What happened
Trevor John Schultz, a long-term resident of South Australia, worked for BHP Billiton Limited at its shipyard in Whyalla, South Australia, during two periods between 1957 and 1977. He alleged that exposure to asbestos during that employment caused him to develop asbestosis and asbestos-related pleural disease. In 2002 he commenced proceedings in the Dust Diseases Tribunal of New South Wales against BHP and four other corporations involved in the manufacture or supply of asbestos-containing products. The claims were framed in negligence, breach of contract and breach of statutory duty. Subject to proof of exposure and diagnosis, liability was not contested. The only live issues were damages (including a claim under s. 11A of the Dust Diseases Tribunal Act 1989 (NSW) to preserve the right to seek further damages should Mr Schultz later develop one of several specified cancers or mesotheliomas) and a possible limitation defence. Most lay witnesses and the majority of medical witnesses lived in South Australia. BHP, the appellant, promptly applied under s. 8 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) for the proceedings to be removed from the Tribunal into the Supreme Court of New South Wales and then, under s. 5 of the same Act, transferred to the Supreme Court of South Australia on the footing that South Australia was the more appropriate forum in the interests of justice.
Sully J dismissed the application. His Honour imported by reference the reasoning in an earlier, similar application he had decided (BHP Co Ltd v Zunic [2001] NSWSC 561; (2001) 22 NSWCCR 92). He listed nine factors said to bear on the interests of justice and concluded that they favoured retention in the Tribunal. Particular emphasis was placed on the fact that Mr Schultz had regularly invoked the Tribunal's jurisdiction, that the Tribunal possessed specialist expertise and procedural facilities (including those under ss. 25, 25A and 25B of the Dust Diseases Tribunal Act), and that s. 11A conferred "very unusual advantages" that should be kept open to him. Sully J also observed that a plaintiff's choice of forum "ought not lightly to be overridden". He did not refer to s. 30B of the Supreme Court Act 1935 (SA), which empowers the making of interim awards of damages, nor did he mention undertakings given by the defendants that they would not object to the use in the Supreme Court of South Australia of evidence that could have been admitted under the Tribunal's special provisions.
BHP appealed to the High Court by special leave. The Court (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ) allowed the appeal. The joint reasons of Gleeson CJ, McHugh and Heydon JJ (with which Gummow, Kirby, Hayne and Callinan JJ substantially agreed on the non-constitutional issues) held that Sully J's reasoning was affected by material error. The primary judge had approached the matter as though there were a presumption in favour of the plaintiff's choice and had treated the "advantages" of s. 11A as a factor weighing against transfer without balancing them against the South Australian equivalent or the defendants' undertakings. That approach was said to import into the statutory "interests of justice" test concepts derived from the Australian forum non conveniens doctrine that are foreign to the Cross-vesting Act. The Court declined to decide the constitutional questions that had been raised concerning the Tribunal's capacity to sit outside New South Wales and the interaction of full faith and credit with choice-of-law rules. Instead, it made orders removing the proceeding from the Tribunal and transferring it to the Supreme Court of South Australia. The appellant was ordered to pay the first respondent's costs in the High Court.
Why the court decided this way
The High Court began from the proposition that the Cross-vesting Act operates in a different juridical context from the common-law doctrine of forum non conveniens. The latter doctrine, as settled in Australia in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538, starts from the premise that a court whose jurisdiction has been regularly invoked has a duty to exercise it unless the selected forum is clearly inappropriate. That premise echoes the older English view expressed by Scott LJ in St Pierre v South American Stores (Gath & Chaves) Ltd [1936] 1 KB 382 that a plaintiff's right of access to the King's courts must not be lightly refused. The joint reasons observed that this approach had been abandoned in England in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, which asks simply whether there is another available and more appropriate forum.
The Cross-vesting Act, by contrast, was enacted as part of a national scheme whose preamble and structure evince a legislative policy that cases should be heard in the forum dictated by the interests of justice. As Street CJ had explained in the seminal Court of Appeal decision Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713-714, the legislation calls for a "nuts and bolts" management decision as to which court is the more appropriate. Once it appears that the interests of justice favour the other court, the first court "shall transfer" the proceeding. There is no residual discretion and no presumption that the plaintiff's choice should prevail. The joint reasons emphasised that the plaintiff's motives for choosing a particular court may be various and are not necessarily aligned with the interests of justice. Those interests are not disembodied; they include practical matters such as cost, efficiency, the location of witnesses and the governing law, but they are not coterminous with the interests of any one party.
Sully J's error lay in the cumulative weight he gave to two considerations. First, he treated the plaintiff's choice of forum as a matter not lightly to be overridden. That language was redolent of the forum non conveniens starting point and had no place in a s. 5 decision. Second, he regarded the "very unusual advantages" conferred by s. 11A of the Dust Diseases Tribunal Act as a factor that should be kept open to Mr Schultz. The joint reasons accepted that the substantive law governing the claim against BHP was the law of South Australia as the lex loci delicti (John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503). South Australian law included s. 30B of the Supreme Court Act 1935 (SA), which permits interim awards of damages. The two provisions adopt different solutions to the problem of progressive disease, but both modify the common-law "once and for all" rule. There was no warrant for a New South Wales judge to prefer one legislative policy over the other or to treat the possibility of a higher ultimate award under s. 11A as a consideration of justice weighing against transfer. Where the plaintiff's forensic advantage is matched by a commensurate disadvantage to the defendant, the scales are not tipped; the judge should withdraw from comparing the merits of the two States' legislation and look to more neutral factors.
The Court acknowledged that the Tribunal's specialist experience and procedural powers (as discussed in James Hardie & Coy Pty Ltd v Barry [2000] NSWCA 353; (2000) 50 NSWLR 357) are relevant because they promote the efficient and economical resolution of disputes and therefore serve the public interest. Those considerations had rightly been taken into account by Sully J. However, the defendants had given undertakings to afford Mr Schultz the benefit of equivalent provisions in South Australia. Those undertakings had not been mentioned in the reasons below and their existence altered the balance. The specialist nature of the Tribunal and the procedural facilities peculiar to it remained live matters on remitter, as did the claims against the other respondents and the cross-claims, which had received little attention in argument. Because the interests of justice did not point overwhelmingly in one direction, the appropriate course was to allow the appeal, set aside the dismissal, and order the removal and transfer.
Before and after state of the law
Prior to the enactment of the uniform Cross-vesting Acts in 1987, choice of forum within Australia was governed by the common-law doctrine of forum non conveniens. The Australian version, settled in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538, required a stay only where the local court was a "clearly inappropriate" forum. That test was deliberately stricter than the English test in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 because it reflected a judicial reluctance to decline to exercise a jurisdiction that had been regularly invoked. The earlier English approach in St Pierre v South American Stores (Gath & Chaves) Ltd [1936] 1 KB 382 had emphasised that a mere balance of convenience was insufficient to deprive a plaintiff of the advantages of an English court. Although that view had been abandoned in England, its echoes remained in the Australian emphasis on justification for refusing to exercise jurisdiction.
The Cross-vesting Acts were a legislative response to the inconvenience and expense caused by jurisdictional limitations and forum shopping. The preamble to the New South Wales Act expressly records the desirability of ensuring that proceedings are instituted and determined in the appropriate court and, if commenced in an inappropriate court, transferred to the appropriate one. As explained in Bankinvest AG v Seabrook (1988) 14 NSWLR 711, the legislation creates a national scheme in which each participating court is vested with the jurisdiction of the others and a statutory duty is imposed to transfer wherever the interests of justice so require. The Court of Appeal in that case and in later decisions such as James Hardie & Coy Pty Ltd v Barry [2000] NSWCA 353; (2000) 50 NSWLR 357 made clear that the inquiry is not whether the local court is clearly inappropriate but which court is the more appropriate. The present judgment reinforces and applies that understanding. It confirms that the "plaintiff's choice" factor that remains influential in forum non conveniens applications has no presumptive weight under the Cross-vesting Act. It also makes plain that differences in substantive or procedural law between States should not be converted into a preference for one forum unless they bear on the practical administration of justice in a way that cannot be accommodated by undertakings or other neutral factors.
After the decision, the law is clearer that cross-vesting applications are to be approached without the lens of the "clearly inappropriate" test. Judges must identify the natural forum by reference to connecting factors (place of the tort, residence of parties and witnesses, governing law) and practical considerations (cost, expedition, specialist expertise). Where a specialist tribunal such as the Dust Diseases Tribunal offers real efficiencies that benefit both sides, that remains a powerful factor, but it is not decisive if the defendant offers equivalent facilities elsewhere. The judgment also underscores that a judge should not embark upon a comparison of the relative justice of different States' legislation; to do so would be to prefer one legislature's policy over another's in a federation where each is competent within its sphere. The constitutional questions left open (the extraterritorial reach of State judicial power and the interaction of full faith and credit with choice-of-law rules) mean that those issues may still require resolution in a future case, but for day-to-day cross-vesting applications the practical test is now firmly established.
Key passages with plain-English translation
Paragraph [15]: "In the context of the Cross-vesting Act, one is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice."
Plain-English translation: The Cross-vesting Act does not start from the idea that once a case is filed in a court that court must hear it unless there is a very good reason to refuse. Instead the statute simply tells the judge to work out which court is the right one for the overall interests of justice and send the case there if necessary.
Paragraph [16]: "The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in s. 5 is not disembodied, or divorced from practical reality."
Plain-English translation: Justice in this context is not just about what helps the plaintiff or the defendant. It includes wider public interests and practical matters such as how quickly and cheaply the case can be heard. If the plaintiff is dying and only one court can give an early hearing, that practical reality may outweigh the defendant's preference for delay.
Paragraph [26]: "This, on the appellant's submission, is where the primary judge fell into error. Notwithstanding his general reference to a fair balancing of all the factors defining the relevant interests of justice, the exercise was weighted in favour of the plaintiff in two ways that worked in combination: first, the plaintiff's choice of forum was 'not lightly to be overridden'; secondly, the 'unusual advantages' conferred on a plaintiff by s. 11A were to be kept open."
Plain-English translation: The trial judge made two linked mistakes. He treated the plaintiff's choice of the Tribunal as something that should not easily be disturbed, and he treated the special damages rule in s. 11A as a reason to keep the case in New South Wales. That tilted the scales in the plaintiff's favour in a way the statute does not allow.
Paragraph [27]: "If, in a particular respect, the first respondent's assumed advantage and the appellant's assumed disadvantage are commensurate, the one simply being the converse of the other, then that does not advance the matter. The scales are inappropriately weighted in favour of a plaintiff if a possibility of what might ultimately turn out to be a higher total award of damages is treated as a consideration of justice which argues against transfer and if, in addition, the plaintiff's choice of venue is treated as a matter not lightly to be overridden."
Plain-English translation: When one side's gain is exactly the other side's loss, the judge should not count that as a reason to keep the case in the plaintiff's chosen court. Doing so would unfairly favour plaintiffs. A judge should also avoid deciding which State's law is "fairer"; that is not the judge's job in a federation.
Paragraph [29]: "For the reasons given by the Court of Appeal in James Hardie & Coy Pty Ltd v Barry, Sully J was right to attach importance to the procedural and evidentiary advantages offered to all parties in the Tribunal. In assessing the weight to be given to those advantages, however, his Honour may have overlooked the fact that all defendants undertook to give Mr Schultz the benefit of those provisions if the proceedings were transferred."
Plain-English translation: The Tribunal's special rules for using evidence from other cases and avoiding re-litigation of general issues are genuinely useful to everyone, not just plaintiffs. The trial judge was right to think they mattered, but he forgot that BHP had promised to allow the same rules to be used in South Australia.
What fact patterns trigger this precedent
The decision is engaged whenever a party applies under s. 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (or its equivalents) for the transfer of proceedings from one Australian superior court (or, via s. 8, from a tribunal such as the Dust Diseases Tribunal) to the Supreme Court of another State or Territory. It is particularly apt where the plaintiff's choice of forum is a specialist tribunal whose procedural or substantive rules differ from those of the court that would otherwise be the natural forum. Typical triggers include: the tort or breach of contract occurring in one State while proceedings are brought in another; the plaintiff and most witnesses residing in the State where the events happened; the substantive law being the lex loci delicti of that State; and the existence of a statutory regime in the chosen forum (such as s. 11A) that modifies the common-law once-and-for-all rule in a manner not mirrored in the natural forum. The precedent is also triggered where the primary judge has referred to the plaintiff's choice as not lightly to be overridden or has treated a forensic advantage unique to the chosen forum as a decisive factor without considering commensurate disadvantages to the defendant or undertakings offered by the defendant to replicate the advantage elsewhere. Because the legislation uses the mandatory "shall transfer" once the interests of justice point to the other court, the decision applies to any case in which the judge has approached the matter through the lens of the stricter forum non conveniens test rather than the neutral statutory inquiry. The presence of multiple defendants or cross-claims does not prevent transfer but requires the judge to consider whether the claims between all parties can be resolved most efficiently in one court.
How later courts have treated it
The judgment has been treated as authoritative on the proper construction of the "interests of justice" criterion in s. 5 of the Cross-vesting Act. It is routinely cited for the proposition that the statutory test does not carry the presumption, derived from forum non conveniens doctrine, that a plaintiff's choice of a regularly invoked jurisdiction should not lightly be overridden. Subsequent decisions have followed the "nuts and bolts" practical approach endorsed from Bankinvest AG v Seabrook (1988) 14 NSWLR 711 and have confirmed that differences in substantive law (including damages regimes) are to be applied by the transferee court rather than used as a reason to retain the proceeding in the plaintiff's chosen forum. The emphasis on neutral connecting factors (place of the tort, residence of witnesses, governing law) has been applied in personal injury, commercial and defamation cases alike. The clarification that a judge should not compare the relative merits of different States' legislation has prevented attempts to argue that one State's procedural advantages render its courts inherently more just. The Court's refusal to decide the constitutional questions has left open the extraterritorial reach of State judicial power, but lower courts have proceeded on the basis that the statutory test can be applied without resolving those issues. The decision has also been followed for the proposition that undertakings by a defendant to replicate the procedural advantages of a specialist tribunal are relevant and may tip the balance in favour of transfer. Overall, the judgment has reinforced the policy of the Cross-vesting Acts that forum shopping is to be minimised by a ruthless focus on the court best placed to do justice between the parties and to the public.
Still-open questions
The judgment expressly left undecided several important constitutional questions. First, whether a State Parliament may validly authorise its courts or tribunals to exercise adjudicative functions outside the State's geographical territory remains open. The reasons note that s. 13(7) of the Dust Diseases Tribunal Act 1989 (NSW), which permits the President to direct that a hearing take place outside New South Wales if the balance of cost and convenience so requires, raises that issue, but the Court found it unnecessary to resolve it because the appeal could be decided on non-constitutional grounds. Second, the interaction between the full faith and credit obligation in s. 118 of the Constitution and the common-law choice-of-law rule that the lex loci delicti governs substantive rights was not determined. The Court recorded the argument that it may be beyond the competence of one State to require its courts to apply any substantive law other than the lex loci delicti, but again declined to decide the point. Third, the precise characterisation of provisions such as s. 11A of the Dust Diseases Tribunal Act (provisional damages) and s. 30B of the Supreme Court Act 1935 (SA) (interim assessments) as substantive or procedural was left unresolved because, even on the assumption that s. 11A would apply in the Tribunal, it did not alter the balance of the interests of justice. Finally, the precise weight to be given to the specialist nature of the Dust Diseases Tribunal and its procedural facilities when the claims against multiple defendants and cross-claims have received little attention remains for future cases. These open questions mean that in a future matter where constitutional invalidity is squarely raised, or where the procedural advantages of the Tribunal cannot be replicated by undertakings, the Court may be required to return to the issues left undecided.