Thomson Aviation Pty Ltd v Dufresne

The evidence on the motion 5In support of its motion, Longview relies on the affidavit of its President and Chief Executive Officer, Mr John Icke, dated 3 June 2011. Mr Icke gives evidence that Longview is a company incorporated in British Columbia and does not maintain any legal or other presence in Australia and that Longview "conducts its business internationally, but not in Australia". Counsel for Longview accepted that I should read these statements as directed only to whether Longview itself conducts business in Australia (in the sense contemplated, for example, by the requirement for registration of a foreign company under Corporations Act s 601CD) rather than as advancing any wider statement as to whether Longview has held interests in companies which in turn have business interests in Australia. The evidence before me (to which I refer in paragraphs 10 - 11 below) indicates that Longview had such interests during the relevant period although the evidence does not disclose whether it continues to do so. 6Mr Icke's evidence is that Longview's current directors and executive officers reside in British Columbia and Canada and not within Australia. Mr Icke also gives evidence that Longview's directors and executive officers travel extensively on Longview's business, primarily in Canada and not to Australia or New Zealand. Given the distinction drawn in Mr Icke's evidence between Longview's business and the business of other entities in which it has an interest, it is not clear whether Mr Icke's evidence is intended to indicate that Longview's directors and executive officers do not travel to Australia in respect of the business of other entities in which Longview has an interest, or only that they do not do so in respect of the business of Longview itself. 7Mr Icke's evidence is that Longview's current officers, directors and employees do not have direct knowledge of the alleged oral agreement between Longview and Mr Dufresne. His evidence is that Longview has little or no documentary evidence of that agreement and the evidence necessary for it to defend the Cross-Claim would be predominantly, if not entirely, of an oral nature and would require up to four "material witnesses" to give evidence in Court including details of Longview's past and present business practices and policies. I accept that evidence of past business practices of Longview might well be relevant to any question of authority which arises in respect of the Cross-Claim, although it is difficult to see how evidence of present business practices could be relevant. Mr Icke's evidence is that Longview's "material witnesses" reside in British Columbia and Canada and not within Australia. 8Mr Icke's evidence is that Mr Stewart, a former General Counsel of Longview who was party to the dealings with Mr Dufresne (although whether he had Longview's authority for such dealings is in issue) also resides in British Columbia and has no current relationship with Longview and that Mr Dufresne also resides near Edmonton, Alberta and not in Australia. 9Counsel for Longview submitted that Mr Icke's evidence, read as a whole, disclosed that Longview's defence to Mr Dufresne's Cross-Claim would be that Mr Stewart did not have authority to enter an agreement with Mr Dufresne or Apex Geoscience on behalf of Longview, evidence of Longview's historical practices would be led to make good that proposition and the "material witnesses" would give evidence of that matter. I consider that is a fair characterisation of that evidence and I will proceed on that basis. However, in the absence of further detail in Mr Icke's evidence as to the nature and extent of the evidence that would be given by Longview's "material witnesses", it is not clear whether the evidence of those persons will be lengthy or complex or that any cross-examination of them could not properly be undertaken by, for example, videolink. 10Mr Dufresne in turn gives evidence of the circumstances in which his dealings with Longview commenced in about December 2006, and of subsequent dealings with Mr Stewart before Mr Dufresne signed the Aviation Service Agreement with Thomson Aviation. The exhibits to Mr Dufresne's first affidavit indicate that Mr Icke and Mr Stewart were directors of WADI from mid-2008 until mid-2009 when Mr Stewart ceased to be a director. A management information circular for Longview's annual and special meetings in June 2009 refers to its holding greater than 20% of the outstanding share capital of, inter alia, WADI. Longview's financial statements for the years ended 31 December 2007 and 31 December 2008 also indicate that it had an investment of greater than 10% in WADI and that a director of Longview was also a director of WADI. 11Mr Dufresne also relies on an affidavit of Mr Stewart dated 7 July 2011. Mr Stewart gives evidence that, inter alia, WADI was a subsidiary of Longview and exhibits extensive correspondence between Longview and Mr Dufresne. Mr Stewart gives evidence of a conversation with Longview's Chief Executive Officer, Mr Damien Reynolds, in February 2007 in which Mr Reynolds instructed him to liaise with Mr Dufresne on the "WADI deal" and identifies WADI as a company incorporated in British Columbia that was formed by Longview to acquire and explore a group of diamond tenements in the Kimberley region of Western Australia. Mr Stewart gives evidence of his subsequent dealings with Mr Dufresne in relation to the operations of WADI and that Mr Stewart reported to Mr Reynolds on the progress of the WADI project from time to time on an informal basis and at weekly management meetings and other meetings which were also attended by Mr Icke. 12Mr Dufresne relies on a further affidavit dated 28 July 2011 which annexes a British Columbia company summary for WADI which discloses that entity was incorporated in 21 March 2007 and has the same mailing address and delivery address as Longview.

Whether this Court is a clearly inappropriate forum 13It is common ground that the Cross-Claim was properly served on Longview outside Australia pursuant to UCPR Sch 6. Counsel for Mr Dufresne contends that the Court's jurisdiction is established under paragraphs (c), (f) and (i) of that Schedule, dealing respectively with the position where a breach of a contract was committed in New South Wales; the proceedings are for contribution or indemnity in respect of a liability enforceable by proceedings in the Court; or a person to be served outside New South Wales is properly joined as a party to the proceedings. Counsel for Longview accepts that the proceedings upon it were properly served pursuant to paragraph (f) of UCPR Sch 6 on the basis that they are proceedings for contribution or indemnity. 14I accept Longview's submission that the fact that proceedings were properly served upon it in accordance with UCPR Schedule 6 does not itself establish that New South Wales is an appropriate forum for the proceedings, and that UCPR rr 11.7(2)(b) and 12.11(1)(a) would, in an appropriate case, allow the Court to strike out or stay proceedings on the basis that New South Wales was an inappropriate forum notwithstanding those proceedings had properly been served under UCPR Sch 6. 15In determining whether to strike out or stay Mr Dufresne's Cross-Claim, the question is whether a trial of that Cross-Claim in New South Wales would be productive of injustice, because it would be oppressive in the sense of being seriously and unfairly burdensome, prejudicial or damaging, or vexatious in the sense of being productive of serious and unjustifiable trouble and harassment for Longview: Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564 - 565; Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 at 521. In Puttick v Tenon Ltd [2008] HCA 54; (2008) 238 CLR 265 at 276 - 277, [27], the majority in the High Court noted that Voth indicated that a defendant would ordinarily be entitled to a permanent stay of proceedings which were regularly served upon it: "... [I]f 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'." 16Longview submits that this Court is an inappropriate forum for determination of the Cross-Claim by reference to the matters identified by Campbell JA in Garsec Pty Ltd v His Majesty Sultan of Brunei (2008) 250 ALR 682 at 712 [141] that all witnesses and documents are in another country and the transaction is governed by the law of that other country. Longview places weight on the fact that the alleged indemnity is a domestic agreement entered into by two Canadian companies in Canada and also argues that the proper law of the contract is Canadian law so that Longview would have to plead any point of Canadian law to take advantage of it. The fact that this Court would be required to apply foreign law in the proceedings is a significant factor against the exercise of the Court's jurisdiction, given the risk that aspects of the foreign law will be lost in translation: Murakami v Wiryadi [2010] NSWCA 7 at [63], [150] - [151]. 17The test for the "proper law" of the contact is where the contract has its "closest and most real connection", by reference to the place of contracting, place of performance, place of residence or business of the parties and the nature and subject matter of the contract: Garstang v Cedenco JV Australia Ltd t/as Cedenco Australia [2002] NSWSC 144 at [17]. I will proceed, for the purposes of this application, on the basis that it is very likely that the proper law of the Geotechnical Services Agreement is Canadian law and to reach any final determination as to that matter in the circumstances there may be an issue before the trial judge if the proceedings are to remain in this Court. 18Longview properly concedes that the fact that the proper law of the contract is Canadian law is not in itself sufficient to establish that an Australian Court is an inappropriate forum for the dispute: Regie Nationale des Usines Renault SA v Zhang above at 521; Puttick v Fenon Ltd , above at [31]; Murakami v Wiryadi , above at [151]. However, Longview also contends that, even if the proper law of the relevant contract is Australian law, the fact that the four material witnesses to which Mr Icke has referred and Mr Dufresne and Mr Stewart are resident in Canada points to the fact that this Court is an inappropriate forum for the Cross-Claim to be tried. 19Several factors favour the result that this Court should not exercise its jurisdiction in the matter, although I consider that those factors have significantly less weight than Longview suggests. 20First, Longview is a foreign corporation, incorporated in British Columbia with no presence in Australia, although it appears that associate entities had business interests in Australia at the relevant time and that at least one of its directors was a director of WADI at the relevant time. There is no evidence before me as to whether Longview continues to hold such interests. 21Second, I should accept Mr Icke's evidence that four persons resident in Canada would be material witnesses in the Cross-Claim. However, that factor seems to me to have lesser weight where the scope of the evidence to be called by those witnesses has not been identified with any specificity and Longview has not established that their attendance in Australia for cross-examination would be required, rather than their being made available for cross-examination by videolink. As Giles CJ CommD observed in Sunbeam Corporation Ltd v MTI Qualos Pty Ltd (unreported, 14 December 1995), this Court has available to it a range of procedures to reduce the burden of witnesses outside the jurisdiction giving evidence, including the use of affidavits or written statements and the possible use of video technology which is now commonly used in commercial proceedings where overseas witnesses are involved. 22Third, the fact that the proper law of the contract is likely to be Canadian law is also a factor supporting a hearing of the proceedings in a Canadian Court. However, I give that factor less weight where Longview has not sought to identify any relevant difference in the Canadian (or British Columbia) law of contract, agency or company law which it would need to prove in Australia. I note that the High Court drew attention to the relevance of such information in Regie Nationale des Usines Renault SA v Zhang , above. 23On the other hand, I consider that there would be significant disadvantages to Mr Dufresne if he were required to bring separate proceedings in Canada rather than to bring a Cross-Claim in these proceedings. There is very substantial force in the observation of Yeldham J in Australian Iron and Steel Pty Ltd v Jumbo Scheepvaart Maatschappij (Curacao) NV & Ors (1988) 14 NSWLR 507 at 521 that: "It is apparent that, as has been said on many occasions, where a defendant seeks contribution or indemnity (whether as a statutory right or pursuant to a contract) such proceedings, brought by way of cross-claim, should in all but exceptional circumstances be heard and determined at the same time as the claim between plaintiff and defendant." His Honour also there noted the importance of all parties, including the proposed cross-defendant, being bound by the decision as between plaintiff and defendant. 24The significance of this matter is clear in the present circumstances. If Mr Dufresne were required to bring separate proceedings in Canada, he would have to establish his liability to Thomson Aviation in a Canadian court in order to establish a right of indemnity against Longview. If Longview is not party to these proceedings and is not bound by the Court's decision in them, it would be open to it, in a Canadian court, to deny that Mr Dufresne is liable to Thomson Aviation in reliance on the same matters on which Mr Dufresne relies to deny such liability in this Court. Counsel for Longview fairly accepted that he was unable to exclude the possibility that Longview would take that course. There would be a significant prejudice to Mr Dufresne if any right of indemnity which he has against Longview was defeated by inconsistent findings between the Australian and Canadian courts - in particular, if this Court held Mr Dufresne was liable to Thomson Aviation under the Aviation Service Agreement in proceedings between those parties, but a Canadian court, applying Australian law in construing the same agreement, held the contrary in proceedings between Mr Dufresne and Longview and denied a right of indemnity to Mr Dufresne on that basis. 25Second, if Mr Dufresne were required to bring separate proceedings in Canada, he would likely be required to give evidence twice, once in Australia in defence of the proceedings brought by Thomson Aviation and, if it is necessary to pursue the Canadian proceedings, again in Canada. If it were necessary to pursue the Canadian proceedings, he would also potentially be exposed to the costs of canvassing the facts of his dealings with Thomson Aviation, so far as they are necessary to establish a claim to indemnity against Longview, in two separate proceedings. 26I have had regard to the factors that support the Court declining to exercise its jurisdiction, which I have noted above, and to the disadvantages that Mr Dufresne would suffer if he were unable to pursue his Cross-Claim against Longview in this Court. While I accept that Longview may suffer some inconvenience from the conduct of the Cross-Claim in this Court, I do not consider that the evidence before me establishes that that inconvenience is substantial where (1) there is not sufficient information before me as to the scope of the evidence to be led by Longview's four "material witnesses" to establish that the relevant witnesses would (if required for cross-examination) be required to attend in person rather than being cross-examined by videolink and (2) Longview has not identified any particular differences between Canadian law and Australian law which may be of significance for the outcome of the proceedings, such that Canadian law could not appropriately be proved in these proceedings. On the other hand, I consider that the disadvantages that Mr Dufresne would suffer from the risk of inconsistent findings and duplication 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. 27In these circumstances, I do not find that this Court is an inappropriate, still less a clearly inappropriate, forum for the determination of the Cross-Claim. 28For these reasons, the motion filed by Longview seeking an order that the Cross-Claim against it be set aside is dismissed. Subject to hearing from Counsel, I propose to order that Longview pay Mr Dufresne's costs of and incidental to the motion.

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