Fresha Export Ltd v Tap Investments Ltd [2007] TOSC 38; CV 686-2007 (17 December 2007)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA REGISTRY

CV. 686 of 2007.

BETWEEN:

FRESHA EXPORT LIMITED
Plaintiff

AND:

TAP INVESTMENTS LIMITED
First Defendants

AND:

MR TANUSIA ANOANO PAEA &
MRS MA’ATA FAKAFANUA PAEA
Second Defendants

BEFORE THE HON. JUSTICE ANDREW

Counsel
Mr B. Afeaki for the plaintiff and
Mr D. Corbett for the defendants.

Date of hearing: 13th December 2007.
Date of ruling: 17th December 2007.

JUDGMENT

The Plaintiffs issued proceedings in relation to an alleged breach of contract concerning goods supplied by the plaintiff to the defendants. They have now made application for summary judgment and for mareva injunctions to issue but the defendants have objected on the grounds of jurisdiction, namely that the Contract or ‘Agreement as to Terms of Trade’ entered into by the parties on the 29th April 2006 provided in Clause 4(ii) that:

"4(ii) in the event of dispute it is agreed any legal hearing will be held in New Zealand."

The plaintiff company has its registered office in Auckland, New Zealand and the defendant company carries on business in Tonga and is based in NUKU’ALOFA. The defendants had filed a defence to the claim without taking the jurisdiction issue and say they were not then in possession of the contract and filed a defence to protect their position.

This is not the more common challenge to jurisdiction pursuant to ORDER 7 Rule I involving competing claims to jurisdiction, where a party who takes any step in the original action shall be deemed to have submitted to the jurisdiction and where the question arises as to which is the appropriate court or "forum conveniens".

The present case is concerned with the validity of the WRIT itself. In my view the plaintiffs were in breach of the contract when they issued proceedings in Tonga. That is, they were in breach of Clause 4(ii) that "in the event of dispute it is agreed any legal hearing will be held in New Zealand". That is an exclusive jurisdiction clause in the contract.

‘When parties agree to an exclusive forum for their disputes, they are or must be treated as being mindful both that they have chosen for themselves where such considerations of convenience take them and also that their choice may override pure matters of convenience: see SENOCHEN v MOBIL SALES [2000] 1 LLOYD’S REP.670 at PP.679-680.

The leading authority and the general principle in cases involving an exclusive jurisdiction clause such as here is DONOHUE v ARMCO INC and OTHERS [2001] UKHL 64 (13rd December 2001) that:

"But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it."

Further,

"where the dispute is between two contracting parties, A and B, and A sues B in a non-contractual forum and As claims fall within the scope of the exclusive jurisdiction clause in their contract and the interests of other parties are not involved, effect will in all probability be given to the clause ........ A similar approach has been followed by courts in the United States, Canada, Australia and New Zealand: see for example, M/S BREMEN v ZAPATA OFF-SHORE Co [1972] USSC 129; (1972) 407 US 1; VOLKWAGEN CANADA INC v AUTO HAUS FROHLICH LTD [1986] 1 WWR 380; FAI GENERAL INSURANCE CO LTD v OCEAN MARINE MUTUAL PROTECTION AND INDEMNITY ASSOCIATION (1997) 41 N.S.W.L.R 559; and KIDD v VAN HEEREN [1998] 1 N.Z.L.R 324."

The present case is a dispute between two parties and the interests of other parties are not involved.

In considering when it is appropriate to depart from the principle that effect will in all probability be given to an exclusive jurisdiction clause the courts have considered that the ‘strong reasons’ relied on must ordinarily go beyond a mere matter of forseeable convenience and extend either to some unforseeable matter of convenience or enter into the interests of justice itself: see IMPORT EXPORT METRO LTD (2) METRO EXPORTS v COMPANIA SUD AMERICANA DE VAPORES S.A. [2003] 1 ALL E.R. 203.

No unforseeable matters of convenience have been shown in this case nor matters relating to the interests of justice which would amount to ‘very special reasons’ for departing from the parties contractual agreement to have any dispute resolved in New Zealand.

Accordingly these proceeding are struck out and costs are awarded to the defendants as agreed or taxed.

ORDER

The Plaintiffs claim is struck out. Costs to the defendants as agreed or taxed.

DATED: 17 December 2007.

JUDGE