FORUM NON CONVENIENS : ENGLISH OR AUSTRALIAN APPROACH?

Date01 December 1990
Published date01 December 1990
Citation(1990) 2 SAcLJ 41
AuthorLEOW CHYE SIAN
Introduction

In 1987, the House of Lords in Spiliada Maritime Corporation v. Cansulex Ltd1 changed the law as regards a stay of the English proceedings by the English court. However in 1988, the High Court of Australia in the case of Oceanic Sun Line Special Shipping Co. Inc v. Fay2 refused to follow Spiliada3 and preferred to follow the old traditional rules4.

Facts

The Respondent lived in Queensland and went on a cruise of the Aegean Sea on a Greek vessel operated by the Appellant. During the cruise, the Respondent was severely injured when a shot gun exploded during a shipboard entertainment of trapshooting and he commenced proceedings for damages in the Supreme Court of New South Wales. The Respondent obtained leave to serve the writ upon the Appellant in Athens, Greece. The Appellant moved to stay the proceedings on the ground, inter alia, that Greece was the appropriate forum for the litigation of the Respondent’s claim, having regard to all the circumstances of the case, and the Supreme Court of New South Wales should stay the action in that court in the exercise of discretion, leaving the Respondent to pursue his remedy in Greece. An exclusive jurisdiction clause was found in the ticket issued in Athens. However the contract had been made before that time and hence the clause did not apply as it did not form part of the contract.

Decision

It should be borne in mind that the case was not one involving a choice of forum clause for foreign jurisdiction since the clause was not part of the contract. It was a case on forum non conveniens, the principles applicable on service of a writ out of the jurisdiction being substantially the same as those for staying of actions brought by proper service within the jurisdiction.5

The dissenting judgments of Wilson & Toohey J J supported Spiliada.6 However the majority refused to follow it. Brennan J at p.38 stated, “In retrospect the English law can be seen to have moved from a discretion confined by a tolerably precise principle to a broad discretion to be exercised

according to the judge’s view of what is ‘suitable for the interests of all the parties and the ends of justice’. The new approach can offer little guidance to a judge in ascertaining what is ‘suitable’ when the parties have opposing interests, when advantage to one is disadvantage to the other and when the choice of forum is the very means by which one party’s interest is preferred over the other. Once the test involves a balancing of the interests of plaintiff and defendant, the court is inevitably involved in a discretionary conferring of an advantage on one party and a disadvantage on the other; it is involved not in the enforcement of existing rights and liabilities but in the creation, modification or abolition of rights and liabilities. If the touchstone to guide the exercise of such a discretion is to be “the ends of justice” how can a court decide what is just in the particular case except by reference to the law which would govern the matter if it were tried in that court?… The function which the courts of this country would be required to perform if the new English approach were adopted would be inconsistent with what we have hitherto understood to be the function and the duty of court; the function of enforcing rights and liabilities according to the law of the forum (including private international law) and the duty to exercise jurisdiction which is regularly invoked unless the invocation of the jurisdiction is oppressive, vexatious or otherwise an abuse of process”.

Brennan J. thus concluded that the formulation of Scott L J in St. Pierre v South American Stores (Gath and Chaves) Ltd7 should be followed, that is, that a plaintiff who founds jurisdiction will not be denied a hearing unless the invocation of that jurisdiction was oppressive, vexatious or an abuse of process.

Deane J. decided that the English case of Spiliada8 should not be accepted as the law of Australia on three grounds, namely:- legal principle, decided authority and policy. On the latter, he concluded that there would be greater uncertainty and an increase in litigation about where to litigate if the broader forum non conveniens discretion was substituted for the discretion under the traditional principle.

Comments

Before we proceed further, let us look at the English position since the majority refused to follow the English position. In 1936, Scott L J in St Pierre v. South American Stores (Gath and Chaves) Ltd9 stated the rule as follows:

“The true rule about a stay…may I think be stated thus;

  1. (1)A mere balance of convenience is not a sufficient ground for depriving a plaintiff of the advantages of prosecuting his action in an English

court if it is otherwise properly brought. The right of access to the King’s court must not be lightly refused.

  1. (2)In order to justify a stay two conditions must be satisfied, one positive and the other negative:-

    1. (a) the defendant must satisfy the court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in some other way; and

    2. (b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant”.

In 1983 the House of Lords in “The Atlantic Star10 relaxed the strict formulation of rules above quoted and gave the words ‘Vexatious’ and ‘oppressive’ a more flexible or liberal application than was the case previously.

In “The Abidin Daver11Lord Diplock described the essential change in the attitude of the English courts as being “that judicial chauvinism has been replaced by judicial comity to an extent which I think… is, in the field of law with which this appeal is concerned, indistinguishable from the Scottish legal doctrine of forum non conveniens”.

In Spiliada12 the Appellants, a Liberian corporation, were the owners of the carrier the ‘Spiliada’. Under a voyage charterparty, the vessel was chartered to the M.M.T.C. Pursuant to this charterparty, the respondents who carried on a business of exporting sulphur in British Columbia loaded a cargo of sulphur on board the vessel in Vancouver bound for ports in India.

The Appellants alleged that the cargo of sulphur was wet when it was loaded and hence caused severe corrosion to the vessel. They obtained leave from the English court to serve a writ outside the jurisdiction on the respondents under the then Order 11 Rule l(f)(iii) of the Rules of the Supreme Court, (“R.S.C.”), that is, to recover damages in respect of a contract governed by English law. The respondents issued a summons under Order 12 Rule 8, R.S.C. on the ground that this was not a proper case for service out of the jurisdiction since it was Canada and not England which was the proper forum for trying the action. The House of Lords, in particular, Lord Goff of Chieveley at p.476-78 laid down new fundamental principles to be applied by a court in deciding whether or not to stay an action as follows:-

  1. (1) The basic principle is that stay will only be granted on...

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