Ivanovski & Anor v Perdacher

1 The Plaintiffs have commenced proceedings in this Court by summons filed on 12 July 2006 claiming judgment for a debt said to arise on a contract for loan between the Plaintiffs and the Defendant. The contract is evidenced in writing, at least so the Plaintiffs contend, this writing being a loan agreement dated 18 August 2005. The loan agreement was said to have been executed in Mt Hagan in Papua New Guinea. The Defendant is a resident of Papua New Guinea. The Plaintiffs are New South Wales residents. 2 The Plaintiffs claim that the Defendant has breached the loan agreement in that the Defendant has not repaid the capital of the loan at the stipulated time and by the stipulated means, namely by payment into a bank account of the Plaintiffs in New South Wales. 3 The Defendant does not dispute that a New South Wales Court has jurisdiction to entertain the claim brought by the Plaintiffs against him. However, he says that proceedings in this Court should be stayed permanently because this Court is a clearly inappropriate Court for the trial of the proceedings - the appropriate Court clearly being a Papua New Guinean Court. 4 The parties have debated only one issue before me and that is whether or not, according to the law as stated in cases such as Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 and the multitude of cases which follow or discuss that decision, it has been demonstrated by the Defendant/Applicant that this Court is a clearly inappropriate forum for the trial of the proceedings. 5 The Defendant/Applicant points to the following factors as demonstrating that this Court is a clearly inappropriate forum:

the Defendant is resident in Papua New Guinea and the Plaintiffs visited Papua New Guinea on a regular basis for extensive periods of time, most particularly to conduct negotiations with the Defendant. 6 The Defendant also says that there was a variation to the loan agreement made between the parties in the presence of a witnesses, an employee of the Defendant, Ms Nancy Onglo and possibly her husband as well. The Defendant says that in order to establish the variation to the loan agreement he wishes to call as witnesses Ms Onglo and her husband. It would be oppressive, so he says, to require those persons to travel to New South Wales to give evidence. It is by no means clear, so the Defendant says, that those persons could give evidence by video conferencing arrangement between a New South Wales Court and somewhere in Papua New Guinea. 7 The Defendant also says that he wishes to call as witnesses two policemen who, he says, attended at his premises at the instigation of the Plaintiffs and made demands on him for payment of the debt as a result of which he was compelled to write a letter acknowledging indebtedness and promising a schedule of repayments. The Defendant says that it would be impossible to procure the attendance in Australia of those policemen to give evidence as to what the Defendant says was an attempt at extortion engineered by the Plaintiffs. 8 Finally, the Defendant says that it has not been demonstrated in any way by the evidence that the courts of Papua New Guinea are incapable of determining the issues presently in dispute between the parties. 9 For all of those reasons, the Defendant submits that it would be seriously and unfairly burdensome to permit the proceedings in this Court to continue, rather than leaving the Plaintiffs to prosecute their claim in the courts of Papua New Guinea. 10 The principles upon which the Court will stay proceedings permanently on the basis that the Court is a clearly inappropriate forum have been very frequently discussed and the law is established. The difficulty is in applying principle to the particular facts of a case. It has been acknowledged that decisions in this area are often really matters of ultimate impression in weighing the competing factors and in such an exercise judicial minds may differ. 11 In this case, the subject contract is silent as to the proper law. However, it appears clear that some document or other evidencing the agreement was made in Papua New Guinea and it seems also clear enough that the agreement was struck when the Plaintiffs were in Papua New Guinea in a meeting with the Defendant. 12 On the other hand, of course, it is said that performance of the contract was required to occur outside Papua New Guinea, by payments to the Plaintiffs' bank accounts in New South Wales. 13 As to the question of convenience of witnesses, it is clear that the Plaintiffs, residents of New South Wales, will themselves give evidence. On the other hand, the Defendant says that he will give evidence and that he wishes to call four other witnesses, namely, Ms Onglo, her husband and the two policemen. The Defendant and his proposed four witnesses are residents of Papua New Guinea. 14 Mr McLeod of Counsel, who appears for the Plaintiffs, has obtained instructions to give an undertaking to this Court, which will bind the Plaintiffs if they proceed with the case in this Court, to the effect that the letter of acknowledgement which the Defendant says was coerced from him by the two policemen at the instigation of the Plaintiffs will not form part of any evidence to be relied upon by the Plaintiffs. 15 As far as the Plaintiffs' case, therefore, is concerned there is no issue as to the effect of the letter of acknowledgement. Whether or not the letter was procured by coercion will be immaterial to the Plaintiffs' case. 16 However Mr Egan, who appears for the Defendant, says that even if this is the position adopted by the Plaintiffs as to the letter of acknowledgement, he will wish to call the two policemen as witnesses in an attack on the Plaintiffs' credit. The Defendant says that to demonstrate that the Plaintiffs are people capable of unlawfully procuring policemen to make extortion demands demonstrates they are not persons of credit generally, so that their account of disputed factual issues should not be believed. 17 In reply Mr McLeod says, rightly, in my opinion, that to call the evidence of the policemen on that issue alone would be to call evidence purely on the question of credit. That evidence would be inadmissible under s.102 of the Evidence Act 1995 (NSW). Mr Egan has not demonstrated that any of the quite limited exceptions to that rule would apply in the present case. He directly adopts the position that even if the letter of acknowledgement signed by the Defendant is not tendered in the Plaintiffs' case, the Defendant would still wish to call the policemen to demonstrate that the Plaintiffs are persons whose credibility is generally unacceptable. 18 As matters presently stand, if the matter was to be pursued in this Court, evidence of the policemen - and I should note they have not even been identified - would be rejected. They would not, therefore, be required as witnesses at all in the proceedings and there would be no need to procure their attendance in this Court. I think that I have to approach the issue on the basis of how the proceedings would run in this Court if they were allowed to continue here, as compared to how they would run in the Papua New Guinea Court if they were to proceed there. 19 As I have said, I do not see how the evidence of the two policemen would be admissible in this Court on the issues as now framed, so that I cannot see how their absence from this Court would prejudice the Defendant's case. 20 What one is then left with are the following considerations. The Plaintiffs are New South Wales residents, and the Defendant is a Papua New Guinea resident. That in itself is a fairly even-handed consideration, bearing in mind the relative ease of international travel these days, so that the scales are not weighed down on one side or the other by that circumstance alone. The contract is said to be made in Papua New Guinea but the proper law is not expressly made in Papua New Guinea, the contract is in English, and I am not aware of any material difference in the contract law of Papua New Guinea and the contract law of New South Wales. A consideration of the proper law of the contract likewise does not weigh down the scales in favour of one side or the other. 21 The only other consideration is the calling of the two witnesses the Defendant wishes to call, that is, Ms Onglo and, perhaps, her husband. It is said by the Defendant that to call those witnesses would be unduly oppressive if they were required to travel to New South Wales. It is said that there may be difficulties in obtaining visas for those people. I do not think that the evidence establishes that it will be impossible for those two witnesses to obtain visas. I do not think the evidence goes so far as to say that those persons have applied for visas and have been refused or that they have any grounds for believing that if they make application for visas the visas will be refused. 22 It really comes down to a question of expense and convenience. In my view, the necessity for two witnesses, in addition to the Defendant himself, to come to Australia to give evidence in the case does not alone make this Court a clearly inappropriate forum for the trial of the proceedings. I need not repeat the observations of many other Judges in this context to the effect that international travel is not the burden and expense it used to be. 23 The loan agreement itself does not refer to dealings in coffee, at least on its face. It simply requires payment of money at a certain time. As I understand the evidence to be adduced by the Defendant, there was no variation to the loan agreement which involved the Plaintiffs themselves in the Defendant's coffee business, so that the mechanisms or dealings of that business in themselves could not become an issue in the proceedings. No doubt the ability of the Defendant to collect and sell coffee grown in Papua New Guinea had an impact on his ability to repay the loan but, as the issues are presently outlined, it does not seem to me that the Defendant's difficulties in procuring funds for repayment, dependent as they obviously are on conditions in Papua New Guinea, themselves form issues in this case. 24 Accordingly, it seems to me that the Defendant has not succeeded in demonstrating that this Court is a clearly inappropriate forum for the determination of the proceedings and the application will be dismissed. 25 The Defendant will pay the Plaintiffs' costs of this application.
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