Supreme Court New South Wales

• Medium Neutral Citation: In the matter of Douglas Webber Events Pty Ltd (ACN 160 966 914) [2014] NSWSC 1544
• Hearing dates: 21 October 2014
• Decision date: 06 November 2014
• Jurisdiction: Equity Division - Corporations List
• Before: Brereton J

Decision

Application for stay of proceedings under Trans-Tasman Proceedings Act dismissed with costs.

• Catchwords: PRIVATE INTERNATIONAL LAW - stay of proceedings - generally - forum non conveniens - application under (CTH) Trans-Tasman Proceedings Act 2010 - proceedings for leave to bring derivative action alleging breach of directors duties, and oppression, in respect of Australian company the shareholders in which are New Zealanders - whether High Court of New Zealand is the more appropriate court to determine the matters in issue - whether exclusive choice of court agreement - whether High Court of New Zealand has jurisdiction to grant relief under (CTH) Corporations Act
• Legislation Cited: (CTH) Corporations Act 2001, s 58AA, s 58FF, s 181, s 182, s 183, s 232, s 236, s 237, s 1317H; (CTH) Trans-Tasman Proceedings Act 2010, s 9, s 10, s 17, s 19, s 20; (NZ) Companies Act 1993, s 165; (NZ) Limited Partnerships Act 2008, s 9(3)
• Cases Cited: Asciano v ARTC Ltd [2008] NSWSC 652; Australian Commercial Research & Development Ltd v ANZ McCaughan Merchant Bank Ltd [1989] 3 All ER 65; Australian Securities and Investments Commission v Edensor Nominees Pty Limited [2001] HCA 1; (2001) 204 CLR 559; (2001) 37 ACSR 1; Base Metal Trading Ltd v Shamurin [2004] EWCA Civ 1316; [2005] 1 WLR 1157; Commonwealth Bank of Australia v White [1999] 2 VR 681; Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749; In the matter of Featherston Resources Limited [2014] NSWSC 1139; Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 All ER 979; [2002] 1 WLR 1269; Oates v Consolidated Capital Services Ltd (2008) 66 ACSR 277; Pergamon Press Ltd v Maxwell [1970] 2 All ER 809; [1970] 1 WLR 1167; In the Marriage of J G and R J Smith [1986] HCA 36; (1986) 161 CLR 217; (1986) 10 Fam LR 769; Taurus v Aurox [2010] NSWSC 1223; Titchfield Management Ltd v Vaccinoma Inc (2008) 68 ACSR 448; Williams v The Society of Lloyds [1994] 1 VR 274
• Texts Cited: Bell, Forum Shopping and Venue in Transnational Litigation, Oxford 2003
• Category: Interlocutory applications
• Parties: Gareth John Webber (plaintiff); Craig Douglas (first defendant); Grant Norman Poole (second defendant)
• Representation: Counsel: E Finnane (plaintiff/respondent); Q Rares (first defendant/applicant); Solicitors: Streeterlaw (plaintiff/respondent); Clyde & Co Australia (first defendant/applicant)
• File Number(s): 2014/230987

Judgment

1 Pursuant to an originating process filed on 6 August 2014, the plaintiff Gareth John Webber, a New Zealander, claims (1) leave pursuant to (CTH) Corporations Act 2001, s 237, to bring proceedings in the name of the third defendant company Douglas Webber Events Pty Ltd (DWE AS), an Australian company registered in Victoria but having its registered office and principal place of business in New South Wales, against the first defendant Craig Douglas, also a New Zealander, for compensation pursuant to Corporations Act, s 1317H, for alleged breaches of his duties as a director of the company under Corporations Act, ss 181, 182 and 183; (2) a compulsory purchase order in respect of his shareholding in the company, pursuant to Corporations Act, ss 232 and 233; and (3) damages for breach of a "non-compete" clause in a Limited Partnership Agreement between Mr Douglas, Mr Webber and the company. The second defendant Grant Norman Poole, a Queenslander, is a director of the company, but no relief appears to be sought against him. The proceedings were served on Mr Douglas in New Zealand on 7 August 2014, in reliance on (CTH) Trans-Tasman Proceedings Act 2010, ss 9 and 10, and on Mr Poole in Queensland also on 7 August. Mr Poole has not, to date, participated in the proceedings. Mr Douglas has not filed an appearance but, by interlocutory process filed on 16 September 2014, applies pursuant to Trans-Tasman Proceedings Act, s 17, for an order staying the proceeding, on the grounds that the High Court of New Zealand is the more appropriate court to determine the matters in issue.

Background

2 In about 2006, Mr Douglas (who had for some years been engaged in the event management business in New Zealand) agreed at Mr Webber's request to allow him to assist, as a volunteer, to organise certain events. A business relationship developed between them, and in about 2007 they established a new indoor rodeo business, in which Mr Douglas held 85% and Mr Webber 15%, until it was sold in 2009. On 10 April 2007, they became 50/50 shareholders in a New Zealand company called Party Hoppers International, which provided alcohol distribution rights at events. These were all New Zealand companies and conducted their businesses in New Zealand, although Party Hoppers International later granted franchises in Australia.

3 In 2010, Mr Douglas and Mr Webber commenced Douglas Webber Events Ltd (DWE NZ), a New Zealand company, the primary business of which was the organisation of ice hockey events and the installation of ice rinks, in New Zealand. Fifty of the 100 issued shares are held by Mr Douglas or his family trust, and 50 by Mr Webber or his family trust. All the shareholders are New Zealanders or New Zealand entities.

4 In or about 2012, Mr Douglas and Mr Webber organised the installation of a number of portable ice rinks in New Zealand and Australia. Mr Douglas says that they agreed that Mr Webber would continue running the ice rink business in New Zealand while Mr Douglas would focus on hosting an ice hockey event in Australia, and resolved to establish an Australian company with Australian bank accounts that could hold moneys for Australian creditors and pay Australian expenses. As a result, DWE AS was incorporated and registered on 26 October 2012, with three directors: Mr Douglas, Mr Webber, and Mr Poole - a friend of Mr Douglas who agreed to act as a non-executive director in order to meet the requirement that there be at least one resident Australian director. Mr Douglas and Mr Webber each hold 450 of the 900 issued shares.

5 On 30 May 2013, DWE AS (as General Partner) and Mr Douglas and Mr Webber (as Limited Partners) entered into a Limited Partnership Agreement, establishing a Limited Partnership under the (NZ) Limited Partnerships Act 2008, s 9(3), called International Ice Hockey Australia LP (IIHA LP), which appears to have been registered on or about 6 June 2013, to carry on "the Business", defined as that of "an Australian-based event management company specialising in the promotion, production and event management of Ice Hockey exhibition events in venues throughout Australia generally". Clause 14.1 (Non-Competition) provides:

To protect the interests of the Limited Partnership in the goodwill of the Business, the Partners covenant that, in consideration of their entering into this Agreement, no Partner will, and will procure that none of its Associated Parties will, at any time without the prior written approval of all remaining Limited Partners:

14.1.1 while they are a Party to this Agreement or a Partner of the Limited Partnership or for the period of five (5) years from the day they cease to be a Party to this Agreement or a Partner of the Limited Partnership:

14.1.1.1 directly or indirectly carry on or be interested, engaged or concerned in, whether alone or in partnership with or as manager, agent, director, shareholder or employee or beneficiary under a trust or in any other capacity in any other business within Australia that is the same as or similar to the Business (including but not limited to any business relating to ice hockey events in Australia); or

14.1.1.2 directly solicit or approach and entice or endeavor to entice away any of the contractors, consultants, customers, clients, or employees, or officers of the Limited Partnership.

6 Clause 15.7 (Governing Law) provides:

This Agreement and the rights of the parties are governed by and construed in accordance with the laws of New Zealand. Each of the parties irrevocably agrees that the courts of New Zealand have non-exclusive jurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes which may arise out of or in connection with this Agreement and, for such purposes, irrevocably submits to the jurisdiction of such courts.

7 Difficulties in the relationship emerged during 2013. As a result, Mr Webber and Mr Douglas came to an agreement that in return for a payment of $300,000, Mr Douglas would manage the Australian operations as an independent contractor (as well as retaining his equity), while Mr Webber would have no active role in them but would be a "silent partner". To give effect to this arrangement, and for tax effectiveness, on 11 October 2013, three relevant agreements were executed.

8 The first was a "Shareholders Agreement", between the shareholders of DWE NZ - the trustees of the Douglas Family Trust and Mr Douglas, and the trustees of the Webber Family Trust and Mr Webber - and DWE NZ, which made provision for the governance and operation of DWE NZ and its business, which was defined (by clause 3) as that of an event management company specialising in the promotion, production and event management of Ice Hockey exhibition events and Ice Rink events in venues throughout New Zealand generally, and was geographically limited to "within New Zealand".

9 The second was a "Management Agreement", between the Limited Partnership IIHA LP and DWE AS. It recited that IIHA LP carries on the business of Australia-based event management specialising in the promotion, production and event management of Ice Hockey exhibition events in venues throughout Australia, and provided for the retention of the services of DWE AS, as an independent contractor and agent, to provide management services and take primary responsibility for the overall management of the business as agent for IIHA LP. By clause 3.3, IIHA LP consented to DWE AS engaging Douglas Projects International Limited (DPI) as an independent contractor (called the "Key Contractor") on behalf of IIHA LP to carry out the day-to-day functions (but not the strategic or managerial functions) of DWE AS under the agreement. DPI is a New Zealand company, in which 99 of the 100 issued shares are owned by the Douglas Family Trust and one by Mr Douglas, who is the sole director.

10 The third was an "Independent Contractor Agreement", between IIHA LP and DWE NZ as principals and DPI as contractor, which recited that DWE NZ carried on the Ice Hockey Business in New Zealand and IIHA LP carried on that business in Australia, and that both wished to retain the services of DPI to provide management services and take primary responsibility for the overall management of the business in each country, and provided for the engagement of DPI as an independent contractor for a term of 12 months to provide services in connection with the promotion and management of the business.

11 Each of the three agreements contained a New Zealand choice of law clause, and a New Zealand exclusive jurisdiction clause; it will be necessary to return to their terms in more detail.

12 The plaintiff's claim has not yet been pleaded and must be distilled from the relief claimed in the originating process, the affidavit evidence so far adduced, and the submissions. For present purposes, it suffices that the matters said to constitute the breach of director's duties, and to constitute oppression, involve the alleged diversion of income generated in Australia by the operations of DWE AS to accounts (in Australia) in the name and under the control of Mr Douglas. Mr Douglas' defence will apparently be that he believed that this to be in accordance with the Independent Contractor Agreement, and that in any event he intends and has always intended to account for one-half of those receipts to Mr Webber, once reconciliations have been completed.

Application under (CTH) Trans-Tasman Proceedings Act 2010

13 Part 3 of the Trans-Tasman Proceedings Act provides for an Australian court to stay a proceeding on the grounds that a New Zealand court is the more appropriate court to determine the matters in issue, upon application made by the defendant within 30 working days after being served with the initiating document (or such shorter or longer period as the court considers appropriate) [s 17], if it is satisfied that a New Zealand court has jurisdiction to determine the matters in issue and that it is the more appropriate court to determine those matters [s 19(1)]. However, if the parties have made an exclusive choice of court agreement designating a New Zealand court as the court to determine the matters in issue, the Australian court must stay the proceeding [s 20(1)(a)].

14 The applicant invokes s 20(1)(a), and alternatively s 19(1).

No applicable exclusive choice of court agreement

15 Section 20, which provides for a mandatory stay where there is an exclusive choice of court agreement, relevantly provides as follows:

20 Exclusive choice of court agreements

(1) On application under section 17 (and despite section 19), the Australian court:

(a) must, by order, stay the proceeding, if satisfied that an exclusive choice of court agreement designates a New Zealand court as the court to determine the matters in issue; and

(b) must not, by order, stay the proceeding, if satisfied that an exclusive choice of court agreement designates an Australian court as the court to determine those matters.

(2) Paragraph (1)(a) does not apply to an exclusive choice of court agreement if the Australian court is satisfied that:

(a) it is null and void under New Zealand law (including the rules of private international law); or

(b) a party to it lacked the capacity to conclude it under Australian law; or

(c) giving effect to it would lead to a manifest injustice or would be manifestly contrary to Australian public policy; or

(d) for exceptional reasons beyond the control of the parties to it, it cannot reasonably be performed; or

(e) the court designated by it as the court to determine the matters in issue between the parties to the proceeding has decided not to determine those matters.

...

(3) Exclusive choice of court agreement, in relation to matters in issue between parties to a proceeding, means a written agreement between those parties that:

(a) designates the courts, or a specified court or courts, of a specified country, to the exclusion of any other courts, as the court or courts to determine disputes between those parties that are or include those matters; and

(b) is not an agreement the parties to which are or include an individual acting primarily for personal, family, or household purposes; and

(c) is not a contract of employment.

16 The applicant submits that each of the three agreements includes an "exclusive choice of court agreement" within s 20(3) designating the courts of New Zealand to the exclusion of any other courts as the courts to determine disputes between the parties that include the matters in dispute in these proceedings. (Relevantly, the parties to the proceedings are Mr Webber as plaintiff, Mr Douglas as first defendant, and DWE AS as third defendant; although Mr Poole is named as second defendant, it does not appear that any relief is sought against him).

17 The relevant clause in the Shareholders Agreement is as follows:

25.10 This agreement will be governed by, and construed in accordance with the laws of New Zealand. The Parties irrevocably submit to the exclusive jurisdiction of the Courts of New Zealand with respect to any legal action, suit or proceeding or any other matter arising out of or in connection with this agreement ...

18 Mr Webber and Mr Douglas are both parties to the Shareholders Agreement. Although DWE AS and Mr Poole are not, I proceed on the basis that it suffices that Mr Webber, who is the plaintiff in the Australian proceedings, is bound by it.

19 Clause 25.10 clearly enough designates the courts of New Zealand, to the exclusion of other courts, as the courts to determine "any legal action, suit or proceeding or any other matter arising out of or in connection with this agreement". But these proceedings do not arise out of the Shareholders Agreement. Nor are they proceedings in connection with the Shareholders Agreement. As has been observed, the Shareholders Agreement makes provision for the governance of DWE NZ and its business, which is geographically limited to New Zealand. It makes no provision in respect of the Australian business. The applicant referred to clause 7.2, which authorises the Board to determine the management structure of the company. But in the light of the definition of "Business" (clause 3), this has nothing to do with the Australian business. DWE NZ is not a shareholder in DWE AS, nor is it a party to the Management Agreement (which relates to the Australian business), and although it is a party to the Independent Contractor Agreement, that is in its capacity as operator of the New Zealand business. DWE NZ has no interest or role in the Australian business, or in DWE AS. These proceedings are concerned with DWE AS and the Australian business. They have no connection with the Shareholders Agreement within the meaning of clause 25.10.

20 It follows that the Shareholders Agreement does not designate the courts of New Zealand, to the exclusion of any other courts, as the courts to determine between Mr Webber and Mr Douglas the matters that are in issue in these proceedings [s 20(3)(a)], and thus does not designate a New Zealand court as the court to determine the matters in issue, for the purposes of s 20(1)(a).

21 The relevant clause in the Management Agreement is as follows:

25. Governing Law. This agreement shall be interpreted and take effect in accordance with the laws of New Zealand and the New Zealand Courts shall be the only Courts competent to entertain any action taken pursuant to this agreement ...

22 The parties to the Management Agreement are IIHA LP and DWE AS. Neither Mr Webber nor Mr Douglas personally is a party. The Management Agreement is therefore not an agreement between the parties to the proceeding, and cannot be an "Exclusive choice of court agreement" within s 20(3).

23 Apart from that, the present proceeding is not an action taken "pursuant to" the Management Agreement. The reference to "any action taken pursuant to this agreement" restricts the scope of the clause. The present proceeding is not authorised by, consequent on, or in accordance with the management agreement. It does not even seek to enforce it, or claim damages for its breach. I appreciate that Mr Douglas may plead in his defence that the Management Agreement, in conjunction with the Independent Contractor Agreement, provides justification for the actions about which Mr Webber complains; but that does not render the present proceeding one that is "pursuant to" the Management Agreement. It is founded on rights and obligations created by the Corporations Act, not the Management Agreement. It follows that the Management Agreement does not designate a New Zealand court as the court to determine the matters in issue, for the purposes of s 20(1)(a).

24 The relevant clause in the Independent Contractor Agreement is as follows:

26. Governing Law. This agreement shall be interpreted and take effect in accordance with the laws of New Zealand and the New Zealand Courts shall be the only Courts competent to entertain any action taken pursuant to this agreement ...

25 The parties to the Independent Contractor Agreement are IIHA LP and DWE NZ as principals, and DPI as contractor. Neither Mr Webber nor Mr Douglas personally is a party. The Independent Contractor Agreement is therefore not an agreement between the parties to the proceeding, and cannot be an "Exclusive choice of court agreement" within s 20(3).

26 Apart from that, for the reasons explained above in connection with the Management Agreement the present proceeding is not an action taken "pursuant to" the Independent Contractor Agreement. It follows that the Independent Contractor Agreement does not designate a New Zealand court as the court to determine the matters in issue, for the purposes of s 20(1)(a).

27 The present proceeding is, at least in part, proceedings that "arise out of or in connection with" the Limited Partnership Agreement, within clause 15.7 of that agreement. However, that clause (set out at [6] above) is a non-exclusive choice of jurisdiction clause.

28 Accordingly, no "Exclusive choice of court agreement" between the parties to these proceedings designates a New Zealand court, to the exclusion of any other courts, as the court to determine disputes between them that are or include the matters in issue in these proceedings. Section 20(1)(a) is not engaged.

New Zealand has no jurisdiction to determine matters in issue

29 Section 19 provides as follows:

19 Order of stay of proceeding

(1) On application under section 17, the Australian court may, by order, stay the proceeding if it is satisfied that a New Zealand court:

(a) has jurisdiction to determine the matters in issue between the parties to the proceeding; and

(b) is the more appropriate court to determine those matters.

(2) In determining whether a New Zealand court is the more appropriate court to determine those matters, the Australian court must take into account the following matters:

(a) the places of residence of the parties or, if a party is not an individual, its principal place of business;

(b) the places of residence of the witnesses likely to be called in the proceeding;

(c) the place where the subject matter of the proceeding is situated;

(d) any agreement between the parties about the court or place in which those matters should be determined or the proceeding should be commenced (other than an exclusive choice of court agreement to which subsection 20(1) applies);

(e) the law that it would be most appropriate to apply in the proceeding;

(f) whether a related or similar proceeding has been commenced against the defendant or another person in a court in New Zealand;

(g) the financial circumstances of the parties, so far as the Australian court is aware of them;

(h) any matter that is prescribed by the regulations;

(i) any other matter that the Australian court considers relevant;

and must not take into account the fact that the proceeding was commenced in Australia.

(3) An order under subsection (1) may be made subject to any conditions the Australian court considers are appropriate in order to facilitate, without delay or undue expense, the determination of the matters in issue between the parties to the proceeding.

30 Thus the Australian court has a discretion to stay the proceeding if satisfied of two conditions, the first being that a New Zealand court has jurisdiction to determine the matters in issue between the parties to the proceeding, and the second being that the New Zealand Court is the more appropriate court to determine those matters, having regard to the factors listed in s 19(2). (While the power to stay is a discretionary one, in that the statute permits but does not require the court to stay the proceedings if satisfied that the New Zealand court has jurisdiction and is the "more appropriate court", I accept that it would be an exceptional case, if there is one at all, in which being satisfied that the New Zealand court had jurisdiction and was the more appropriate one, the Court would not stay the Australian proceedings).

31 As to the first condition, the matters in issue in the proceeding are claims for relief by way of (1) leave under Corporations Act, s 236, to bring proceedings for compensation pursuant to Corporations Act, s 1317H for alleged breaches of directors' duties under Corporations Act, s 181, 182 and 183; (2) a compulsory purchase order under Corporations Act, 233, for alleged oppression within s 232; and (3) damages for breach of clause 14.1 of the Limited Partnership Agreement dated 30 May 2013 between Mr Douglas, Mr Webber and DWE AS.

32 The New Zealand courts would plainly have jurisdiction in respect of the claim under the Limited Partnership Agreement; and were that the only matter in issue the (albeit non-exclusive) choice of jurisdiction clause in the Limited Partnership Agreement would weigh significantly in favour of a conclusion that the courts of New Zealand were more appropriate [cf Asciano v ARTC Ltd [2008] NSWSC 652, [18]-[19]; Taurus v Aurox [2010] NSWSC 1223, [38]]. However, that claim forms only a small part of the plaintiff's case; indeed, the plaintiff's counsel was hard-pressed to indicate how the evidence supported any such claim at all. In substance, the plaintiff's claim is one in respect of members' rights and directors' duties in connection with DWE AS, an Australian company, under the Corporations Act - although the defence will contend that Mr Douglas' duties and Mr Webber's rights must be viewed in the context of the Limited Partnership Agreement, the Management Agreement and the Independent Contractor Agreement.

33 Save insofar as statute otherwise provides, the content of the duties of a company director are governed by the law of the company, which is that of the place of incorporation [Pergamon Press Ltd v Maxwell [1970] 2 All ER 809; [1970] 1 WLR 1167, 1172; Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 All ER 979; [2002] 1 WLR 1269, [52]-[55]; Base Metal Trading Ltd v Shamurin [2004] EWCA Civ 1316; [2005] 1 WLR 1157, [56]; Oates v Consolidated Capital Services Ltd (2008) 66 ACSR 277, [41]; Titchfield Management Ltd v Vaccinoma Inc (2008) 68 ACSR 448, [37]]. That of itself does not necessarily mean that a foreign court would not have jurisdiction, but where the claim is a statutory one, it may be doubtful that it can be litigated in a foreign court. Thus in Australian Commercial Research and Development Ltd v ANZ McCaughan Merchant Bank Ltd [1989] 3 All ER 65, Sir Nicolas Browne-Wilkinson V-C doubted that an English Court would apply the (CTH) Trade Practices Act 1974 as part of the applicable law, even though the proper law of the contract was Queensland. In Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749, it was common ground that a claim under the (USA) Federal Racketeer Influenced and Corrupt Organisations Act (18 USC § 1962(c)) could not be brought in an English court, even though such claims fell within the terms of an exclusive jurisdiction clause (at 773a). In Williams v The Society of Lloyds [1994] 1 VR 274, McDonald J appears to have accepted, in the course of staying proceedings for damages for misrepresentation in Australia, in favour of proceedings in England, that the English court would not have jurisdiction to grant relief under the Trade Practices Act (at 320.40-321.25, 325.43-47). In Commonwealth Bank of Australia v White [1999] 2 VR 681, Byrne J, in declining to enforce an exclusive choice of jurisdiction in favour of the courts of England, took into account that the plaintiff's claim for misleading and deceptive conduct and for breaches of the companies legislation would not be available in the English courts.

34 But even if the forum's choice of law rules would otherwise permit a foreign statutory claim to be litigated before it [as to which see A.S. Bell, Forum Shopping and Venue in Transnational Litigation, Oxford 2003, [3.111]], there is an additional obstacle where the statute confers jurisdiction only on a specified court or courts, not including a foreign court. Corporations Act, s 237, confers jurisdiction on "the Court". Section 1317H similarly confers jurisdiction on "a Court". Sections 232 and 233 likewise confer jurisdiction on "the Court". By s 58AA, "Court" means, relevantly, any of the Federal Court of Australia, the Supreme Court of a State or Territory of Australia, or the Family Court of Australia. No other court may exercise the powers given by those sections. Necessarily, that means that no foreign court may do so. (Where, under the Act, jurisdiction is not limited to a "Court" but given to any "court", it is at least arguable that a foreign court whose choice of law rules selected Australian law as applicable would be able to exercise such Corporations Act jurisdiction as is exercisable by any "court", as distinct from a "Court").

35 The applicant argued that s 58AA was not a provision conferring jurisdiction, for which Australian Securities and Investments Commission v Edensor Nominees Pty Limited [2001] HCA 1; (2001) 204 CLR 559; (2001) 37 ACSR 1 was cited. That case was decided on the previous (VIC) Corporations Law, which was state legislation, and the issue was whether particular (state) jurisdiction had been conferred on the Federal Court. But I would accept that s 58AA, in its current form, does not of itself confer jurisdiction. However, while it does not itself confer jurisdiction, it has the effect, particularly in the light of s 58FF(2), that when read in conjunction with the provisions that do confer jurisdiction on a "Court", that such jurisdiction is limited to the Courts so defined. In other words, where a function under the Act is given to a "Court" (as distinct from a "court"), only a Court as so defined can exercise that function. Sections 237, 1317H, 232 and 233 are such provisions, and jurisdiction under them is limited to such "Courts" and is not given to other courts, including foreign courts.

36 Although in a somewhat different context, the point is illustrated by the High Court's rejection, in In the Marriage of J G and R J Smith [1986] HCA 36; (1986) 161 CLR 217; (1986) 10 Fam LR 769, of the proposition that the Family Court had accrued jurisdiction to approve a release of rights under (NSW) Family Provision Act 1984, s 31, included in a maintenance agreement under the (Cth) Family Law Act 1975. Gibbs CJ, Wilson and Dawson JJ said:

There is a further, and quite independent, reason for concluding that the Family Court cannot give an approval for the purposes of s 31 of the Family Provision Act. That section makes a release effective only if the Supreme Court has given its approval to it. An approval by the Family Court is not an approval by the Supreme Court, and would not satisfy s 31(3).

37 Mason, Brennan and Deane JJ said:

It is sufficient for us to say that if the Family Court assumed an accrued jurisdiction to make an order under s 31 of the Family Provision Act approving a release in a maintenance agreement, the order would none the less not be an order of the Supreme Court. It therefore would not amount to an approval by the "Court" which is referred to in s 31(3), with the consequence that the release would have no effect by virtue of s 31(2). It is quite impossible to read the reference to "Court" in s 31, viewed in the light of the definition of "Court" in s 6(1), otherwise than as a reference to the Supreme Court. It follows that the Family Court does not possess accrued jurisdiction to approve a release for the purposes of the State Act.

38 It follows that the New Zealand court does not have jurisdiction to grant the principal relief sought by the plaintiff in these proceedings, being relief that can be granted only by a "Court" within the meaning of the Corporations Act.

39 While (NZ) Companies Act 1993, s 165, gives the High Court of New Zealand a power to grant leave for a statutory derivative action analogous to that under Corporations Act, s 237, the corollary of In the matter of Featherston Resources Limited [2014] NSWSC 1139, [15]-[31], is that that power is available only in relation to a company registered under the New Zealand Act, and not an "overseas company" within the meaning of that Act. The applicant argued that, by operation of the definition of "related company" in s 2, the reach of the section was extended to DWE AS, but that definition also is expressed in terms of "a company", and not an "overseas company". In my view, the High Court of New Zealand would not have jurisdiction to grant leave under s 165 for a statutory derivative action in respect of an Australian company. Moreover, even if it did, that would not make the New Zealand court a "Court" with jurisdiction to grant relief under the provisions of the Corporations Act that are invoked by the plaintiff, and which provide the governing law as to directors' duties and members' rights of an Australian company.

40 For all those reasons, the New Zealand court does not have jurisdiction to determine the matters in issue between the parties to this proceeding. The condition in s 19(1)(a) is not satisfied.

41 It is therefore unnecessary to consider the second condition, in s 19(1)(b). However, while acknowledging that a number of factors favour New Zealand - including that New Zealand is the place of residence of the main protagonists (Mr Douglas and Webber), and probably of most of the material witnesses, and that the Limited Partnership Agreement contains a non-exclusive choice of jurisdiction clause in favour of New Zealand - the test directs attention to the more appropriate, not the more convenient, court, so that while convenience is undoubtedly an important consideration, it is not determinative [Featherston Resources Limited, [53]-[54]], and the courts of the place of incorporation are usually the appropriate forum for determination of disputes about the duties of directors [Pergamon Press Ltd v Maxwell; Konamaneni v Rolls Royce Industrial Power (India) Ltd, [52]-[55]; Base Metal Trading Ltd v Shamurin, [56]; Oates v Consolidated Capital Services Ltd, [41]; Titchfield Management Ltd v Vaccinoma Inc, [37]]. There would appear to be even less reason for concluding otherwise where the alleged breaches occurred in Australia.

Conclusion

42 My conclusions may be summarised as follows.

43 No "exclusive choice of court agreement" between the parties to these proceedings designates a New Zealand court, to the exclusion of any other courts, as the court to determine disputes between them that are or include the matters in issue in these proceedings. Section 20(1)(a) is not engaged.

44 The New Zealand courts do not have jurisdiction to grant the relief under the Corporations Act claimed in these proceedings. The requirements of s 19(1)(a) are not satisfied, and accordingly s 19(1) is not engaged.

45 The application for a stay therefore fails.

46 The Court orders that the interlocutory process filed 16 September 2014 be dismissed, with costs.

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Decision last updated: 10 November 2014