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AUSTRALIA -- Patrick Quirk

DRAFT ONLY

ABA PROJECT - INTERNET JURISDCTION

Specific questions:

A1.Under what, if any, circumstances, would Australia see as valid the exercise of jurisdiction over a defendant who does not have a permanent place of business in the forum?

A2. Does it matter if the plaintiff is a consumer? (It appears that the European Union may be more willing to permit such assertions of jurisdiction when the plaintiff is a consumer suing at home, while the U.S. finds the past related transaction of business in the forum sufficient.)

B1. …would it be proper for a forum to use forum law to resolve a dispute involving a non-resident defendant acting outside the forum whose activities intentionally caused substantial effects in the forum?

__________________________________

General Sources:

  • P Nygh Conflict of Laws in Australia, Butterworths, 1995.

 

  • New Zealand Law Commission Report 50 Electronic Commerce Part One A Guide for the Legal and Business, October 1998 (available by drilling down under 'publications' at www.lawcom.govt.nz). See especially Chapter 6 and Appendix D which gives a brief but useful summary of the position in Japan, Germany, England and Wales, Korea, China, Taiwan, France. ( I find this summary very useful)

 

 

 

QUESTION A1.

A1.Under what, if any, circumstances, would Australia see as valid the exercise of jurisdiction over a defendant who does not have a permanent place of business in the forum?

 

In Australia most courts will assume jurisdiction if can be shown either that the defendant has submitted to the court’s jurisdiction or that originating process has been served on him or her. The test will be whether a writ can be served on the defendant and this will normally be possible when:

  1. He or she is actually present in the jurisdiction ('tag' jurisdiction)
  2. He or she submits to the court’s jurisdiction (can be done by agreement)
  3. The court authorises someone to go outside the jurisdiction to find the defendant and effect service there.

So far as jurisdiction over a foreigner is concerned, requirement C is crucial. There are no "Long Arm Statutes" in Australia.

Note that these three steps are a reflection of the law in England and Wales from which Australia takes its lead. Recently however Australia has struck out on its own - this due in part of changes in UK law due to Conventions entered into by the UK as part of the EU. For this reason it has been stated that Australia is attempting to remain faithful to an earlier version of English law (Nygh p9).

Service usually involves no more that showing or leaving a copy of a court endorsed (stamped) writ with the defendant. Of course actually locating a person determined to avoid "service" can sometimes be difficult, especially if they are outside the court’s home country.

It is clear that the test for jurisdiction is not dependent upon "permanent place of business". However, the presence or absence of a permanent place of business can be one factor that the courts will take into account in determining whether they will authorise service on a defendant who is outside the jurisdiction.

There must be a nexus or "connection" with the jurisdiction before the court will entertain granting its permission for foreign service.

As far as contracts are concerned, Nygh gives three categories of connection between the cause of action and the jurisdiction:

    • contracts made within the jurisdiction
    • contracts 'governed by the law of the forum' (proper law of the contracts is the law of the forum)
    • contracts broken within the jurisdiction

 

Further guide - when will a court grant leave for foreign service?

The following extract is taken from International jurisdiction and the recognition and enforcement of foreign judgments in civil matters Draft Hague Convention Issues Paper , Part 5, <http://law.gov.au/publications/haguepaper/Welcome.html>

NOTE: Footnotes preserved here but available on Web version - many footnotes are references to Nygh (above).

 

"Existing jurisdictional rules in Australia

5.1 In Australia, existing rules on the jurisdiction of courts in civil matters are established by common law and by Rules of Court relating to service out of the jurisdiction13. Briefly summarized in the most general terms, these rules provide as follows.

5.2 At common law, an Australian court has jurisdiction where the defendant is validly served with a writ while physically present in the court's geographical jurisdiction (' the forum')14. It is not necessary that the subject matter of the litigation has a connection with that forum. Thus a court may exercise jurisdiction where the defendant is served while he is only briefly in the forum in transit to another destination (so called 'tag' or 'transient' jurisdiction).

5.3 Under rules of court in Australia15 a court also has jurisdiction where the defendant is validly served with a writ outside the forum and the court grants leave for that service16. The categories of cases, in which the court may grant leave, vary from court

to court but in general include the following :

  • actions against a natural person whose domicile or ordinary residence is in the forum17
  • actions against a corporation registered or carrying on business in the forum18
  • actions in contract where the contract was made in the forum, is governed by the law of the forum or is broken in the forum19;
  • actions in tort where the tort is committed in the forum20;
  • actions in which the defendant has submitted to the court's jurisdiction by a choice of court clause in a contract21;
  • actions in which the defendant has submitted to the court's jurisdiction by entering an appearance22;
  • actions in which the defendant has submitted to the court's jurisdiction by commencing proceedings in the court23
  • actions against a defendant who is a necessary and proper party to an action against a defendant served within the forum24;
  • actions relating to property within the forum25;
  • actions relating to injunctions to compel or restrain the doing of an act within the forum26;
  • actions relating to trusts governed by the law of the forum27;
  • actions against defendant air carriers28;
  • actions in relation to shares in a corporation29;
  • actions to enforce a judgment30

5.4 There are certain other grounds of jurisdiction of Australian courts which would not be affected by the draft Convention31."

 

A2. Does it matter if the plaintiff is a consumer? (It appears that the European Union may be more willing to permit such assertions of jurisdiction when the plaintiff is a consumer suing at home, while the U.S. finds the past related transaction of business in the forum sufficient.)

 

The fact that the plaintiff is a consumer will generally be irrelevant to the questions of jurisdiction (apart from the fact that consumers may not have resources to pursue a defendant who is outside the State or overseas).

There are provisions under the Commonwealth Trade Practices Act which give a "consumer" (as defined under that Act) special advantages in terms of remedies and in bringing suit against importers of defective goods. A "consumer" for the purposes of the Trade Practices Act is generally someone who purchases for "personal domestic or household use" or who has bought for less than A$40,000.

Note that the Federal Court case of Paper Products Pty Ltd v Tomlinsons (Rochdale) (1993) 122 ALR 279, 287, decided that telephone or facsimile representations to an Australian company are equivalent to "carrying on business within Australia" for the purposes of the Trade Practices Act 1974 (Cth). (c/f bullet point two under 5.3 of Hague Convention Paper above; see also para 270 at page 95 of New Zealand Report .)

 

The discretion to decline jurisdiction

It must be remembered that even if jurisdiction is shown to exist, an Australian court may still choose not to hear the case due to the fact that another court system might be deemed the more appropriate forum.

The question of whether the court can exercise jurisdiction is separate from the question of whether they will in fact exercise it. For example a court in England will

"… decline to exercise its jurisdiction if the court is satisfied that there is some other available forum, having jurisdiction, which is the appropriate forum for trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice. (Parks and Cromie, International Commercial Litigation, (Butterworths, London, 1990 437, citing Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460,476)"

As elsewhere, so too in Australia this approach goes by the name forum conveniens.

In making a decision to send parties elsewhere an English court will take into account policy considerations such as:

  • Just how "real and substantial" a connection the forum court has with the dispute.
  • The quality of any foreign judiciary that might hear the case if it were to be sent away.
  • The convenience to each of the parties in conducting their case elsewhere eg language translation problems, transport and other costs.
  • Whether the parties are already engaged in similar litigation elsewhere.
  • The presence of a ‘choice of law’ clause in any contract between the parties.

The Australian discretion to decline jurisdiction

Australian courts were once in accord with the English position but since the High Court case of Voth v Manildra Flour Mills (1990) 171 CL 538 a different approach has emerged. Australian courts will now only exercise their discretion if it can be shown that the Australian court is a "clearly inappropriate forum". To be clearly inappropriate the defendant must show that to allow proceedings to continue would be "vexatious and oppressive" and that a foreign forum exists elsewhere which has power (ie jurisdiction) to hear the case. The kinds of public interest factors listed for an English court (above) have not been eliminated but now appear to be receiving less emphasis. (There is a further case after Voth??)

 

B1. …would it be proper for a forum to use forum law to resolve a dispute involving a non-resident defendant acting outside the forum whose activities intentionally caused substantial effects in the forum?

 

This is a choice of law question - tort - need to be a tort within and outside the jurisdiction…..

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