Taurus Funds Management Pty Ltd v Aurox Resources Ltd

Taurus Funds Management Pty Ltd v Aurox Resources Ltd - [2010] NSWSC 1223 - NSWSC 2010 case summary — Zoe

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2010/00237928 Taurus Funds Management Pty Ltd v Aurox Resources Ltd JUDGMENT The application before the Court 1 There is before the Court a notice of motion pursued by the defendant seeking an order that these proceedings be transferred to the Supreme Court of Western Australia pursuant to s 5 (2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) 2 Both parties have sought to mobilise a number of authorities seeking to further their clients interests in relation to the contest of application The principles 3 Section 5(2)(b)(iii) relevantly provides that if it appears to the Supreme Court of New South Wales that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory, then the Supreme Court of New South Wales shall transfer the relevant proceeding to that other Supreme Court. 4 This requires a "management decision as to which Court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute": see Bankinvest AG v Seabrook & Ors (1988) 90 ALR 407 at 409, James Hardie & Coy Pty Limited v Barry (2000) 50 NSWLR 357 at [87] per Mason P, BHP Billiton Limited v Schultz (2004) 221 CLR 400 at 421 [14], 434 [63]. 5 An applicant for a transfer bears no burden of persuasion or onus of proof: BHP v Schultz (supra) at 437 [71]; and no particular significance attends the plaintiff's original choice of forum: see BHP v Schultz (supra) at 425 [26]-[27], 439 [77]. 6 The interests of justice concern those of both parties, and rather than the selection of the most advantageous, or least disadvantageous, forum for one of them, the "interests of justice" are to be judged by more objective factors, such as to facilitate identification of the "natural forum", in which objectively judged it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be: see Valceski v Valceski (2007) 70 NSWLR 36 at 60 [69] per Brereton J. 7 In James Hardie & Coy Pty Limited v Barry (2000) 50 NSWLR 357, Mason P at [95] endorsed the following useful checklist of factors, namely:-

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ii. the fact Mallesons Stephen Jaques has offices in Perth and is able to continue acting for Taurus if the proceeding is transferred to Western Australia is matched by the commensurate fact that Blake Dawson has offices in Sydney and is able to continue acting if the proceeding remains in this Court. 14 It is however fair to say that the balance of convenience is very close in relation to the respective contentions The background The issues arising for determination in the preceding 15 Taurus and Aurox entered two contracts in 2007 and 2008 respectively, and this proceeding primarily concerns the interpretation and application of those contracts. 16 The first contract was entered between Taurus and Aurox on 23 July 2007 (the Engagement), which superceded an earlier agreement entered into on 26 March 2006. Pursuant to the Engagement, Aurox appointed Taurus's authorised representative (New Holland) as its "Financial Bank Debt Advisor". This role encompassed the proposed scope of work at Appendix 1 to the Engagement. In return, Aurox undertook to pay certain fees to Taurus, set out in clause 3 of the Engagement. The Engagement was expressed to be governed by the laws of Western Australia, but did not contain any choice of jurisdiction clause. 17 The second contract was entered between Taurus and Aurox on 24 September 2008 (the Equity Mandate). Pursuant to the Equity Mandate, Aurox appointed Taurus's authorised representative, New Holland, as its financial advisor to assist Aurox to negotiate a proposed sale of an equity interest in an iron ore project (the Project) to one or more strategic investors. Aurox agreed to pay fees for New Holland's services in accordance with clause 3 of the Equity Mandate, with such fees to be invoiced directly by Taurus. The Equity Mandate was expressed to be governed by the laws of New South Wales (clause 13(e)), and further provided that Aurox irrevocably submitted to the non-exclusive jurisdiction of the Supreme Court of New South Wales in respect of any proceeding relating to the Equity Mandate (clause 13(f)). 18 The evidence filed on the motion discloses that the services performed by New Holland for Aurox as financial adviser were primarily performed in New South Wales, with payment to be made by Aurox to Taurus in New South Wales pursuant to clause 3 of the Engagement. In particular, the modelling and analysis set out in the scope of work at Appendix 1 to the Engagement was undertaken in New South Wales by staff based in New South Wales; the majority of discussions which New Holland had with potential third party financiers took place in New South Wales; and Mr Charles Schaus of Aurox attended numerous meetings at New Holland's offices in Sydney. 19 Although New Holland had two employees based in Perth, who provided assistance on the Engagement from time to time, they took their instructions from the executive directors in Sydney. Further, the evidence filed by Aurox acknowledges that New Holland did not open its Perth office until late 2008, more than a year after entry into the Engagement. In addition, Aurox's evidence is to the effect that there was only one occasion in September 2008 when representatives of New Holland visited the site of the Project in the Pilbara region of Western Australia; and otherwise the executive directors of New Holland only tended to come to Perth once every couple of months, and such trips were for the purpose of visiting various clients in addition to Aurox. 20 In its Commercial List Statement, Taurus pleads that:

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[18] However, regardless of whether a proper law and jurisdiction clause confers exclusive jurisdiction, it carries great weight in determining the appropriate forum in a cross vesting application because it records a term of the bargain between the parties that litigation arising from their agreement will be resolved in accordance with the substantive law of a specified forum and by the courts of that forum: see, for example, per Howie J in Patrick Badges Pty Ltd v Commonwealth [2002] NSWSC 221, at [23]. Particularly persuasive is the weight of such a clause in a contract between commercial parties well able to protect their respective interests. [19] In my opinion, the provisions of cl 21 in the present case as to the governing law of the Track Access Agreement and as to the courts in which disputes shall be determined are dispositive of the application. Whether or not cl 21.2 confers exclusive jurisdiction on the South Australian courts, the parties themselves have given a strong indication in that clause of where and under what law their disputes should be tried, regardless of the inconveniences which may be occasioned to either or both of them. 38 The fact that parties have expressly consented to the non-exclusive jurisdiction of the Supreme Court of New South Wales in respect to disputes arising out of the Equity Mandate should be regarded as a critical and decisive factor in determining that the Supreme Court of New South Wales is a more appropriate forum than the Supreme Court of Western Australia. When considering any inconvenience to Aurox by reason of the proceeding having been commenced in this Court, it is important to recognise that Aurox expressly agreed to proceedings being brought in this Court, and irrevocably submitted to its jurisdiction. Moreover, that choice of forum clause appears in the contract which, on Aurox's pleading, governs the rights and obligations of the parties at the relevant time in relation to the introduction of any equity partner. 39 In his Honour Justice Palmer's words, such a clause carries particularly persuasive weight when it appears in a contract between commercial parties well able to protect their respective interests: by clause 13(f) of the Equity Mandate, the parties "themselves have given a strong indication … of where and under what law their disputes should be tried, regardless of the inconveniences which may be occasioned to either or both of them." Location of witnesses 40 Leaving aside the issues regarding the interpretation and application of the Engagement and the Equity Mandate, there are two main areas of factual dispute on the pleadings:

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