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Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155

Facts: Australian Gourmet Pastes (AGP) contracted with Endeavour (Insured by IAG) to supply cap for garlic paste jars. The insurance contract contained a NZ jurisdiction clause. IAG sought stay proceedings under s 17, Australian Gourmet Pastes Pty Ltd v IAG New Zealand Ltd [2017] VSCA 155.


Held (trial judge): Issued the stay, due to the jurisdiction clause and that NZ more appropriate court.


Held: The trial judge was not bound to issue a stay. Factors against a stay of proceedings outweighed the factors in favour of grant of a stay. The exclusive jurisdiction clause bound manufacturer and insurer but not AGP (not a party to that contract within meaning of s 20(3)). For s 20(3) to apply, the parties to the proceeding must personally be parties to the written agreement in the strictest contractual sense in accordance with the doctrine of privity of contract’ [65]


Factors against stay: Australia was the manufacturer’s place of business, subject matter of dispute occurred in AU (i.e. spoiling of garlic occurred there); Ws mostly from Victoria (only one from NZ to be called by AGP); although proper law of contract was NZ, the parties accepted there wouldn’t be much difference between AU & NZ law.

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