision of the Full Court of the Federal Court in Comandante Marine Corp v Pan Australian Shipping Pty Ltd ('Comandante').[17]

29 Comandante[18] concerned a company, Pan, which had commenced an in rem proceeding against a ship chartered by Comandante but subsequently insisted upon arbitration in London pursuant to an arbitration clause in the charterparty. The Full Court held that Pan had not made an election or waived its right to insist upon arbitration under the clause by commencing its in rem claim.

30 Allsop J (with whom Finn and Finkelstein JJ agreed) noted[19] that Comandante had from the outset asserted its rights under the arbitration clause and made clear that it would move the Court for a stay under the International Arbitration Act 1974 (Cth). Further, Allsop J noted[20] that:**

In the practice of Admiralty in Australia, a regular occurrence is the arrest of a ship under in rem proceedings without any further in personam proceeding occurring. That is, ships are regularly arrested for security for an arbitration award or foreign judgment.

**31 Further, his Honour noted that in the short life of the proceeding the subject of the appeal, the parties were focused on the question of statutory authority for the invocation of the authority of the Court under Part III of the Admiralty Act 1988 (Cth). "No occasion for Comandante ... arose to press an articulated claim in a statement of claim or otherwise. ... No occasion arose for Comandante ... to apply for a stay under s 29 of the Admiralty Act."[21] Comandante had also commenced arbitration in London.[22]

32 Thus, the Full Court found that Comandante had not made an election because:**

(a) it had from the outset expressed an intention to insist upon arbitration in London;

(b) its primary purpose was to obtain security for an arbitral award in London;

(c) it had not pressed an articulated claim for final relief in the Federal Court; and

(d) it had no early opportunity to apply for a stay of the proceedings.

**33 In Comandante, Allsop J[23] also approved the statement of Austin J in Tridon[24] that "the selection of the method of dispute resolution is not between inconsistent rights". As already mentioned, LCA relies on this statement and authority.

The principal difficulty is the absence of two mutually inconsistent rights, in the sense that exercise of one presupposes the non-existence of the other. I agree with Austin J in ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 at [58] that the selection of the method of dispute resolution is not between inconsistent rights. See also Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178 at [15] per Chernov JA, with whom Ashley JA and Bongiorno AJA agreed at [28] and [29], respectively. The notion of inconsistent rights was explained by Stephen J in Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634 at 641-2: the rights are inconsistent if neither may be enjoyed without the extinction of the other. For instance, when a contract is repudiated the innocent party either accepts the repudiation and ends the contract or chooses not to end the contract. Both cannot be done - the contract is either ended or on foot. A litigant who has bound itself to arbitrate and who commences so to do and who files court proceedings as well may be acting oppressively or abusively and may be in breach of contract, but has not elected between inconsistent rights. Here, the filing of the writ did not extinguish the rights under the arbitration agreement: it may or may not have constituted, or formed part of, an inconsistent course of conduct; it may or may not have amounted to a breach of contract; but it did not cause or presuppose the extinction of the rights under the arbitration agreement.[25]

**35 Accepting for present purposes that the choice in this case does relate to the method of dispute resolution, the authorities relied on do not support the proposition that there can never be an election. There was no election in each of the cases referred to because of the particular facts of each case. There is nothing in the judgments of Austin J and Allsop P to suggest that there can never be an election. As the facts in these cases demonstrate the nature and extent of the conduct of each party was not inconsistent with the later assertion that a different method of dispute resolution was appropriate. However, in a particular case, the facts might suggest that a party has proceeded to such an extent that such a later assertion will be inconsistent. This is such a case.

36 In the final analysis, the nature and extent of LCA's substantial, unconditional and unqualified involvement in this proceeding is such that it would be unrealistic and fanciful to suggest that both rights may be enjoyed together without one necessarily extinguishing the other. LCA made a choice and at some point it lost the ability to enjoy the other alternative.

37 In contrast to the cases relied on by LCA, in the present proceeding LCA:**

(a) took 10 months and 10 days, from the filing of Bogart's statement of claim, to raise for the first time the exclusive jurisdiction clause. This was in circumstances where it had pleaded the Specifications which included clause 10.4 in its AD & CC;

(b) filed a claim which sought final relief by way of damages for breach of contract and breaches of Australian consumer protection legislation;

(c) pressed a fully articulated defence and counterclaim, which it further amended;

(d) could have applied for a stay of these proceedings at any time between 16 November 2011 (the date of Bogart's statement of claim) and 1 November 2012 (the date it finally did so);

(e) did not foreshadow a stay application at the time it filed its unconditional notice of appearance on 20 November 2011 or its defence and counterclaim on 22 December 2011 or its AD & CC on 23 March 2012 or at any other time before 10 October 2012;

(f) has not merely defended against Bogart's debt claim but has commenced a proceeding by way of counterclaim seeking "damages in an amount which is four to five times the amount claimed by Bogart [and] could now arguably be considered to be the real commercial aggressor in this dispute";[26] and

(g) without reservation engaged in further interlocutory matters, including substantial discovery and obtaining an order for security for costs albeit by consent and up to and including mediation.

**38 In any event, in my opinion, a choice between courts is not a choice of method of dispute resolution. It is a choice between the curial determination of a claim and the grant of final relief in one court or another which, once made and sufficiently acted upon necessarily encompasses the extinguishment of any contractual right to insist upon curial determination and final relief in the court whose jurisdiction has not been engaged.

39 In Zhang,[27] the Court of Appeal only passingly referred to Tridon. Chernov JA did so only to make the point that, where the terms of s 7(2) of the International Arbitration Act 1974 (Cth) are made out, "the court is generally required to stay the proceeding and refer the parties to arbitration".[28] Zhang, like the other arbitration cases referred to by LCA, turns largely upon, or is entirely determined by its own facts which in the case of Zhang was the provisions of that Act.

41 Her Honour found that LCA, by its conduct, had waived its right to rely upon the exclusive jurisdiction clause, and that the abandonment of such a right can take place even though a party does not formally commit to a trial. Her Honour found the issue of the counterclaim by LCA as decisive, stating:

In my view, LCA's conduct in bringing its counterclaim against Bogart amounted to waiver in the stronger sense. It may well be that if LCA's conduct in this proceeding was merely defensive, it may not have been taken to have waived its rights to rely upon the exclusive jurisdiction clause at this stage of the proceeding. However, by filing a counterclaim in this proceeding, which relies upon the Specifications containing the exclusive jurisdiction clause as the basis of its entitlement to seek relief, and seeks damages in an amount which is four to five times the amount claimed by Bogart, LCA could now arguably be considered to be the real commercial aggressor in this dispute. It could have chosen to issue proceedings in France, either alone, or in tandem with Simone Perele, but for whatever reason, chose not to do so. There is no evidence that representatives of Simone Perele and/or LCA did not know of or forgot about the exclusive jurisdiction clause: indeed, the evidence of Mr Grodner is to the contrary.[29]

**42 LCA submitted that her Honour was in error essentially because her analysis and focus does not conform with the established authorities in terms of requiring a change in the parties' relationship, a commitment to a final hearing or the time for the exercise of the right having arrived.

43 On the facts of this case it was submitted by LCA there has been no waiver because:**

(a) unlike the facts in Verwayen, LCA at no time represented or stated that it would not rely on the exclusive jurisdiction clause which it has then resiled from at the final hearing;

(b) there has been no unequivocal abandonment of the right to apply for a stay based on the exclusive jurisdiction clause;[30]

(c) any steps that have occurred in this proceeding have not materially changed the relationship of the parties nor the position of the respondent;[31]

(d) the parties have not committed to a final hearing of the proceeding[32] nor has LCA conducted this litigation on any premise that the litigation would proceed to trial in this Court in the absence of a settlement;[33]

(e) the proceeding is not at any advanced stage with no mediation yet completed; and

(f) the time for exercising the right to apply for a stay based on the exclusive jurisdiction clause had not yet arrived.[34]

**44 LCA, it was further contended, made its application promptly after Simone Perele issued proceedings in France against Bogart, well before any mediation or a commitment to a final hearing and at no time expressly abandoned its right to seek a stay based on, or from otherwise relying on, the exclusive jurisdiction clause. In accordance with established principles, there was no waiver of any right to rely on the exclusive jurisdiction clause.

45 In my opinion her Honour's reasoning does not contain any error. In effect her Honour concluded that the conduct of LCA evinced an intentional and unequivocal abandonment of the right to apply for a stay based on the exclusive jurisdiction clause, and that this constituted a waiver. The conduct referred to was common ground. The legal question was whether the conduct went far enough so as to constitute such abandonment. Her Honour found that it did and there is no error in the approach or reasoning.

46 In Tridon, Austin J, applying the reasoning of Toohey J and Gaudron J in Verwayen, described two kinds of waiver:[35]**

(a) waiver in the stronger sense in that there has been an abandonment of a right implied from intentional acts with knowledge;

(b) waiver in the weaker sense in that it is a matter going to the court's discretion.

47 Austin J concluded that the conduct that had occurred in that proceeding did not give rise to waiver in either the stronger or weaker sense but observed:

I agree with counsel for Tridon that the Court would not permit a party to demand the enforcement of an arbitration clause at the end of the final hearing in court, either because of waiver in the strong sense or the adverse exercise of the Court's discretion. But that is not the present case. The difference is that by committing to a final hearing, the litigant has irrevocably committed to curial rather than arbitral determination of the dispute. Lesser conduct might also amount to an irrevocable abandonment of the right to arbitration, but wherever the line is drawn, the defendant's conduct here cannot be so categorised.[36]

48 In La Donna v Wolford ('La Donna'),[37] Whelan J had to consider whether a right to arbitrate had been waived by virtue of particular conduct in the proceeding. His Honour observed:

In this application, La Donna submitted that Wolford had abandoned its right to a stay by its failure to reserve its position or to foreshadow a stay application, by its conduct in contesting the injunction, by its conduct in acquiescing or agreeing to the directions, and by its participation in the mediation. It seems to me that this conduct was all relevantly similar to the kind of conduct considered by Austin J in Tridon, which he found to be insufficient to constitute an unequivocal abandonment. I am conscious of the distinction between Tridon and this case, in that in Tridon the relevant party had expressly reserved its position on a number of occasions, but I do not think that that circumstance alone makes a difference.

If all that was relied upon here were the steps taken on the interlocutory injunction, the directions and the mediation, I would find, as Austin J did, that there had been no abandonment, as a party could rationally take the view that it was desirable to participate in those steps even though one believed, and intended to persuade the Court at an appropriate time, that the dispute should be arbitrated.

The application for security for costs falls into an entirely different category, however. That application was based on the explicit premise that the litigation would proceed to trial in the absence of a settlement, and that the matters the subject of the proceeding would be determined by the Court.

Wolford sought an advantage, or at least sought to impose upon La Donna a burden, which was based upon the proposition that the litigation would proceed in this Court, that the defendant would take steps, and that the defendant would incur costs in taking those steps, in that litigation in this Court. This step was an unequivocal abandonment of the alternative course, being an application for a stay and a consequent arbitration.[38]

49 In BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd ('BHPB Freight'),[39] Finkelstein J held that a party had waived its right to rely on an arbitration clause because the party had commenced a cross-claim. His Honour said:

Cosco entered an unconditional appearance. Second, it did not raise the possibility of an arbitration until 23 April 2007, some eight and a half months after the action was commenced ... . [T]he various steps taken by Cosco in the proceeding indicate a willingness on its part to allow the claim to be resolved by the court. I refer in particular to filing a positive defence, giving and taking discovery and seeking and obtaining an order to cross-claim. These steps imposed a burden on BHPB consistent only with the premise that Cosco would defend the claim in court.[40]

50 In AED Oil Ltd v Puffin FPSO Ltd (No 2),[41] Judd J had to consider an argument that the right to arbitration had been waived. Judd J observed that:

Waiver must always be an intentional act with knowledge. But in the context of steps in litigation its application may depend upon the extent to which the relationship of the parties has changed as a consequence. In the present case AED Oil sought urgent injunctive relief. Such action was expressly authorised as an exception to the arbitration agreement to which Puffin and AED Services are party. It is true that AED Oil and AED Services both filed defences. That step in the proceeding does not, however, constitute a waiver of the right to arbitrate or amount to an election to submit to jurisdiction such as to render the arbitration agreement "inoperative". Puffin's position has not materially changed as a consequence.[42]

**51 The authorities referred to by LCA when properly analysed do not establish the principles contended for, or are readily distinguishable.

52 The critical question is whether there has been an unequivocal abandonment of a right. This requires an analysis of the conduct of the party in order to determine whether such conduct, viewed objectively, is consistent with the party giving up a right that may have otherwise been available.

53 In Tridon and Comandante it is clear that the right to arbitrate was not given up. In Tridon, while the party seeking to enforce an arbitration clause had taken some steps in the proceeding, such as entering an appearance, consenting to directions, giving undertakings in order to forestall threatened injunctive proceedings, and consenting to the joinder of related proceedings, these were very much preliminary matters. Further, the relevant party had frequently and expressly made reference to its intention to refer the disputes between the parties to arbitration, both in correspondence between the parties and in court. In Comandante, the plaintiff had issued proceedings in rem to arrest a ship in an Australian port almost immediately after the defendant had provided notice that it intended to refer disputes between the parties pursuant to a charter party agreement to arbitration in London. In effect, the purpose of bringing the in rem action was to obtain security for the plaintiff's claims in the forthcoming arbitration.

54 By contrast, in La Donna and BHPB Freight the conduct of the parties had reached such a stage in the litigation process that was only consistent with such party giving up a right to litigate (or arbitrate) elsewhere. It may be difficult to pinpoint the exact stage that must be reached before it can be said that there is such an intention. However, it is not necessary to do so. We know it when we see it and general statements of principle are not always helpful. Clearly LCA has reached that stage for the reasons given.

55 This case is not relevantly distinguishable from La Donna and BHPB Freight. The extent of the engagement in the litigation process by LCA goes further than Cosco in BHPB Freight because an application was made for security for costs. The fact that security for costs was requested and subsequently ordered (by consent) up to and including mediation and not trial, as in La Donna[43] is simply a matter of degree. This fact, in light of the extensive involvement in the litigation process by LCA, does not suggest that the right to have the dispute resolved elsewhere was not given up. It is illogical and fanciful to suggest that a party can complete all interlocutory steps, engage in a mediation and when the matter - which would otherwise be ready for trial - does not settle, contend in effect that no choice had been made (the election point) or in relation to waiver that the party had not given up a right.

56 I do not find it necessary or helpful in this case, given the specific and relevant authorities referred to, to refer to the general principles set out in Verwayen[44] and summarised by the plurality judgment of the High Court in Agricultural and Rural Finance Pty Ltd v Gardiner & Anor (Gardiner).[45] There is nothing in these cases that suggests that the approach or reasoning of her Honour was in error. In particular I do not accept that Gardiner so restricts the operation of the doctrine of waiver (and Verwayen) to specific aspects of the adjudicative process so that it is of limited application in this case. Although waiver clearly applies within the adjudicative process in relation to amendments and the like this is not its exclusive province and there is nothing in Verwayen or Gardiner to suggest otherwise.[46]

57 None of the specific matters raised by LCA as suggestive of error are made out. In particular and by reference to each matter raised as set out in paragraph 43 above:**

(a) No such representation or statement is relevant. Waiver can operate by conduct without such a specific statement or representation being necessary.

(b) This is the issue and it was open to her Honour to find that there had been an unequivocal abandonment.

(c) This is not a universal requirement of waiver but may be relevant in particular contexts such as Verwayen. However, to the extent relevant the relationship of the parties has changed.

(d) It is not necessary that the parties commit to a final hearing. It is correct that LCA has not committed to a final hearing in that no trial date has been allocated. However in Tridon, Austin J did note that:[47]

lesser conduct might also amount to an irrevocable abandonment of the right to arbitration.

Further, in my opinion the litigation has proceeded on the premise, and with full knowledge of the exclusive jurisdiction clause, that the case would proceed to trial in this Court if it did not settle at mediation.

(e) The proceeding is sufficiently advanced. Mediation has not taken place because of this application.

(f) The time for exercising its right to apply for a stay arrived some time ago. More precision is not required.

58 The ground of appeal is not made out. I do not propose to deal with the estoppel argument. It is not part of the Notice of Appeal and no Notice of Contention has been filed.

**59 Her Honour found that Victoria is not a clearly inappropriate forum and therefore there were insufficient grounds to permanently stay the proceeding on that basis.[48]

60 Her Honour's reasons for finding that Victoria was not a clearly inappropriate forum were that:**

(a) there were connecting factors in this dispute with regard to both Victoria and France, with Victoria possibly being the more appropriate forum;[49]

(b) this proceeding was issued first in time;[50]

(c) there is no compelling reason why the issues in dispute should be litigated in France; and

(d) it is the quality of the goods here that is in issue.[51]

**61 LCA accepted that the decision as to whether or not to grant a stay based on forum non conveniens involves the exercise of a discretion. Accordingly, LCA was required to show that the primary judge has taken into account some consideration that is irrelevant to the discretion, has failed to take into account some consideration which is relevant and necessary, has otherwise erred in principle or has reached a conclusion that is manifestly wrong or unjust.[52]

62 LCA submitted that her Honour failed to consider the following relevant and necessary matters:**

(a) the fact that the District Court of Nanterre is the only Court capable of providing for the resolution of all matters in dispute between Bogart and the Simone Perele group including the appellant;

(b) the true nature of the controversy is that there is an international dispute between Bogart and the Simone Perele group including LCA concerning the quality of Aura lingerie supplied by Bogart which is being conducted in two separate proceedings in France and Australia; and

(c) the fact there is no juridical advantage to Bogart in having its claims litigated here.

**63 LCA submitted that only the French proceeding can deal with the legal issues raised in that proceeding and those raised in this proceeding. The claims agitated by Bogart in this proceeding do not raise any issues concerning local legislation and there are no other juridical advantages to Bogart in having the matter determined in Victoria.

64 LCA submitted that her Honour erred in failing to consider these matters, that Victoria is clearly an inappropriate forum and that a permanent stay should be granted.

65 Her Honour adopted the summary of principles set out in the judgment of Robson J in Re Point of Pay Pty Ltd ('Re Point of Pay'):[53]**

(a) The court may stay proceedings commenced in the court on inappropriate forum grounds where the court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive in the sense of seriously and unfairly burdensome or prejudicial, or vexatious in the sense of productive of serious and unjustifiable trouble and harassment.

(b) The rationale for the exercise of the power to stay is the avoidance of injustice between parties in a particular case.

(c) The power of the court to stay proceedings is discretionary in the sense that it involves balancing various factors and assessing the weight to be given to the various factors.

(d) Relevant factors include:

(i) whether each country will recognise the others orders and decrees;

(ii) which forum can provide more effectively for the complete resolution of the matters involved in the parties' controversy;

(iii) the order in which the proceedings were instituted, the stage which have reached and the cost that the parties have incurred;

(iv) the connection of the parties and the subject matter of the dispute to each of the jurisdictions and to have regard to the issues on which relief might depend in those jurisdictions;

(v) the ability of the parties to participate in the respective proceedings on an equal footing;

(vi) the true nature and full extent of the issues involved in the controversy between the parties;

(vii) whether the local proceeding offers a juridical advantage over the proceedings in the other forum.

(e) Prima facie, it is vexatious and oppressive (in the strict sense of those terms) to commence second or subsequent actions in the courts of Australia if an action is already pending with respect to the matter in issue.

(f) It may sometimes be appropriate to grant a temporary stay of the local proceeding to allow the factual issues to be determined in another jurisdiction.

(g) Proceedings brought for the dominant purpose of preventing another party from pursuing remedies available in another country and not available in this country.

**66 Applying these principles, her Honour, in the exercise of her discretion declined to order a permanent stay for the reasons referred to.

67 In my opinion her Honour did not fail to consider the various matters referred to. A perusal of the Judgment suggests that all the matters referred to were taken into account in the exercise of her Honour's discretion.

68 Her Honour clearly identified and gave consideration to which forum could "provide more effectively for the complete resolution of the matters involved in the parties controversy".[54]

(a) acknowledged the commencement of proceedings in France against Bogart by LCA's parent, Simone Perele;[55]

(b) noted LCA's letter to Bogart, which stated that it wanted all outstanding issues between Simone Perele, Bogart and LCA to be litigated in France;[56]

(c) noted LCA's submission that there was "a substantial if not a complete overlap between the issues in this proceeding and the French proceeding";[57]

(d) noted LCA's submissions that the French court could determine all of the issues and that the risk of different courts making conflicting findings of fact is to be avoided;[58]

(e) quoted from the affidavit of Michael Rosenfeld sworn 1 November 2012 regarding the alleged reasons why all matters should be heard in France;[59]

(f) summarised the affidavit of Philippe Grodner, sworn 29 January 2013, including the statement that Simone Perele wished to avoid having to deal with concurrent litigation in different jurisdictions;[60]

(g) warned that she did not intend to extensively canvass in her Reasons all of the submissions and authorities referred to and reviewed by her;[61] and

(h) reiterated the entire thrust of LCA's contentions on this ground.[62]

**70 Her Honour was clearly cognisant of this material consideration and held on the facts that, in essence, LCA was not entitled to lump together the matters for trial in Australia and the matters for trial in France and treat them as one controversy. Nor was LCA entitled to treat itself as synonymous with its parent.

71 Further, her Honour noted[63] that (notwithstanding that the goods in dispute in Australia and France were produced from the same designs in the same factory), the goods that are the subject of the dispute between LCA and Bogart are those which are in Victoria, not in France, and that they "are not the same goods". Daly AsJ added, correctly, that 'LCA's claims regarding the quality and merchantability of the goods have to be tested with reference to the goods actually delivered here, not "the Aura line" generally'.

72 It may be inferred from her Honour's reference to the affidavit of Mr Jose Manuel Sevilla, sworn 5 December 2012 ('Mr Sevilla's affidavit'),[64] that Simone Perele had from the outset insisted that Bogart contract with LCA, and not Simone Perele, in relation to the goods to be produced for Australia, that her Honour considered it unfair for LCA to now treat LCA and Simone Perele as one party. The term "parties" in Robson J's summary of principles should not include Simone Perele only when it was convenient for LCA and Simone Perele to do so.

73 For the same reasons, LCA's contention that Daly AsJ failed to consider that "there is an international dispute between Bogart and the Simone Perele group including the appellant concerning the quality of Aura lingerie supplied ..." should also be rejected.

74 LCA's contention that the primary judge failed to consider "the fact that there is no juridical advantage to [Bogart] in having its claims litigated here" is easily dismissed. Her Honour quoted at length from Mr Sevilla's affidavit[65] concerning the connections with Australia and hence the advantages to continuing the proceedings in Australia. These are not merely practical or procedural advantages. Daly AsJ also noted that a number of witnesses were located in Hong Kong and Melbourne.[66]

75 Victoria is not a clearly inappropriate forum. Not even LCA considered it so when it filed a substantial proceeding in this jurisdiction by way of counterclaim seeking final relief. LCA's extremely late argument that Victoria is clearly inappropriate was correctly rejected by Daly AsJ, having regard to the range of relevant factors identified by Robson J, including the important fact that the proceeding in Victoria was first in time,[67] unlike the situation in Re Point of Pay, and not just those identified by LCA.

76 Accordingly, in my opinion her Honour did take into account all relevant matters and exercised her discretion accordingly. The ground is not made out.**

**77 LCA submitted that in finding that there were insufficient grounds to temporarily stay the proceeding,[68] her Honour applied the principles which apply to the Court's jurisdiction to stay a proceeding based on forum non conveniens as if they also applied to the Court's jurisdiction to control its own proceedings in granting a temporary stay.[69] In applying these principles, her Honour it was submitted fell into error.

78 In Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd ('Sterling Pharmaceuticals'),[70] Lockhart J identified the following relevant considerations to be taken into account in considering whether to temporarily stay or stand a matter over:**

• Which proceeding was commenced first.
• Whether the termination of one proceeding is likely to have a material effect on the other.
• The public interest.
• The undesirability of two courts competing to see which of them determines common facts first.
• Consideration of circumstances relating to witnesses.
• Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.
• The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.
• How far advanced the proceedings are in each court.
• The law should strive against permitting the multiplicity of proceedings in relation to similar issues.
• Generally balancing the advantages and disadvantages to each party.[71]

**79 It was submitted that instead of applying these principles, her Honour applied the principles relevant to forum non conveniens[72] as set out in Re Point of Pay.[73] Her Honour placed particular significance on the fact that this proceeding was issued first in time[74] and the fact that it is the quality of the goods supplied here that is in issue, not the quality of the Aura line generally.[75]

80 Her Honour, it was submitted, should have applied the principles set out in Sterling Pharmaceuticals.[76] If these correct principles had been applied, her Honour would have reasoned that:**

(a) only the French Court can effectively determine all issues in dispute between Bogart and the Simone Perele group;

(b) the termination of either the French proceeding or this proceeding would be likely to have a material practical effect on the conduct of litigation in the other proceeding because of the similar issues involved;

(c) there are two concurrent proceedings on foot at the moment involving similar issues between Bogart and the Simone Perele Group - there is a strong public interest in avoiding such multiplicity and it is undesirable in having two courts competing to see which of them determines common questions first;

(d) there is likely to be a substantial measure of duplication in the preparation for and the conduct of the final hearings of both proceedings in respect of similar issues including evidence from lay and expert witnesses;

(e) the quality issues concerned were common to the goods supplied to both France and Australia;

(f) there are substantially common witnesses in both proceedings; and

(g) both proceedings are not well advanced and there has been no mediation or trial fixed in either proceeding.

81 As Lockhart J observed in Sterling Pharmaceuticals:

Although the two Sterling companies and the two Boots companies are different entities, the reality is that each of the Sterling companies and each of the Boots companies comes from the same family ... . Doubtless the resolution of the issues in New Zealand or Australia will not give rise to issue estoppel in the other country because the parties are different. But it would be quite unreal to regard companies from the same international group as if they were totally independent of each other such that the success or reversal of one of them in proceedings in one country would not materially, as a practical matter, affect the conduct of their associates in another country where the proceedings involve similar issues.[77]

**82 It is well established that the Court has general power to control its own proceedings, and that power extends to enable it to order a temporary stay of proceedings in various circumstances including the case where proceedings are pending in another court and it is desirable that those proceedings should proceed to their conclusion first.[78]

83 In DA Technology Australia Pty Ltd v Discreet Logic Inc,[79] Gummow J observed:[80]**

The adjournment of the present proceeding in this fashion does not involve a permanent stay. It involves an approach akin to that followed in Sterling Pharmaceuticals Pty Ltd v The Boots Co (Aust) Pty Ltd (1992) 34 FCR 87. This means that what was laid down by the High Court in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 is not directly applicable.

**84 Whilst Daly AsJ did not address in any detail the distinct considerations applicable to the exercise of a discretion to grant or refuse a stay for forum non conveniens on the one hand, and to grant a temporary stay or stand a matter over on the other, there is nothing to suggest that her Honour confused the two or applied the former to the latter. On the contrary, her Honour specifically recognised this alternative ground.[81]

85 Her Honour cited Sterling Pharmaceuticals in the Judgment,[82] and was clearly aware of the two sets of principles. It is sufficiently clear from the Judgment that the relevant matters were taken into account. To the extent that a number of the relevant factors are common to both sets of principles (e.g. which proceeding was commenced first; the stage at which the proceeding has reached and any work wasted) it should be accepted that her Honour considered such factors notwithstanding that her Honour did not specifically say so. Reading the Judgment as a whole, it is clear that had Daly AsJ expressly dealt with the principles separately, her Honour's discretion would not have been exercised differently.

86 Accordingly, in my opinion there is no error in the exercise of her Honour's discretion in relation to this issue and the ground is not made out.**

87 For the reasons given none of the appeal grounds have been made out and the appeal should be dismissed.

[3] Judgment, [36]-[51]. Her Honour found it was unnecessary to consider the question of estoppel.

[6] See Commonwealth v Verwayen (1990) 170 CLR 394 (Verwayen), 421 (Brennan J); 472, (Toohey J); Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634, 646 (Stephen J); Agricultural and Rural v Gardiner [2008] HCA 57; [2008] 238 CLR 570, 588-589 (Gummow, Hayne and Kiefel JJ); see also Meagher RP; Heydon; and Leeming MJ, Meagher, Gummow and Lehane's Equity - Doctrines and Remedies (Butterworth, 4th ed, 2002), [39-025].

[7] [1974] HCA 40; (1974) 131 CLR 634.

[9] (1990) 170 CLR 394, 421; see also Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178, 186 (Chernov JA, with whom Ashley JA and Bongiorno AJA agreed).

[10] See ACD Tridon Inc v Tridon Australia [2002] NSWSC 896, [58] (Austin J): Comandante Marine v Pan Australia Shipping (2006) 57 FCR 45, 64 (Allsop J with whom Finkelstein and Finn JJ agreed).

[11] ACD Tridon Inc v Tridon Australia [2002] NSWSC 896, [58]. Further, Austin J had to consider evidence and submissions concerning a preference for matters to be litigated in New South Wales rather than the High Court of New Zealand, [72]-[73].

[15] Commonwealth v Verwayen (1990) 170 CLR 394, 421.

[16] [2006] VSCA 133; (2006) 201 FLR 178,187 (Chernov J with whom Ashley JA and Bongiorno AJA agreed).

[17] [2006] FCAFC 192; (2006) 157 FCR 45, 64 (Allsop J with whom Finkelstein and Finn JJ agreed).

[18] [2006] FCAFC 192; (2006) 157 FCR 45.

[24] Ibid, referring to ACD Tridon v Tridon Australia Pty Ltd [2002] NSWSC 896, [58].

[27] [2006] VSCA 133; (2006) 201 FLR 178.

[30] Reference was made to ACD Tridon v Tridon Australia Pty Ltd [2002] NSWSC 896, [87] (Austin J); La Donna Pty Ltd v Wolford [2005] VSC 359, [21]-[24] (Whelan J); Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133, [16]-[20].

[31] Reference was made to Commonwealth v Verwayen (1990) 170 CLR 394, 482-484 (Gaudron J); AED Oil Ltd v Puffin FPSO Ltd (No 2) [2009] VSC 534, [75]-[78] (Judd J).

[32] Reference was made to ACD Tridon v Tridon Australia Pty Ltd [2002] NSWSC 896,[90] (Austin J).

[33] At no time has the appellant sought or applied for security for costs up to trial; security for the costs up to mediation was agreed to cf La Donna Pty Ltd v Wolford [2005] VSC 359, [25]-[27]. See also Comandante Marine v Pan Australia Shipping (2006) 157 FCR 4, 73 (Allsop J with whom Finn and Finkelstein JJ agreed).

[34] Reference was made to Commonwealth v Verwayen (1990) 170 CLR 394, 427 (Brennan J) See also S.T.Y. (Afforestation) Pty Ltd v Atkinson [2006] VSCA 283, [23]); Dance with Mr D Ltd v Dirty Dancing Investments Pty Ltd [2009] NSWSC 332, [67].

[35] [2002] NSWSC 896, [59]-[62].

[37] [2005] VSC 359.

[38] Ibid [23]-[26]. Emphasis added.

[39] [2008] FCA 551; (2008) 168 FCR 169.

[40] Ibid [53]-[54]. Citations excluded, emphasis added.

[41] [2009] VSC 534.

[42] Ibid [78]. Emphasis added. The decision was reversed on appeal (AED Oil Ltd v Puffin FPSO Ltd [2010] VSCA 37; (2010) 27 VR 22) but this aspect of Judd J's decision was not disturbed, [38]-[39].

[43] Although security for costs was sought up to the conclusion of the trial, no security was ordered by Master Evans because Wolford was unable to establish the requisite threshold financial position of La Donna_._

[45] [2008] HCA 57; (2008) 238 CLR 570.

[46] The varied uses of the term 'waiver' and the different legal principles engaged in 11 identified categories of waiver are discussed in Jeremy Stoljar SC, 'The Categories of Waiver' (2013) 87 Australian Law Journal 482. Stoljar concludes (493) that '..[T]here is no overarching doctrine of waiver which unifies and explains every use of the term and this is not an area of the law susceptible to general or rigid propositions.'

[47] [2002] NSWSC 896, [90].

[52] Reference was made to House v R [1936] HCA 40; (1936) 55 CLR 499, 504-505 (Dixon, Evatt and McTiernan JJ); Ramton v Cassin (1995) 38 NSWLR 88, 91.

[53] [2012] VSC 380, [31]; cited in Judgment, [60].

[67] Re Point of Pay Pty Ltd [2012] VSC 380, [31](d)(iii); Judgment, [59], [61].

[70] [1992] FCA 72; (1992) 34 FCR 287.

[73] [2012] VSC 380, [31] (Robson J).

[76] [1992] FCA 72; (1992) 34 FCR 287, 294.

[78] Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287; Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd [1978] FCA 49; [1978] 35 FLR 346; DA Technology Australia Pty Ltd v Discreet Logic Inc [1994] FCA 958; Telesto Investments Ltd v UBS AG [2012] NSWSC 44.

[79] [1994] FCA 958.