Plaintiffs v Defendant

2 The plaintiffs are the trustees of self managed superannuation funds operated for the benefit of Ms Helen Sedman and Ms Sally Middleton. The plaintiffs are both former clients of Morgan Stanley.

3 The plaintiffs have issued proceedings against Morgan Stanley in substantially identical terms. They allege that they became clients of Morgan Stanley at the urging of Ms Kate Kearney, who had, since October 2009, been their financial advisor while employed at the Commonwealth Bank. When Ms Kearney left the Commonwealth Bank to take up a position at Morgan Stanley, the plaintiffs agreed to follow her there as clients and to shift their investment funds to Morgan Stanley. They allege that, on 30 December 2009, Ms Kearney attended their residence with forms for Ms Sedman and Ms Middleton to sign to facilitate the transfer of the plaintiffs' accounts to Morgan Stanley. They did not read or fill out any forms: they signed documents where indicated by Ms Kearney, and provided photocopies of relevant identification documents to Ms Kearney.

4 The plaintiffs' statements of claim make a number of allegations regarding the terms of the retainers between them and Morgan Stanley and breaches of those retainers. The nub of their complaints is that, instead of adopting a conservative, low risk approach to investing the plaintiffs' funds, Morgan Stanley invested the plaintiffs' funds in an aggressive and risky manner, which resulted in substantial losses to the plaintiffs, and generated substantial brokerage fees and commissions for Morgan Stanley and Ms Kearney.

5 Strictly speaking, the merits of the parties' respective positions in the proceedings are not relevant to the determination of the application, save and except for the question of whether, for the purposes of this application alone, the terms of the retainer incorporate the exclusive jurisdiction clause relied upon by Morgan Stanley to support its application for transferring this proceeding to New South Wales under section 5(2)(b)(iii) of the Act, or alternatively, that these proceedings be stayed under the Court's inherent jurisdiction.

6 Counsel for Morgan Stanley submitted that it is open for me to make a determination as to whether an exclusive jurisdiction clause was incorporated into the agreement between the parties for the purposes of this application alone, and, indeed, that it was appropriate I do so. In response, counsel for the plaintiffs did not strongly press an argument to the contrary, but submitted that the lack of certainty as to whether the exclusive jurisdiction clause was incorporated into the agreement between the parties was a factor against giving too much weight to the exclusive jurisdiction clause when determining whether it is in the interests of justice to transfer the proceeding to New South Wales, particularly in circumstances where, as counsel for Morgan Stanley candidly conceded, the application for transfer would have little prospect of success in the absence of such a clause.

7 The evidence relevant to the determination of whether the agreements between the parties contained the exclusive jurisdiction clause relied upon by Morgan Stanley is as follows:

(a) Ms Sedman and Ms Middleton each signed a form titled "Investment Solutions: Portfolio Wrap Application Form" ("Form"). The execution page of the form included the following text:

By signing this Application Form, you agree, represent and warrant to Morgan Stanley Smith Barney and Ausmag that:

...

You have read and understood the Portfolio Wrap Investor brochure including part 2 relating to the Managed Funds Portfolio Service and agree to be bound by its terms and the terms of the IDPS Contract in each case as amended from time to time.

8 Ms Mills, the solicitor for Morgan Stanley, deposed that the document titled "Investment Solutions Portfolio Wrap - Investor Brochure" ("Investor Brochure") dated 10 August 2009 was the document referred to in the Form. Part 3 of the Investor Brochure is headed "Terms and Conditions". Clause 26 of the Terms and Conditions is reproduced below.

26.1 This Agreement is governed by the laws of New South Wales.

26.2 Each of the parties irrevocably submits to the exclusive jurisdiction of the Courts of New South Wales.

9 The plaintiffs have given evidence, through the affidavit of their solicitor, Mr Mark Walter sworn on 30 August 2013, that they were not given a copy of the Investor Brochure at the time they signed the forms and provided them to Ms Kearney, or at any time. There was also a suggestion in an affidavit sworn by Mr Walter on 6 August 2013 that the Investor Brochure was only a reporting and administration agreement, but this was not strongly pressed during the hearing. The evidence of Ms Mills is that Ms Kearney told her that, on the occasion she attended at Ms Sedman's and Ms Middleton's home on 30 October 2009, she provided them with copies of the Investor Brochure, and another document, Morgan Stanley's Financial Services Guide.

10 The issues for determination in this application are as follows:

(a) whether the agreements between the plaintiffs and Morgan Stanley incorporated clause 26 in Part 3 of the Investor Brochure ("exclusive jurisdiction clause");

(b) if so, whether the scope of the exclusive jurisdiction clause was sufficiently broad to include the claims made by the plaintiffs against Morgan Stanley in these proceedings;

(c) if it was sufficiently broad, whether Morgan Stanley is precluded from relying upon the exclusive jurisdiction clauses (by reason of election, waiver, or estoppel) as a result of its conduct of the proceedings to date; and

(d) if Morgan Stanley is not so precluded, whether it is in the interests of justice that the proceeding be transferred to New South Wales, or, alternatively, whether Morgan Stanley is entitled to an order from the Court staying the proceedings under its inherent jurisdiction by reason of the exclusive jurisdiction clause.

11 In relation to the question of whether the agreement between the parties contains an exclusive jurisdiction clause, I agree, for the purposes of this application, with the submissions of counsel for Morgan Stanley that I should determine this question, at least on a preliminary basis. In my view, the agreement between the parties includes an exclusive jurisdiction clause which is sufficiently broad in scope to, in the absence of other considerations, preclude the plaintiffs from bringing claims against Morgan Stanley in any other jurisdiction apart from New South Wales.

12 I agree with counsel for Morgan Stanley that it is unlikely that the plaintiffs were unaware that by signing the Form that they were entering into a contractual relationship with Morgan Stanley. The execution page of the Form made express reference to the Investor Brochure, and to "terms". There is no evidence, or any suggestion of any evidence that either or both of Ms Sedman or Ms Middleton are unusually unsophisticated clients: the fact that they both operate self-managed superannuation funds indicates to the contrary.

13 As stated by counsel for Morgan Stanley in his written submissions, it is trite law that a person who signs a document which is known by that person to contain contractual terms and affect legal relations is bound by those terms, and it is immaterial whether the person concerned has actually read the documents.[1] Also, I agree that the authorities support the proposition that some of the binding terms may be found in another document to which reference is made in the signed document, regardless of whether or not that other document is provided to the signatory or read by them. I can make that determination without needing to resolve the conflict of evidence between Ms Sedman and Ms Middleton on the one hand, and Ms Kearney on the other hand.

14 A question does arise as to whether the exclusive jurisdiction clause was "so exceptional, unusual and unexpected" that it would only be incorporated into the agreement if Morgan Stanley took reasonably sufficient steps to draw it to the attention of Ms Sedman and Ms Middleton.[2] However, there was no evidence regarding the prevalence of such clauses in contracts for the provision of financial services in the broader financial services industry and the plaintiffs did not make submissions or otherwise rely upon such a proposition.

15 I also agree that the scope of the exclusive jurisdiction clause is sufficiently wide to encompass the claims brought by the plaintiffs in these proceedings. The Investor Brochure is not merely a "reporting and administration" agreement. Clause 5.1 of the Investor Brochure refers to the services being provided by Morgan Stanley to the plaintiffs. Under clause 5.1(a), it provides that Morgan Stanley will:

Assess the Client's current situation, risk profile and objectives and tailor appropriate investment recommendations.

16 The adequacy and appropriateness of Morgan Stanley's investment recommendations is the core of the plaintiffs' complaints in these proceedings. In any event, the authorities support Morgan Stanley's contention that exclusive jurisdiction clauses ought to be broadly construed.[3]

17 Accordingly, it is necessary to consider the question of whether, by reason of the participation of Morgan Stanley in these proceedings, Morgan Stanley is precluded from relying upon the exclusive jurisdiction clause by reason of the doctrines of election, waiver, and estoppel.

18 While the plaintiffs assert that the exclusive jurisdiction clause is not part of the agreement between the parties, they submitted that, in any event, by reason of the conduct of Morgan Stanley in these proceedings, Morgan Stanley has elected not to rely upon the exclusive jurisdiction clause, or alternatively, has waived its contractual rights by reason of that conduct. The conduct relied upon by the plaintiffs includes:

(a) Morgan Stanley having filed unconditional appearances;

(b) Morgan Stanley seeking security for costs, threatening an application to this Court in the event that suitable security was not provided, and participating in negotiations regarding the provision of security; and

(c) Morgan Stanley adopting the position that it did not intend to file a defence pending the provision of security and/or further and better particulars by the plaintiffs.

19 Counsel for the plaintiffs submitted that prior to Morgan Stanley's notification that it intended to apply for the proceeding to be transferred, it had "engaged in substantial, unconditional and/or unqualified involvement in the proceeding".[4]

20 In my view, the conduct of Morgan Stanley did not amount to substantial, unconditional and unqualified involvement in this proceeding such that it was precluded from relying upon the exclusive jurisdiction clause in any application to transfer or stay the proceeding. Authorities such as Steadmark demonstrate that there is no clear line, which once crossed, would amount to an irrevocable commitment to litigating in a particular jurisdiction on the part of a defendant. Ultimately, the position needs to be determined on a case by case basis. As stated by Sifris J in Steadmark:[5]

In La Donna and BHPB Freight the conduct of the parties had reached such a stage in the litigation process that was only consistent with giving up a right to litigate (or arbitrate) elsewhere. It may be difficult to pinpoint the exact stage that must be reached before it can be said that there is such an intention. However, it is not necessary to do so. We know it when we see it and general statements of principle are not helpful.

21 Morgan Stanley's conduct in the current case is readily distinguishable from the conduct of the defendant in Steadmark. In Steadmark, eleven months had elapsed between the commencement of the proceeding and the notification of the defendant's intention to rely upon the exclusive jurisdiction clause. In the current case, the equivalent period was two months. In Steadmark, orders for the provision of security were made, by consent, the pleadings had closed, and discovery and inspection of documents had taken place. Significantly, the defendant had filed and served a counterclaim raising a range of factual issues in response to the plaintiff's simple debt claim. Accordingly, the defendant in Steadmark had not only acquiesced in submitting to the jurisdiction of the court, for some time, but had actively invoked the jurisdiction of the court itself.

22 In contrast, in the current case, Morgan Stanley has taken a relatively limited number of steps over a relatively short period of time. It has filed a defence, but it is apparent from the transcript of the hearing before Macaulay J that it did so under protest. It has complied (or at least has said it would comply) with the obligation to provide critical documents under s 26 of the Civil Procedure Act 2010 (Vic), but again, this was at the urging of his Honour. There was some correspondence about the provision of security, but no application was made, nothing was agreed, and no orders were made. There is no counterclaim, or any suggestion of one. I agree with counsel for Morgan Stanley that this case is much more analogous to The Christos,[6] where the court held that participation in a proceeding did not amount to an election, than to Steadmark.

23 Given that I have found that Morgan Stanley is not precluded from relying upon the exclusive jurisdiction clause, the question is what weight the clause ought be given in determining Morgan Stanley's application.

24 Counsel for Morgan Stanley submitted that I should exercise my discretion, both under the Act and under the inherent jurisdiction of the Court, to follow the traditional approach of the courts in giving effect to the terms of the contractual bargain of the parties. Ordinarily, the existence of the exclusive jurisdiction clause would be a powerful argument in support of a conclusion that Victoria is a clearly inappropriate forum.

25 However, the position has changed at least with respect to disputes concerning which Australian court should hear a dispute, with the introduction of the statutory case transfer and cross-vesting regime by the Act. The issue in the current application is whether the "strong bias" towards the enforcement of exclusive jurisdiction clauses under the common law has been imported into, or instead, ousted by, the statutory regime put into place by the Act.

26 Counsel for Morgan Stanley submitted that I should not follow the decision of Philippides J in World Firefighters Games Brisbane v World Firefighters Games Western Australia Inc[7] where the existence of an exclusive jurisdiction clause was found to be but one of a number of relevant factors to be taken into account when determining whether to exercise the court's jurisdiction to transfer a proceeding. There, Philippides J stated:

The authorities favour the view that under the cross-vesting legislation, the exclusive jurisdiction clause remains a relevant consideration, on the basis that the "interests of justice" require that due acknowledgment be accorded to such a clause as representing the bargain between the parties and that proper regard be given to the need to hold parties to their bargain. Nevertheless, in my opinion, in considering the weight to be given under the legislation to such a clause, one should not start from the position that such clauses should be viewed with the "strong bias" in their favour previously accorded to them at common law. The weight to be given to such clauses will vary depending on the other surrounding and countervailing circumstances.

27 The decision of Philippides J in World Firefighters was endorsed by the Queensland Court of Appeal in Rivergum Homes Pty Ltd v Meridian Pty Ltd.[8] However, counsel for Morgan Stanley submitted that the remarks made by the Court of Appeal in that decision were obiter, on the basis that the appeal was dismissed because it was incompetent by reason of section 13(a) of the Queensland equivalent to the Act. In any event, counsel submitted that, given that there is no right to appeal from a decision made by me under the Act, I should not be confined by the traditional approach that a single judge should not depart from the reasoning of an intermediate appellate court in another Australian jurisdiction unless that position was considered to be plainly wrong.

28 Counsel submitted that the reasoning in World Firefighters, that the existence of an exclusive jurisdiction clause is but one of a range of factors to be taken into account in an enquiry under s 5(2)(iii) of the Act, is wrong, and suggested that the better approach is that adopted by Bryson J in Wholesome Bake Pty Ltd v Sweetoz Pty Ltd,[9] where he stated:

In my view [the exclusive jurisdiction clause] has a strong claim to fulfilment when I am considering what is required in the interests of justice; the interests of justice require that if parties make an agreement, they should keep to it, in the absence of extreme considerations such as fraud or duress.

29 In Wholesome Bake, Bryson J adopted the views of Rolfe J in West's Process Engineering Pty Ltd (administrator appointed) v Western Sands Ltd & Anor,[10] where he stated:

In my opinion, it is appropriate to give substantial weight to the jurisdiction clause for it represents the bargain of the parties. The one with the advantage of it should not be subjected to the inconveniences, to which I have referred, unless the other relevant factors are powerfully in favour of another jurisdiction.

30 Counsel for Morgan Stanley submitted that the reasoning of the High Court in BHP Billiton Ltd v Schultz[11] (which approved the decisions of the New South Wales Court of Appeal in Bankinvest AG v Seabrook,[12] and the Court of Appeal in this State in Schmidt v Won[13]) that the Act ousted the common law doctrine espoused in Voth v Manildra Flour Mills Pty Ltd,[14] that a court should not decline to exercise its jurisdiction to hear a proceeding save in circumstances where it was a "clearly inappropriate forum," at least insofar as it applied to disputes as to which Australian court should hear and determine a proceeding, did not displace the long established line of authority at common law that there is a strong bias towards upholding exclusive jurisdiction clauses.[15]

31 Finally, counsel submitted that as one of the objectives of the Act was to facilitate the transfer of proceedings between Australian jurisdictions, it would be an absurd result if the construction of the term "interests of justice" actually made it harder for a party with the benefit of an exclusive jurisdiction clause to transfer a case to the jurisdiction of the contract by giving such clauses less weight than they would have ordinarily been accorded under the common law.

32 It is correct to say that neither BHP Billiton, nor Bankinvest or Schmidt before it, considered the question of what weight ought to be given to an exclusive jurisdiction clause when determining whether or not it is in the interests of justice to transfer the proceeding to a court in another Australian jurisdiction. However, the following principles can be distilled from these authorities:

(a) the provisions of the Act have ousted the common law doctrine of forum non conveniens insofar as it applies to disputes as to which Australian Court should hear a particular proceeding;

(b) as such, the question for determination is not whether the court in which the proceeding has commenced is a clearly inappropriate forum, but rather that, whether another court is a more appropriate forum;

(c) in determining which court is the most appropriate forum, the court should have regard to the "connecting factors" described by Lord Goff in Spiliada Maritime Corp v Cansulex Ltd,[16] in order to determine with which forum the proceeding has the most real and substantial connection;[17]

(d) the appropriate mechanism for facilitating the transfer of proceedings between Australian courts is the utilisation of the provisions of the Act, and seeking a stay of the kind contemplated by Voth is an inappropriately heavy handed means of ensuring that issues are determined in the proper forum;[18]

(e) the plaintiff's choice of forum, or at least the reasons for that choice of forum, may be relevant in a particular case, but is to be given no specific emphasis;[19] and

(f) similarly, the residence of the defendant, while it may be the foundation for jurisdiction, is not necessarily decisive as to which is the most appropriate forum.[20]

33 While the "connecting factors" in Spiliada do not make express reference to the existence or otherwise of an exclusive jurisdiction clause, the authorities regarding determination of transfer applications under the Act demonstrate that the existence of such a clause is, at the very least, relevant. The divergence between the authorities is really as to the question of what weight ought to be afforded to an exclusive jurisdiction clause: that is, whether there ought to be a strong bias towards holding parties to their bargains, or whether the existence of an exclusive jurisdiction clause is simply one of a range of matters that needs to be taken into account.

34 In my view, the emphatic statements of the High Court, the NSW Court of Appeal, and the Victorian Court of Appeal regarding the ouster of traditional common law principles by the scheme put in place by the Act, including their observations that the interests of justice do not necessarily align with the interests of the parties, support the approach adopted by Philippides J in World Firefighters, and endorsed by the Queensland Court of Appeal in Rivergum. At the very least, I would be hard pressed to form the view that this position is "plainly wrong". Perhaps a more nuanced position is expressed by Whelan J in Slater & Gordon v Porteous:[21]

Whilst exclusive jurisdiction clauses ... do not have the effect that they have in the "forum non conveniens" context, they remain a relevant factor and may be the critical factor in a particular case. Such a clause may indicate that the parties turned their minds to the question of where litigation should occur and agreed upon a single exclusive venue. This factor may be particularly compelling where it can be said that the parties must have been conscious at the time of the agreement of the existence of connecting factors between potential disputes and a State other than the exclusively designated State, and must have been conscious of the existence of potential inconvenience for one of the parties in litigating in the exclusively designated State.

35 Notwithstanding the remarks above, Whelan J expressly endorsed the approach of World Firefighters to the question of what weight ought to be given an exclusive jurisdiction clause.

36 In Hungtingdale Village Pty Ltd (Receivers and Managers Appointed) (ACN 085 048 531), In the matter of Huntingdale Village (Receiver and Managers Appointed) (ACN 085 048 531)[22] Gordon J was referred to the authorities considered and not followed by Philippedes J in World Firefighters, which supported the proposition that the existence of a jurisdiction clause was a "significant" or "overwhelming" factor in the determination of applications under the Act. In endorsing the approach adopted by Philippedes J in World Firefighters her Honour stated as follows:[23]

1. Put simply, the significance of the existence of a jurisdiction clause is to be determined in the particular circumstances of the case having regard first and foremost to the interests of justice.
2. Further, the authorities must be read in light of the decision in BHP Billiton [2004] HCA 61; 221 CLR 400. In that case, the High Court found that the trial judge erred in taking into account the plaintiff's choice of forum as a matter not to be lightly overridden. In other words, the High Court reinforced the type of balancing exercise necessary to establish whether the transfer of proceedings to a more appropriate forum is in the interests of justice: BHP Billiton 221 CLR at [15] and [19] per Gleeson CJ, McHugh and Heydon JJ; at [77] per Gummow J (Hayne J agreeing); at [168]-[169] per Kirby J.

26 As Gleeson CJ, McHugh and Heydon JJ stated (at [19]):

In many cases, there will be such a preponderance of connecting factors with one forum that it can readily be identified as the most appropriate, or natural forum. In other cases, there might be significant connecting factors with each of two different forums. Some of the factors might cancel each other out ... Weighing considerations of cost, expense, and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many [transfer] applications.

1. Accordingly, the existence of a non-exclusive jurisdiction clause is a relevant factor to be weighed against other relevant factors, and the significance or otherwise of such a factor is to be determined in the circumstances of the case at hand. It is one factor among many and not immediately overwhelming simply because of its existence.

37 While her Honour was dealing with a non-exclusive jurisdiction clause, her observations are clearly intended to apply to cases involving exclusive jurisdiction clauses. I would add further that most of the authorities which supported a predisposition towards the enforcement of exclusive jurisdiction clauses pre-dated the High Court's decision in BHP Billiton. In BHP Billiton the Court determined that the primary judge erred in giving the plaintiff's choice of forum particular weight, as would have been the approach under the common law. Rather, a court must apply the statute without any kind of presumption as to where the balance of the interests of justice might come down.[24] In my view, it is unlikely that the High Court would have approached the question of the weight to be given to an exclusive jurisdiction clause any differently than it did to the traditional emphasis given to the plaintiff's choice of forum.

38 Finally, the "balancing" approach required by the authorities is inconsistent with the submission of counsel for Morgan Stanley that I should give substantial weight to the exclusive jurisdiction clause, because if I did not do so, it would be inconsistent with the objectives of the Act, which is to make it easier to transfer cases between jurisdictions than under common law. In my view, this submission is of limited merit. The effect of the case transfer regime provided for by the Act may be that, it is generally easier to transfer cases from one jurisdiction to another, given that generally, it is easier to establish that another jurisdiction is a "more appropriate forum" than it is to establish that a jurisdiction in which a proceeding is issued is a "clearly inappropriate forum". But that is not the object of the Act, which is to determine which is the appropriate court to hear the proceeding, and to ensure that the chosen court has the necessary jurisdiction to deal with all matters which might be raised in that proceeding.[25] There is no predisposition in favour of transferring cases as such.

39 Applying this approach to the current application, I would conclude that this proceeding concerns an agreement or transaction of such a nature that would warrant according the exclusive jurisdiction clause less weight than might be the case in other proceedings. This is a case where two individuals, being the principals of the plaintiffs, at the urging of a person with whom they had a relationship at another financial institution, transferred some of their investments to that person's new employer. The principals of those parties were presented with standard form documents for signing which incorporated standard form terms and conditions. The evidence is that they did not read those terms and conditions. It was not contended that if they had read them and had taken objection to the exclusive jurisdiction clause they would have been in a position to re-negotiate that clause, or that Ms Kearney would have been authorised to vary that term on behalf of Morgan Stanley. It could not seriously be contended that new customers of a major financial institution, would or should consciously identify and evaluate the competing connecting factors between, in this case, New South Wales and Victoria, and make a conscious decision that, notwithstanding their residence in Victoria, New South Wales was the proper jurisdiction to litigate any disputes they had with that institution in another State. This was not a situation, such as in the World Firefighters case, the Wholesome Bake case, or in West's Process Engineering case, where the parties to the dispute were commercial entities entering into commercial contracts, or, as in the Slater & Gordon case, a client entering into a specific purpose deed with her solicitors. This is essentially a case of two women transferring their investments to another financial institution in order to follow a favoured adviser to her new employer.

40 In my view, taking into account these matters does not, as suggested by counsel for Morgan Stanley, detract from the objective approach to contract law. This is not an exercise of contractual construction. I have already determined, for the purpose of this application at least, that the plaintiffs entered into agreements with Morgan Stanley which incorporated the exclusive jurisdiction clause, and that the clause should be construed sufficiently broadly to encompass the disputes arising in this proceeding. However, the authorities suggest that the circumstances surrounding the entry into the relevant contract, including what the parties knew or must have known about the convenience or otherwise of having foreseeable disputes litigated in a jurisdiction in which only one party is domiciled, is relevant to determining what weight ought to be given to an exclusive jurisdiction clause, having regard to all of the other connecting factors.

41 That the actual or presumed knowledge or "consciousness" of the parties regarding these matters is relevant does not detract from the objective approach to contractual formation or construction, as the inquiry required under the Act is a distinct inquiry as to what the interests of justice require in a particular case. The authorities (World Firefighters, Slater & Gordon v Porteous, and Huntingdale Village) make it clear that the weight to be accorded to an exclusive jurisdiction clause is to be determined according to the particular circumstances of the case. In Slater & Gordon v Porteous, Whelan J gave the relevant exclusive jurisdiction clause significant weight, because of what matters the parties must have been "conscious" of when entering into the relevant agreement. The fact that Ms Porteous had obtained legal advice regarding the agreement was considered significant. Similarly, in World Firefighters, Philippedes J considered the exclusive jurisdiction clause had significant weight, because at the time of entry into the agreement, it must have been apparent to the parties that there might be a dispute about the performance of the agreement, and that it must have been in the contemplation of the parties that the jurisdiction with the closest nexus to any such dispute would be one other than that agreed to by the parties. Accordingly, the issue of the parties' subjective knowledge, or "consciousness" of various matters at the time of entry into an agreement containing an exclusive jurisdiction clause are relevant circumstances in determining what weight might be given to such a provision.

42 Accordingly, it is necessary to turn to the connecting factors ultimately derived from the statements of Lord Goff in Spiliada, as follows:

(a) the application of the substantive law, if it is peculiar to a particular jurisdiction;

(b) forensic advantages or disadvantages conferred by the competing procedural laws;

(c) the plaintiff's choice of forum and the reasons for that choice;

(d) substantive connections with the forum (residence, domicile, place of occurrence and choice of law);

(e) the balance of convenience to parties and witnesses;

43 Applying these considerations to the facts of the current case, I agree with the submissions of counsel for the plaintiffs that the factors in favour of keeping these proceedings in Victoria outweigh the factors pointing to the proceeding being more appropriately heard in New South Wales. These include:

(a) the residence of the principals of both plaintiffs in Melbourne, with Ms Sedman's health problems being a matter of particular significance. The evidence is that most of the plaintiffs' dealings with Morgan Stanley were through Ms Sedman, so she will be a significant witness in both proceedings;

(b) the contractual documentation was executed in Victoria;

(c) Morgan Stanley's representative in its dealings with the plaintiffs is located in Victoria, and the communications between the parties took place in Victoria;

(d) initially, the plaintiffs' complaints regarding Morgan Stanley's management of their investments were made to and responded to by Morgan Stanley's Melbourne office;

(e) as such, the likely witnesses are, by and large, located in Victoria;

(f) while the plaintiffs' claims for breach of contract are likely to be governed by the law of New South Wales, by reason of clause 26, the other claims (negligence, misleading and deceptive conduct, and breach of fiduciary duty) are likely to be governed by the law of Victoria (or, in the case of the plaintiffs' statutory claims, Commonwealth legislation); and

(g) while it is not suggested that the plaintiffs, or, more accurately, their principals are impecunious, and indeed, the best evidence is that they are not, such as to make the cost of litigating in another jurisdiction prohibitive, one can infer that any additional costs can be better absorbed by a large financial institution such as Morgan Stanley.

44 Conversely, the connecting factors relied upon by Morgan Stanley are, save for the existence of the exclusive jurisdiction clause, relatively tenuous. The Sydney based witnesses likely to be called by Morgan Stanley are its employees, and as such will be giving evidence in their professional capacities, for a matter of hours rather than days. Their credit is unlikely to be of great issue, and in any event, is likely to be less in issue than that of the plaintiffs' principals and Ms Kearney, given the factual disputes in the proceeding. As such, it would probably be inappropriate for the Victorian based witnesses to give evidence by video-link. No expert witnesses have been identified by any party to date, and suitable experts would be available in both Melbourne and Sydney. Further, Morgan Stanley is represented by a large transnational firm with a substantial presence in Melbourne.

45 The procedural advantages contended for by Morgan Stanley of having the proceeding managed and heard in New South Wales are of limited significance. Just as it is generally considered to be inappropriate to comment negatively upon the perceived capacities of courts in other jurisdictions,[26] one should be cautious about commenting upon the advantages or disadvantages of one's home jurisdiction. However, I would make the observation that while the absence of an obligation to make discovery in New South Wales may be perceived to be an advantage by Morgan Stanley, it may not be viewed as an unmitigated blessing by the plaintiffs, given that many of the relevant transactional documents are likely to be held by Morgan Stanley. In any event, the provisions of the Rules and the Civil Procedure Act 2010 provide this Court with ample scope to limit the burden of discovery where appropriate. As for the question of the time to be taken to get to a hearing date: the setting of a trial date much depends upon the commitment of the parties to completion of interlocutory steps in an expeditious manner, and, in the current case, much of the delay to date can be sheeted home to Morgan Stanley rather than the plaintiffs.

46 Given the preponderance of connecting factors to Victoria, the relatively limited connecting factors to New South Wales, and the rather limited weight to be accorded to the exclusive jurisdiction clause in the circumstances of the current case, I am not persuaded that transferring this proceeding to New South Wales is in the interests of justice. For the same reason, I would refuse to stay the proceeding, given that the approach of the authorities has been to treat the Act as an exclusive code,[27] and that the Court's inherent jurisdiction to stay a proceeding should not be utilised as a means of circumventing the principles and requirements of the Act, except in cases where there is otherwise an abuse of process of the Court.

[1] Toll (FGCT) Pty Ltd Alpha Pharm Pty Ltd (2004) 219 CLR 165 at [57].

[2] See Ange v First East Auction Holdings Pty Ltd [2011] VSCA 335; (2011) 284 ALR 638, 646.

[3] See, for example, Global Partners Fund Ltd v Babcock & Brown Ltd (In Liq) [2010] NSWCA 196; (2010) 79 ACSR 383.

[4] See Steadmark v Bogart Lingerie Pty Ltd [2013] VSC 402, at [36].

[7] [2001] QSC 164; (2001) 161 FLR 355.

[8] [2010] QCA 293.

[9] [2001] NSWSC 248.

[10] Rolfe J, 6 August 1997 (unreported), at [14].

[11] [2004] HCA 61.

[12] (1988) 14 NSWLR 711.

[13] [1997] VSC 24.

[14] [1990] HCA 55.

[15] Huddart Parker Ltd v The Shop "Mill Hill" [1950] HCA 43; (1950) 81 CLR 502, at 508-509; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 Ch R 197 at 230-1, 259; Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 419 at 425-9, 445; Global Partners Fund Ltd v Babcocke Brown Ltd (In liq) [2010] NSWCA 196; (2010) 79 ACSR 383 at [40], [81]-[82].

[16] [1987] 1 AC 460.

[21] [2005] VSC 398, at [26].

[22] [2009] FCA 1323.

[27] See Schmidt v Won, at 453-454; Rivergum Homes, at [10].