Baily v Zurich Australian Insurance Ltd [2010] QSC 422

SUPREME COURT OF QUEENSLAND CITATION: Baily v Zurich Australian Insurance Ltd [2010] QSC 422 PARTIES: KERRY WILLIAM BAILY (respondent/plaintiff) v ZURICH AUSTRALIAN INSURANCE LIMITED (ACN 000 296 640) (applicant/defendant) FILE NO: BS6234/10 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court DELIVERED ON: 19 November 2010 DELIVERED AT: Brisbane HEARING DATE: 20 August 2010 JUDGE: Martin J ORDER: APPLICATION IS DISMISSED CATCHWORDS: PROCEDURE – COURTS AND JUDGES GENERALLY – COURTS – CONCURRENT JURISDICTION OF DIFFERENT COURTS – TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION – WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE – OTHER CASES – where an insurance policy was issued in Victoria – where a vessel insured under the policy was destroyed in Tasmanian waters – whether proceedings should be transferred to the Supreme Court of Victoria Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 5(2)(b)(iii) Backyard Concepts Corporation Pty Ltd v Jim’s Group Pty Ltd [2007] QSC 295 Meridian Pty Ltd v Rivergum Homes Pty Ltd [2010] QSC 123 River Gum Homes Pty Ltd v Meridian Pty Ltd [2010] QCA 293 World Firefighters Games Brisbane v World Firefighters Games Western Australia Incorporated & Others (2001) 161 FLR 355 -- 1 of 5 -- 2 COUNSEL: P P McQuaid for the respondent/plaintiff S C Derrington for the applicant/defendant SOLICITORS: DW Legal for the respondent/plaintiff CLS Lawyers for the applicant/defendant [1] The applicant (the defendant in this action) seeks an order pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) (“the Act”) that these proceedings be transferred to the Supreme Court of Victoria. The application also sought that the claim and statement of claim be set aside pursuant to r 16 of the Uniform Civil Procedure Rules but that relief was not pressed. [2] In June this year the plaintiff (“Baily”) commenced proceedings against the defendant (“Zurich”) claiming that: (a) Zurich was the insurer and issuer of a policy of insurance for a vessel owned by Baily; (b) the vessel had been destroyed in an accident at sea in the waters surrounding Tasmania; and (c) Zurich had refused to make any payment under that policy of insurance. [3] The policy contained a jurisdiction clause in the following terms: “8.26 Any dispute arising under this policy of insurance will be determined by the courts, and in accordance with the laws of the State or Territory where the Policy was issued.” [4] The policy was issued in Victoria. [5] Section 5(2)(b)(iii) of the Act provides: “Transfer of proceedings … (2) Where: … (b) it appears to the first court that: … (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory; the first court shall transfer the relevant proceeding to that other Supreme Court.” [6] There is no dispute between the parties that there is no difference as to the substantive law to be applied with respect to this action, because the dispute is governed by the Insurance Contracts Act 1984 (Cth) and the proper construction of the policy of insurance. [7] While there may be other disagreements between the parties, the major dispute is with respect to whether or not Zurich can rely on an exclusion clause to relieve it from liability and, although only a conditional notice of intention to defend has been -- 2 of 5 -- 3 filed, Ms Derrington said that the defence could rest on a number of different exclusions such as: the unseaworthiness of the vessel, whether or not the event was in fact an accident, or whether or not there was some reckless conduct on the part of the insured. [8] The range of factors considered relevant in assessing which is the ‘more appropriate forum’ was considered and identified by Philippides J in World Firefighters Games Brisbane v World Firefighters Games Western Australia Incorporated & Others (2001) 161 FLR 355 where, at [32], her Honour listed the following factors: “(a) the application of the substantive law, if it is peculiar to a particular jurisdiction; (b) forensic advantages or disadvantages conferred by the competing procedural laws; (c) the plaintiff’s choice of forum and the reasons for that choice; (d) substantive connections with the forum (eg. residence, domicile, place of occurrence and choice of law); (e) balance of convenience to parties and witnesses; (f) comparative cost and delay; (g) convenience of the court system.” [9] Her Honour’s decision has been followed a number of times in this court – Meridian Pty Ltd v Rivergum Homes Pty Ltd [2010] QSC 123 and Backyard Concepts Corporation Pty Ltd v Jim’s Group Pty Ltd [2007] QSC 295. I will use those factors as a guide to analysing this application: (a) The substantive law As referred to above, the substantive law is Commonwealth legislation and so there is no link to any State or Territory jurisdiction. (b) Procedural laws No forensic advantages or disadvantages were identified for hearing the matter in either State. (c)&(d) Plaintiff’s choice of forum The respondent to this application relies on the following: (i) Queensland is where he lives; (ii) the plaintiff’s lawyers are in Queensland; (iii) the salvaged parts of the vessel are in this State; (iv) the expert witness likely to be called by the plaintiff resides in this State; (v) the defendant has retained an expert who resides in Queensland; and (vi) the defendant has an office in Queensland. The defendant points to: (i) the jurisdiction clause contained in the contract into which the parties freely entered; (ii) the loss of the vessel occurred in a neutral third forum, that is, Tasmania; -- 3 of 5 -- 4 (iii) the defendant is located in Melbourne; (iv) the underwriter is located in Melbourne; (v) the broker is located in Melbourne; and (vi) the lay witnesses are located in Tasmania. (e) Balance of convenience to parties and witnesses The only matter of importance under this heading is that there are some lay witnesses in Tasmania. They would have to travel to either Victoria or Queensland and the “inconvenience” of a few extra hours on commercial flights is neither here nor there. (f) Comparative cost and delay Neither party suggested that this was relevant. (g) Convenience of the court system Neither party suggested that this was relevant. [10] This is not a case in which there will be any claim to be made with respect to any alleged representations or misrepresentations. It seems that the issues that will be decisive do not relate to anything said by the underwriter, the broker, or anybody engaged by the defendant. [11] The most substantial argument for the defendant was the choice of jurisdiction clause. The plaintiff argued that a distinction should be drawn between a jurisdiction clause which specifically identifies a jurisdiction and one which, as in this case, simply provides that the relevant jurisdiction shall be that in which the policy was entered into. There is, I think, a proper distinction to be drawn between a case where parties agree upon a particular jurisdiction and a case where the jurisdiction chosen is entirely dependent on where the policy may fortuitously be issued. There was nothing put before me which suggested that there was any compelling reason for the policy to have been issued in Victoria. [12] The decision in World Fightfighters Games was recently the subject of consideration by the Court of Appeal in River Gum Homes Pty Ltd v Meridian Pty Ltd [2010] QCA 293. The Court of Appeal decided that the appeal was incompetent for reasons irrelevant to this matter. Nevertheless, de Jersey CJ examined the merits of the appeal. At [20], his Honour said: “As to the weight to be given to the exclusive jurisdiction provision, it is relevant, but subject to other considerations bearing on the comparative convenience of litigating in the competing jurisdictions. The approach taken by Philippides J conforms with the appellate approach in Schmidt v Won at 454 and Bankinvest AG v Seabrook at 726. In the cross-vesting context, there is no ‘bias’ (in terms of the common law test) in favour of the contractually agreed jurisdiction where considerations of convenience and efficiency militate in favour of another jurisdiction.” [13] The factors to be considered here align more favourably with the plaintiff’s case than with the defendant’s. The accident occurred in a neutral third jurisdiction, but the remnants of the vessel and at least two experts (one for each side) reside in Queensland. The balance is a relatively fine one but I think that, on the whole, -- 4 of 5 -- 5 considerations of convenience and efficiency identified above are in favour of the plaintiff. The application is dismissed. -- 5 of 5 --