Tiger v Morris. The Australian courts on ‘exorbitant’ aka parochial jurisdiction.

A bit of a late note on an interesting case for the comparative binder. Thank you very much indeed Sarah McKibbin for flagging Tiger Yacht Management Ltd v Morris [2019] FCAFC 8.  See further review in the meantime by Michael Douglas here. The Court dismissed Tiger’s appeal from orders made providing for it to be served out of the jurisdiction: The case involves a shareholders’ dispute concerning individuals and companies incorporated outside Australia – where appellant is a shareholder in a foreign company which wholly owns Australian subsidiary. At 100 the relevant points are well summarised.

The discussion essentially concerns ‘exorbitant’ jurisdiction under English and Australian law in a modern context, considering principles of comity and forum non conveniens. At 89, reference is made to Lord Sumption in Abela v Baadarani [2013] 4 All ER 119, a quote worth reciting in full:

This characterisation of the jurisdiction to allow service out is traditional, and was originally based on the notion that the service of proceedings abroad was an assertion of sovereign power over the defendant and a corresponding interference with the sovereignty of the state in which process was served. This is no longer a realistic view of the situation. The adoption in English law of the doctrine of forum non conveniens and the accession by the United Kingdom to a number of conventions regulating the international jurisdiction of national courts, means that in the overwhelming majority of cases where service out is authorised there will have been either a contractual submission to the jurisdiction of the English court or else a substantial connection between the dispute and this country. Moreover, there is now a far greater measure of practical reciprocity than there once was. Litigation between residents of different states is a routine incident of modern commercial life. A jurisdiction similar to that exercised by the English court is now exercised by the courts of many other countries. The basic principles on which the jurisdiction is exercisable by the English courts are similar to those underlying a number of international jurisdictional conventions, notably the Brussels Convention … and the Lugano Convention…The characterisation of the service of process abroad as an assertion of sovereignty may have been superficially plausible under the old form of writ (We command you …). But it is, and probably always was, in reality no more than notice of the commencement of proceedings which was necessary to enable the defendant to decide whether and if so how to respond in his own interest. It should no longer be necessary to resort to the kind of muscular presumptions against service out which are implicit in adjectives like ‘exorbitant‘. The decision is generally a pragmatic one in the interests of the efficient conduct of litigation in an appropriate forum.

The High Court then notes a difference in the approach of forum non between the English and the Australian common law: at 90: ‘The test in the [UK] focuses upon a consideration of the ‘more appropriate forum’: Spiliada Maritime Corporation v Cansulex Ltd [1986] 3 All ER 843. Whereas, Voth (1990) 171 CLR 538 establishes the clearly inappropriate forum test as the test to be applied in Australia.’ Arguably the Australian test leads to a more ‘parochial’ outcome: it is more likely than the English test to lead to jurisdiction being established.

As Michael notes, the core business of the foreign parent, MC2, was to manage the affairs of its subsidiaries, including the Australian company, MA. That involved the management supervision of boatbuilding activities in Australia through Mr Morris, who was resident in Australia. Connections with Australia are strong, therefore. Michael also makes an important point on the current era of globalisation (and, I would add, special purpose vehicles): jurisdictions’ reach over corporations set up outside of the jurisdiction, often to avoid some of its laws (whether tax laws or otherwise) but with strong links to it, is likely to have to be entertained increasingly. That is the case for Australia. It is also the case for the EU and elsewhere, among others under the corporate social responsibility and human rights due diligence agenda.

Geert.

 

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