LARS S.A. v Bone China Pty Ltd

Supreme Court of NSW|2015-06-02|Before: Sackar J, Brereton P, Mr J

Solicitors: Mr D Maxwell of Holman Webb Lawyers - Plaintiff Moisson Lawyers - Defendant/Cross-Claimants Hahm Lawyers - Second Cross-Defendant File Number(s): 2012/339587 Publication restriction: N/A

Judgment

The primary dispute between the parties has arisen on the basis of monies said by the plaintiff (LARS) to be due and unpaid as a consequence of goods sold and delivered to the defendant (Bone China). LARS is a manufacturer and seller of synthetic ligaments that are used in orthopaedic surgery. The second cross-defendant (Dr Laboureau) is the inventor of the material in question and an officer of LARS.
These reasons concern a cross-claim being made by the defendant against the plaintiff, who is the first cross-defendant, Mr Laboureau, and Mr Quint, who is the third cross-defendant. The cross-claim has proceeded through a number of iterations. Bone China is now seeking to file a Third Further Amended Statement of Cross-Claim (TFACC) which, among other things, removes Mr Timothy Gerber as the second cross-claimant.

Background facts

As mentioned above, the dispute between the parties has arisen on the basis of monies said by the plaintiff to be due and unpaid as a consequence of goods sold and delivered to the defendant.
The matters raised by the TFACC pertain to representations said to have been made by Dr Laboureau on behalf of LARS that LARS wanted Bone China to distribute LARS products (the relevant product is referred to as the "LARS Ligament") in China and to expand Bone China's business into China. These representations are said to have been made orally during the course of a number of telephone and Skype conversations in August and September 2010.
Dr Laboureau is a French national who lives in Cannes. The representations made by Dr Laboureau are particularised in the TFACC by reference to an affidavit of Mr Timothy Gerber of 4 April 2014. Dr Laboureau is said by Bone China to have made representations referred to as the "Ongoing Supply Representation and Promise" and further to have represented that he had authority to make the Ongoing Supply Representation and Promise on behalf of LARS.
The representations alleged to have been made by Dr Laboureau are said to have been made in France, Malaysia, China and the Maldives. It is common ground between the parties that the law applicable to various claims might be foreign law. Bone China accepts, citing Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 606, that in determining the proper law of its tortious claims against Dr Laboureau it is where Dr Laboureau acted, not where the consequences of his conduct were felt, which would usually be important,

Forum non conveniens

Dr Laboureau submits that there is no relevant connection between Australia and the subject matter of the cross-claim. He says that Bone China is claiming that a French company, LARS, through a French shareholder (Dr Laboureau) and a Dutch managing director (Mr Quint), made certain representations about the future supply from Europe to China of artificial ligaments for distribution by Bone China to medical practices in China.
Dr Laboureau says the only connection of any kind to Australia is that Bone China was incorporated in New South Wales in 2009 and Mr Gerber, the sole shareholder and director, now lives in Sydney. At the time the representations complained of were made, Mr Gerber apparently lived in China.
Dr Laboureau submits that the lex loci delicti of the representations referred to in the TFACC is China, France, Malaysia or the Maldives, depending upon the location of the parties at the time. He says that there is no tort alleged to have been committed by Dr Laboureau in Australia. In this context, given that the lex causae is the French, Chinese, Malaysian or Maldives law, Dr Laboureau submits that the Supreme Court of New South Wales is clearly an inappropriate forum for the determination of the matter.
Bone China points out, first, that it was not Bone China's decision to litigate in Australia; it was the choice of LARS, who elected to sue an Australian company in Australia for goods sold and delivered in Australia. Bone China submits that the application concerns a multiplicity of proceedings relating to the same substratum of facts and that thus there are public policy reasons a stay should be refused.
Furthermore, Bone China submits that the representation claim against LARS by Bone China will, forensically, involve Dr Laboureau at "front and centre". In those circumstances, Bone China says that it would be "senseless" to split the hearing of the cross-claim as it pertains to LARS from the cross-claim relating to Dr Laboureau.
The set-off claim made by Bone China relates to the alleged representations by LARS to Bone China through Dr Laboureau and Mr Quint. As a consequence of the claim to set-off, the allegations concerning the representations form an element of both Bone China's defence and Bone China's cross-claim.
Bone China submits that correspondence with LARS indicated that LARS will seek to deny that Dr Laboureau and Mr Quint acted within their actual, apparent or ostensible authority in making the alleged representations. As a consequence, Bone China has included discrete claims against Dr Laboureau and Mr Quint. In those circumstances, Bone China says that the cross-claim against Dr Laboureau will not require much additional hearing time.
Bone China submits that the Court will need to determine, inter alia, whether the alleged representations were made by Dr Laboureau and Mr Quint and whether those representations were made with the authority of LARS. Forensically, Bone China says that it is likely Dr Laboureau will need to be called as a witness, and hence the requirement he be in Australia to defend the claims against him will not impose additional inconvenience. Further, Bone China says, citing Colosseum Investment Holdings Pty Ltd v Vanguard Logistics Services Pty Ltd [2005] NSWSC 803 (Colosseum Investment v Vanguard) at [87] that the need for a witness to travel internationally is not regarded as the burden that it once was.
Furthermore, the evidence to be given on Bone China's behalf will be primarily that of Mr Gerber, who resides in New South Wales, and evidence drawn from the records of Bone China, which are kept in New South Wales.
Referring to the factors listed at [69] of Colloseum Investment v Vanguard (noted below at [50]), Bone China says that when the respective locations where the parties reside and carry out business are considered the result is a "scoreless draw". Bone China further submits that the relevant damage was suffered in New South Wales because Bone China is incorporated in New South Wales and its principal place of business is New South Wales.
Bone China submits that, having properly invoked the jurisdiction of this Court, it has a prima facie right to insist upon the exercise of this jurisdiction (though acknowledges that this factor ought not be given "undue weight"). Bone China says that splitting the claim brought against Dr Laboureau from the cross-claim against LARS will "bring about the spectre of duplicated proceedings in different jurisdictions".
Bone China says further that if it is forced to litigate against Dr Laboureau in a foreign court it risks inconsistent findings, which may result in its claims against LARS and Dr Laboureau failing for inconsistent reasons. It says there is also likely to be inconvenience to third parties, particularly to those witnesses on whom LARS proposes to rely.
Bone China accepts that New South Wales law may not be the applicable law of the contract, for example, but says that this is only one factor in the analysis to be undertaken as to whether New South Wales is a clearly inappropriate forum.

Inadequacies in the TFACC

Paragraph 31 of the TFACC pleads that Dr Laboureau knew, or ought to have known, certain matters. These allegations echo those made in the Second Further Amended Statement of Cross-Claim at 18A, (g), (h) and (j). Dr Laboureau argues that [31] is not adequately particularised.
In response, Bone China says the claim has been adequately particularised and refers to [14], [29] and [31]. Bone China has also offered to provide further particulars in the form annexed to its submissions on this motion.
Paragraphs 32 and 33 of the TFACC plead the existence of a duty of care between Dr Laboureau and Bone China in relation to a claim of pure economic loss. Dr Laboureau complains that the alleged duty of care is pleaded as a conclusion, and does not particularise the facts that would be necessary to support a duty of care in such circumstances. Dr Laboureau submits that there is nothing pleaded in the TFACC capable of constituting the necessary vulnerability in order to establish a duty of care in the context of a pure economic loss claim. As such, Dr Laboureau says that no reasonable cause of action is disclosed in the case for negligent misrepresentation.
This issue was dealt with by McDougall J at [11]-[14] of his judgment, as the pleading then stood. His Honour there observed that Dr Laboureau should not "be forced to try and work out what precisely is the case asserted against him, how it arises and how he might defend himself."
Bone China says that Dr Laboureau's submission elevates "vulnerability" to being a necessary element of a claim in negligent misrepresentation, and submits that this submission is contrary to law. Bone China accepts that "vulnerability" is an important consideration in the determination of a duty of care, but contests that it is a necessary element.
Although Bone China contends that the basis of the allegations made is clear, it is willing to provide further particulars to [33] in the form annexed to its submissions on the motion.
Dr Laboureau further complains that no cause of action in negligent misrepresentation can arise against Dr Laboureau because, first, the "representations" are, in reality, contractual promises and not in the nature of "advice, information and opinion." Second, Dr Laboureau submits that statements of intention are not actionable as misrepresentations and must be embodied as contractual promises to attract a remedy.
Bone China says that Dr Laboureau's argument "fundamentally misunderstands" the claim against Dr Laboureau, which it says may be simply stated. If LARS succeeds in establishing that Dr Laboureau acted without authority in making the relevant representations, then Bone China contends that Dr Laboureau is liable for loss arising on grounds of negligent misrepresentation or breach of warranty of authority.

Abandonment of the cross-claim by Mr Gerber

Dr Laboureau points out that he has maintained an objection to Mr Gerber being a cross-claimant since he filed submissions in support of the Notice of Motion, filed on 12 November 2014, which was heard by McDougall J on 6 March 2015. McDougall J noted in his judgment that Mr Gerber's loss was reflective of the company's loss and that no individual loss was pleaded. Dr Laboureau draws to the Court's attention the fact that, despite these comments, the Second Further Amended Statement of Cross-Claim pleaded Mr Gerber's loss using a series of "and/or" constructions whereby loss was alleged to have been incurred by "Bone China and/or Timothy Gerber." They note that now, Mr Gerber's claims having been twice struck out, Mr Gerber seeks to abandon his cross-claim entirely.
Dr Laboureau's concerns arise because in both of the previous motions Mr Gerber and Bone China were ordered to pay Dr Laboureau's costs. Dr Laboureau is concerned about the expense and inconvenience of pursuing both Bone China and Mr Gerber, particularly if there are issues concerning apportionment between Mr Gerber and Bone China. In these circumstances, Dr Laboureau submits that Mr Gerber should be ordered to pay the costs of the motion before McDougall J on 6 March 2015 and the costs of the motion before me on 23 April 2015 forthwith.
I do not consider that this matter bears upon the current application before the Court, although I accept it may have costs consequences.

Forum non conveniens

The stay application is not made on the motion of Dr Laboureau; rather, it is made in response to Bone China seeking leave from the Court to file the TFACC. The parties have proceeded on the basis that, as such, it is the common law test of "clearly inappropriate forum" to be applied. However, in this case, nothing turns upon whether the forum is "clearly" inappropriate or merely inappropriate. I am satisfied the result would be the same utilising either test (for discussion of the differences, see Studorp Ltd v Robinson [2012] NSWCA 382 at [60]-[62], ref. Uniform Civil Procedure Rules 2005 (NSW) r 11.7).
Section 67 of the Civil Procedure Act 2005 (NSW) provides as follows: 67 Stay of proceedings Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.
It is clear that proceedings may be stayed in circumstances where the forum is clearly an inappropriate one. The High Court (Mason CJ, Deane, Dawson and Gaudron JJ) in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (Voth) at 556-7 made the following remarks (footnotes omitted): Comparison between the "clearly inappropriate forum" test and the traditional test The content of the "clearly inappropriate forum" test is more expansive than the traditional test applied by Brennan J. The former test, unlike the latter, recognizes that in some situations the continuation of an action in the selected forum, though not amounting to vexation or oppression or an abuse of process in the strict sense, will amount to an injustice to the defendant when the bringing of the action in some other available and competent forum will not occasion an injustice to the plaintiff. Thus, in order to obtain a legitimate advantage, the plaintiff may commence an action in the selected forum though the subject-matter of the action and the parties have little connexion with that forum and the defendant may be put to great expense and inconvenience in contesting the action in that forum. On the application of traditional principles, a stay would be refused in such a case, notwithstanding that the selected forum was a clearly inappropriate forum. Since the traditional test is apt to produce such an extreme result, the "clearly inappropriate forum" test is to be preferred to the traditional test. In this respect, it is significant that the traditional test is no longer applied in the United Kingdom, New Zealand, Canada or the United States.
At 564, their Honours endorsed the articulation of the relevant principles found in the judgment of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 248: The power [to grant a stay] should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for the determination that their continuation would be oppressive and vexatious to him.
In Henry v Henry (1996) 185 CLR 571 the High Court (Brennan CJ at 575, Dawson, Gaudron, McHugh and Gummow JJ at 587) again accepted the "clearly inappropriate forum" test. The plurality considered (footnotes omitted): In Voth, this court adopted for Australia the test propounded by Deane J in Oceanic Sun, namely, that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of 'seriously and unfairly burdensome, prejudicial or damaging', or, vexatious, in the sense of 'productive of serious and unjustified trouble and harassment'.
In Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (Renault v Zhang), the plaintiff alleged injuries he had sustained had been caused by the negligent design and manufacture of a vehicle designed by the defendants. The defendants were foreign companies whose principal place of business was France. They had no offices or employees in Australia and the accident itself occurred in New Caledonia. The defendants sought a stay pursuant to Pt 10 r 6A of the Supreme Court Rules 1970 (NSW) which provided that service of a Statement of Claim could be set aside if the "Court is an inappropriate forum for the trial of the proceedings".
The defendants in that matter argued that the Supreme Court of New South Wales was an inappropriate forum for the trial of the proceedings. At [24]-[25] the plurality (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) considered (footnotes omitted): "Inappropriate forum"? 24 The expression "inappropriate forum" in par (b) of Pt 10, r 6A(2) is less emphatic than the expression "clearly inappropriate forum", the latter being the term adopted in Voth to determine whether an Australian court should decline to exercise its jurisdiction. The formulation in Voth, as Spigelman CJ pointed out in James Hardie Industries Pty Ltd v Grigor, was adopted in preference to the "clearly more appropriate forum" test favoured in the United Kingdom. Thus, it should at once be noted that a court is not an inappropriate forum merely because another is more appropriate. Because a court's power to stay proceedings is an aspect of its inherent or implied power to prevent its own processes being used to bring about injustice, the same concepts and considerations necessarily inform the test of "inappropriate forum" in par (b) of Pt 10, r 6A(2) 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.
They went on to say at [78] and [81] (citations omitted): 78 …Rather, it was the task of the Renault companies as applicants on the motion to demonstrate that a trial in New South Wales would be productive of injustice, because it would be oppressive in the sense of seriously and unfairly burdensome, prejudicial or damaging, or vexatious, in the sense of productive of serious and unjustified trouble and harassment. … 81 An Australian court cannot be a clearly inappropriate forum merely by virtue of the circumstance that the choice of law rules which apply in the forum require its courts to apply foreign law as the lex causae. In any event, reference has been made earlier in these reasons to the limited nature of the evidence led by the Renault companies respecting the substantive law applicable in New Caledonia to an action such as that brought by Mr Zhang.
In that case, it was held by Gleeson CJ, Gaudron, McHugh and Gummow JJ that the substantive law for the determination of rights and liabilities in relation to foreign torts was the lex loci delicti. Their Honours considered that the "double actionability" rule had no application in Australia to international torts.
In Puttick v Tenon Ltd (2008) 238 CLR 265 the High Court considered whether proceedings should be stayed on the basis of forum non conveniens where the plaintiff made allegations concerning injuries obtained as a consequence of exposure to asbestos in Belgium and Malaysia in the course of employment with a New Zealand company. Chief Justice French, Gummow, Hayne and Kiefel JJ emphasised, applying Voth, that showing that the alleged tort was, or might be, governed by New Zealand law did not demonstrate that the chosen forum was clearly inappropriate to try the action. Their Honours considered at [29] that (citations omitted): 29 It may readily be accepted that, as pointed out in Voth, the power to stay proceedings, regularly commenced, on inappropriate forum grounds, is exercised "in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process" and that "the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case". It may also be observed, as it was in Voth, that "oppressive" and "vexatious" are terms that have been understood in different senses. But in Voth, these differences were examined in the course of considering what test should be adopted for deciding whether proceedings should be stayed on inappropriate forum grounds. What was said in Voth about those differences casts no doubt on the content of the test ultimately stated in Voth. In particular, contrary to Tenon's submissions, it provides no "scope for tension and confusion" about the content or application of the clearly inappropriate forum test.
In Studorp Ltd v Robinson [2012] NSWCA 382 Hoeben JA, with whom Allsop P (as he then was) and Meagher JA agreed, said at [60]-[62]: 60 Before proceeding further, it is necessary to have regard to the nature of the test which has to be applied. With one qualification, the issues in this case turn on the application to the facts of the well established test for the grant of a stay of proceedings on forum non conveniens grounds determined by the High Court in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; 171 CLR 538 and affirmed subsequently, (Henry v Henry [1996] HCA 51; 185 CLR 571; Regie National des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491; BHP Billiton Ltd v Schultz [2004] HCA 61; 221 CLR 400; Puttick v Tenon Limited (formerly called Fletcher Challenge Forests Limited) [2008] HCA 54; 238 CLR 265). 61 The principle in Voth was conveniently restated by the plurality (French CJ, Gummow, Hayne and Kiefel JJ) in Puttick as follows: "27 In Voth v Manildra Flour Mills Pty Ltd the Court held that a defendant will ordinarily be entitled to a permanent stay of proceedings instituted against it and regularly served upon it within the jurisdiction, if the defendant persuades the local court that, having regard to the circumstances of the particular case, and the availability of an alternative foreign forum to whose jurisdiction the defendant is amenable, the local court is a clearly inappropriate forum for determination of the dispute. The reasons of the plurality in Voth pointed out that the focus must be "upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum". " 62 The qualification to which I referred emerges from the wording of 11.7 UCPR which refers to granting a stay "on the ground that the court is an inappropriate forum for the trial of the proceedings". The formulation of the test in the rule does not use the word "clearly" to qualify it. The significance of the absence of the word "clearly" is not obvious, although as a matter of simple English, the phrase "an inappropriate forum" is not as emphatic as "a clearly inappropriate forum". In this case nothing appears to turn on the distinction.
In Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (Spiliada) Lord Goff of Chieveley identified at 478 that matters of convenience and expense (such as the availability of witnesses) will be considered, as will the law governing the relevant transaction and the places where the parties reside or carry on their businesses. At 482-4 Lord Goff considered the treatment of a "legitimate personal or juridical advantage" and concluded that a consideration of such an advantage must be undertaken with an eye to the fundamental principles of whether the matter may be tried "suitably for the interests of all the parties and for the ends of justice". The position in Australia has, of course, diverged from that in the United Kingdom as a consequence of Voth and the adoption of the "clearly inappropriate forum" test, but these remarks are still apposite to the question of whether a forum is appropriate.
In Gilmore v Gilmore (1993) 110 FLR 311; [1993] FLC 92-353, Fogarty, Lindemayer and Finn JJ considered whether proceedings should be stayed in Australia where a wife had instituted proceedings for a property settlement in Australia and her husband had initiated similar proceedings in New Zealand. At 317-18 Fogarty J considered the question of juridical advantage, and having concluded that there were only marginal differences between the approach to this issue in Voth and Spiliada, observed that the High Court in Voth had said that relevant "connecting factors" and a "legitimate personal or juridical advantage" may provide valuable assistance in determining whether a forum is clearly in appropriate.
In Murakami v Wiryadi [2010] NSWCA 7, Spigelman CJ considered that the applicability of foreign (in that case Indonesian) law was a factor that needed to be considered in determining whether Australia is a "clearly inappropriate forum". His Honour said at [63]-[66]: 63 The applicability of Indonesian law is a factor which must be considered in determining whether Australia is a clearly inappropriate forum. The Voth test will apply differently if the substantive law to be applied is that of New South Wales, rather than that of Indonesia. Accordingly, the choice of law issues must be addressed. 64 It is not, in my opinion, necessary to finally resolve the two choice of law issues referred to at [59] above. However, the strength of the respective submissions in this regard is relevant to the application of the Voth test. The appellant's submission that all it needs to show is an arguable case on either question understates the position. 65 As I will discuss below, the position in Australian law on the two questions is not entirely clear. It is not, in my opinion, appropriate to resolve such questions in the course of an application for a stay on forum non conveniens grounds. Such an application is interlocutory and should be determined in a comparatively expeditious manner. There may be cases where it is possible to resolve choice of law issues in that way. This is not such a case. 66 Furthermore, it is not appropriate to definitively resolve a complex choice of law question when the legal issues to be determined have not been identified. This application is based solely on the statement of claim. No defence has been filed. The identification of possible legal issues has been made solely on the basis of the respondents' expert evidence about Indonesian law. This evidence is given at a level of abstraction which does not identify any specific legal issues which will arise.
Spigelman CJ went on to refer to Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1995] 1 WLR 978 at 988, where Millett J (as his Lordship then was) observed that "[i]n order to ascertain the applicable law under English conflict of laws, it is not sufficient to characterise the nature of the claim: it is necessary to identify the question in issue."
In Colosseum Investment v Vanguard, Palmer J set out the relevant considerations at [69]-[70] and identified seventeen factors which may be of relevance. There is no indication his Honour intended these to be any form of "checklist"; it is clear that some may be relevant in particular cases and not in others, and that some might be weighty in some circumstances and not in others. Ward J in Telesto Investments Ltd v UBS AG [2012] NSWSC 44 quoted from Nygh's Conflict of Laws in Australia (Davies M, Bell A, Brereton P (8th ed, LexisNexis Butterworths, 2010)), summarising the relevant factors as: (a) Any significant connection between the forum selected and the subject matter of the action and/or the parties, such as the domiciles of the parties, their places of business and the place where the relevant transaction occurred or the subject matter of the suit is situated, and other factors affecting convenience or expense, such as the availability of witnesses. (b) Any legitimate and substantial juridical advantage to the plaintiff, such as greater recovery, more favourable limitation period, better ancillary procedures, or assets within the jurisdiction against which any judgment can be enforced. (c) Whether the law of the forum will supply the substantive law to be applied in the resolution of the subject case or whether the matter is governed by foreign law.
As Palmer J observed in Colosseum Investment v Vanguard: 70 These factors can be given no particular order of priority nor is any one of them of such significance as to outweigh all or any of the others. This is because resolution of the issue of forum non conveniens depends on the "general circumstances" of the case; exercise of the power to dismiss or stay proceedings on that ground ultimately depends upon a subjective balancing process taking into account some or all of these factors or, perhaps, some other factors. To a significant extent, the exercise is a matter of impression and judgment yet the power to stay should not be exercised unless the applicant has satisfied the Court that it is a clear case: Oceanic Sun Line at 247-248; Henry at 593.
In Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496, Allsop J (as his Honour then was) made the following observations about duplicated proceedings in the context of a case involving exclusive jurisdiction clauses: 47 At this point, one has the intersection of two powerful considerations in international litigation: first, the desire of courts to hold commercial parties to their bargain in terms of exclusive jurisdiction clauses; secondly, the desire of courts to avoid disruption and multiplicity of litigation, in particular a desire to avoid parallel proceedings and the risk of inconsistent findings, and to avoid the causing of inconvenience to third parties. … 62 The very existence of the possibility, if not probability, of duplicated litigation is, on modern authority of the highest persuasive stature a cogent consideration in assessing the effect of an exclusive jurisdiction clause. This is for good and powerful reasons based on the cost and inconvenience of litigation and the desire not to foster the circumstances of courts coming to different conclusions about the same facts on perhaps different, or even the same, evidence. If I may be permitted to say, respectfully, the views of judges of such eminence and experience as McNair J, Lord Denning, Lord Brandon, Colman J, Rix J and the Law Lords in Donohue v Armco are overwhelmingly persuasive of the great importance of this consideration. Related to it, but a distinct and equally powerful consideration in the administration of justice, is the inability to be certain that third parties, whether as witnesses or as parties, will not become involved in the London proceedings as well as the Australian proceedings at duplicated inconvenience and cost. Mr Nell says that the London proceedings will only be between ASC and Hyundai. That might be able to be said with confidence if it were to be an arbitration. It cannot be said with any confidence if curial proceedings are brought. I cannot be clear who might be joined, by ASC or Hyundai, depending on the progress and flow of proceedings there and here. The promotion of duplication may tend to encourage parties to view the interconnection and overlap of the cases as a field of potential tactical advantage. That is something which should be avoided and which can be avoided if it is possible to have all aspects of the dispute resolved in one convenient location 63 These considerations are not conclusive but they are very persuasive. … 66 The balance is a fine one, but overall in my view this Court should not promote competing and potentially conflicting litigation in circumstances where one venue can conveniently and promptly deal with the whole controversy.
In Thomson Aviation Pty Ltd v Dufresne [2011] NSWSC 864, Black J said at [26]: 26 …I consider that the disadvantage that [the defendant/cross-claimant] would suffer from the risk of inconsistent findings and duplications of costs if he were not permitted to pursue the Cross-Claim are substantial. In my view, these disadvantages are of particular weight where a Cross-Claim is brought in existing proceedings, by contrast with the common situation relating to the commencement of separate proceedings against a foreign defendant.

Applicable principles to strike out a pleading

The principles applicable to the striking out of pleadings are well known and have been fulsomely stated in many cases: see, eg, McGuirk v University of New South Wales [2009] NSWSC 1424.
In Meckiff v Simpson [1968] VR 62 at 70, Winneke CJ, Adams and Gowans JJ considered that a pleading will be embarrassing where it is "unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him." A pleading may be embarrassing notwithstanding that it alleges material facts sufficient to constitute a cause of action in circumstances where the material facts alleged are described in a way which leaves difficulties or doubts in relation to what is referred to: see Charlie Carter Pty Ltd v Shop, Distributive and Allied Employees' Association of Western Australia (1987) 13 FCR 413 at 417-18.
A very clear case will be required before a person is prevented from pleading a case on the basis that no reasonable cause of action is disclosed: see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. A high degree of certainty about the outcome of the proceedings will be required before a party will be prevented from pleading a cause of action on the grounds that there is no reasonable basis for it: Agar v Hyde (2000) 201 CLR 552 at 575-6.

Duty of care

Dr Laboureau refers to Brookfield Multiplex v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408; [2014] HCA 36 (Brookfield Multiplex). In that case, at [22] and at [25]-[26], French CJ made the following remarks (footnotes omitted): 22 …Abstracting the reference to proximity in Bryan, the decision adverted to factors adverse to the recognition of a duty of care for pure economic loss other than in special cases. The special cases would commonly, but not necessarily, involve an identified element of known reliance or dependence on the part of the plaintiff, or the assumption of responsibility by the defendant, or a combination of the two. The contract between the prior owner and the builder in that case was "non-detailed and contained no exclusion or limitation of liability". … Those considerations may be seen as elements of the notion of "vulnerability", which has become an important consideration in determining the existence of a duty of care for pure economic loss. In this context, it refers to the plaintiff's incapacity or limited capacity to take steps to protect itself from economic loss arising out of the defendant's conduct. … 25 Much legal reasoning in relation to novel cases can proceed by way of analogy, as McHugh J pointed out in Crimmins v Stevedoring Industry Finance Committee. The advantage of the analogical approach appears from an observation by Professor Cass Sunstein quoted by McHugh J (at [74]): [74] [A]nalogical reasoning reduces the need for theory-building, and for generating law from the ground up, by creating a shared and relatively fixed background from which diverse judges can work. Thus judges who disagree on a great deal can work together far more easily if they think analogically and by reference to agreed-upon fixed points. Reasoning by analogy should be conducive to coherence in the development of the law. Concerns about coherence may also inform the determination of the existence or non-existence of a duty of care in particular classes of case. As the court said in Sullivan, the problems in determining the duty of care (at [50]): [50] … may [sometimes] concern the need to preserve the coherence of other legal principles, or of a statutory scheme which governs certain conduct or relationships. [26] The reference to analogical reasoning directs attention to the decision in Woolcock. This court held that an engineering company, which had designed inadequate foundations for a warehouse and office complex resulting in subsequent structural damage, did not owe a duty of care in respect of economic loss suffered by a subsequent purchaser of the complex. The case came to the court on appeal from a decision of the Court of Appeal of the Supreme Court of Queensland, which had decided the matter on a case stated to that court from a single judge. It was decided on a restricted set of agreed and pleaded facts.
In Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (Hedley Byrne v Heller), the House of Lords held that a negligent (though honest) misrepresentation may give rise to an action in damages where, apart from any contractual or fiduciary relationship, a party seeks information from a person possessing a special skill and trusts him to exercise due care, in circumstances where that party knew, or ought to have known, that reliance was being placed on his skill and judgement (see pp 486, 502, 514). In that case, there was no duty of care implied because there had been an express disclaimer.
In L Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225 at 231 Gibbs CJ stated (footnotes omitted): It would appear to accord with general principle that a person should be under no duty to take reasonable care that advice or information which he gives to another is correct, unless he knows, or ought to know, that the other relies on him to take such reasonable care and may act in reliance on the advice or information which he is given, and unless it would be reasonable for that other person so to rely and act. It would not be reasonable to act in reliance on advice or information given casually on some informal occasion or, generally speaking, unless that advice or information concerned "a business or professional transaction whose nature makes clear the gravity of the inquiry and the importance and influence attached to the answer", to use the words of Lord Pearce in Hedley Byrne.
In Esso Petroleum Co Ltd v Mardon [1976] QB 801 at 820, Lord Denning MR said: …if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another - be it advice, information or opinion - with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable. If he negligently gives unsound advice or misleading information or expresses an erroneous opinion, and thereby induces the other side to enter into a contract with him, he is liable in damages.
In Beattie v Lord Ebury (1872) 7 LR Ch App 777 at 804, Mellish LJ said at 804 that: …I should remark that there is a clear difference between a misrepresentation in point of fact, a representation that something exists at that moment which does not exist, and a representation that something will be done in the future. Of course, a representation that something will be done in the future cannot either be true or false at the moment it is made, and although you may call it a representation, if it is anything, it is a contract or promise.
In San Sebastian Pty Ltd v Minister Administering the Environmental Planning Act 1979 (1986) 162 CLR 340, the majority (Gibbs CJ, Mason, Wilson and Dawson JJ) said at 355: When the economic loss results from negligent misstatement, the element of reliance plays a prominent part in the ascertainment of a relationship of proximity between the plaintiff and the defendant, and therefore in the ascertainment of a duty of care. But when the economic loss results from a negligent act or omission outside the realm of negligent misstatement, the element of reliance may not be present. It is in this sphere that the absence of reliance as a factor creates an additional difficulty in deciding whether a sufficient relationship of proximity exists to enable a plaintiff to recover economic loss. In cases of negligent misstatement, reliance plays an important role, particularly so when the defendant directs his statement to a class of persons with the intention of inducing members of the class to act or refrain from acting, in reliance on the statement, in circumstances where he should realize that they may thereby suffer economic loss if the statement is not true.
They continued at 357: The maker of a statement may come under a duty to take care through a combination of circumstances or in various ways, in the absence of a request by the recipient. The author, though volunteering information or advice, may be known to possess, or profess to possess, skill and competence in the area which is the subject of the communication. He may warrant the correctness of what he says or assume responsibility for its correctness. He may invite the recipient to act on the basis of the information or advice, or intend to induce the recipient to act in a particular way. He may actually have an interest in the recipient so acting.
It is tolerably clear that French CJ in Brookfield Multiplex was not indicating that vulnerability would necessarily be present and hence needed to be pleaded in every case.

Consideration

It is clear that the potential applicability of Chinese or French law is a factor that must be weighed in determining whether New South Wales is a clearly inappropriate forum; Spigelman CJ indicated in Murakami that the Voth test will apply differently if the substantive law of New South Wales is to apply. I note also, however, his Honour's observations concerning the potential inappropriateness of determining the applicable law at an early, interlocutory phase. That is particularly true in this case given that, although the parties accept that the governing law may well be foreign law, they have not particularised the manner in which foreign law is said to apply, specified the relevant jurisdictions or led any evidence regarding the foreign law and its applicability.
With that said, the cross-defendants perhaps correctly point to a multitude of locations where activities and/or representations are said to have been undertaken or made. There is little doubt foreign law will need to be invoked to determine the rights of the parties. In and of itself, that should not be a deterrent insofar as the jurisdiction of this Court is concerned, but it is an important factor in considering whether New South Wales is a clearly inappropriate forum. Indeed, the potential applicability of foreign law is most compelling argument put by Dr Laboureau. It is clear that the law of a variety of different jurisdictions may be relevant to the determination of the parties' claims against one another. In essence, Dr Laboureau submits that there is very little connection between these proceedings and Australia and that this should weigh heavily in the exercise of the discretion.
However, because of the multiplicity of jurisdictions involved, a central tribunal able to receive the law of each jurisdiction and determine its import is desirable from the perspective of the administration of justice. This approach is likely to minimise costs to the parties and promote the efficacious resolution of the dispute. I note that LARS does not object to the use of the New South Wales courts (and, indeed, that it was LARS' choice to commence proceedings here), and LARS will be present in the case no matter what course is taken regarding the cross-claim against Dr Laboureau.
Mr Maxwell, who represented LARS at the hearing, candidly indicated to the Court that although he had no final instructions regarding the point taken concerning the authority of Dr Laboureau and Mr Quint to make the alleged representations, LARS's position at the time of the hearing was that Dr Laboureau did not have actual authority. This bolsters the submissions of Bone China insofar as they relate to the need for Dr Laboureau to be present regardless of whether the cross-claim against him proceeds.
I should record that there was an attempt to point to the weakness of the case against Dr Laboureau. I do not understand this to be a relevant factor in determining the issue of whether NSW is a clearly inappropriate forum. It could, of course, be relevant to the inadequacies alleged in the TFACC, and indeed it is the allegation of Dr Laboureau that parts of the TFACC do not rise to an arguable case due to the alleged deficiencies in the matters pleaded. I do not consider, however, that it bears upon the issue of forum non conveniens in this context, though the issue of "juridical advantage" might, in some cases, allow a consideration of the strength of a case in different jurisdictions given different governing laws, assuming they could be addressed with confidence.
It is asserted by LARS that the damage was suffered in Australia, and proceedings were commenced in Australia. It is not immediately obvious that there is another appropriate tribunal capable of hearing and determining all facets of the matter (though I note that the question of whether a forum is clearly inappropriate cannot be answered through a comparison of potential forums). The courts of Australia are accustomed to receiving foreign law, despite the evidentiary effort this requires, and although I accept foreign law may well be applicable to many, if not all, parts of the claim, I am not persuaded that this renders New South Wales a clearly inappropriate forum.
One of the most influential factors concerning New South Wales, in my view, is the existence of the main proceedings and the likelihood of a set-off being available in the event the cross-claimants are successful against the cross-defendants. It is obviously convenient for the administration of justice that the jurisdiction be one where all matters can be determined in one place, notwithstanding the capacity for different law to apply to different issues.
There is nothing in the evidence that suggests travelling to Australia will cause particular hardship to Dr Laboureau, even assuming that it will not be possible to take his evidence via videolink. A similar point may be made in relation to subsidiary witnesses.

Conclusion

Notwithstanding the choice of law issues, I do not consider that Dr Laboureau has demonstrated that New South Wales is a clearly inappropriate forum (or an inappropriate forum) for the elements of the cross-claim that deal with Dr Laboureau.
I am also not satisfied that Dr Laboureau has demonstrated that the claims against him are inadequately pleaded. To the extent deficiencies have been previously identified, they have been remedied in the TFACC with the proposed additional particulars.
I would invite the parties to prepare short minutes to reflect these reasons. I will hear the parties on costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 June 2015

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