WA Dewhurst and Co Pty Ltd v. Cawrse

[1960] VR 278

(Judgment by: Dean, J)


Supreme Court of Victoria

Dean, J

Subject References:
Private international law
Service of writ in South Australia
No appearance entered
Court moved by defendant to stay proceedings
Procedure permissible
Onus of proof
Degree of proof

Legislative References:
Service and Execution of Process Act 1901-1953 (Com.) - s11.

Hearing date: 26 October 1959
Judgment date: 12 November 1959

Judgment by:
Dean, J

In this action, plaintiff, a company registered and carrying on business in Victoria, issued a writ out of the Supreme Court of Victoria claiming damages against defendant for breach of contract. The defendant was a grazier and meat exporter carrying on business in South Australia. Under the contract defendant was to supply a quantity of boneless mutton f.o.b. Adelaide to be shipped to the United States of America. Plaintiff alleged a breach of the contract in that the meat in fact supplied by defendant was not reasonably fit for the purpose for which it was supplied but was of unmerchantable quality.

Plaintiff issued a writ endorsed as required by the Service and Execution of Process Act 1901-1953 and caused it to be served upon the defendant in South Australia. Defendant, without entering an appearance, conditional or otherwise, moved to stay all further proceedings in the action upon the ground that the Court had no jurisdiction. When the motion came before me, it appeared that the only ground upon which it might be possible to rely to support jurisdiction was that in s11(1)(b), that the contract was made or entered into within Victoria, for everything to be done by defendant was done in South Australia and the breach, if any, occurred in that State. Each party filed affidavits as to the making of the contract which appeared to have been made by telephone between Mr. Dewhurst, the plaintiff's managing director, speaking from Melbourne, and defendant speaking from Adelaide. The affidavits appeared to be in conflict and it was impossible to determine the question where the contract was made without oral evidence or at least cross-examination of the deponents. I did not think it a proper case to adjourn the motion to the trial, as was done by O'Bryan, J, in Friedman v Kemp's Nurseries Ltd, [1954] VLR 336; [1954] ALR 733. There was no dispute as to the terms of the contract or that it was made. The only dispute was where it was made. This issue would not arise at the trial and it seemed undesirable to allow this question to await decision until the trial after great expense had been incurred, third parties in all probability added, witnesses brought to Victoria, and a possible issue of letters of request to take evidence in the United States of America as to the condition of the meat on arrival there. The House of Lords has expressed the view that it is undesirable to adjourn the question of jurisdiction to be dealt with at the trial: Vitkovice Horni a Hutni Tezirstvo v Korner, [1951] AC 869, at p. 887; [1951] 2 All ER 334, per Lord Radcliff.

After the hearing of the motion upon the affidavits had proceeded some distance, it appeared to me that it was not possible to deal with it merely upon affidavit. The order I made was that the motion be transferred to the Miscellaneous Causes list for hearing upon viva voce evidence. The matter now comes on and each side has called evidence upon the issue where the contract was made.

Several questions of difficulty arise and should be considered before I discuss the evidence. These are--

Has defendant adopted the proper procedure by moving for a stay of proceedings without entering an appearance?
On whom lies the onus of proof? Must plaintiff on defendant's motion satisfy me that the case is within s11(1)(b), or must defendant satisfy me it is not?
If the onus of proof is on plaintiff, can he discharge it by some lesser degree of proof, such as that there is "a strong argument for the opinion that the qualifying conditions are indeed satisfied"--see per Lord Radcliffe, in the Korner Case, supra, at p. 883; Carroll v Laurie, [1959] VR 275, at p. 277.
If plaintiff does bring itself within s11(1)(b), is he entitled to have the motion dismissed and to obtain leave to proceed, or has the Court a discretion which entitles it to consider the relative advantages and conveniences of a trial in South Australia and a trial in Victoria?

So far as procedure is concerned there have been differences of opinion. But despite Luke v Mayoh (1921) 29 CLR 435; 27 ALR 344, a practice appears to have been adopted in New South Wales (see Ex parte Walker; Re Caldwell's Wines Ltd (1931) 31 SR (NSW) 494, at p. 503) to allow defendant to move for a stay of proceedings "if the case appears to be one in which leave to proceed would not be granted on application by the plaintiff in case of non-appearance". This was followed by O'Bryan, J, in Friedman v Kemp's Nurseries Ltd., supra, and very recently by Adam, J, in State of Victoria v Hansen and Bradford (14 August 1959, as yet unreported). In Tallerman and Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93, at p. 107, Dixon, C J, and Fullagar, J, describe this as "a practice which has much to recommend it, but is difficult to reconcile with Luke v Mayoh". This appears to be the view taken also by Sholl, J, in Gilchrist v Dean, [1960] VR 266. I think I should follow O'Bryan and Adam, JJ, in treating as proper the procedure adopted by the defendant in this case. No objection was raised by plaintiff to this course, either at the first hearing of the motion or at the present hearing, and the difficulty was raised by the court.
This and the next question depend primarily upon the view taken as to the nature of the present proceedings. It is in form a motion to stay proceedings which suggests that the onus is on defendant. My order of 7 August 1959 transfers the hearing of this motion to the Miscellaneous Causes list and provides for its hearing by viva voce evidence. It may be doubtful whether the order sufficiently expresses what I intended to order. What I had in mind was that the question of jurisdiction should be investigated and finally determined, so that the parties might come to trial knowing that this question was settled, or that further proceedings would be stayed leaving plaintiff to resort to the proper jurisdiction without further delay or expense. The issue of jurisdiction is of necessity to be decided as an interlocutory matter. It sometimes happens that the court has to determine for this purpose the truth of some fact, e.g. the existence of a contract, which will have to be determined at the trial. But if jurisdiction be held to exist, it will not be divested because it may appear at the trial that it has been wrongly assumed. See Korner's Case, supra, at pp. 889-90, per Lord Tucker. The question of jurisdiction and the proof of the necessary facts to establish jurisdiction may arise at any one or more of three stages-- (a) when plaintiff seeks liberty to proceed against a defendant who has not appeared; (b) when, as here, defendant moves for a stay of proceedings; (c) when defendant applies under s11(2) to rescind, set aside or amend the order giving leave to proceed. It seems to me that the onus of proof rests upon plaintiff in each case to make it appear that the facts necessary to jurisdiction exist. He has plainly this burden when he seeks liberty to proceed. When defendant moves to rescind an order giving liberty to proceed, he is really saying that on the evidence plaintiff has not brought his case within s11(1). A similar view has been acted upon by the Court of Appeal under O.XI of the Rules of the Supreme Court. In Malik v National Bank of Czechoslovakia (1946) 176 LT 136; [1946] 2 All ER 663, defendant moved to set aside an order giving leave to serve a writ out of the jurisdiction. The Court of Appeal treated the matter on the basis that it was for plaintiff to show the necessary facts. Thus Lord Goddard, C J, said (176 LT, at p. 137): "The court has to be satisfied upon the affidavits that the action is brought in respect of a breach committed within the jurisdiction", and Morton, L J, said (176 LT, at p. 139)...: "it is not shown that a breach...has been committed within the jurisdiction". The same view was taken by the Full Court of New South Wales in Ex parte Walker; Re Caldwell's Wines Ltd., supra, in a case where defendant sought a stay of proceedings, as the present defendant does. At p. 499, after referring to earlier cases in New South Wales and in England, it is said: "The reason for setting aside the writ was that the court was not satisfied that conditions existed which would have entitled the plaintiff to an order for leave to proceed if an appearance had not been entered", and, at p. 504, the question of onus of proof is discussed, and the view is expressed that it is incumbent on the plaintiff to make it appear that, if his evidence is accepted, there is jurisdiction in the Court. After a consideration of the affidavits, the court was unable to say affirmatively that there was evidence which, if believed, would establish jurisdiction. In whichever way the matter comes before the Court, I think plaintiff must make the necessary facts appear. This is particularly so in this case where plaintiff has not so far applied for liberty to proceed and where no objection has been taken to the procedure adopted. However the matter is raised, the real question is the same: has plaintiff made out the necessary facts? The position is that plaintiff is now called upon to show that the case is one in which he can obtain liberty to proceed, although he has not up to this stage formally sought such liberty. In the Tallerman Case, supra, at p. 108, however, Dixon, C J, and Fullagar, J, said: "If the defendant establishes that the case does not fall within any of the classes specified in s11 of the Service and Execution of Process Act, an order is made setting aside the writ.... If it appears that the case falls within one of the classes mentioned in s11, the appearance becomes unconditional".
I do not think this passage was intended, or should be construed, as a pronouncement upon the question of where the onus lay. Adam, J, in State of Victoria v Hansen and Bradford, supra, was disposed to think that it was for the defendants, who were applying for a stay, to adduce evidence of a particular fact relevant to the issue of jurisdiction. But in the circumstances of this case, especially in view of the course the proceedings have taken, I think I should treat the burden of proof as resting upon plaintiff.
The degree of proof required must now be considered. S11 uses the expression "if it is made to appear to the Court" that one of the matters referred to in the following paragraphs of the section exists. This follows the language of the English Rules of the Supreme Court, O.XI, r1, except that s11 omits the word "sufficiently" which appears to add nothing. But in the English Rules, as in the Rules of the Supreme Court in Victoria, it is provided: "...no such leave shall be granted unless it shall be made sufficiently to appear to the Court or judge that the case is a proper one for service out of the jurisdiction under this Order." No such language is used in s11 although it may be that the use of the word "may" in the section confers a like discretion, a question I am for the present leaving to one side. But the language which I have quoted from the English Order XI has greatly influenced the decisions upon the effect of the Rules; see, particularly, the Korner Case, supra. In Hemelryck v William Lyell Shipbuilding Co Ltd, [1921] 1 AC 698, at p. 701, in the judgment of the Privy Council it is said that for the purpose of enabling the discretion conferred by the Rules to be exercised it is sufficient if there appears reasonable evidence that a contract had been made unless the defendant was able to satisfy the court otherwise. When the Korner Case came before Slade, J, his Lordship, founding himself upon what was said by Lord Goddard, C J, in Malik's Case, supra, considered that it was sufficient for plaintiff to show a prima facie case of the existence of a contract and its breach, but that the question where the breach occurred, a question which would not arise at the trial as an issue should be decided in the same way as any other issue in dispute at a trial and the judge must be satisfied that the breach took place within the jurisdiction. The idea that there were two different kinds of onus of proof was rejected by the majority of the Court of Appeal ([1950] 2 KB 128; [1950] 1 All ER 558), and by the House of Lords. Lord Simonds considered that plaintiff must establish a "good arguable case"; Lord Radcliffe, that he must show "a strong argument"; Lord Tucker, that the words "made sufficiently to appear" meant "satisfied", but not that the ground relied on must be proved as an issue required to be proved at trial.
The result appears to be that when defendant moves to stay proceedings or to set aside an order, the court must, upon the whole of the material, be satisfied that plaintiff has a strong arguable case that the ground relied upon is made out, but he does not have to prove it as fully as a disputed issue would have to be established at a trial. The rule is the same whether the ground relied on raises an issue which will arise for determination at the trial or not. In the present case, there is no dispute that a contract was made or as to its terms; the only dispute is whether the contract was made in Victoria, an issue which will not arise at the trial. The issue has not to be determined in the same way as an issue at trial, but plaintiff has to satisfy the Court, in the light of all the material facts put before it by both sides, that there is a strong argument, more than a prima facie case, that the contract was made in Victoria.
I postpone for the present the question of discretion until I have discussed the facts.

Before turning to the facts it is desirable to state as clearly as possible the legal situation to which the evidence is directed. Plaintiff has to make it appear that the contract for the sale of the meat in question was made in Victoria. This means that the offer was accepted here. It has been held recently by the Court of Appeal that the law applicable to the making of a contract by an acceptance by post or telegram is not the same as where the acceptance is by teleprinter, by telephone, or by any other instantaneous means. In the case of an acceptance by post, the acceptance is in the usual case completed by posting the letter of acceptance, even though it never reaches the offeror. The contract is made where the letter of acceptance is posted; but where acceptance is by telephone or teleprinter there is no acceptance until it is received. See Entores Ltd v Miles Far East Corporation, [1955] 2 QB 327; [1955] 2 All ER 493, a case where a contract resulted from messages transmitted instantaneously between the parties by teleprinter. At p. 332, Denning, L J, said: "When a contract is made by post it is clear law throughout the common law countries that the acceptance is complete as soon as the letter is put into the post box, and that is the place where the contract is made." His Lordship then turned to the case of instantaneous communications and said that the rule is different. His Lordship said, at p. 334: "The contract is only complete when the acceptance is received by the offeror: and the contract is made at the place where the acceptance is received". I need not discuss the reasons for this distinction, which are carefully explained by all members of the Court.

What plaintiff sets out to establish, therefore, and what he must satisfy the Court upon, is that defendant in South Australia stated on the telephone that he accepted plaintiff's offer and that plaintiff in Melbourne received that acceptance. In other words, plaintiff must satisfy me that it was the offeror and defendant the acceptor. It is difficult enough in any circumstances when a contract results from a verbal negotiation to determine who is offeror and who is offeree. A number of terms are discussed and eventually agreement is reached. If there were available a precise record of the conversation it might be possible to analyze it and discover who made the final counter-offer which was accepted. But here are two business men who simply cannot recall with any accuracy how the discussions proceeded. Both are frank and honest witnesses, but both agree that their recollections of this conversation of two years ago are imperfect.

The matter begins with a letter dated 20 November 1957 sent by plaintiff to defendant. The relevant part reads: "We would be very pleased to hear from you as to whether you can offer us boneless mutton and/or boneless bull for shipment under your own quota to the United States of America. Packing would be in polythene lined cartons and we could pay the following prices for these items: boneless mutton, 16 1/2d.; boneless bull, 24d.; f.o.b. Adelaide."

There is no reference to quantity, date of shipment, payment or other terms. It is not an offer, but an invitation to treat.

Defendant did not reply to this letter, but about two or three weeks later he, in Adelaide, rang plaintiff in Melbourne and a conversation took place. Defendant says he knew of the letter but did not have it before him and did not have in his mind the price suggested therein. Defendant in evidence said that he was wanting 18d. and stuck to his price. He told Mr. Dewhurst he could let him have up to 100 tons. Mr. Dewhurst wanted it at 15d. or 16d. He said:

"I eventually said that I would let him have it at 16 1/2d. a pound and he intimated to me that he would take it at that or something like that".

Later he said:

"I finally offered it to him at 16 1/2d. as a last resort. I offered him 16 1/2d."

If this account is correct, it was Mr. Dewhurst who accepted defendant's offer, and so completed the contract, and the contract was made in South Australia.

Mr. Dewhurst said he did not remember the conversation, but gave this account:

"We indicated or I told Mr. Cawrse that we could pay a certain amount which was 16 1/2d. for mutton for America.... The substance of what he said was he accepted it".

If that account is accepted the acceptance was by Mr. Cawrse in Adelaide and the contract was made in Melbourne where it was received by plaintiff.

Upon this evidence I do not feel satisfied even to the extent to which I am required to be satisfied, that defendant was the acceptor. There is, as I think, a burden on plaintiff to bring himself within s11(1)(b), a lesser burden than on the trial of an issue, but still a definite burden. In view of the admitted uncertainty of his memory, the importance of the precise words used and their order, and in the light of the evidence of the defendant whose memory is slightly more reliable, I do not consider plaintiff has discharged the burden upon him.

It therefore is unnecessary to consider whether I have discretion in cases where the plaintiff brings himself within the section. If I have, I would certainly exercise it in defendant's favour. South Australia is the forum conveniens in this case. Everything done in performance of the contract took place there; witnesses are all there; inspection of abattoirs there may be necessary; parties in South Australia may well be joined as third parties.

The action will be stayed.

Action stayed.

Hulme, for the defendant, in support of the motion.
Ball, for the plaintiff, contra.
Solicitors for the defendant: Whiting and Byrne.
Solicitors for the plaintiff: Russell, Kennedy and Cook.