Facts: Pl (NSW corporation) commenced proceedings in the NSWSC. The tort alleged was negligent misrepresentation by D (an accountant in Missouri, USA). Pl had a North American subsidiary. D (Mr Voth) gave some tax advice to the subsidiary, which the Pl relied on to its financial loss (Pl’s reliance occurred in NSW). The financial loss comprised of the Pl being unable to claim certain deductions under AU tax law concerning withholding tax on dividends. There is no exclusive jurisdiction clause because there was no contract. Originating process was served on D in Missouri on the basis of tort damage suffered in NSW. D applied for a permanent stay of proceedings on the ground of FNC.
Held: Despite some factors against a stay (damage sustained in NSW; unable to get lawyer fees), a stay granted. There was a substantial connection with USA law; acts and omissions occurred in USA; D’s lawyer resides and works in USA, so USA professional standards apply; evidence is in USA; D has undertaken not to raise the limitation bar in USA proceedings. Hence, NSW is a clearly inappropriate forum.
Factors/connections to Missouri
Tort committed in Missouri
Professional accounting standard applicable in Missouri would be relevant in NSW
D carried professional practice in Missouri
Tax laws of the US would be material in determining any liability so long as D is concerned
Factors/connections to NSW
NSW Pl suing for damage suffered entirely in NSW
AU tax law relevant in determining the extent of loss
In Missouri, a successful Pl does not recover legal costs
In NSW the interest on damages was considerably more attractive than interest on damages of Missouri
After looking at these factors, HCA was drawn ‘irresistibly’ that NSW is a clearly inappropriate forum.
Principle: An Australian court will decline to exercise its jurisdiction as a matter of discretion, if it is a ‘clearly inappropriate forum’ - i.e. proceedings would be oppressive (“seriously and unfairly burdensome prejudicial or damaging”), or vexatious (“productive of serious and unjustified trouble and harassment”) so far as the defendant is concerned.
It was also held that, in determining whether the local court is a clearly inappropriate forum, "the discussion by Lord Goff in Spiliada of relevant 'connecting factors' and 'a legitimate personal or juridical advantage' provides valuable assistance".
Summary of principles in Voth:
If the court has jurisdiction, P prima facie has a right to be heard.
If D wants the NSW forum to stay proceedings, the onus is on D to show that not granting a stay (and proceedings to hear the dispute) would be vexatious or oppressive.
Determining this turns on whether the local court would be a clearly inappropriate forum
In determining the appropriateness of the local forum, must consider various factors, such as the advantages and disadvantages.