Stay of pending proceedings

[2-2600] The power

There is a statutory power for all courts to stay, by order, any proceedings before the court, either permanently or until a specified day: CPA s 67.

The Supreme Court has inherent power to stay proceedings which are an abuse of process: Jago v District Court of NSW (1989) 168 CLR 23.

Certain stay proceedings may be affected by the Trans-Tasman Proceedings Act 2010 (Cth), as to which see “Trans-Tasman proceedings” at [5-3520]–[5-3540].

[2-2610] Forum non conveniens

An application for a stay of proceedings on the ground of forum non conveniens is ordinarily made by a defendant, with a view to requiring that the claim made by the plaintiff in the proceedings be litigated in some other jurisdiction.

[2-2620] The test for forum non conveniens

The test is whether the court is a “clearly inappropriate forum”: Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; Garsec v His Majesty The Sultan of Brunei (2008) 250 ALR 682.

English authorities, such as Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, lay down a different test, namely, in which jurisdiction the case would most suitably be tried. Those cases should be disregarded.

[2-2630] Applicable principles of forum non conveniens

The following statement of principle appears in Voth, above, at 554 (HCA [30]):

First, a plaintiff who has regularly invoked the jurisdiction of a court has a prima facie right to insist upon its exercise. Secondly, the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case. Thirdly, the mere fact that the balance of convenience favours another jurisdiction or that some other jurisdiction would provide a more appropriate forum does not justify the dismissal of the action or the grant of a stay. Finally, the jurisdiction to grant a stay or dismiss the action is to be exercised “with great care” or “extreme caution”.

“Oppressive” in this context means seriously and unfairly burdensome, prejudicial or damaging; and “vexatious” means productive of serious or unjustified trouble and harassment: Oceanic, above, per Deane J at 247, approved in Voth at 556.

The test focuses on the advantages and disadvantages arising from a continuation of the proceedings in the selected forum rather than on a judgment concerning the comparative merits of the two legal systems: Voth at 558–559.

For a further statement of principle to the same effect as in Voth, see Henry v Henry (1996) 185 CLR 571 at 587 (a passage adopted and applied in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 504):

In Voth, this Court adopted for Australia the test propounded by Deane J in Oceanic Sun, namely, that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of “seriously and unfairly burdensome, prejudicial or damaging”, or, vexatious, in the sense of “productive of serious and unjustified trouble and harassment” [Oceanic Sun, above at 247].

See also Murakami v Wiryadi (2010) 268 ALR 377.

[2-2640] Relevant considerations for forum non conveniens

Connecting factors

“Connecting factors” are relevant: Spiliada, above, per Lord Goff (dissenting) at 477–478, approved in Voth at 564–565. According to that passage in Spiliada:

  • Connecting factors include factors “indicating that justice can be done in the other forum at ‘substantially less inconvenience or expense’” (such as the availability of witnesses).

  • They also include factors which may make the other forum “the ‘natural forum’, as being that with which the action (has) the most real and substantial connection”, such as the law governing the relevant transaction and the places where the parties respectively reside or carry on business.

Legitimate personal or juridical advantage

A “legitimate personal or juridical advantage” to the plaintiff in having the proceedings heard in the domestic forum is a relevant consideration: Spiliada per Lord Goff at 482–484, a further passage approved in Voth at 564–565. According to that passage:

  • Such advantages may include damages awarded on a higher scale than in the other forum, a more complete procedure of discovery, a power to award interest, or a more generous limitation period. But the mere fact that the plaintiff has such an advantage is not decisive.

  • A stay order might be made notwithstanding that the plaintiff would be defeated by a time bar in the other jurisdiction; but, where a plaintiff has acted reasonably in commencing the proceedings in the domestic court and has not acted unreasonably in failing to commence proceedings within time in the other jurisdiction (for example, by issuing a protective writ), the plaintiff should not be deprived of the advantage of having the proceedings heard in the domestic court.

  • Where a stay would otherwise be appropriate and the time limitation in the foreign jurisdiction is dependent on the defendant invoking the limitation, it can be made a condition of the stay that the defendant waive the time bar in the foreign jurisdiction.

Parallel proceedings in different jurisdictions

Parallel proceedings in different jurisdictions should be avoided if possible; it is prima facie vexatious and oppressive to commence a second action locally if an action is pending elsewhere with respect to the matter in issue; but this consideration is not necessarily determinative: Henry v Henry, above, at 590–591 (HCA [34]–[35]):

Parallel proceedings in another country with respect to the same issue may be compared with multiple proceedings with respect to the same subject matter in different courts in Australia. In Union Steamship Co of New Zealand Ltd v The Caradale [(1937) 56 CLR 277 at 281], Dixon J observed of that latter situation that “[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration.” From the parties’ point of view, there is no less — perhaps, considerably more — inconvenience and embarrassment if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of entirely different outcomes.

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words. [references deleted]

Waste of costs

A waste of costs if the proceedings were stayed is a legitimate consideration: Julia Farr Services Inc v Hayes [2003] NSWCA 37 at [89].

Local professional standards

Where professional standards in a particular locality are in question, that is a relevant consideration: Voth at 570.

Law of the local forum

If the law of the local forum is applicable in determining the rights and liabilities of the parties, that is a very significant consideration against granting a stay of the local proceedings, but not a decisive factor: Voth at 566.

Foreign lex causae

Where the applicant for a stay seeks to rely on a foreign lex causae as providing an advantage, it is for the applicant to give proof of the foreign law and, in particular, the features of it which are said to provide the advantage: Regie Nationale des Usines Renault SA v Zhang, above, at [72]. Further, the applicant must establish that the lex causae is the foreign law relied upon: Puttick v Tenon Ltd (2008) 238 CLR 265.

The local court is not a clearly inappropriate forum merely because foreign law is to be applied as the lex causae: Regie Nationale des Usines Renault SA v Zhang at [81].

Agreement to refer disputes to a foreign court

An agreement to refer disputes to a foreign court exclusively does not mandate a determination that the domestic court is a clearly inappropriate forum, but substantial grounds are required for refusing a stay in such a case: FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association Ltd (1997) 41 NSWLR 559 at 569, per Giles CJ Com Div and the authorities cited therein. Also see Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) [2010] NSWCA 196 at [83]–[92].

Further relevant considerations

The following matters were stated in Henry v Henry, above, at 592–593, to be relevant considerations:

  • No question arises unless the courts of the respective localities have jurisdiction

  • If the orders of the foreign court will not be recognised locally, the application for a stay will ordinarily fail

  • If the orders of the foreign court will be recognised locally, it is relevant whether any orders made locally may need to be enforced elsewhere and, if so, the relative ease with which that can be done

  • Which forum can provide more effectively for the complete resolution of the matters in issue

  • The order in which the proceedings were instituted, the stage the respective proceedings have reached, and the costs that have been incurred, or

  • Whether, having regard to their resources and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing.

[2-2650] Conditional order

In an appropriate case, proceedings may be stayed conditionally (see above). In Voth, the defendant had undertaken not to invoke the time bar available in the foreign court (at 571). A stay was ordered on the condition that the respondent did not plead the bar, provided that the plaintiff commenced proceedings in the foreign court within a time specified in the order.

[2-2660] Conduct of hearing and reasons for decision

Argument should be brief and reasons for decision may ordinarily be brief. The following passage appears in Voth at 565 (HCA [53]):

The qualification is that we think that, in the ordinary case, counsel should be able to furnish the primary judge with any necessary assistance by a short, written (preferably agreed) summary identification of relevant connecting factors and by oral submissions measured in minutes rather than hours. There may well be circumstances in which the primary judge may conclude that it is desirable to give detailed reasons balancing the particular weight to be given to the presence or absence of particular connecting factors and explaining why the local forum is or is not a clearly inappropriate one. Ordinarily, however, it will be unnecessary for the primary judge to do more than briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view that the proceedings should or should not be stayed on forum non conveniens (ie “clearly inappropriate forum”) grounds.

[2-2670] Related topic: anti-suit injunction

For injunction to restrain the prosecution of proceedings in a foreign court, see CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345.

[2-2680] Abuse of process

Proceedings may be stayed permanently, as an abuse of process, where there cannot be a fair trial due to delay in commencing the proceedings: Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256.

The varied circumstances in which the use of the court’s processes will amount to an abuse, notwithstanding that the use is consistent with the literal application of its rules, do not lend themselves to exhaustive statement. Either of two conditions enlivens the power to permanently stay proceedings as an abuse of process: where the use of the court’s procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute: UBS AG v Scott Francis Tyne as trustee of the Argot Trust (2018) 92 ALJR at [1]; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [33].

The inherent jurisdiction of the Supreme Court to stay proceedings on this ground extends to proceedings in courts and tribunals over which the Supreme Court exercises a supervisory jurisdiction: Walton v Gardiner (1993) 177 CLR 378; Jago v District Court of NSW, above.

Proceedings may be stayed, as an abuse of process, where there is multiplicity of proceedings relating to the same subject matter: Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201; or where there is re-litigation of a previously determined claim: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [33].

Proceedings may be stayed, as an abuse of process, where the predominant purpose in bringing the action is not the vindication of reputation but to provide a forum for the advancement of the plaintiff’s beliefs: Toben v Nationwide News Pty Ltd (2016) 93 NSWLR 639.

[2-2690] Other grounds on which proceedings may be stayed

  • Pending the determination of proceedings in another forum: see Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 and L & W Developments Pty Ltd v Della [2003] NSWCA 140.

  • Concurrent criminal proceedings: see [2-0280] in “Adjournment”.

  • Consolidation of arbitral proceedings: Commercial Arbitration Act 2010, ss 27C(3)(c), 33D(3).

  • Agreement to mediate before action: Australian Power & Water Pty Ltd v Independent Public Business Corporation of Papua New Guinea [2003] NSWSC 1227.

  • Failure to pay the costs of discontinued proceedings involving substantially the same claim: r 12.4.

  • Failure to pay the costs of dismissed proceedings involving substantially the same claim: r 12.10.

  • Failure to answer interrogatories: r 22.5.

  • Failure to comply with directions. Section 61 of the CPA provides that, in the event of non-compliance with a direction, the court may (amongst other things) dismiss or strike out the proceedings, or may make such other order as it considers appropriate, which would appear to include an order for a stay pending compliance with the direction.

  • Failure to confirm to timetable for medical examination: Rowlands v State of NSW (2009) 74 NSWLR 715.

  • For a discussion of lack of proportionality as a ground for a permanent stay, see Toben v Nationwide News Pty Ltd (2016) 93 NSWLR 639; [2016] NSWCA 296 at [130]–[143].

This list is not necessarily comprehensive.

Legislation

  • CPA ss 61, 67

  • Commercial Arbitration Act 2010, s 27C(3)(c)

  • Trans-Tasman Proceedings Act 2010 (Cth)

Rules

  • UCPR rr 12.4, 12.10, 22.5