(e) sections 14(1)(d) and 63 of the Limitation Act 1969 (NSW) operate to preclude any application for apportionment.
39 The plaintiffs say that the second declaration is purely consequential on the first declaration and is not intended to be supported independently of the grounds for the first declaration.
The deeds of company arrangement
40 One of the issues in this case is whether two provisions of the deed of company arrangement, clauses 7.2(d) and 33, provide a basis for transferring the applications to the Federal Court or the Supreme Court of Victoria, or granting leave conditionally on the substantive proceedings being commenced in one of those courts. It is therefore necessary to examine relevant provisions of the deed.
41 I have been invited to assume, for the purposes of the present judgment, that the deeds of company arrangement made by the three corporate defendants are identical, except as to the parties. I shall therefore deal only with the deed of company arrangement entered into by Pasminco Australia Ltd (referred to in the relevant deed and here as "the Company"). My summary of the complex provisions of the deed is selective, so as to identify the matters relevant to the applications.
42 According to the recitals to the deed, the Company appointed Mr McCluskey and Mr Spark ("the Deed Administrators") as voluntary administrators of the Company on 19 September 2001. At their second meeting held under Part 5.3A, the creditors of the Company resolved that the Company execute a deed of company arrangement substantially on the terms set out in the deed that was eventually executed. The evidence does not reveal whether the text of clauses 7.2 and 33 of the deed, or even the substance of those provisions, was placed before the creditors.
43 The moratorium provisions of the deed are found in chapter 7. Clause 7.1 says, in substance, that the deed binds all "Deed Creditors".
44 A "Deed Creditor" is, according to the definition of that expression in clause 1.1, any person who has a "Claim". The plaintiffs, who have lodged proofs of debt in respect of the pure Rio claims and now wish to make the pre-administration straddle claims, are Deed Creditors as defined.
45 "Claim" is defined to mean a debt payable by, or claim against, the Company, whether certain or contingent and whether ascertainable or sounding only in damages, being a debt or claim the circumstances giving rise to which occurred on or before the Appointment Date, that would be admissible to proof against the Company under Division 6 of Part 5.6 of the Corporations Act if the Company were to be wound up. The Appointment Date is 19 September 2001. The plaintiffs' pure Rio claims, and the pre-administration straddle claims, are Claims within this definition.
46 Clause 7.2, which is headed "Restrictions on persons bound", says:
"During the Deed Period [which is continuing], without the Deed Administrators' prior written consent, a Deed Creditor must not in relation to its Claim (other than a Claim which is an Excluded Claim under paragraphs (e) to (h) inclusive of the definition of Excluded Claims in clause 1.1):
…
(d) begin or continue any proceeding against the Company … except with the leave of the Court and in accordance with such terms if any as the Court imposes;
…".
47 "Excluded Claims" are defined to include, in paragraph (d) of the definition, Claims in respect of Employee Entitlements. "Employee Entitlements" are defined to mean Accrued Entitlement as defined in the Pasminco Employee Entitlements Trust Deed. According to the latter deed, "Accrued Entitlement" means, inter alia, the entitlements (as defined in s 556(1)(e), (f), (g) and (h) of the Corporations Act), if any, of any Employee (defined to include former employees).
48 "Court" is defined in the deed to mean the Federal Court of Australia or the Supreme Court of Victoria. Therefore the literal effect of clause 7.2(d) would be, unless the pre-administration straddle claims are Excluded Claims, to prohibit the plaintiffs from commencing the substantive proceedings in this Court in the absence of the consent of the Deed Administrators (which is not forthcoming), or the leave of the Federal Court or the Supreme Court of Victoria (which has not been obtained or sought).
49 The plaintiffs will contend in the substantive proceedings that their pre-administration straddle claims, as well (presumably) as the pure Rio claims, are Claims in respect of Employee Entitlements, because they are in respect of the entitlements of Employees to amounts due in respect of injury compensation, being compensation the liability for which arose before the date of commencement of the voluntary administration (s 556(1)(f)). If that contention is correct, clause 7.2(d) does not apply to the pre-administration straddle claims.
50 Clause 7.2(d) is different in scope from s 444E(3) in three respects. First, s 444E(3) imposes a moratorium on any proceeding against the company, whereas clause 7.2(d) applies only to a proceeding in relation to certain Claims, defined so as to be limited to claims arising out of circumstances that occurred before the Appointment Date, other than Excluded Claims. Secondly, clause 7.2(d) would permit the Deed Administrators to consent to a Deed Creditor beginning or continuing any proceeding against the Company. But that consent would not be effective to authorise the commencement of the proceeding or its continuation, because the statute would override the deed and require the leave of a Court. Thirdly, and importantly for the purposes of the transfer application, the prohibition in clause 7(2)(d) would apply if the Deed Creditor obtained the leave of any Court other than the Federal Court or the Supreme Court of Victoria. For the purposes of s 444E(3), "Court" is defined to mean the Federal Court, the Supreme Court of any State or Territory, and certain family courts. I shall return to the significance of this restriction in the deed.
51 Clause 19 states that the Deed Creditors agree that the Company is released and completely discharged from all Claims (other than Excluded Claims if certain specified matters have occurred), and all Claims (other than Excluded Claims if those matters have occurred) are extinguished, in each case effective immediately on whichever of a list of specified events occurs first. None of the specified events has yet occurred. Therefore, although the plaintiffs' Claims have not yet been released, they will be released by operation of the deed upon the happening of one of the specified events, unless they are Excluded Claims.
52 Clause 33, headed "Jurisdiction", says:
"All Parties agree that any application or proceedings concerning this deed or a Claim must only be made to or brought in the Court, unless otherwise agreed in writing by the Deed Administrators or unless the Court does not have jurisdiction to deal with such applications or proceedings."
53 "Parties" is defined to mean the persons bound by the deed, including the Executing Parties. The plaintiffs, being Deed Creditors, are persons bound by the deed. The pre-administration straddle claims are Claims as defined, and the substantive proceedings are proceedings concerning those Claims. Therefore, literally construed, clause 33 operates a contractual promise by the plaintiffs that the substantive proceedings will be brought in the Federal Court of the Supreme Court of Victoria unless the Deed Administrators otherwise agree in writing (consent has been refused) or those courts do not have jurisdiction to deal with the proceedings. There is an issue about the jurisdiction of the Federal Court, as I shall explain, but no doubt that the Supreme Court of Victoria has the requisite jurisdiction. Clause 33 may also extend to the leave applications under s 444E(3), that are presently before this court, as the leave applications also "concern" the pre-administration straddle claims.
The application for transfer - general principles
54 The defendants' application for transfer is made under s 1337H. Subsection (1) says, relevantly, that the section applies to a proceeding with respect to a civil matter arising under the Corporations legislation, where the transferor court is, as here, a State Supreme Court. The application for leave under s 444E(3) is a proceeding from with respect to a civil matter arising under the Corporations legislation. The proposed substantive proceedings are principally proceedings with respect to civil matters arising under contracts, rather than under the Corporations legislation, though they may fall within the latter description if, and to the extent that, declaratory relief with respect to priorities under s 556 is sought. If, however, the claim for declaratory orders with respect to the application of s 556 is withdrawn before the summonses are filed, s 1337H will not apply to the substantive proceedings, although it applies to the applications for leave.
55 Subsection 1337H(2) confers on the transferor court a discretion to transfer the relevant proceeding to another court that has jurisdiction in the matters the determination in the relevant proceeding, if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for the relevant proceeding to be determined by that other court. Section 1337L requires the transferor court to have regard to
(a) the principal place a business of any body corporate concerned in the proceeding; and
(b) the place or places where the events that are the subject of the proceeding took place; and
(c) the other courts that have jurisdiction to deal with the proceeding.
56 These transfer provisions were introduced, in the Corporations Act 2001 (Cth), after the States referred their legislative power with respect to corporations to the Commonwealth and permitted the Commonwealth, for the first time, to make valid general Corporations legislation as Commonwealth legislation, rather than as State-based uniform co-operative legislation. Nevertheless, the provisions are sufficiently similar to the transfer provisions under the legislation ancillary to the former Corporations Law, that cases on the construction of the former law are helpful.
57 Acton Engineering Pty Ltd v Campbell (1991) 103 ALR 437 was a case under the legislation supporting the Corporations Law, in which the Full Federal Court explained the considerations to be taken into account under the transfer provisions of the scheme. Black CJ emphasised (at 440) the wide range of considerations which could be taken into account in deciding whether it is more appropriate for a proceeding to be determined by another court, saying that the expression "the interests of justice" is a broad one. He said that the legislation recognises that, Australia being a large country with widely dispersed main centres of population, it is necessary to have regard to practical connections between a proceeding and a particular part or parts of Australia, to see where the interests of justice lie. Davies J observed (at 441) that the term "interests of justice" permits the court to take into account matters relating to the efficiency, including the economy and the expedition, of litigation, and matters of convenience having regard to the location of witnesses and records. Lockhart J said (at 453) that the practice of the Federal Court with respect to the transfer of proceedings from one registry to another provides a useful analogy. I shall return to the Federal Court analogy when considering the significance of clauses 7.2(d) and 33.
58 It has been held, in respect of the Jurisdiction of Courts (Cross-vesting) Act 1987, that the Court's task in a cross-vesting application is to consider which is the more appropriate court, without any presumption that the transferor court, if it has jurisdiction, should be allowed to exercise it: Bankinvest AG v Seabrook (1988) 14 NSWLR 711; James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357. In my opinion the same approach should be applied to an application under s 1337H.
Considerations in the present case
59 In my opinion there is an overwhelming practical ground for refusing the application to transfer the leave proceedings to the Federal Court. The defendants oppose the granting of leave principally on choice of forum grounds, although they also raise a concern about the form of the summonses for the substantive proceedings. The choice of forum debate has been fully ventilated in the hearing before me, and the parties have had the opportunity to raise the other considerations that they regard as relevant to the leave proceedings. That being so, it would be a waste of money and time to send the leave proceedings to another court.
60 The plaintiffs submit that (putting to one side the question of forum) there are good reasons for the granting of leave under s 444E(3), having regard to the nature of the relief sought, the bases upon which that relief is sought, the probable legal complexity of the substantive proceedings and the general effect of the decision across numerous claims (citing Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1996) 22 ACSR 123,125 and other cases on analogous provisions, including Re AJ Benjamin Ltd (in liq) and the Companies Act (1969) 90 WN(Pt 1)(NSW) 107). I agree, subject to the some unsatisfactory aspects of the summonses for the substantive proceedings.
61 The first declaration, as presently drafted, seems to me to be too wide. It is not, in terms, confined to the pre-administration straddle claims. But counsel for the plaintiffs indicated that his clients would revise the drafting of the summonses to make it clear that only those claims were to be put into contest. That will need to be done.
62 The second declaration purports to determine entitlements of certain former employees of the plaintiffs. The employees will not be parties to the substantive proceedings, either individually or by a representative, according to the present draft summonses. Senior counsel for the defendants cites the Full Federal Court's discussion of proper parties in News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410, at 523-525, and he contends that a representative of the employees should be joined as a party.
63 After listening to this admission, counsel for the plaintiffs informed me from that his clients might decide not to pursue the second declaration, if (on reflection) they decide it is unnecessary and its pursuit might give rise to procedural difficulties. Alternatively, they could amend the draft summonses to join additional parties, perhaps including representatives appointed under Part 8 rule 14 of the Supreme Court Rules. In the circumstances, uncertainty as to the second declaration and the joinder of parties is not a ground for denying leave under s 444E(3).
64 I have therefore decided that I should grant leave under s 444E(3) in both cases, subject to settling the form of the summonses to which the leave will relate. The remaining question, and the more important one, is whether I should impose a condition on the granting of leave, having the effect of requiring that the substantive proceedings be commenced in Victoria.
65 I agree with the plaintiffs that a condition requiring the substantive proceedings to be commenced in the Federal Court is tantamount to a successful application by the defendants for transfer of the substantive proceedings from the Supreme Court of New South Wales to the Federal Court. The question, therefore, is whether it would be more appropriate for the substantive proceedings to be commenced in the Supreme Court of New South Wales, as the plaintiffs wish, or in the Victoria District Court of the Federal Court or the Supreme Court of Victoria. I refer to the Supreme Court of Victoria because of a concern about Federal Court jurisdiction, raised by the plaintiffs in submissions.
66 The plaintiffs contend that the Federal Court does not have jurisdiction in respect of the substantive proceedings, or at a minimum there is a serious risk that it has no jurisdiction. They say, correctly, that the Federal Court is a superior court of limited jurisdiction, which could not entertain proceedings solely for the first declaration, which relates only to contractual matters, estoppel and the application of the Limitation Act of New South Wales. Then they say that there is no conferral, in the Corporations Act or otherwise, on the Federal Court of jurisdiction to determine proceedings for the second declaration. The argument is that, while there are numerous provisions of the Corporations Act conferring jurisdiction on the Court (defined in ss 9 and 58AA to include the Federal Court) in relation to deeds of company arrangement, none of those provisions is invoked in the proposed substantive proceedings.
67 The submission concerning the second declaration raises some difficult and uncertain questions. It is, however, unnecessary for me to answer them. As I have said, counsel for the plaintiffs informed me at the hearing that there is some uncertainty as to whether the second declaration will be pressed. It would be unwise to express a view on difficult questions, when the answer may prove to be hypothetical. Moreover, for the most part the defendants' arguments are directed to having the substantive proceedings commenced in Victoria, and most of the defendants' concerns would be met if I were to make the granting of leave conditional upon the substantive proceedings being commenced either in the Victoria District Registry of the Federal Court or in the Supreme Court of Victoria. It would then be up to the plaintiffs to decide, after clarifying their intentions regarding the second declaration, whether their concerns about the Federal Court's jurisdiction are sufficiently substantial to make it safer to commence in the Supreme Court of Victoria.
68 The plaintiffs say that the following factors indicate that the Supreme Court of New South Wales is a more appropriate forum for the substantive proceedings than a Victorian court:
(a) the proceedings centre on the operation of the New South Wales workers' compensation legislation;
(b) the principal relief sought concerns proposed applications in New South Wales to the Workers Compensation Commission;
(c) the proposed substantive proceedings arise out of agreements and deeds relating to sales of mining businesses in New South Wales and transfers of employees of those businesses;
(d) those agreements and deeds are governed by the law of New South Wales;
(e) the proposed substantive proceedings also arise out of entitlements of New South Wales workers who worked in mines in New South Wales.
69 These matters are made out by the evidence before me. The plaintiffs say that, consequently, New South Wales is the forum with the most real and substantial connection with the proposed substantive proceedings: cf Oceanic Sun Line Special Shipping Inc v Fay (1988) 165 CLR 97. Of course, that is not the real issue for me to decide, as cases such as Bankinvest show. My task, in the interests of justice, is to select the court that is the more appropriate forum for resolution of the dispute.
70 Taking this wider and more flexible approach, I must say that the factors pointing towards New South Wales are not particularly strong. The Federal Court and the Supreme Court of Victoria are not intrinsically in any weaker position than the Supreme Court of New South Wales to construe the workers compensation legislation of New South Wales; or intrinsically in any weaker position to apply the law of New South Wales to the construction of the sale agreements and the 1992 deed. There should be no difficulty in producing the relevant documents and court records to a Victorian court, especially when one bears in mind that the plaintiff companies have a substantial presence in Melbourne. Pasminco's records concerning workers compensation claims are located either in their Melbourne office or in storage at Port Melbourne. The fact that the mines are located in New South Wales is close to irrelevant, especially given that the administration of workers compensation claims has been conducted by Pasminco staff in Melbourne since about May 2002. Most of the employees live in New South Wales, but if it becomes necessary for them to be represented in the proceedings, they could be represented by trade unions, presumably with no more difficulty in Victoria than in New South Wales.
71 The three factors to which s 1337L directs attention are inconclusive. The first is the principal place of business of any body corporate concerned in the proceeding. This factor tends to favour Melbourne, as the defendants point out. The principal place of business of the Pasminco companies is Melbourne, and the Deed Administrators operate out of the Melbourne office of Ferrier Hodson. The plaintiffs are based either in Melbourne or Perth, and their holding company is based in Melbourne.
72 However, the mere fact that parties are located in one jurisdiction rather than another is of little weight. The important question is whether that fact leads to cost, inefficiency or inconvenience sufficiently substantial to be weighed in the balance. I shall return to that question later.
73 The second factor to be considered under s 1337L is "the place or places where the events that are the subject of the proceeding or application took place". The Deed Administrators are in Melbourne and the need to seek leave arose out of the voluntary administration of the corporate defendants and the execution of the deeds of company arrangement. The two meetings of creditors of each company, required by Part 5.3A, were held in Melbourne, and at the second meeting the creditors resolved that the company execute deeds of company arrangement. However, the substantive proceedings are connected with New South Wales to the extent outlined above. In my opinion neither the elements pointing to Victoria nor the elements pointing to New South Wales have any great weight.
74 The third factor under s 1337L, the other courts that have jurisdiction to deal with the proceeding, would be a factor pointing against transfer of the substantive proceedings to the Federal Court, especially if the second declaration is abandoned, because of the doubt raised by the plaintiffs as to the Federal Court's jurisdiction. But it is not a factor pointing against transfer to the Supreme Court of Victoria, or against a condition on the granting of leave which would require the substantive proceedings to be commenced in one or the other of those courts.
75 The defendants refer to several other factors. First, they draw attention to the fact that litigation arising in the Pasminco administration has been "case-managed" by the Federal Court in Melbourne. Nine applications of various kinds have been dealt with by Goldberg J or Finkelstein J since the commencement of the voluntary administration of the Pasminco companies, although only a few of them have been made since the commencement of the deeds of company arrangement. There might be an advantage for the parties in bringing the proposed substantive proceedings before a judge who is already familiar with the deeds of company arrangement and other instruments such as the Pasminco Security Trust Deed and the Pasminco Employee Entitlement Trust Deed, and also with the restructuring of the Pasminco group which has led to the flotation in recent weeks of the ongoing group of companies under the name of Zinifex Ltd. But it seems to me that the advantage is likely to be minor, since the focus of the substantive proceedings will be transactions and instruments entered into in the period from about 1988 to 1992.
76 Perhaps a bigger practical advantage will arise if it becomes necessary to join representatives of the employees as parties to the substantive proceedings. The Federal Court in Victoria already has experience of doing so, in the administration of the Pasminco companies. In McCluskey v Pasminco Ltd (2002) 120 FCR 326 Goldberg J dealt with a question of priority, under s 556 of the Corporations Act, of legal costs incurred by present and former employees of certain Pasminco companies in pursuing injury compensation claims. Three trade unions appeared at the hearing to represent the interests of the employees. Of course, if the plaintiffs decide to abandon the second declaration, the question of joinder of additional parties will go away.
77 Next, the defendants submit that additional costs will be incurred in the deed administration if it is necessary for them to defend substantial proceedings in Sydney. Although Ferrier Hodgson, the Deed Administrators' firm, is a national firm with a Sydney office, and the defendants' solicitors are a national law firm, the Pasminco administration has been handled in the Melbourne offices of the Deed Administrators and the lawyers. The evidence is that if the litigation is in Sydney, and it becomes necessary (as seems to me to be likely) that staff of the Deed Administrators, or one or both of the Deed Administrators themselves, are required to attend conferences or give evidence or attend the court to give instructions, costs will be incurred in addition to the costs which would be incurred in Melbourne litigation. Staff of the Deed Administrators would charge for their attendance in Sydney at the usual hourly rates, and in addition there would be charges for airfares, accommodation, meals, taxis and other incidental expenses. Either the Melbourne lawyers would need to come to Sydney for the litigation, incurring similar expenses, or Sydney lawyers would incur costs in liaising with their Melbourne colleagues who are responsible for managing other aspects of the deed administration.
78 These costs have not been quantified, perhaps because it is too early to guess how substantial the hearing of the proposed proceedings will be. It may eventuate that the additional costs involved in running the litigation in Sydney rather Melbourne will be very small in proportion to the large amount at stake in the litigation. If, on the other hand, the proceedings are lengthy, the extra costs could be high enough to become material.
79 It is important in the interests of the Pasminco creditors to avoid any unnecessary costs, and therefore the risk that substantial additional costs will be incurred if the litigation is conducted in Sydney, rather than Melbourne, is a matter to which I give some weight. Weighing up all the factors that I have mentioned so far, but paying particular attention to the risk of additional costs, and also the location of the workers compensation records in Melbourne and the Federal Court's experience in representative employee proceedings in the Pasminco administration, my view is that overall the interests of justice will be best served if the substantive proceedings take place in Melbourne, in the Federal Court or (if jurisdiction is a problem) the Supreme Court of Victoria.
80 I have reached this conclusion, very much on balance, without taking into account a final factor upon which the defendants placed heavy emphasis. This is that the deeds of company administration select the Federal Court or the Supreme Court of Victoria as the forum for litigation concerning Claims.
The significance of the "choice of jurisdiction" clauses
81 Clause 33 of the deed of company arrangement, and also clause 7.2(d) to the extent that it applies, are choice of jurisdiction clauses. There is a substantial body of case law dealing with the proper interpretation of such clauses. Most of the cases consider agreements for the determination of disputes by foreign tribunals (a "foreign jurisdiction clause"). Such a clause does not operate to exclude the jurisdiction of the Supreme Court of New South Wales, although it may constitute a ground for this court to refuse to exercise its jurisdiction: Compagnie des Maritimes v Wilson (1954) 94 CLR 577, 586-7, 589; Oceanic Sun Line Special Shipping Co Inc v Fay, at 259; Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418, 445.
82 Usually the question before the Court is whether to stay a proceeding in the domestic court brought in apparent breach of the clause. According to Dixon J in Huddart Parker Ltd v The Ship "Mill Hill" (1950) 81 CLR 502, 508-509, the court considering an application for a stay begins with the fact that there is a special contract between the parties to refer the dispute to another tribunal, and therefore the court considers the circumstances of the instant case with "a strong bias in favour of maintaining the special bargain". Brennan J observed, in Oceanic Sun Line v Fay, at 224, that an Australian court regards such a clause as a submission of disputes to arbitration, and will in the absence of countervailing reasons stay the proceeding brought here. In the same case, at 259, Gaudron J said that the power to grant a stay "rests on the principle that the courts will, except where the plaintiff produces strong reasons against doing so, require the parties to abide by the agreement".
83 Notwithstanding the "strong bias in favour of maintaining the special bargain", the court has a discretion to refuse a stay of proceedings if sufficient cause is shown. In their dissenting judgment in Akai v People's Insurance, at 428-9, Dawson and McHugh JJ approved the principles stated by Brandon J in The "Eleftheria" [1970] P 94, 99 and 103, to the effect the court should refuse to grant a stay only if "strong cause" is shown, taking into account all the circumstances of the case, and the Court should "be careful not just to pay lip service to the principle involved, and then fail to give effect to it because of a mere balance of convenience". In Akai v People's Insurance, the majority (Toohey, Gaudron and Gummow JJ) applied the same general principles (at 444-447), while pointing out (at 445) that a stay may be refused if the foreign jurisdiction clause offends public policy of the forum, whether evinced by statute or declared by judicial decision. They held that a stay would not be granted in the case before them, where the effect doing so would be to allow the dispute between the parties to be determined in a court that would not apply the Insurance Contracts Act 1984 (Cth), because the policy of the Act was to curtail freedom to choose a forum outside the reach of the Act.
84 In KC Park Safe (SA) Pty Ltd v Adelaide Terrace Investments Pty Ltd (unreported, Federal Court of Australia, 15 May 1998), Finkelstein J applied these principles to a local choice of jurisdiction clause. There a proceeding in respect of a deed of guarantee, in which the applicant sought relief for misleading and deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) and for common law negligence, was commenced in the Victoria District Registry of the Federal Court. The respondent sought an order to transfer the proceeding to the South Australia District Registry. The deed of guarantee contained a clause by which the parties submitted to the jurisdiction of the courts of South Australia and Commonwealth, provided that any proceeding issued in the courts of the Commonwealth was to be issued in the "Adelaide registry" of the court. Finkelstein J made the order, applying the case law on choice of jurisdiction clauses to a transfer of registry case.
85 After outlining the general "balance of convenience" considerations arising in such an application, Finkelstein J said:
"In this case the matter that is of real importance so far as I am concerned is the choice of jurisdiction clause. … In my view when parties have reached an agreement that a particular court or a court that sits a particular place is to have exclusive jurisdiction to resolve their disputes, that agreement should be given effect unless there is some good reason why the parties should not be kept to their bargain."
86 His Honour analysed English and Australian cases on foreign jurisdiction clauses, concluding that the manner in which a choice of jurisdiction clause should be given effect has not been authoritatively resolved in this country. He drew a distinction between cases in which the foreign jurisdiction clause was treated as a submission to arbitration (represented by Dixon J's judgment in The Mill Hill and Brennan J's observations in Oceanic Sun Line v Fay), and cases in which the effect of the clause was addressed according to a "wider general principle", to the effect that the court makes people abide by their contracts and will therefore restrain a plaintiff from bringing an action in breach of his agreement with the defendant (citing Racecourse Betting Control Board v Secretary for Air [1944] Ch 114, 126 per Mackinnon LJ, and Gaudron J's judgment in Oceanic Sun Line v Fay).
87 In another transfer of Federal Court registry case, Aquila Resources Ltd v Spark [2004] FCA 39 (30 January 2004), R D Nicholson J adopted the principle enunciated by Finkelstein J, as quoted above.
88 I am not convinced that there is any significant difference of principle, on the present point, between the approaches of Brennan and Gaudron JJ - both judgments were cited in Akai v People's Insurance without any indication that they represented divergent approaches. What seems to be clear from the earlier cases, and accepted by Finkelstein J and R D Nicholson J, is that the court has a strong bias in favour of enforcing the choice of jurisdiction clause by granting a stay of the proceeding in the domestic court, and will refuse a stay only if good reasons are established by the party opposing the stay, such as reasons based upon public policy. These principles apply in an application for transfer, in a case where there is a choice of jurisdiction clause favouring the proposed transferee court.
89 It seems to me, however, that the weight to be attached to a choice of jurisdiction clause is much less in the present circumstances, than in a case where the clause is the product of arms' length negotiation. A deed of company arrangement is not the outcome of an arms' length negotiation between the creditors and the proponents of the deed. Rather, a proposal for a deed is placed before a meeting of creditors and they are invited to vote on it. There is very little opportunity for the creditors, as a body, to negotiate. There is no requirement that the text of the proposed deed be sent to creditors with the notice of meeting. All that is required is "a statement setting out the details of the proposed deed": s 439A(4)(c). The deed need not even be prepared until after the creditors' meeting: s 444A(3). Once the creditors have resolved that the company execute the proposed deed, and the company does so in accordance with s 444B, the deed binds all creditors of the company, so far as concerns claims arising on or before the day specified in the deed, by force of s 444D(1), whether or not they have individually voted in favour of or against the deed proposal. In such a case there is an element of artificiality in treating a choice of jurisdiction clause in the deed as reflecting the intention of the persons bound by the deed.
90 If, therefore, there was a strong practical reason for preferring the forum selected by a creditor to the forum designated by the deed, I think it unlikely that a court would feel constrained by the deed from giving effect to the practicalities. In the present case, however, clauses 7.2(d) and 33 merely reinforce the conclusion that I would have reached in their absence.
91 Counsel for the plaintiffs submitted that clauses 7.2(d) and 33 are contrary to public policy. He said that the public policy was that the Supreme Courts of all of the States and territories, and also the Federal Courts, are to have jurisdiction in Corporations Act matters, and submitted that it would undermine this public policy if it were permissible for a deed of company arrangement to bind creditors not to use some of these courts for the resolution of their disputes with the company. In view of the conclusions that I have reached, it is unnecessary for me to express an opinion on this matter, and I would prefer not to do so, as the submission was not fully developed.
Conclusions
92 I have decided not to transfer the present leave proceedings, but to grant the plaintiffs leave under s 444E(3) on condition that the proposed substantive proceedings be commenced either in the Victoria District Registry of the Federal Court or the Supreme Court of Victoria.
93 It will be necessary for the plaintiffs to revise the draft summonses so as to cure the ambiguity of the proposed first declaration. It will be up to the plaintiffs to decide whether to amend the draft summonses so as to join representatives of the employees, or so as to delete the proposed second declaration. I shall stand the leave proceedings over for a short time to give the plaintiffs the opportunity to consider their position. At that time I shall hear the submissions of the parties with respect to costs.
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