Garsec v His Majesty The Sultan of Brunei

Application of Laws Act (Brunei) Civil Procedure Act 2005 Constitution of Brunei Crimes Act 1900 (NSW LEGISLATION CITED : Evidence Act 1995 Fair Trading Act 1987 Foreign States Immunities Act 1985 (Cth) Prevention of Corruption Act 1984 Uniform Civil Procedure Rules Supreme Court Rules

Amwano v Parbery and Robinson (2005) 226 ALR 767 CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 Firth v John Mowlem & Co Ltd (1978) 3 All ER 331 James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554 John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503 McKain v R. W. Miller & Company (South Australia) Pty Limited (1991) 174 CLR 1 CASES CITED : Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 Regie Nationale Des Usines Renault SA v Zhang (2002) 210 CLR 491 Rothmans of Pall Mall (Overseas) Ltd. v Saudi Arabian Airlines Corporation [1981] 1 QB 368 Somportex Limited v Philadelphia Chewing Gum Corporation [1968] 3 All ER 26 The Commonwealth of Australia v Mewett (1997) 191 CLR 471 Voth v Manildra Flour Mills Pty Ltd (1989) 15 NSWLR 513 Voth v Manildra Flour Mills Proprietary Limited (1990) 171 CLR 538

Garsec Pty Limited (Plaintiff) PARTIES : His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah the Sultan and Yang Di-Pertuan of Brunei Darussalam (First Defendant) Pehin Orang Kaya Shah Bandarhj Awang Mohd Nawawi bin Pehin Orang Kaya Shah Bandar Hj Awang Mohd Taha (Second Defendant)

COUNSEL : N C Hutley SC / D R Pritchard / S J Free (Plaintiff) J T Gleeson SC / S A Kerr (First and Second Defendants)

SOLICITORS : Swabb Attorneys (Plaintiff) Clayton Utz Lawyers (First and Second Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

50183/06 GARSEC PTY LIMITED v HIS MAJESTY THE SULTAN OF BRUNEI JUDGMENT 1 HIS HONOUR: These proceedings concern an alleged agreement for the sale of an old, rare and beautiful manuscript copy of the Holy Koran. The plaintiff (Garsec) claims to be the owner of that work. It says that the first defendant, his Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam (to whom, for convenience and I hope without offence, I shall refer as the Sultan) agreed to buy it for the sum of USD 8 million. Garsec claims that the agreement for sale was made orally between its agent, Mr Sunny Chai, and the Sultan's agent, the second defendant (Pehin Nawawi). Garsec claims either an order for specific performance of the alleged contract for sale or damages for its breach.

2 The question for my decision is in substance whether the proceedings should be allowed to go forward in this State.

3 By an amended notice of motion, the date of filing of which is unclear, the defendants sought relief including the following: 1. The First and Second Defendants be granted leave to withdraw their Notice of Appearance filed on 12 September 2006. ….

5. In the alternative to the order sought in paragraph 4, an order that the proceedings be permanently stayed against the Second Defendant, pursuant to Section 67 of the Civil Procedure Act 2005 .

6. Further or in the alternative to the orders sought in paragraphs 2, 3, 4 and 5, pursuant to Rules 11.7(1) and 11.7(2)(a):

(a) a declaration that service of the Commercial List Summons outside of Australia was not authorised by the Rules; and

(b) to the extent necessary, an order pursuant to Rule 11.14 extending the time for filing this Notice of Motion under Rule 12.2; and

(c) an order setting aside the Commercial List Summons dated 16 November 2006 pursuant to Rule 12.11(1)(a); or

(d) in the alternative to the order sought in paragraph 6(c), an order setting aside service of the Commercial List Summons dated 16 November 2006 on the First and Second Defendants pursuant to Rule 12.11(1)(b);

(e) in the further alternative to the orders sought in paragraphs 6(c) and 6(d):

(i) a declaration that the court has no jurisdiction over the First and Second Defendants in respect of the subject-matter of the proceedings pursuant to Rule 12.11(1)(g); and

(ii) an order declining to exercise jurisdiction in the proceedings pursuant to Rule 12.11(1)(h).

7. Further or in the alternative to the orders sought in paragraphs 2, 3, 4, 5 and 6, pursuant to Rules 11.7(1) and 11.7(2)(b):

(a) an order declining to exercise jurisdiction in the proceedings pursuant to Rule 12.11(1)(h); or

(b) in the alternative to the order sought in paragraph 7(a), an order that the proceedings be permanently stayed pursuant to Rule 12.11(i) and/or Section 67 of the Civil Procedure Act 2005 .

8. The Plaintiff to pay the costs of the First and Second Defendants.

4 To the extent that prayers 5 and 7 refer to prayers 2, 3 or 4, the references are for present purposes superfluous.

5 Mr J S Gleeson SC, who appeared with Mr S A Kerr of counsel for the defendants, identified five questions that, he submitted, were relevant to the application. Summarised, they are as follows: (1) Whether the Sultan as head of a foreign State has immunity from this Court's jurisdiction under Australian law. (That question was not pressed on the hearing before me.)

(2) Whether this Court has jurisdiction over both defendants in accordance with its rules, neither defendant being resident within the jurisdiction.

(3) The closely related question, whether there has been proper and valid service of the proceedings.

(4) Whether, if the Court has jurisdiction and service was validly effected, the Court should decline to exercise that jurisdiction because the continuation of the proceedings would be vexatious or oppressive. This question was said to raise three separate issues: (a) The significance of immunities available (or arguably available) to the defendants pursuant to the Constitution of Brunei Darussalam (Brunei). (b) The significance of the circumstance that, as the defendants would have it, the matters relied upon by Garsec to prove its contract occurred in Brunei and were illegal under Bruneian law. (c) More conventional factors, relating to inconvenience and the like, if the Sultan and Pehin Nawawi were required to defend themselves in this Court (Mr Gleeson referred to these as " Voth " factors - see Voth v Manildra Flour Mills Proprietary Limited (1990) 171 CLR 538 - and I shall do likewise). (5) Whether, if proceedings did go forward in this Court, there were particular immunities or privileges under Australian law relevant to aspects of the case rather than the whole jurisdiction of the Court (for example, s 15 of the Evidence Act 1995, or s 39 of the Foreign States Immunities Act 1985 (Cth)). (As with the first question, Mr Gleeson accepted that this question - or group of issues - was not something with which I was concerned.)

6 The Sultan and Pehin Nawawi have filed an unconditional appearance. Thus, unless they are given leave to withdraw their appearance, question 2 and 3 must be answered in favour of Garsec (see UCPR, r 11.2 and Schedule 6(h)).

7 Garsec commenced proceedings by statement of claim filed on 19 June 2006. The defendants to the proceedings thus commenced were the Sultan, Pehin Nawawi, another Bruneian gentleman referred to in the proceedings as Mr Othman (said to be the Director of Transportation within the Ministry of Communications of Brunei) and Mr Chai.

8 Pehin Nawawi is the Private and Confidential Secretary to the Sultan. Garsec's case is that Pehin Nawawi was a trusted adviser to the Sultan, with express or alternatively implied authority to make and receive communications on behalf of the Sultan. The Sultan and Pehin Nawawi deny that Pehin Nawawi possessed such authority.

9 In the statement of claim, Mr Chai was nominated in substance as the agent of Pehin Nawawi. The contract on which Garsec sued was said to have been made by: (1) An offer made in April 2005 by Mr Michael McGurk, a director of Garsec, to Mr Chai, to be communicated by Mr Chai to Pehin Nawawi and through Pehin Nawawi to the Sultan; and

(2) An acceptance of that offer communicated on about 30 May 2005 by Mr Chai (with the authority of Pehin Nawawi and through him the Sultan) to Mr McGurk. That communication was said to have been effected by a telephone call made to Mr McGurk in Sydney.

10 Thus, Garsec alleged that the contract was made in this State.

11 Garsec pleaded an alternative case against Pehin Nawawi (and others) in the event that it were found that the Sultan was not bound to any contract. That was a case for misrepresentation, based on the communications to which I have referred. That was said to give rise to liability under ss 42 and 44 of the Fair Trading Act 1987.

12 I interrupt the narrative to note that the evidence of the defendants' solicitor, Mr David Cowling, is that he reviewed the statement of claim to which I have referred and formed the view based on it that the alleged contract was made in this State, so that this Court had jurisdiction to hear the case as pleaded. Acting on advice of senior and junior counsel and instructions (to which it will be necessary to return), he caused notices of appearance to be filed. They were served under cover of a letter of 13 September 2006 which stated, among other things:

"Please note that we are instructed to file the Notice of Appearance based on the allegations as pleaded in the Statement of Claim.

Our clients reserve their rights, including but not limited to their rights to challenge jurisdiction and, in the case of His Majesty, assert Sovereign immunity, should the statement of claim be amended or should it emerge that the relevant allegations in the Statement of Claim are unable to be substantiated." 13 The defendants moved to dismiss or strike out the statement of claim. Garsec sought leave to file an amended statement of claim. That amended statement of claim signalled a shift in the role attributed to Mr Chai. Paragraph 10 alleged that "[i]n April 2005 Garsec appointed Sunny Chai as its sole and exclusive agent to offer the Manuscript for sale to His Majesty."

14 The draft amended statement of claim alleged that Mr Chai did offer the Koran to Pehin Nawawi and through him to the Sultan; that Pehin Nawawi, with the authority of the Sultan, accepted the offer; and that Mr Chai communicated this acceptance to Mr McGurk by telephone call made on 30 May 2005 to Mr McGurk in Sydney. Thus, as before, it was alleged that the contract was one made in this State.

15 Bergin J heard the application to dismiss or strike out. Her Honour acceded to the application to strike out (but not to dismiss). She refused leave to Garsec to file the amended statement of claim. She did however give it leave to try again. She did so on terms that (among other things) Garsec file affidavits in support of the factual case that it sought to make out.

16 A Commercial List Summons was filed on 16 November 2006, together with a Commercial List Statement. There were also filed two affidavits: one by Mr McGurk and one by Rosihan Nazwar Yakub (Mr Rosihan). Mr Rosihan is an Indonesian resident and businessman, who was involved in some of the dealings upon which Garsec relies to prove its case.

17 The case "pleaded" in the Commercial List Statement continued to be one alleging that Mr Chai was the agent of Garsec, that Pehin Nawawi was the agent of the Sultan and that the relevant communications took place between them in April 2005. By paragraph 3 of Garsec's contentions, Mr Chai is said to have had authority to offer the Koran to the Sultan at a price not less than USD 8 million "and further to receive acceptance of any such offer on behalf of Garsec or, alternatively, communicate any acceptance of such an offer to Garsec."

18 Further, in paragraph 7, Garsec alleges that between 3 or 4 April and 27 April 2005, the Sultan through Pehin Nawawi "communicated His Majesty's acceptance of the Offer to Sunny Chai."

19 Thus, it is plain as a matter of pleading that: (1) Mr Chai could make an offer on behalf of Garsec which, if accepted, would lead to a contract binding Garsec;

(2) Mr Chai could also receive an acceptance of that offer so as to bind Garsec accordingly; and

(3) The contract was made (on Garsec's case) when Pehin Nawawi on behalf of the Sultan communicated to Mr Chai the Sultan's acceptance of the offer made by Mr Chai on behalf of Garsec.

20 Nonetheless, the Commercial List Statement asserts that on 27 April 2005, Mr Chai, in the exercise of his authority, communicated the acceptance of the offer to Garsec. The particulars state that:

"The communication was by telephone to Michael McGurk on behalf of Garsec in Sydney and from Sunny Chai in Brunei."

21 The Commercial List Statement does not assert explicitly that the contract said thereby to have been concluded was one made in this State. Nonetheless, at all times up until the hearing before me, it was Garsec's case that the contract was one made in this State (presumably because Mr Chai was said to have communicated the acceptance of the offer by telephone to Mr McGurk in Sydney) so that para (c)(i) of Schedule 6 to the Rules was satisfied.

22 Mr Cowling's affidavit exhibited a number of documents, including the various documents by which from time to time Garsec had sought to articulate its case in these proceedings, and the affidavits of Messrs McGurk and Rosihan to which I have referred in para [16] above. Those documents (and other communications of Garsec's case) were tendered "not as proof of truth of their contents but rather as evidence that documents in those terms have been filed, served or exchanged in the proceedings" (T8.45). In substance, then, they were tendered to prove what was from time to time the case that Garsec had notified to the defendants that it wished to advance. To the extent that I refer in these reasons to the affidavits of Messrs McGurk and Rosihan, I do so not for the purpose of making factual findings as to the matters asserted by them but for the purpose of making findings as to the factual basis of Garsec's case, to the extent that it can be gleaned from those affidavits.

23 Mr McGurk said in his affidavit that on about 27 April 2005 he had a telephone conversation with Mr Chai in which Mr Chai said among other things that "Pehin Nawawi has told me that he discussed [the price of USD 8 million] with His Majesty and that His Majesty has agreed at that price. Is that OK with you?". Mr McGurk says that he replied "yes".

24 Mr McGurk did not say where he was when this conversation took place. That was prudent, because at the hearing the defendants tendered Mr McGurk's passport. It showed that Mr McGurk was out of Australia over a range of dates that included 27 April 2005. Thus, if (contrary to the analysis that I have set out above) the contract was not concluded until the acceptance was communicated to Mr McGurk, that communication was not one made to Mr McGurk in Sydney. The particulars to paragraph 8 of the contentions cannot be supported. In the end, Mr N C Hutley SC (who appeared with Messrs D R Pritchard and S J Free of counsel for Garsec) did not attempt to support the particulars, or the proposition that the contract was one made in this State.

Should the defendants be given leave to withdraw their appearance?

25 UCPR r 12.5 provides that "[a]n active party may withdraw an appearance by leave of the court". The discretion in terms is unconfined; and its operation is confined only by the requirement that it be exercised judicially. Thus, decided cases cannot be taken as laying down any general (or even particular) rules, let alone as fettering or limiting the discretion.

26 The defendants submitted that there were four circumstances that justified the grant of leave: (1) There has been a material change in the case for which Garsec contends.

(2) The original appearance was served under cover of a letter notifying Garsec of a qualification or reservation of right.

(3) There would be no relevant prejudice, save for some relatively small amount of costs.

(4) The final articulation of Garsec's case through the Commercial List Statement "still contained a false statement material to whether there was jurisdiction … which has not been exposed as false until yesterday" (T148.10: a reference to the particulars to para 8 of the contentions). 27 Garsec submitted that leave should be denied. It referred to the deliberate decisions of the defendants: (1) To file a notice of appearance;

(2) To move to dismiss or strike out the statement of claim;

(3) To seek to attach conditions to the grant of leave to replead - those conditions not including any relevant reservation of rights; and

(4) After the Commercial List Statement and supporting affidavits had been filed, to move for summary dismissal.

28 All those steps, Garsec submitted, were taken upon advice. Mr Hutley SC submitted, expansively, that "these defendants couldn't have been better advised in New South Wales, probably in Australia … " - T129.15. He said "with respect to withdrawal [of] appearance there's not a "one free kick" principle in matters of that variety. … [Y]ou don't seek to obtain the tactical advantage and then change one's position." (T129.25).

29 The starting point is Mr Cowling's evidence, which I accept, that, on the basis of the statement of claim that had been served, he formed the view that the contract alleged by Garsec was one formed in New South Wales. That conclusion was correct, on the basis of the matters alleged. Thus, as Mr Cowling also concluded, on that basis this Court had jurisdiction to hear the matter.

30 Mr Cowling took advice from Mr T F Bathurst QC and Mr Kerr. Some of Mr Bathurst's advice was exposed in an e-mail from Ms Kristy Zander, a senior associate of Mr Cowling's firm Clayton Utz, to Drew and Napier LLC, the Sultan's solicitors in Singapore: "We consider that it is now necessary to file a Notice of Appearance, so that if Garsec does decide to discontinue the proceedings, His Majesty and Pehin Nawawi can make a claim for costs.

You will appreciate that, by filing a Notice of Appearance, His Majesty and Pehin Nawawi will have waived their rights to dispute jurisdiction or to assert Sovereign immunity. As discussed at our conference on 4 September 2006, we do not consider that, on the facts as presently pleaded, there are strong prospects of making an application to strike out the proceedings on these bases. You will recall that Mr Bathurst QC noted he would seek to make it a requirement of any leave granted to amend the Statement of Claim that His Majesty and Pehin Nawawi be allowed to withdraw their appearance."

31 Drew and Napier's reply enquired: "Can we clarify that in addition to withdrawal of entry of appearance, we would also seek to make it a condition that His Majesty and Pehin Nawawi reserve their right to challenge jurisdiction and assert Sovereign immunity (for His Majesty) if Garsec were allowed to re-plead? Subject to your confirmation that we would seek to have the foregoing requirements made conditions for amendment for the Statement of Claim, please proceed to file a Notice of Appearance … ."

32 Ms Zander replied as follows: "As we understood it, we agreed at our conference on 4 September 2006 that neither His Majesty nor Pehin Nawawi had grounds for challenging jurisdiction or asserting sovereign immunity on the current pleadings. We were further instructed that His Majesty and Pehin Nawawi wanted to file an application to strike out the Statement of Claim on the grounds that it discloses no cause of action against them. In order to make such an application, it is necessary to file a Notice of Appearance. This is slightly different to an application to challenge jurisdiction, which can be made without filing a Notice of Appearance.

Mr Bathurst QC suggested that if, as a result of the strike-out application, Garsec was given leave to amend the Statement of Claim, he would ask the Court to make that leave conditional on His Majesty and Pehin Nawawi having leave to withdraw their appearance (and thus leave the way open for them to challenge jurisdiction and/or sovereign immunity should the new pleading give rise to such a challenge). Of course, you will appreciate that the granting of such a condition is entirely discretionary, and we can provide no guarantee that the Court will make such an order.

In any event, practically speaking, it would be difficult for Garsec to make any pleading amendment which would have the effect of "reviving" a jurisdiction or sovereign immunity argument where one does not currently exist. We cannot readily envisage what new pleading could emerge that would fix the problems inherent in the existing pleading AND would fail to establish a jurisdictional link with Australia or a "commercial transaction" exception to sovereign immunity. Of course, it may be that after all of the evidence emerges, it becomes apparent that the facts establishing jurisdiction in Australia on the pleading cannot be made out. It will be difficult for His Majesty and Pehin Nawawi to then challenge jurisdiction.

We recommend that to provide His Majesty and Pehin Nawawi additional protection, we send SWAAB Attorneys a letter in the form of the attached when serving the Notice of Appearance. You will appreciate that the letter may only be of limited utility, but may assist your position later should an amended pleading and/or facts emerge that would enable His Majesty or Pehin Nawawi to challenge jurisdiction or assert sovereign immunity.

Having regard to the above, please provide us with your instructions to file the Notice of Appearance and serve it under cover of the attached draft letter, and do not hesitate to contact us should you wish to discuss the above."

33 It is apparent from this exchange of advice and instructions that: (1) The defendants must be taken to have been aware that, by filing an appearance, they would waive their rights to dispute jurisdiction;

(2) The defendants sought to gain a particular advantage by filing an appearance; and (3) Even if the appearance were served under cover of a reservation of an opportunity to seek leave to withdraw the appearance, the allowance of that opportunity would be "entirely discretionary", and there was no guarantee that the Court would so order.

34 In other words, the defendants must have appreciated that the submission to jurisdiction constituted by the filing of an unconditional notice of appearance would bind them, and might remain binding, even if Garsec obtained leave to replead.

35 As I have said, the Notice of Appearance was filed and served on 8 September 2006. I have referred in para [12] above to the relevant terms of the letter under cover of which it was served.

36 At this point, it is necessary to recall that the statement of claim alleged that Mr Chai was Pehin Nawawi's agent, and that the contract was made in Sydney when Mr Chai, with the authority of Pehin Nawawi and through him the Sultan, communicated to Mr McGurk in Sydney the Sultan's acceptance of the offer made by Mr McGurk to Mr Chai (as agent for Pehin Nawawi) for transmission through Pehin Nawawi to the Sultan.

37 The matter came before Bergin J on 4 and 5 October 2006. Her Honour concluded on the latter day that: the proceedings should not be dismissed, but that the statement of claim should be struck out; Garsec should not have leave to file the amended statement of claim then propounded; but Garsec should have general leave to "re-plead".

38 The defendants did not then seek that the condition to which Mr Bathurst had referred be attached to the grant of leave to replead. There is no explanation of that omission (if omission, rather than decision, is the correct term; and one would not readily ascribe omission to the eminent, capable and substantial legal team then representing the defendants).

39 Although, as I have now said twice, Bergin J did not give Garsec leave to file the amended statement of claim propounded on 5 October 2006, that document cannot be disregarded. Even a cursory reading of it (and I would be slow to conclude that it was in fact given only cursory consideration) would indicate a significant shift in Garsec's case: from Mr Chai as agent of Pehin Nawawi and through him the Sultan to Mr Chai as agent of Garsec; and with acceptance being communicated by the Sultan through Pehin Nawawi to Mr Chai in his capacity as Garsec's agent. Thus, although the amended statement of claim continued to allege that Mr Chai passed that communication on to Mr McGurk in Sydney, so as to lead to a concluded agreement made in New South Wales, it should have been apparent that there was at the least an argument available that the contract was concluded earlier, upon communication of acceptance to Mr Chai. (In this context, I note that when Mr Gleeson opened the defendants' case before me, that was the primary way that he put their submissions on jurisdiction; it was not until the defendants discovered, and proved, that Mr McGurk had not been in Australia on the date when the alleged communication to him was said to have taken place that Mr Gleeson, quite understandably, changed the focus of this aspect of his submissions.)

40 In any event, the Commercial List Summons and Statement were served on 16 November 2006. I have set out in paras [17] and [18] above the way that the Statement "pleaded" Garsec's case on the formation of the contract; and I have noted that (unlike its predecessors) it contained no explicit averment that the contract was one made in this State. Further, the affidavits that were served with the Commercial List Summons and Statement suggested - although to a large extent in a hearsay fashion - that the contract had indeed been concluded when Pehin Nawawi communicated acceptance of the offer to Mr Chai (in Brunei). On the case as pleaded, and as sought to be advanced through those affidavits, the communication of acceptance to Mr McGurk was a communication of the fact of prior acceptance - ie, a communication of the fact of making of the contract. It was not a communication whereby the contract was made.

41 Thus, had the defendants followed Mr Bathurst's advice, it would have been open to them to take advantage of the opportunity that, he advised, should have been reserved. Even without that reservation of opportunity, it would have been open to them, on the faith of the significant amendment to the hitherto pleaded case, to seek leave to withdraw their appearance.

42 But the defendants did not move to seek leave to withdraw their appearance. Instead, the next day after service, they filed a notice of motion for summary dismissal. That did not raise any issue as to jurisdiction. Nonetheless, according to Mr Cowling, they were aware that the Commercial List Statement and the affidavits of Messrs McGurk and Rosihan "did not disclose any relevant connection with New South Wales and that that was a matter that the Defendants wished to raise in an application to the Court" (affidavit sworn 18 January 2007, para 14).

43 Bergin J heard the application for summary dismissal on 23 November 2006. She dismissed it, and gave directions for the future conduct of the proceedings. The transcript on that occasion reveals the following: HUGHES: There is one other matter I should refer to and it is this: When this case came before your Honour in October it was based upon an assertion that the alleged contract had been made in Australia because on the case as then articulated there was a telephone call from Brunei, Mr Chai, to Mr McGurk in Sydney at which the contract is said to have been made, Mr Chai at that stage being alleged to be the agent of the defendants.

HUGHES: There has been a sea change, unexplained; no Chai.

On that evidence if there was a contract, it was made in Australia because the call from Chai was received in Sydney.

On the new case that they seek to articulate, the alleged contact was made in Brunei, that's subject to admissibility questions.

Now, if that's the new case we should have an opportunity - and we've articulated this in our submissions - of raising - it's not a jurisdictional argument, a forum non-convenience [sic] argument.

44 Mr Cowling said (para 15 of the same affidavit) that on this occasion "Mr Hughes … (QC, who then appeared for the defendants) informed the Court that the Defendants wished to reserve their rights in relation to potential applications regarding forum non conveniens and security for costs." The transcript of that occasion reveals the following (T19.32-.40): HUGHES: Now, your Honour has reserved to us the right--

HER HONOUR: I will do that formally. Any party may make any application they wish.

HUGHES: We ask that the matter be listed in tomorrow's directions list. We need to obtain instructions from Brunei, from Malaysia, about the forum non-convenience [sic] argument and the possible application for security for costs. 45 Her Honour's reasons, declining the application for summary dismissal, do not elucidate the point.

46 Again, there is no explanation of the omission (or decision; and I repeat what I have said on this topic in para [38] above) to refer to forum non conveniens and security for costs but not to leave to withdraw the notice of appearance.

47 The defendants filed yet another notice of motion, on 8 December 2005. That was the forebear of the amended notice of motion heard by me. That was the first intimation to the Court that the defendants sought to withdraw their notice of appearance. There is no explanation of the decision to seek that relief; whether or not it is significant, or merely coincidental, that the defendants' legal team was enhanced by the retainer of Mr Gleeson on 26 or 28 November 2006 (an agreed fact) is a question that cannot be resolved on the evidence before me.

48 This is not a case where the notice of appearance was filed without instructions, by mistake, without proper consideration or without advice. On the contrary, the proper conclusion is that it was filed after careful consideration, and with an appreciation of the risks.

49 In Rothmans of Pall Mall (Overseas) Ltd. v Saudi Arabian Airlines Corporation [1981] 1 QB 368, Mustill J at 377 referred to the equivalent English rule empowering the Court to give defendants leave to withdraw an unconditional appearance. His Lordship said that the discretion was not limited to cases of mistake, but was "completely unfettered", although it was "one which must be exercised with caution". His Lordship contrasted the position of mistake with one of "deliberate if misguided choice". His Lordship's characterisation of the discretion as being "completely unfettered" means that even in the latter case it would be open to the Court to give leave. It is, however, plain from the decision of the English Court of Appeal in Somportex Limited v Philadelphia Chewing Gum Corporation [1968] 3 All ER 26 that, in a case of deliberate choice, the applicant for leave might have a difficult task.

50 The exercise of the discretion is to be undertaken on the facts of the particular case, and is not to be constrained by statements of principle or dicta in decisions on similar facts (let alone, on different facts): see Firth v John Mowlem & Co Ltd (1978) 3 All ER 331. I note that in that case Waller LJ, who concurred in the result and gave short reasons, stated at 336 that the discretion is one to be exercised "sparingly", but was "a matter for the judge, acting judicially".

51 I do not think that this is an appropriate case for the grant of leave to withdraw the notice of appearance. I express no view as to whether it might have been appropriate to grant that leave had application been made (with reasonable promptness) after service of the Commercial List Statement on 16 November 2006. I express no view as to whether the prospects of grant of leave on such a hypothetical application would have been improved if (as Mr Bathurst had advised) the defendants had sought to reserve the opportunity to do so in the events that occurred. The application is to be decided by reference to what has happened, not by reference to what might have happened.

52 In this case, the principal factor telling against the grant of leave is that the defendants, with knowledge of all but one relevant matter, did not upon service of the Commercial List Summons, Statement and supporting affidavits, seek leave to withdraw their appearance. They sought, instead, summary judgment. They have not explained their reasons for doing so. Nor is it possible to divine those reasons from such evidence as there is. The defendants not having put their reasoning processes in evidence, I would infer that (as clearly is the case with the decision to file a notice of appearance in the first place) the decision to move for summary judgment rather than for leave to withdraw the appearance was one made deliberately, to seek to secure some perceived tactical advantage.

53 The application that the defendants did make cannot be characterised as something merely procedural (for example, seeking further particulars, or the production of documents, to enable them better to understand the case to be made, with a view to considering their options). It was a substantive application which, had it succeeded, would have brought the proceedings to an end. It was undertaken with knowledge of all but one of the relevant facts. Specifically, it was undertaken with knowledge that the pleaded case, as Mr Gleeson submitted in his opening (T10.36-12.32) was one of a contract made in Brunei by communication to Mr Chai, as Garsec's agent, in Brunei of the Sultan's alleged acceptance of the offer.

54 The exception (as to knowledge of relevant facts) to which I have referred in paras [52] and [53] above relates to the allegation of communication to Mr McGurk in Sydney on 27 April 2005 (paragraph 8 of the contentions). That, as particularised, has been shown to be wrong (or, as Mr Gleeson would have it, "false"). However, there is no suggestion that the incorrect assertion in paragraph 8 and its particulars had any effect whatsoever on the defendants or their legal advisers. On the contrary, the best evidence of their view of this is contained in Mr Gleeson's submission (T12.30) that "at the end of paragraph 7 [of the contentions] if these conditions were proved a contract was made in Brunei. Paragraph 8 is irrelevant to the formation of the contract".

55 Thus, whilst I do not condone what on the face of things seems to be a continuation (either deliberately or through mistake), of an incorrect allegation, I do not think that this is sufficient to outweigh the matters to which I have referred that tell against the grant of leave.

56 Nor, in my view, are any of the other matters on which Mr Gleeson relied (see para [26] above). The first of those - material change of case - may be accepted. But it was a material change flagged in part in the draft amended statement of claim. In that document, as I have noted more than once, Mr Chai changed from being the defendants' (or Pehin Nawawi's) agent to being Garsec's agent. On the case there sought to be advanced, it was at least arguable (as indeed Mr Gleeson argued, on the reformulation of that case in the Commercial List Statement) that the contract alleged by Garsec was concluded in Brunei when (as the draft amended statement of claim had it) Pehin Nawawi communicated to Mr Chai, as Garsec's agent, the Sultan's acceptance of Garsec's offer. Both the draft amended statement of claim and the Commercial List Statement alleged that Mr Chai passed that information on to Mr McGurk in Sydney, and that the contract was then made. But Mr Gleeson's analysis based on the Commercial List Statement was equally available based on the draft amended statement of claim. The "sea change" to which the defendants referred more than once had been well and truly signalled.

57 There is no evidence from the defendants that they failed to appreciate the significance of the "sea change". Having regard to the quantity and quality of their legal team and in the absence of compelling evidence, I would not, conclude that they did.

58 The second matter relates to the reservation in the letter under cover of which the notice of appearance was served. That does no more than confirm that the defendants were aware that they might have an opportunity to withdraw their notice of appearance if there were a substantial change in the pleaded case against them. The significant fact is not that they sought to reserve the right, but that, having sought to do so, they failed to seek to avail themselves of it when the opportunity presented itself. Instead, they made a substantive application, as defendants who had filed an appearance.

59 The third matter relates to prejudice. Garsec submitted that it had incurred substantial costs, and that it would lose the benefit of those costs if the defendants were now given leave to withdraw their appearance. The defendants submitted that the amount was relatively small, because the relevant period should be limited to that between 16 November 2006 (when the Commercial List Summons and Statement and accompanying affidavits were served) and 8 December 2006 (when they were notified that the defendants would seek leave to withdraw their appearance). In principle, I think, it is correct to say that the relevant period is limited, and that the relevant costs are not the whole of the costs incurred by Garsec. Nonetheless, on the evidence, those limited costs (including counsel's fees and other disbursements) are substantial: in round figures $42,000. The loss, or waste, of those costs is to my mind a significant detriment.

60 Garsec pointed also to detriment in that (based on the defendants' analysis of Bruneian law) it would be unable to prosecute its case in Brunei. That is a topic to which I shall return in considering the question of forum non conveniens, the consideration of which is necessitated by my conclusion that the defendants should not be given leave to withdraw their notice of appearance.

61 The defendants should not be given leave to withdraw their appearance. Thus, the Court has jurisdiction by virtue of para (h) of Schedule 6 to the Rules. It is unnecessary to consider the other paragraphs of Schedule 6 on which Garsec relied. Specifically, it is unnecessary to consider whether "the subject-matter of the proceedings … is property in New South Wales" (para (j)); or whether "the proceedings are for the … enforcement … of a contract, obligation or liability, affecting property in New South Wales" (para (m)). In each case, those submissions were founded on the fact that the Koran is and at all material times has been kept within the boundaries of this State (with the exception of two brief periods when it was taken to Singapore for inspection and anticipation of completion). Since that fact was agreed, and there are no other relevant facts, I do not propose to burden the reader with an analysis of those paragraphs of Schedule 6.

62 Again, in the case of Pehin Nawawi, Garsec relied on para (e): asserting that it had suffered damage in New South Wales. It is clear that Garsec has incurred at least some expense in New South Wales. Garsec's case was that the expense was incurred on the faith of the representations said to have been made by Pehin Nawawi. It will be necessary to deal with those submissions in the context of the forum non conveniens argument. I do so in the following section of these reasons.

63 As will be apparent from para [5] above, there were two distinct strands to the defendants' submissions on this point. The first related to relevant aspects of Bruneian law. The second related to the "Voth" factors. I shall deal with them separately.

11.7 Setting aside originating process served outside Australia (cf SCR Part 10, rule 6A)

(1) The Supreme Court may make an order of a kind referred to in rule 12.11 (Setting aside originating process etc) on application by a defendant on whom originating process is served outside Australia.

(2) Without limiting subrule (1), the Supreme Court may make an order under this rule:

(a) on the ground that the service of the originating process is not authorised by these rules, or

(b) on the ground that the court is an inappropriate forum for the trial of the proceedings.

65 Rule 12.11 provides as follows: 12.11 Setting aside originating process etc (cf SCR Part 11, rule 8)

(1) In any proceedings, the court may make any of the following orders on the application of a defendant: (a) an order setting aside the originating process, (b) an order setting aside the service of the originating process on the defendant, (c) an order declaring that the originating process has not been duly served on the defendant, (d) an order discharging: (i) any order giving leave to serve the originating process outside New South Wales, or (ii) any order confirming service of the originating process outside New South Wales, (e) an order discharging any order extending the validity for service of the originating process, (f) an order protecting or releasing: (i) property seized, or threatened with seizure, in the proceedings, or (ii) property subject to an order restraining its disposal or in relation to which such an order is sought, (g) an order declaring that the court has no jurisdiction over the defendant in respect of the subject-matter of the proceedings, (h) an order declining to exercise jurisdiction in the proceedings, (i) an order granting such other relief as the court thinks appropriate. (2) Such an order may not be made unless notice of motion to apply for the order is filed by the defendant within the time limited for the defendant to enter an appearance in the proceedings. (3) Notice of motion under subrule (2): (a) may be filed without entering an appearance, and (b) must bear a note stating the applicant's address for service. (4) The making of an application for an order under subrule (1) does not constitute submission to the jurisdiction of the court.

66 At common law, the test for forum non conveniens is the "clearly inappropriate forum test": see the judgment of the majority (Mason CJ, Deane, Dawson and Gaudron JJ) in Voth at 556-561. A resolution of that test requires the Court to consider the competing connexions of the respective forums with the subject-matter of the proceedings, taking due account of any legitimate personal or juridical advantage" that accrues to one party or another by the choice of forum: ibid at 571.

67 The Uniform Civil Procedure Rules provide in r 11.7 that this Court may make an order of a kind referred to in r 12.11 in circumstances including that this Court "is an inappropriate forum for the trial of the proceedings" (UCPR r 11.7(2)(b)). The orders referred to in r 12.11 include orders setting aside the originating process or the service of it on the defendant (UCPR r 12.11(1)(a), (b)). There was an equivalent power under the former Supreme Court Rules: SCR Pt 10 r 6A(1), Pt 11 r 8. Part 10 r 6A was not in force at the time of the application at first instance in Voth, so that its construction and application did not arise for consideration. See the judgment of Gleeson CJ in Voth v Manildra Flour Mills Pty Ltd (1989) 15 NSWLR 513 at 531.

68 Part 10 r 6A was considered in Regie Nationale Des Usines Renault SA v Zhang (2002) 210 CLR 491. The majority in that case (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) held at 503-504 that although the words "inappropriate forum" in SCR Pt 10 r 6A(2)(b) were not preceded by the word "clearly", nonetheless the "clearly inappropriate forum test" adopted in Voth applied to the discretion conferred by the rule. That was because "the same concepts and considerations necessarily inform the test of 'inappropriate forum' in [the rule] as inform the 'clearly inappropriate forum' test adopted in Voth. And because the ultimate consideration is the prevention of injustice, they inform it in the same way."

69 There is no difference of substance (if at all ) between the former rule Pt 10 r 6A and the present r 11.7 (nor between the former Pt 11 r 8 and the present r 12.11). Thus, the test to be applied is the "clearly inappropriate forum" test.

70 In Amwano v Parbery and Robinson (2005) 226 ALR 767, Finkelstein J considered an application for an order that the proceeding before him be stayed. The stay was sought on at least two bases. Of present relevance is his Honour's consideration of the forum non conveniens argument.

71 The issues raised by the proceedings required to consider Articles in the Constitution of Nauru and the provisions of his Honour a number of Nauruan statutes. Finkelstein J said at 771 [18] that a court of this country should be slow to interpret the Constitution or the statutes of a foreign country: "It need hardly be said that this court should only as a last resort, if at all, give meaning and content to the constitution of a foreign country. ... It is also undesirable, but not of course to the same extent as in the case of a constitution, for this court to interpret the statutes of a foreign country. This should only be done if the court cannot avoid the task."

72 I agree. The position is, perhaps, even stronger in the present case, because of the facility under Article 86 of The Constitution of Brunei for questions involving the interpretation or application of that Constitution to be referred to and decided by the Interpretation Tribunal.

73 In CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345, the majority (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) concluded at 401 that it was oppressive in the Voth sense to bring proceedings in this court to prevent the opposing party from pursuing remedies available in the courts of another country but not available in this country. In my view, the same applies where proceedings are brought here to prevent the other party from enjoying defences available in the courts of another country and not available in this country. That is particularly so where, for the reasons that I give in paras [98] to [103] below, the issues in these proceedings - in contract and in tort - have a much closer connection to Brunei than to New South Wales or Australia. Thus if, contrary to my conclusion in para [97] below, the immunities for which Article 84B of The Constitution of Brunei provides are matters of procedure and not substance, so that they would not avail the defendants if the proceedings went forward in this Court, that would be oppressive to the defendants in the Voth sense.

74 Expert evidence as to the content and application of aspects of Bruneian law was given by Muhammed Jamil Abas Bin Abdul'Ali James Chiew Siew Hua (the parties referred to him as and called him, "Mr Chiew" and I shall do likewise).

75 There are two separate court systems in Brunei. One group of courts is known as the Syariah Courts. Mr Chiew said that those courts deal specifically with matters involving or relating to the Islamic faith, marriage, divorce, succession and the like, and that the dispute between Garsec and the defendants does not fall within the jurisdiction of those courts.

76 Otherwise, Mr Chiew said, the system of laws in Brunei "is made up of statute law (both local and English statutes of general application), common law and principles of equity as applied in England prior to the 25th day of April 1951 ... administered by and in the civil courts" (first report dated 18 January 2007, section E para (i)(2)a(i)). There are four qualifications to the adoption of the statute law, common law and equitable jurisprudence of England (ibid, para (6)): (1) There are no conflicting provisions in Brunei statutes;

(2) The common law to be applied is that in force at the commencement of the Bruneian Application of Laws Act - 25 April 1951;

(3) Those principles of English law apply "so far as the circumstances of Brunei and of its inhabitants permit"; and

(4) They apply "subject to such qualifications as local circumstances and customs deem necessary".

77 The Constitution of Brunei is comprised in a document which, in its English translation, is known as the Constitution of Brunei Darussalam. That Constitution was made by Proclamation on 29 September 1959 and amended in 2004.

78 Under the Constitution (as I shall call it), the Sultan is Prime Minister and Head of the Armed Forces, supreme executive authority is vested in him, and executive authority is to be exercised by him (Article 4). I interpose to note that according to the uncontested evidence of Pehin Orang Kaya Pekerma Dewa Dato Seri Setia Lim Jock Seng ("Pehin Lim") who is the second Minister of Foreign Affairs and Trade for Brunei, the Sultan exercises his constitutional authorities personally and directly. It will be necessary to refer to more of Pehin Lin's evidence when dealing with the "Voth" issues.

79 Article 84B confers immunities on the Sultan in the following terms: 84b(1) His Majesty the Sultan and Yang Di-Pertuan can do no wrong in either his personal or any official capacity. His Majesty the Sultan and Yang Di-Pertuan shall not be liable to any proceedings whatsoever in any court in respect of anything done or omitted to have been done by him during or after his reign in either his personal or any official capacity.

(2) Any person acting on behalf, or under the authority, of His Majesty the Sultan and Yang Di-Pertuan shall not be liable to any proceedings whatsoever in any court in respect of anything done or omitted to have been done by him in his official capacity:

Provided that, subject to Article 84C, provision may be made by written law for the bringing of proceedings against the Government or any officer, servant or agent thereof, but not His Majesty the Sultan and Yang Di-Pertuan, in respect of wrongs committed in the course of carrying on the government of Brunei Darussalam.

(3) Any such law as is referred to in the proviso of Clause (2) shall not be deemed to be an amendment to this Constitution.

80 The declaration that the Sultan can do no wrong is found also in Article 25 of the Succession and Regency Proclamation, as is also the proviso to Article 84B(2).

81 Article 84C reads, relevantly, as follows: 84C(1) The remedy of judicial review is and shall not be available in Brunei Darussalam. (2) For the avoidance of doubt, there is and shall be no judicial review in any court of any act, decision, grant, revocation or suspension, or refusal or omission to do so, any exercise of or refusal or omission to exercise any power, authority or discretion by His Majesty the Sultan and Yang Di-Pertuan, or any party acting on his behalf or under his authority or in the performance of any public function, under the provisions of this Constitution or any written law or otherwise, including any question relating to compliance with any procedural requirement governing such act or decision.

82 Article 86 establishes an "Interpretation Tribunal" to resolve questions of interpretation and the like relating to the Constitution. It provides relevantly as follows: 86(1) His Majesty the Sultan and Yang Di-Pertuan may refer any question involving, arising from, relating to, or in connection with, the meaning, interpretation, purpose, construction, ambit or effect of any of the provisions of this Constitution to the Interpretation Tribunal established in accordance with Clause (7) for its determination.

(2) When any such question arises in any legal proceedings before any court, His Majesty the Sultan and Yang Di-Pertuan may direct that court to refer such question to the Interpretation Tribunal or that court shall refer such question to His Majesty the Sultan and Yang Di-Pertuan, with a submission that His Majesty the Sultan and Yang Di-Pertuan should refer that question to the Interpretation Tribunal, and upon receiving such reference His Majesty the Sultan and Yang Di-Pertuan may refer such question to the Interpretation Tribunal:

Provided that the court shall not refer such question which has already been decided by the Interpretation Tribunal.

(3) If His Majesty the Sultan and Yang Di-Pertuan does not refer such question to the Interpretation Tribunal, he shall cause the court by whom the reference thereof was made to be so informed, and the court shall thereupon proceed with the determination of the legal proceedings before it.

83 Garsec's case, as advanced through the affidavits to which I have referred, includes the proposition that the proceeds of sale would be split. Mr McGurk would say that he offered to Mr Chai to divide the proceeds: "10%… to an appropriate Muslim charity with the balance split three ways, one-third to you and your associates, one-third to my company and one-third to my associates". (The reference to "you and your associates" includes both Mr Chai and a Mr Yakub Othman, who was present at the discussion.) Mr McGurk would say further that this arrangement, as to the division of the proceeds of sale, was confirmed in a discussion with Mr Chai on about 27 April 2005. As to that evidence, Mr Chiew said: (1) The facts disclosed, if proved, would constitute an offence under section 6 of the Prevention of Corruption Act 1984 (which, in terms, closely resembles s 249 of the Crimes Act 1900 (NSW));

(2) In addition, those facts, if proved, would demonstrate a criminal conspiracy pursuant to s 120A of the Penal Code;

(3) Accordingly, the consideration for or object of the contract upon which Garsec sues (as disclosed by its evidence) would be held by the Courts of Brunei to be unlawful and void under s 24 of the Contracts Act (which provides relevantly that the consideration or object of an agreement is lawful unless forbidden by law, of such a nature that if permitted would defeat the provision of any law, or is immoral or opposed to public policy).

(4) In addition, the alleged contract (if made) would be voidable at the instance of the Sultan by s 168 of the Contracts Act, which renders void any contract made through an agent where the agent has dealt on his own account without the consent of the principal, or has dishonestly concealed material facts from the principal.

84 Mr Chiew said in his first report that Article 84B provided "2 distinct prerogatives". The first derives from the declaration that the Sultan can do no wrong. The second derives from the provision for immunity from suit.

85 In his first report, Mr Chiew concluded that the effect of both provisions of the Constitution and the Succession and Regency Proclamation, combined with applicable doctrines of the common law of England, was that the Sultan was both incapable of committing any wrong (civil or criminal) and clothed with absolute immunity from any legal proceedings. Thus, Mr Chiew concluded, if Garsec's claim were to be determined according to the law of Brunei, the Sultan "would enjoy immunity from suit in respect of the claims made in the Commercial List Statement, whether in his personal or official capacity" (first report, section E para 2 (b)(1)(I)).

86 Mr Chiew expressed the further opinion that under Bruneian law "there is no mechanism for the issuance of any writ or summons against the person of [the Sultan] and none for the enforcement of any judgment against him." (ibid, sub para (2)(iii)).

87 Dealing with the question of any immunity that Pehin Nawawi might enjoy, Mr Chiew said that a resolution of the question would depend on whether (assuming that he had been involved as the plaintiffs allege he was) he was acting in his official capacity.

88 In his second report made on 8 June 2007 (mistakenly dated 12 May 2007), Mr Chiew returned to the question of the character of the Sultan's immunities. He said in section E to para 2(b) 7.4(ii) that Article 84B(1) of the Constitution "is not a mere procedural bar, but a provision of substantive law which clearly states that [the Sultan] is not liable to any proceedings in any court in respect of anything done in his personal or official capacity; and this would cover acts, which might otherwise amount to a breach of contract." Mr Chiew based that construction on the second sentence of Article 84B(1).

89 Having considered various statutes and other materials, Mr Chiew reaffirmed this opinion in para 9.2 of the same section of his second report. He expanded on it slightly in section E para 2 (1) (4) by saying that although the provision at first glance might seem to be procedural, it had "the clear effect of taking away rights, that is, a bar or the loss of a right to sue, and is equivalent to a loss of the cause of action (a substantive right)."

90 Mr Chiew was cross-examined on this opinion, with a view to securing his acceptance of the proposition that the immunity was procedural only, and not substantive. He did not accept that proposition, but maintained the view set out in his report. For reasons that will become apparent, I do not think that it is necessary to deal with this attack on Mr Chiew's evidence. Nor is it necessary to consider whether I should entertain the attack having regard to the principles stated by Sheller JA (with whom Beazley and Stein JJA agreed) in James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554 at 573. His Honour said that a trial judge should rarely make findings about foreign law contrary to the opinion of an appropriately qualified expert unless the interpretation of the trial judge was supported by other expert opinion, or was shown to be inconsistent with high judicial authority in the country concerned. Secondly, his Honour said, an Australian court should be slow to make findings about the meaning and effect of a foreign statute contrary to the uncontradicted evidence of a relevant expert where that statute was "over many years applied daily in the country concerned".

91 The High Court of Australia dealt with the distinction between substance and procedure in John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503. The majority (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) dealt with the proposition at 542 [97] and following. At 543 [99], their Honours gave two alternative formulations of the test.

92 First, they said, matters affecting the existence, extent or enforceability of rights or duties appear on their face to be concerned with issues of substance rather than procedure. Alternatively, their Honours said (basing themselves on the dissenting judgment of Mason CJ in McKain v R. W. Miller & Company (South Australia) Pty. Limited (1991) 174 CLR 1 at 26-27), rules governing or regulating the mode or conduct of court proceedings were procedural and all other provisions or rules were substantive.

93 Their Honours expanded on this at 544 [100]. Having observed that the principles might require further elucidation in subsequent cases, they said that "the application of any limitation period, whether barring the remedy or extinguishing the right, would be taken to be a question of substance not procedure". Again, their Honours said, all questions concerning the kinds or amounts of damages that could be recovered were substantive.

94 In The Commonwealth of Australia v Mewett (1997) 191 CLR 471, Gummow and Kirby JJ dealt with the common law immunities of the Crown at 545. Their Honours referred to the two principles that the Crown could do no wrong, and was immune from suit (both of which are embodied in Article 84B(1) of The Constitution of Brunei). They said that the Crown could make a contract, and could break it; and the common law would accept that a contract had been made and broken so that a wrongful act had been committed. But, their Honours said, "the rights thereby engendered in the plaintiff were rendered imperfect by that further branch of the common law which provided the Crown with an immunity to action." What their Honours meant by "rendered imperfect" may be seen from a passage at 541, where they said that "[a] defendant may be said not to be liable because of an immunity from suit which the defendant is not prepared to waive."

95 If one were to apply a test relating to "the existence, extent or enforceability of the rights or duties of [a party] to an action" as the test for distinguishing between matters of substance and matters of procedure, an absolute immunity from suit could only be regarded as substantive. Likewise, if one were to apply an alternative test by asking whether such a statute was directed (merely) to governing or regulating the mode or conduct of court proceedings, the answer must be that it is not; and thus, that it is to be regarded as substantive. In my view, this approach is confirmed by the analysis of Gummow and Kirby JJ in Mewett: the defeat of a substantive right must be regarded as a matter of substance.

96 Mr Hutley stressed the statement of the majority in John Pfeiffer at 544 [100] that the principles "may require further elucidation". In my view, where (as is the present case) the facts fall squarely within the statement of principle, my duty is to apply that statement of principle and to leave the question of further elucidation to others.

97 Thus, I conclude that the immunities given by Article 84B of the Constitution of Brunei are to be regarded, under the law of New South Wales (and, to the extent relevant, the common law of Australia) as substantive and not procedural.

98 On the facts that emerged in the course of the hearing, it is clear that if a contract were made as alleged by Garsec, the proper law of that contract is the law of Brunei. On what I think is the preferable analysis both of Garsec's pleadings and of the evidence (or what might be the evidence if the matter went to trial) the contract was concluded in Brunei when, on Garsec's case, Pehin Nawawi conveyed to Mr Chai the Sultan's acceptance of Garsec's offer made through Mr Chai to Pehin Nawawi for communication to the Sultan. On the alternative view - that the communication of that acceptance (or, in my view, of the fact of the conclusion of the contract) to Mr McGurk has some dispositive significance - there is no evidence as to where Mr McGurk was when the communication took place. The pleaded position - that he was in New South Wales - has been shown to be incorrect. Garsec put no submissions, based on his passport, as to where I might infer he was when that communication took place.

99 The position is a little less clear in the case of the claim in tort against Pehin Nawawi. The tort alleged is negligent misstatement (see paras 15 to 24 of Garsec's Commercial List Statement). That is said to reflect a duty of care owed by Pehin Nawawi to Garsec and a breach of that duty of care when Pehin Nawawi (as Garsec alleges) communicated (to Mr Chai) the Sultan's acceptance of Garsec's offer. As I have said, those were all matters that arose or occurred in Brunei. Likewise, the reliance alleged by Garsec (entry in the contract - see para 23 of his contentions) is reliance that occurred in Brunei, because it entered into the contract (or purported to do so) in Brunei when Mr Chai (as Garsec alleges) received Pehin Nawawi's communication of the Sultan's acceptance.

100 The loss and damage particularised by Garsec includes the cost of flights, hotel expenses and meals, consultants' and authentication expenses and "miscellaneous" expenses. There is no evidence of where it was that those expenses were incurred. Some of them - for example, hotel and meal expenses - are likely to have been incurred outside Australia - in Indonesia, Singapore or Brunei, according to the occasion on which they were incurred. Others - for example, flight expenses - may have been incurred either in Australia or overseas (depending on where it was that the flight was booked and where it was that payment for the flight was made). At least some of the fees for consultants and authentication are likely to have been incurred in Australia. Garsec's evidence would be that it retained Associate Professor Ahmed Shboul of the University of Sydney to authenticate the Koran, and Henry Davis York to certify title.

101 There is a real question as to what expenses were incurred on the faith of the alleged communication of acceptance. The evidence would suggest that a number of those expenses were incurred before the purported communication on 27 April 2005.

102 Nonetheless, I would be prepared to infer, and in any event I proceed on the basis, that at least some of the expenses that would be recoverable as damages if the claim for negligent misstatement succeeded were incurred in Australia.

103 Even on that basis, I think that the other factors point to the conclusion that the place of the wrong was Brunei, being the place where the acts alleged to constitute the wrong occurred.

104 There thus arises for consideration the question of the law to be applied if the matter were to proceed in this Court. In my view, whether one considers the claim in contract against the Sultan or the claim in tort against Pehin Nawawi the answer is the same. The law to be applied is the law of Brunei.

105 The majority in John Pfeiffer said at 536 [75] "that reliance on the legal order in force in the law area in which people act or are exposed to risk of injury gives rise to expectations that should be protected." This, their Honours said, was "[t]he chief theoretical consideration in favour of applying the law of the place of commission of the tort to decide the substantive rights of the parties ... ."

106 In Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331, Gleeson CJ said at 342 [13] that "the objective [of choice of law rules] ought to be to have an Australian court decide a case in the same way as it would be decided in [the place of the wrong]". Gummow and Hayne JJ referred to the "no advantage" test at 363 [89] and following. "Their Honours said that "the [choice of law] rules adopted should, as far as possible, avoid parties being able to obtain advantages by litigating in an Australian forum which could not be obtained if the issue were to be litigated in the courts of the jurisdiction whose law is chosen as the governing law". Their Honours said at 363 [90] that once a question of choice of law is raised, "basic considerations of justice require that, as far as possible, the rights and obligations of the parties should be the same whether the dispute is litigated in the courts of [the] foreign jurisdiction or is determined in the Australian forum."

107 In circumstances where a resolution of Garsec's claim will require the application of the law of Brunei, and will thus (among other things) require consideration of the immunities afforded by Article 84B of The Constitution of Brunei, it is appropriate for the dispute to be dealt with in the Courts of Brunei. Among other things, to the extent that a resolution of the dispute will involve the interpretation of Article 84B, or will involve the application of Article 84B to whatever facts may be found, that is a task properly to be undertaken by the Courts of Brunei. It is a task that this Court (or, in my view, any foreign court) should be slow to entertain. This proposition is strengthened by the consideration of Article 86 of The Constitution of Brunei. The Interpretation Tribunal has been designated as the body to undertake the resolution of "any question involving, arising from, relating to, or in connection with, the meaning, interpretation, purpose, construction, ambit or effect of any of the provisions of" The Constitution. The issues of immunity under Article 84B fall within the description of issues that may be decided by the Interpretation Tribunal. The Sultan, the State and its citizens are entitled to have constitutional questions decided by the tribunal of their choice and not by a foreign court.

108 Garsec submitted that these considerations provided a strong reason for this Court to hear the dispute. It submitted that its suit must fail in Brunei as against the Sultan, and might fail as against Pehin Nawawi (depending upon the conclusion as to the capacity in which, if at all, he acted). I do not accept that submission. Firstly, on its case, Garsec chose to contract with the Sultan of Brunei. It must take him as it finds him: including, at least prima facie, with the benefit of sovereign immunity. Secondly, even if the dispute were heard in this Court, it would apply the substantive law of Brunei for the reasons that I have given. Thus, in any event, the Sultan should enjoy the benefit of his immunity and Pehin Nawawi might be entitled to claim the benefit of immunity.

109 Garsec submitted further that it should not be forced to litigate in the Courts of Brunei if (as was the effect of Mr Chiew's evidence) the formation of the contract on which it sued might involve illegality under the law of Brunei. I do not accept that submission. If Garsec chose to contract in Brunei on a basis that is illegal under Bruneian law, it should not be permitted to escape the consequences by bringing proceedings in this Court. In any event, as I have already said, this Court would apply Bruneian law. Thus, to the extent that there were illegality, the Civil consequences of that illegality would be determined by this Court applying the law of Brunei. The only "benefit" to Garsec would be a diminution in the risk of prosecution.

110 Thus, I do not accept this aspect of Garsec's submissions. Putting them in the traditional formulation, I do not accept those submissions as demonstrating that Garsec has a "legitimate juridical advantage" in having its action heard by this Court.

111 For those reasons alone, I would conclude that the proceedings in this Court should be stayed so that Garsec (should it choose to do so) should bring its case in the courts of the proper forum - Brunei.

112 Pehin Lim has held a variety of official posts in Brunei, commencing as an Assistant Curator in the Museums Department in 1969. Over the years, he has been summoned regularly by the Sultan to discuss, take instructions or report on various matters. As Second Minister of Foreign Affairs and Trade, Pehin Lim deals directly with the Sultan in relation to matters within his portfolio.

113 In paras 14 and 15 of his affidavit sworn 1 February 2007, Pehin Lim said: [14] The Sultan of an Islamic monarchy is seen as the source of all things. The Sultan sits at the apex of the Government and is supported by his officials who are appointed by and are directly answerable to him. This traditional system of government, which has been likened to the ancient European feudal systems, is the only form of government known to Brunei, and continues to exist to this day.

[15] Discussion and consultations, both formal and informal, between the Sultan and his officials and advisors have always been and continue to be an integral part of the administration of the country.

114 It is clear from Pehin Lim's evidence that the Sultan is what might be called a "hands on" ruler, who is very closely involved on a day-to-day basis not only with his various ministers, officials and advisers, but also with the people of Brunei. The Sultan is regularly accessible to the people of Brunei, who are able to come to him with their grievances and problems.

115 When the Sultan deals with his ministers, advisers and officials he does so face-to-face. He does not use the telephone or e-mail. Thus, when the Sultan travels (as from time to time he does) he is attended by large numbers of people. That is necessary for the workings of government to continue. During the Sultan's absences from Brunei, the role of Head of State is performed by a Deputy Sultan. However, Pehin Lim said, the Deputy Sultan will not take any decision on any matter of importance without consulting the Sultan.

116 There are many other aspects of the Sultan's involvement in the affairs of Brunei to which I have not referred. It is not necessary to recite them. The uncontested evidence of Pehin Lim made the following points (paras 46 to 53 of the same affidavit): (1) The Sultan's absence to prepare for and attend a hearing in this State would cause severe difficulties for the administration of Brunei; and if that were not compromised, preparation for the hearing would be. (2) In any event, during the Sultan's absence, many matters requiring his personal attention would be postponed.

(3) The Sultan would be attended by an entourage of probably 30 to 50 officials; and even then, it might be necessary for ministers, advisers or officials to be summoned from Brunei to this State to advise or assist the Sultan on a particular matter. (4) It would be necessary for the Sultan and his entourage to be accommodated "in a leading hotel". (5) The Sultan and his entourage would travel by the Sultan's private jet. The cost of that, together with the cost of accommodation for the Sultan and his entourage, would be very substantial. Additional costs would be incurred if others were summoned from Brunei to Australia to deal with particular matters. (6) It is likely that significant security arrangements would have to be put in place to ensure the safety of the Sultan and his entourage. That would involve (in this country) the Department of Foreign Affairs and Trade and the Australian Federal Police). 117 It is clear that the defendants will be put to very substantial inconvenience and expense if the proceedings are heard in this Court. It is clear in addition that the daily administration of affairs in Brunei will be disrupted, and that the people of Brunei will be deprived of contact with their ruler whilst he is overseas.

118 Of course, those things do happen from time to time. The Sultan does travel overseas. Pehin Lim said that the Sultan has travelled on occasion to London. As I understand it, he attends meetings of the Asia Pacific Economic Conference, and is likely to attend that Conference in Sydney in September 2007. In addition, I infer from the Sultan's full name, he has made the Haj to Mecca at least once. Thus, it is clear that the difficulties to which Pehin Lim referred (and without being critical, I would observe that Pehin Lim did not seek to understate those difficulties) can be overcome.

119 If the proceedings were to be heard in Brunei (assuming that there is a mechanism for the Courts of Brunei to hear a case against the Sultan), Mr McGurk would be required to travel there. There is no evidence that it would cause him particular inconvenience or expense; on the evidence, he has travelled many times to Brunei or nearby States.

120 The other witness who has sworn an affidavit for Garsec, Mr Rosihan, gives an address in Jakarta. That city is much closer to Brunei than it is to Sydney. There is no evidence of any difficulty in commuting from Jakarta to Brunei.

121 The other actors referred to in the affidavits of Messrs McGurk and Rosihan appear to be citizens of either Indonesia or Brunei; and Mr Chai is a citizen of Brunei. Thus, if any of those persons are to give evidence, it will be easier for them to do so in Brunei than in Sydney.

122 Mr Chiew's evidence of the legal system of Brunei is that it is modelled on the common law of England, and that it adopts many English statutes of general application. The relevant principles appear to be well defined, either through statutes or through the system of precedent. There was no suggestion that the legal system of Brunei was oppressive, unfair or capricious.

123 However, there are connections with this State. Garsec is incorporated here. As I have said, Mr McGurk lives here. The Koran that is the subject of the action is held here. At least some relevant communications were made to Mr McGurk here, and at least some of the expense characterised by Garsec as wasted was incurred here.

124 Garsec submitted that there were "significant and legitimate juridical advantages" available to it in maintaining the proceedings in this State (outline of submissions dated 11 May 2007, para 50). The first of those was said to be "that the proceedings are maintainable in New South Wales and in no other forum." This submission appears to accept that the only competing fora are New South Wales and Brunei, and that the Sultan at least would be immune from suit if the proceedings were brought in Brunei. Another legitimate juridical advantage to which Garsec pointed was the ability to prosecute its case in this Court "without fear of criminal prosecution" (ibid, para 53).

125 An analysis of the competing connections of Brunei and New South Wales to the subject matter of the proceedings requires the conclusion that this Court is a clearly inappropriate forum. That proposition would be incontestable but for Garsec's submissions as to legitimate juridical advantage. On analysis, however, those submissions do not detract from the conclusion.

126 The first submission relates to the unavailability of any alternative forum. There are at least two answers to this submission. The first is that the unavailability of an alternative forum was something expressly considered by the majority in Voth at 558-559. Their Honours accepted that circumstances might exist in which the local court might be a clearly inappropriate forum notwithstanding that there was no other tribunal in which the particular proceedings could be heard. They said: "The availability of relief in a foreign forum will always be a relevant factor in deciding whether or not the local forum is a clearly inappropriate one. But such a decision neither turns upon an assessment of the comparative procedural or other claims of the foreign forum nor requires the formation of subjective views about either the merits of that forum's legal system or the standards and impartiality of those who administer it. Indeed, circumstances could well exist in which the local court was a clearly inappropriate one notwithstanding that there was no other tribunal which was competent to entertain the particular proceedings: e.g., a claim for damages for injury in a road accident in circumstances where the courts of the only country with which the parties or the accident had any real connection were denied jurisdiction to entertain any such claim by reason of the express provisions of a general legislative scheme providing for limited benefits and compensation for all road accident victims from public funds."

127 Garsec submitted (outline, para 56) "that the majority had in mind a situation in which there was an alternative, non judicial system in place in a foreign jurisdiction for providing the plaintiff with a remedy in respect of the loss or damage that is the substance of the proceedings".

128 I do not think that the proposition should be read down in this way. To do so would in effect require attention to be given not to the suitability of the forum (which is what is involved in the "clearly inappropriate forum" test) but to the suitability of the competing forum (which is what is what is involved in the "clearly more appropriate forum" test, rejected by their Honours).

129 The second reason for rejecting the submission relates to the assumption on which it is founded. I have concluded that the immunities given by Article 84B of The Constitution of Brunei are substantive and not procedural. I have also concluded that the law of Brunei is the proper law of the alleged contract and the law applicable to the alleged tort. Thus, if the proceedings were heard in this Court, the substantive law of Brunei including those immunities (to the extent that they might be found to be applicable) would be applied. On that basis, the legitimate juridical advantage for which Garsec contends would disappear. On the other hand, if I am wrong, in both assumptions, then this Court might not give the Sultan the benefit of the immunities. For the reasons that I have given in para [73] above, that in itself would be oppressive. In other words, the counterpart of Garsec's legitimate juridical advantage is an equivalent juridical disadvantage to the Sultan and Pehin Nawawi. In those circumstances, I do not think that the alleged legitimate juridical advantage should be regarded as dispositive.

130 That leaves the risk of prosecution. I do not see why this should be taken into account. If Garsec chose to act in Brunei in a way that was illegal under the law of Brunei, this Court should not shelter it from the consequences by entertaining proceedings based on the consequences of those actions. In other words, I do not think that the concept of legitimate juridical advantage should be extended to protect a litigant from the consequences of the possibility that the actions in respect of which it sues were illegal in the place where those actions were committed.

131 In my view, what I have called the Voth factors (that is, factors other than those relating to the law of Brunei) lead to the conclusion that this Court is a clearly inappropriate forum.

132 I have concluded that the two separate ways in which this issue was argued each leads to the result that this Court is a clearly inappropriate forum for the action that Garsec has brought. In my view, that conclusion is strengthened if (as should be done) those two matters are considered in conjunction.

133 I therefore conclude that the proceedings should be stayed.

134 To recapitulate: the defendants should not be given leave to withdraw their notice of appearance, but the proceedings should be stayed because this Court is a clearly inappropriate forum.

135 Those conclusions do not dispose entirely of the notice of motion. However, since I propose to order a stay, the reality is that there is unlikely to be any further agitation of the defendants' notice of motion.

136 I make the following orders: (1) I dismiss the defendants' application for leave to withdraw their notice of appearance.

(2) Subject to orders (3) to (5), I order that the proceedings be stayed permanently.

(3) I reserve for further consideration the question of costs.

(4) I direct any party seeking an order for costs to give written notice thereof within 21 days of today's date to the party against whom a costs order is sought. Any such notification is to specify the costs order sought and in brief the grounds why it is sought. A copy of any such notification is to be delivered to my associate. (5) I reserve liberty to apply on 7 days' notice either in respect of costs or generally.

16/08/2007 - From Garsec to Chai - Paragraph(s) 39

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