Mody v South Seas Cruises Ltd & Anor [2009] NSWSC 183 | Case summary

Factual background 2 The plaintiff, who is a resident of New South Wales, was injured on 19 February 2006 during a family holiday in Fiji. The injury took place on a vessel "SV Seaspray" which was owned by the first defendant. The first defendant is a resident of Fiji and carries on business there. At the time of the injury the defendant was operating the SV Seaspray to provide day cruises around the Fijian Islands for passengers which included the plaintiff and his wife. 3 The plaintiff alleges that one of the first defendant's employees placed a drink bottle near his own drink bottle when he was eating his lunch. This bottle which was unlabelled was being used for cleaning and contained a dangerous and caustic liquid. The plaintiff drank from the bottle thinking that it contained water and suffered serious burns to his mouth, throat, oesophagus and stomach. He was treated as an emergency patient in a Fijian hospital and thereafter transferred to Sydney where treatment continued. The plaintiff continues to be significantly disabled. 4 The plaintiff instructed solicitors upon his return to Australia and since May 2006 those solicitors have been liaising with the first defendant's solicitors, Munro Leys, in relation to the plaintiff's injuries. Exhibits A and B comprise agreements between the plaintiff and his wife and the first defendant for the payment of monies by the first defendant to them. 5 The plaintiff commenced these proceedings by filing a statement of claim on 11 August 2008. By letter of 17 September 2008, a sealed copy of the statement of claim was sent to Munro Leys who declined to accept it by way of service on the first defendant. The statement of claim was served on the first defendant on 3 October 2008. 6 On 17 October 2008 the first defendant was granted leave by the High Court of Fiji to issue and serve out of the jurisdiction a writ of summons issued out of that Court on the plaintiff. On 20 October 2008 the first defendant commenced proceedings in the High Court of Fiji seeking orders that as the owner of the ship SV Seaspray it should have its limitation of liability determined pursuant to s 178(1) of the Marine Act 1986 (Fiji) in relation to the incident in which the plaintiff was injured. 7 By motion filed in these proceedings on 24 October 2008 the first defendant sought orders that this Court decline to exercise jurisdiction and a permanent stay of these proceedings on the basis of forum non conveniens. That motion was heard by Adams J on 18 November 2008 and was dismissed. 8 On 22 December 2008 the first defendant filed a Summons for Decree of Limitation of Liability (the summons) in the High Court of Fiji. That summons was served on the solicitors for the plaintiff on 30 December 2008. The plaintiff is represented by Fijian solicitors in those proceedings. It is that summons which has been fixed for hearing on 25 March 2009. 9 The primary order sought in the summons by the first defendant is as follows: "(i) A Declaration that by reason of the provisions of the Marine Act , 1986 adopting the International Convention Relating to the Limitation of the Liability of Owners of Sea-going Ships and the Protocol Amending the International Convention Relating to the Limitation of the Liability of Owners of Sea-going Ships and pursuant to s 178(1) of the Marine Act , 1986, it is not answerable in damages beyond Special Drawing Rights of 62,001 converted into Fiji Dollar currency at the time of making such Declaration in respect of the injury suffered by the defendant on 19 February 2006 on board the ship SV Seaspray." 10 The only evidence as to Fijian law is set out in the affidavit of Jon Apted sworn 6 March 2009. Mr Apted is a solicitor representing the first defendant and is a partner of Munro Leys, which is the largest law firm in Fiji. He was admitted to the Fiji High Court in 1986 and has practised law in Fiji for 22 years. Mr Apted has an LL.B degree from the University of Auckland and LL.M degree from Harvard University. The plaintiff accepted that his explanation of Fijian law was correct. 11 The relevant paragraphs from Mr Apted's affidavit are: "12. Under section 178(2) of the Marine Act , Fiji upon application, the Court may determine the limit of the applicant's liability under the International Convention relating to the Limitation of Liability of Owners of Sea-going Ships 1957 as amended by a Protocol entered into in 1979 ("the Convention"). It may thereafter make such orders as it sees fit for the constitution, administration and distribution of a limitation fund in accordance with the provisions of the Convention. The Court's discretion would extend to ordering that the fund be constituted by payment into Court of the limitation amount determined. 13. Under Article 3(2) of the Convention, a fund once constituted is to be distributed amongst claimants in the proportion to the amounts of their claims. In this case, the only claimant currently is Mr Samsul Mody but the fund once constituted would be available to meet the claims of any other claimant, such as his wife, Mrs Mamtaj Mody, that may in the future be made arising out of the same incident. Under Article 3(3) of the Convention, the ship-owner may stand pro tanto in the position in relation to the fund of any claimant whose claim it has already paid. The Fijian limitation proceedings commenced by SSC and referred to above are proceedings for a decree of limitation and if the Courts see fit for the constitution of a limitation fund pursuant to the Marine Act , Fiji. If SSC succeeds in those proceedings, then the constituted fund will be available to meet the claims of any other person that may in the future be made arising out of the incident in relation to which Mr Mody claims his personal injury. 14. Fiji has two statutes concerning the registration and enforcement of foreign judgments, Reciprocal Enforcements of Judgments Act (Cap. 39) and Foreign Judgments (Reciprocal Enforcement) Act (Cap. 40). Under either statute a Fijian Court can decline the registration of a judgment of the Supreme Court of New South Wales on the grounds of Fijian public policy."

Submissions and Consideration 12 Both parties agreed that I had power to make the order sought and the Court was referred to CSR Limited v Cigna Insurance Australia Limited & Ors (1996-1997) 189 CLR 345 at 389 ff. It was also common ground that if the Court were to grant an anti-suit injunction, it would not be exercising its inherent power to protect its own processes but would be exercising a power deriving from equitable principles to make orders in restraint of unconscionable conduct or to restrain proceedings in a foreign court which were vexatious or oppressive. That agreement was appropriate since it is clear that the Fiji proceedings do not prevent this matter proceeding in this Court in the normal way. 13 The plaintiff submitted that the proceedings in this Court and those before the High Court of Fiji were essentially the same. There would be a considerable overlap of factual matters. He submitted that there was nothing to be gained by the first defendant from the Fiji proceedings over and above what might be gained by it in the proceedings in this Court. 14 The plaintiff submitted that the central question to be decided by the High Court in Fiji was whether the plaintiff's loss was caused by the first defendant's "actual fault or privity". If the plaintiff's loss were so caused then there would be no limitation of the first defendant's liability under the International Convention. If the plaintiff's loss was not so caused, the High Court of Fiji could determine the limit of the first defendant's liability to the plaintiff under the International Convention. The plaintiff submitted that since the tort occurred in Fiji, the law of Fiji would apply and in the proceedings before this Court, it would be open to the first defendant to raise by way of defence the limitation of its liability under the International Convention. In that way the same issue would be before the High Court of Fiji as would be before this Court. 15 The significance of the concept of "actual fault or privity" emerges from the decision of Heerey J in Alstergren v Owners of the Ship "Territory Pearl" (1992) 112 ALR 133. The words appear to draw a distinction between vicarious liability - in this case the negligence of the first defendant's employee who placed the corrosive substance in an unmarked bottle next to the plaintiff - and direct liability for which the first defendant would be responsible such as a failure to supervise or instruct that employee in correct safety procedures. 16 The defendant submitted that the proceedings in this Court and in the High Court of Fiji were fundamentally different. The proceedings in this Court were based on contract and tort and sought the recovery of unliquidated damages. The proceedings in Fiji were brought pursuant to the Marine Act 1986 (Fiji) pursuant to which the first defendant sought a declaration that its liability in relation to the incident was limited by virtue of the provisions of the Marine Act which adopt the International Convention limiting the liability of owners of sea-going ships. 17 In addition the first defendant submitted that if it were successful in the Fiji proceedings, it could obtain a relief which was not available in these proceedings. The relief sought by the first defendant in the Fiji proceedings includes the establishment of a limitation fund that would limit its liability to all potential claimants arising from the incident. This would include not only claims by the plaintiff but also claims by other persons such as the plaintiff's wife. The first defendant submitted that it was not without significance that the agreements (exhibits A and B) for the payment of monies arising out of the incident were made not only with the plaintiff but also with his wife. The first defendant submitted that although only hypothetical at this time, the plaintiff's wife may well have a claim against the first defendant for nervous shock and interference with her holiday. 18 The first defendant submitted that since the proceedings were fundamentally different and there was a remedy available to the first defendant in the Fiji proceedings which was not available in these proceedings an anti-suit injunction should not be granted against it. The first defendant relied upon CSR Limited and TS Production LLC v Drew Pictures Pty Ltd [2008] FCAFC 194. 19 The defendant also submitted that the continuation of the Fiji proceedings was relevant to any enforcement of a judgment obtained in this Court. Relying upon paragraph 14 of the affidavit of Mr Apted, the defendant submitted that if the first defendant were successful in obtaining its declaration in the Fiji proceedings, the Courts of Fiji might well decline to register the judgment of this Court on public policy grounds. 20 In CSR Limited the High Court held that "the mere co-existence of proceedings in different countries does not constitute vexation or oppression". It cited with approval the following extract from Peruvian Guano Co v Bockwoldt (1883) 23 Ch D 225: "Double litigation [which] has no other element of oppression than this, that an action is going on simultaneously abroad, which will give other or additional remedies beyond those attainable in [the domestic forum] does not amount to vexation or oppression." 21 Implicit in that statement of principle is a rejection of the proposition that just because additional expense will be incurred if an action is proceeding in another jurisdiction, does not of itself amount to vexation or oppression (see also TS Production LLC at [57]-[58]). 22 CSR Limited identified that which gave rise to vexation or oppression as follows: "That foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings. On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Co , if "complete relief is available in the local proceedings." (p 393-4) 23 I agree with the submission by the first defendant that different issues are involved in these proceedings and the Fiji proceedings, albeit both arise out of a common substratum of facts. It is also clear as the first defendant submitted that a remedy is available to the first defendant in the Fiji proceedings which is not available in these proceedings, i.e. the establishment of a fund from which all claims arising from this incident can be paid. That latter consideration was decisive in CSR Limited (the availability of triple damages in the US) and inferentially in Garsec v His Majesty the Sultan of Brunei [2008] NSWCA 211 (the immunity from suit of the Sultan in Brunei). 24 The extent to which the first defendant could raise the Marine Act (Fiji) and through it the International Convention in its defence in these proceedings is controversial. Certainly the first defendant could not bring an action under the Marine Act (Fiji) in New South Wales. Accordingly, it is not clear that the issue raised for decision in the Fiji proceedings would necessarily be decided in these proceedings. 25 Finally, as TS Production LLC made clear, there is the question of comity: "[59] As a matter of law, a more restrictive approach is implicitly mandated by the High Court's statement in CSR that the mere co-existence of parallel foreign proceedings will not justify an anti-suit injunction … [60] Imagine if courts in other jurisdictions took the contrary approach (ie that foreign proceedings ought to be stayed where there is a partial overlap of issues giving rise to additional cost due to duplication of effort). Under that rule, what would then stop the Illinois court in this case from enjoining the Australian proceedings on the basis that it would be inefficient to allow them to proceed? Should the rule be that the first party to have an anti-suit application heard and determined ought to prevail? The only way out of the chaos that would follow from such a state of affairs is to recognise the importance of the principle of comity (although a precise definition of comity is elusive, it is in many ways a restatement of the Golden Rule of "do unto others as you would have done unto you": See Black's Law Dictionary, 261-262 (7th ed 1999) and due respect for judicial proceedings regularly instituted in a foreign jurisdiction. That is to say, adopting the restrictive approach is necessary to avoid jurisdictional disputes and decisions based solely on an arbitrary consideration (ie who was first in the race to the courthouse) rather than on a point of principle such as completeness of relief, protection of the court's jurisdiction, and so forth." 26 As the above analysis demonstrates, the plaintiff has not satisfied the tests for the issuing of an anti-suit injunction set out in CSR Limited. It follows that the plaintiff has not persuaded me that he is entitled to the relief which he seeks in the motion. The orders which I make are as follows:

Mody v South Seas Cruises Ltd & Anor

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Judgment (15 paragraphs)

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Cases Cited (3)