SUPREME COURT OF QUEENSLAND

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1 SUPREME COURT OF QUEENSLAND CITATION: Central Petroleum Limited v Geoscience Resource Recovery LLC [2017] QSC 223 PARTIES: CENTRAL PETROLEUM LIMITED (ACN ) (Plaintiff) v GEOSCIENCE RESOURCE RECOVERY LLC (Defendant) FILE NO/S: SC No of 2016 DIVISION: PROCEEDING: Trial Division Application DELIVERED ON: 12 October 2017 DELIVERED AT: Brisbane HEARING DATE: 15 September 2017 JUDGE: ORDERS: Bowskill J The application is dismissed CATCHWORDS: PRIVATE INTERNATIONAL LAW JURISDICTION where the defendant commenced proceedings in the United States, in the District Court of Texas, seeking to enforce an alleged 2012 agreement with the plaintiff as well as other relief where the plaintiff subsequently commenced proceedings in Queensland seeking a negative declaration that it did not enter into and is not bound by the alleged 2012 agreement whether the Queensland proceeding is a proceeding relating to a contract made by 1 or more parties carrying on business or residing in Queensland for the purposes of rule 124(1)(g) of the Uniform Civil Procedure Rules 1999, permitting service on the defendant outside Australia whether this Court has jurisdiction in respect of the plaintiff s claim PRIVATE INTERNATIONAL LAW RESTRAINT OF PROCEEDINGS OF LOCAL PROCEEDINGS: CLEARLY INAPPROPRIATE FORUM where there are proceedings in Texas and in Queensland, involving a common issue as to the existence of the alleged 2012 agreement whether Queensland is a clearly inappropriate forum whether the continuation of the Queensland proceedings would be vexatious or oppressive where the proceedings have a connection with Queensland but also with

2 2 Texas where it is at least fairly arguable that Australian law would apply to determine the existence of the alleged 2012 agreement where there is something that may be gained from the Queensland proceedings which cannot be gained from the Texas proceedings alone, namely a determination by an Australian court as to whether the Texas court has jurisdiction over the plaintiff in the international sense, which is an essential condition to enforceability of any Texas judgment in Australia Uniform Civil Procedure Rules 1999 (Qld) rr 124(1)(g), 124(1)(x) Foreign Judgments Act 1991 (Cth) ss 5, 11 Foreign Judgments Regulations 1992 (Cth) s 3 and schedule Davies, Bell and Brereton, Nygh s Conflict of Laws in Australia, 9 th ed (2014) Adams v Cape Industries plc [1990] 1 Ch 433 Armacel Pty Ltd v Smurfit Stone Container Corporation (2008) 248 ALR 573 Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 Borch & Ors v Answer Products Inc & Ors [2000] QSC 379 Boss Group Ltd v Boss France SA [1997] 1 WLR 351 Castillon v P&O Ports Ltd [2008] 2 Qd R 219 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 de Santis v Russo [2002] 2 Qd R 230 DR Insurance Co v Central National Insurance Co of Omaha [1996] 1 Lloyds Reports 74 DSV Silo-und Verwaltungsgesellschaft mbh v Owners of the Sennar [1985] 1 WLR 490 Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078 Harris v Harris [1947] VLR 44 Henry v Henry (1996) 185 CLR 571 Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd (2015) 331 ALR 108 Jet Holdings Inc v Patel [1990] 1 QB 335 Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 Puttick v Tenon Ltd (2008) 238 CLR 265 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) Pty Ltd (1992) 34 FCR 287 Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty

3 3 COUNSEL: SOLICITORS: Ltd [2013] VSCA 237 Svendborg v Wansa [1997] 2 Lloyd s Reports 183 Tana v Baxter (1986) 160 CLR 572 Telesto Investments Ltd v UBS AG (2013) 94 ACSR 29 Trina Solar (US) Inc v Jasmin Solar Pty Ltd (2017) 247 FCR 1 TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 Wong v Jani-King Franchising Inc [2014] QCA 76 B O Donnell QC and D Butler for the plaintiff (respondent) P Franco QC for the defendant (applicant) Allens Lawyers for the plaintiff Clayton Utz for the defendant Introduction [1] Central Petroleum Limited is an Australian listed public company which carries on the business of oil and gas exploration and production in Australia. Geoscience Resource Recovery LLC is an American company, based in Texas, 1 which carries on business as a consulting petroleum engineering firm. In September 2011 Central and Geoscience entered into an agreement under which it was agreed that, among other things, Geoscience would assist Central in contacting and finding a farm-in partner 2 for Central s petroleum tenements in Australia (the 2011 agreement). 3 Pursuant to that agreement Geoscience introduced Central to a French business called Total and in November 2012 Central and one of its subsidiaries, Merlin Energy Pty Ltd, entered into an agreement with Total GLNG Australia. [2] Geoscience claims that it is entitled to commission, by way of a success fee, for introducing Total to Central, on the basis of a further agreement it contends was made with Central on 26 February 2012 (the 2012 agreement). Central denies that it entered into the 2012 agreement. There is a factual dispute as to whether an employee of Central, Mr Trevor Shortt, signed the 2012 agreement. Mr Shortt says he did not. The representative of Geoscience, Mr Niraj Pande, and his assistant, Mr William McGinnis, says he did. No signed copy of the alleged agreement has been produced. Central says, even if it be found that Mr Shortt did sign the agreement, which he denies, he did not have actual or ostensible authority to bind Central to the 2012 agreement. Central also relies upon the 2011 agreement, which provided that Central had no liability to pay any 1 Pande (15 September 2017) at [2]. 2 As explained by the parties, a farm-in partner is a third party who is willing to advance money for the exploration and development of resource tenement(s) in exchange for an interest in the underlying tenement(s). 3 Deane (26 May 2017) at exhibits p 39. The tenements comprise an application for an exploration permit for petroleum in the Northern Territory and three authorities to prospect for petroleum in Queensland: White (17 July 2017) at [19]-[25].

4 4 commission to Geoscience (cl 12) and under which Geoscience released and discharged Central in relation to any claim that Geoscience may make for payment of a commission (cl 26). [3] Relevantly, the 2011 agreement provided that it was to be governed by and construed under the laws of Western Australia (cl 28). The alleged 2012 agreement includes the statement that [t]his agreement shall be governed by the laws of the state of Texas and any dispute will be resolved by suit either in Texas or California. 4 [4] In July 2015 Geoscience commenced a proceeding against Central in the US District Court of Harris County, Texas. In the Texas proceeding Geoscience seeks to recover the success fee, by enforcing the alleged 2012 agreement, or alternatively on the basis of a quantum meruit; in the further alternative, Geoscience claims damages for fraudulent misrepresentation. The amount of Geoscience s claim is not articulated in its originating document, other than by reference to a claimed entitlement to receive the industry-standard rate of 7% on the initial $48 million already received from Total plus all additional exploration funds received and the industry-standard rate of 5% on all follow-on development funds received from Total and a 2% royalty from any production over the farm-out acreage. 5 [5] Central entered a special appearance to Geoscience s petition, objecting to the jurisdiction of the Texas court. 6 In November 2016 the District Court judge determined that court did have jurisdiction. Central appealed this decision to the Court of Appeals. The appeal was heard in May 2017, and the decision is reserved. 7 There are further avenues of appeal/review potentially available, including a rehearing in the Court of Appeals, and then review by the Texas Supreme Court, subject to the grant of the equivalent of special leave. 8 [6] Central commenced proceedings in this court in November 2016, later amended with leave in July 2017, seeking declaratory relief including to the effect that Central did not enter into, and is not bound by, the 2012 agreement. [7] Geoscience filed a conditional notice of intention to defend this proceeding, challenging the jurisdiction of this court to entertain Central s claim. It has applied for orders setting aside Central s claim, or alternatively that the proceedings be stayed, either permanently or at least temporarily, until the outcome of the Texas proceedings is known. A further alternative, of adjourning this application until the US appeal court determines the question of jurisdiction, was proposed by Geoscience. 4 Deane (26 May 2017), unsigned copy of the alleged 2012 agreement, at exhibits p Deane (26 May 2017), plaintiff s original petition in the District Court of Harris County, Texas, at exhibits pp Deane (26 May 2017) at exhibits p 21 and following. 7 Deane (9 June 2017) at [3]. 8 McDougald (26 May 2017) at [6]-[25]; Gunn (15 August 2017), at [55] and [59]-[62] of Mr Gunn s report.

5 5 [8] For the reasons set out below, I was not persuaded that it was appropriate to adjourn the hearing of Geoscience s application. Having heard the application, I find that this court does have jurisdiction in respect of Central s claim and that it is neither necessary nor appropriate to stay these proceedings, permanently or temporarily. Does this court have jurisdiction in respect of Central s claim against Geoscience? [9] Geoscience accepts that this court has jurisdiction if it was validly served with the claim. [10] The fact of service, of both the original and the amended claim and statement of claim, is not in issue. The controversy between the parties is whether Central s claim falls within one of the grounds identified in r 124 of the Uniform Civil Procedure Rules 1999 (Qld) so as to justify service outside of Australia. [11] Relevantly, r 124(1)(g)(ii) permits service on a person outside Australia of an originating process for a proceeding relating to a contract made by 1 or more parties carrying on business or residing in Queensland. Further, r 124(1)(x) permits service outside Australia of a proceeding falling at least in part within one (or more) of the paragraphs of r [12] In determining whether r 124(1)(g) applies, the focus is on the nature of the claim which is made, involving an examination of the pleadings and any additional material relied on by the plaintiff; no assessment of the strength or otherwise of the plaintiff s claim is required. 10 [13] I accept that Central is a party carrying on business or residing in Queensland. The dispute is as to whether Central s proceeding is one relating to a contract. Central s pleaded claim [14] In the amended statement of claim (filed 16 May 2017) Central pleads the 2011 agreement (at [3D]), which is undisputed. The material terms of the 2011 agreement are pleaded (at [3E]) as including: 11 (c) (d) clause 1 which stated, relevantly, that GRR agreed to assist [CPL] in contacting and finding entities to be a farm-in partner for [CPL s] assets in Australia ; clause 8 which stated, relevantly, that CPL would pay GRR a monthly fee of AUD$10,000 for performing the Services; 9 Borch & Ors v Answer Products Inc & Ors [2000] QSC 379 at [28]. 10 Borch & Ors v Answer Products Inc & Ors [2000] QSC 379 at [9] (referring to Agar v Hyde (2000) 74 ALJR 1219 at p 1229) and [10]. 11 References to GRR are to Geoscience; and references to CPL are to Central.

6 6 (e) (f) (g) (h) (i) (j) (k) (l) clause 9 which stated, relevantly, that the effective date of the agreement was 1 May 2011; clause 10, which stated, relevantly, that the term of the agreement was from 1 May 2011 until 31 December 2011, at which time it automatically terminated, unless mutually agreed by the parties in writing; clause 12, which stated, relevantly, that GRR could negotiate a commission fee with a potential farm-in partner, and that CPL would have no liability or obligation to pay any commission fee to GRR; clause 23, headed Ex Gratia Bonus for Outstanding Work, which stated, relevantly, that CPL could, without obligation, make a non-binding ex gratia bonus payment to GRR for its Services and that such payment may follow the methodology / guidance referred to in clauses 24, 25 and 26; clauses 24 and 25, which provided a methodology / guidance for determining the amount of any ex gratia bonus payment that might be paid by CPL pursuant to clause 23; clause 26 which stated, relevantly, that there was no obligation on CPL to pay any bonus payment, and that GRR shall not make demand, have a claim and completely releases and discharges [CPL] and any of its subsidiaries, directors, officers, employees or agents from any and all actual or potential claims, liability, litigation, arbitration, or adjudication for payment of any and all bonus payments or commission fees and any other similar type of payment ; clause 27(i), headed, relevantly, Complete Agreement, which stated, relevantly, that the agreement constituted the final, complete and exclusive agreement of the parties ; and clause 28, headed Governing Law and Jurisdiction, which stated, relevantly, that the agreement was governed by and construed under the laws of Western Australia. [15] Central next pleads that Geoscience introduced Total to Central as a prospective farmin partner, an introduction that fell within the meaning of Services in the 2011 agreement and which was carried out by Geoscience pursuant to the 2011 agreement (at [3F] and [3G]). [16] Central pleads that the parties agreed, in writing or by their conduct, that the 2011 agreement would continue in effect until about 13 April 2012 (based, in part, on

7 7 Geoscience continuing to issue invoices for the monthly fee, and expenses, beyond the expiry date of 31 December 2011) (at [3H] and [3I]). [17] The agreement Central and Merlin Energy entered into with Total in November 2012 is pleaded at [3J]. Central pleads that the 2011 agreement governed whether a fee or other sum was payable by Central to Geoscience in relation to the Total agreement, and that pursuant to the terms of the 2011 agreement (clauses 12 and 23 to 26 in particular) Central was and is not liable to pay a fee or other sum to Geoscience in relation to the Total agreement (at [3K] and [3L]). [18] Central pleads the allegations made by Geoscience in relation to the alleged 2012 agreement, under which Geoscience contends it is entitled to be paid a success fee in relation to the Total agreement (referring to the court document dated 4 December 2015 filed with the District Court of Harris County in Texas) (at [3M]). Central then pleads that the alleged agreement was never entered into by Central and that if it was signed by Mr Shortt (which is denied), he did not have authority from Central to bind it to the alleged 2012 agreement, and accordingly no fee or other sum is payable to Geoscience under any such agreement, nor are any other damages payable by Central to Geoscience for not paying the fee (at [10A] to [10E]). [19] Finally, Central pleads that by clause 26 of the 2011 agreement Geoscience released and discharged Central from paying Geoscience bonus payments or commission fees and any other similar type of payment, and relies on that to deny any liability to Geoscience (at [28] and [29]). [20] Central seeks the following by way of declaratory relief: (a) a declaration that Central did not enter into, and is not bound by, the alleged 2012 agreement; (b) (c) a declaration that Central is not liable to pay a fee, or any other sum to Geoscience in relation to the Total agreement; and a declaration that Central is not liable to pay any damages to Geoscience by reason that it has not paid a fee or other sum to Geoscience in relation to the Total agreement. [21] In addition to the pleading, I have regard to the fact that in the Texas proceedings Geoscience positively asserts the existence of the alleged 2012 agreement, and seeks to enforce it against Central. Is Central s claim a proceeding relating to a contract?

8 8 [22] It was not disputed that the words relating to a contract are to be understood in a wide sense. 12 [23] However, Geoscience submits the proceeding does not relate to a contract made by the parties as the claim is premised on the allegation that the parties did not make a contract. 13 In support of that submission Geoscience relies on Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1 QB 1078, in which it was held that a claim for a declaration that no contract was entered into was not a claim brought to affect a contract (at 1084). Geoscience submits that the reference in Central s pleading to the 2011 agreement is of historical interest only, and that no relief is sought in relation to the 2011 contract. As such, the proceeding cannot be described as relating to the 2011 contract. [24] Central submits that the proceeding is one relating to both the 2011 agreement and the alleged 2012 agreement. Central submits that the 2011 agreement forms a significant part of its pleading, including that the introduction of Total to Central by Geoscience took place during and pursuant to the 2011 agreement, and that it is the 2011 agreement that governs whether or, as contended by Central, not a commission is payable to Geoscience in relation to the Total agreement. In this respect, it is said that part of the relief sought by Central relies on the terms of the 2011 agreement. [25] In relation to the alleged 2012 agreement, Central submits its claim is also one relating to a contract, even though its contention is that there was no 2012 agreement. Central relies on authorities in which it has been held that a proceeding is one relating to a contract where the plaintiff denies the existence of a contract which the defendant says exists, 14 including Boss Group Ltd v Boss France SA [1997] 1 WLR 351. [26] Boss Group v Boss France SA concerned the meaning of the phrase matters relating to a contract in article 5(1) of the Brussels Convention on jurisdiction, incorporated into English law under the Civil Jurisdiction and Judgments Act The Court of Appeal (comprising Russell, Saville and Otton LJJ) said it was well settled that it is no answer to a claim for jurisdiction under this article that the respondent is asserting that no contract ever came into existence, referring to Effer v Kantner [1982] ECR 825 (at 974). Lord Justice Saville, delivering the reasons of the Court, observed at 356 that: There is a lively dispute between the parties as to whether there is a contract between them under which the defendants are the exclusive distributors for the plaintiffs in France. It is true that the plaintiffs, who 12 See, by analogy, Tana v Baxter (1986) 160 CLR 572 at 580 per Gibbs CJ, Mason, Deane and Dawson JJ, Brennan J agreeing at 582, in relation to the phrase otherwise affecting a contract in s 11(1)(b) of the Service and Execution of Process Act 1901 (Cth) (reflecting the wording of the former RSC O 11 r 1(2)(d) and the wording of the equivalent rule in other Australian jurisdictions). See also, in relation to the phrase relating to more generally, Oceanic Life Ltd v Chief Commissioner of Stamp Duties (1999) 168 ALR 211 at [56] per Fitzgerald JA. 13 Geoscience s submissions at [29]. 14 Central s submissions at [48]-[53].

9 9 seek to sue here, are asserting that no such contract exists, but equally the defendants are asserting the contrary. In my judgment, the fact that it is this way round does not make the Article inapplicable. Article 5(1) is not confined to actions to enforce a contract or to obtain recompense for its breach, but refers generally to matters relating to a contract. in a case such as the present, the plaintiffs establish a good arguable case that there is a matter relating to a contract by relying on the fact that this is what the defendants are contending against them. [27] The Boss Group decision was referred to with approval by Clyde LJ in Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 at 182, his Honour noting that [o]nce there is a dispute as to the existence of a contract the performance of which the one party is seeking to enforce or for the non-performance of which he is seeking a remedy, then it should not matter whether procedurally it is the defendant or the plaintiff who raises the issue of the existence of the contract. [28] In both Boss Group and Kleinwort Benson, Finnish Marine is listed amongst the cases cited or referred to in argument; but is not mentioned in either court s decision. It was referred to in DR Insurance Co v Central National Insurance Co of Omaha [1996] 1 Lloyds Reports 74, but expressly not followed, it being held in that case that the policy which underlies the equivalent English rule is to enable all disputes about the existence or effect of contractual rights and liabilities falling within the scope of [the rule] to be brought before the English courts (at 79-80). [29] In Finnish Marine there was apparently no opposing contention as to the existence of a contract; 15 whereas in Boss Group the contradiction inherent in the defendant seeking to assert that there is a contract that the plaintiff has broken (in the foreign proceedings) whilst simultaneously contending the contrary (on the basis of the plaintiff s claim for a negative declaration) in the domestic proceedings was a matter taken into account in the reasoning process. As Saville LJ said, [o]nce one has removed the self-contradictory stance taken up by the defendants, it seems to me that it is self-evident that there are matters relating to a contract between the parties. 16 [30] The English authorities, Boss Group and Kleinwort Benson, are persuasive, and consistent with the High Court s approach in Tana v Baxter (1986) 160 CLR 572 at 580, as to the width of meaning of the equivalent phrase, otherwise affecting such contract, as including practical as well as legal effects. In the face of the positive assertion as to the existence of the alleged 2012 agreement by Geoscience in the Texas 15 In addition to a summons seeking to set aside service on it abroad, the defendant had also brought a summons seeking a stay on the basis of an arbitration clause in the putative contract, but sought to withdraw that summons at the hearing: Finnish Marine at 1081 and Boss Group at 357. See also Youell v La Reunion Aerienne [2008] EWHC 2493; [2009] 1 All ER (Comm) 301 at [17], where Tomlinson J observed that the decision of the Court of Appeal in Boss Group shows that the English market establishes a good arguable case that there is a matter relating to a contract by relying on the fact that that is what the French market is contending against it in Paris.

10 10 proceeding, Central s claim for a negative declaration in the proceeding in this court will have practical as well as legal effects on the legal relationship between the parties in so far as it concerns the 2011 agreement and the alleged 2012 agreement. Finnish Marine has not been followed in England, and I am not persuaded that its reasoning ought to be applied here. There are good policy reasons why this dispute ought to be permitted to be litigated in an Australian court, given that (as discussed below): (i) it is strongly arguable Australian law is the proper law to be applied to determine whether the 2012 agreement was entered into; and (ii) the need for an Australian court to determine for itself whether the Texas court has jurisdiction, in the international sense, over Central (which in the present case involves a determination whether Central entered into the 2012 agreement). [31] I am satisfied Central s claim is one relating to the 2011 agreement and also one relating to the alleged 2012 agreement. It therefore falls within the scope of r 124(1)(g)(ii) of the UCPR and, having been served on Geoscience, is within the jurisdiction of this court to determine. [32] For completeness, I note that even if a different view had been taken in relation to the alleged 2012 agreement, the proceeding would still properly be described as one relating, in part, to the 2011 agreement, and therefore, having regard to r 124(1)(x), be one falling within the scope of r 124(1)(g)(ii). [33] I turn to consider the next part of Geoscience s application, which is that the proceeding, even if found to be within jurisdiction, should be stayed, either permanently or at least temporarily. Should the proceedings be stayed, having regard to the Texas proceedings? Relevant principles [34] In Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554 the majority (Mason CJ, Deane, Dawson and Gaudron JJ) summarised some of the fundamental principles to be drawn from Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197: 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

11 11 jurisdiction to grant a stay or dismiss the action is to be exercised with great care or extreme caution. [35] The test is whether Queensland is a clearly inappropriate forum. The onus is on the defendant, here Geoscience, to satisfy this court that it is so inappropriate a forum for the determination of the proceedings that their continuation would be productive of injustice, because it 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) to it. 17 It is not a question of striking a balance between competing considerations. The focus is upon the inappropriateness of the local court, not the appropriateness or comparative appropriateness of the foreign court. 18 [36] In Henry v Henry (1996) 185 CLR 571, a case, like this one, in which there were already foreign proceedings on foot, Dawson, Gaudron, McHugh and Gummow JJ said, at 591: 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. It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are 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. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at per Deane J; Voth at ; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at [78]; Puttick v Tenon Ltd (2008) 238 CLR 265 at [27]-[29]. 18 Regie Nationale Renault at [78]; Voth at References omitted, emphasis added.

12 12 [37] Central emphasised that, although the question whether the 2012 agreement was entered into is common to both the Texas proceeding and the proceeding in this court, the Texas proceeding also involves issues going beyond that (the quantum meruit claim, and the misrepresentation claim). In this regard, Central relies on CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 in which, at the majority said: In cases such as the present, where different issues are involved in the local and foreign proceedings, albeit that the different proceedings arise out of the same sub-stratum of fact, the question is not whether the Australian court is a clearly inappropriate forum for the litigation of the issues involved in the Australian proceedings. Rather, the question must be whether, having regard to the controversy as a whole, the Australian proceedings are vexatious or oppressive in the Voth sense of those terms, namely, that they are productive of serious and unjustified trouble and harassment or seriously and unfairly burdensome, prejudicial or damaging. [38] Their honours had earlier, at , observed, by reference to previous authorities: that the mere co-existence of proceedings in different countries does not constitute vexation or oppression. In particular, Peruvian Guano establishes that double litigation [which] has no other element of oppression than this, that an action is going on simultaneously abroad, which will give other or additional remedies beyond those attainable in [the domestic forum] does not amount to vexation or oppression. More recently, in Bank of Tokyo Ltd v Karoon, Robert Goff LJ pointed out, correctly, in our view, although without specific reference to underlying equitable principle, that foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings. On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Co, if complete relief is available in the local proceedings. 20 [39] In Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 at [461] the Victorian Court of Appeal said, after referring to TS Production at 443 (per Finkelstein J) and 448 (per Gordon J) and accepting as correct the principle that the existence of simultaneous proceedings alone does not establish vexation and oppression, that something more is needed: 20 References omitted, emphasis added. See also TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433 at [21] per Finkelstein J and at [50] and [55]-[59] per Gordon J (on the Federal Court, as her Honour then was), with whom Stone J agreed.

13 13 These passages support the view that the focus of the inquiry as to whether proceedings are vexatious or oppressive is not primarily on the additional expense and cost to the defendant, but rather on whether the bringing of a second proceeding in respect of the same controversy is unnecessary, unjustified or unfair. The authorities indicate that what is to be established in evidence is not primarily that the duplication of proceedings will lead to additional cost, expense, or harassment, but rather that there is nothing to be gained from the parallel proceeding; alternatively, that complete relief is available in a single proceeding. If there is a legitimate advantage that can be gained, the fact that the defendant will suffer additional cost and harassment is easily outweighed. The authorities show that what is required is not a straightforward balancing exercise that weighs the cost and harassment incurred by an applicant (and presumably their ability to bear that cost and harassment) against the advantage gained by the party bringing the proceeding. Rather, as follows from the majority s reasoning in CSR, the balance is skewed heavily in favour of allowing a party to proceed when there is something substantial that may be gained in the foreign proceedings and is skewed heavily against so allowing when there is not. 21 [40] Central submits that there is something to be gained by the local proceedings in this court, which is a determination by an Australian court of whether the 2012 contract was entered into which it submits will be critical to whether any determination of a Texas court in Geoscience s favour would be enforceable in Australia. I will address this further below. [41] In submitting that the continuation of both sets of proceedings would be vexatious and oppressive to it Geoscience emphasises that the Texas proceedings were commenced first, the stage those proceedings have reached, the connection of the dispute with Texas, the location of witnesses, the law it submits would apply to determine the issue whether the 2012 agreement was entered into and the difference in the size of the parties. 22 [42] Central, on the other hand, contends that there are a number of reasons why it would not be concluded that Queensland is an inappropriate forum, including that the dispute has a significant connection to Queensland, the Texas proceedings have not progressed beyond a challenge to jurisdiction, Queensland law governs the dispute as to the 21 References omitted, emphasis added. 22 Geoscience s written submissions dated 8 June 2017 at [82]; T 1-6 (where Geoscience is described as quite a small company, compared with Central, which is a publicly listed company) and 1-56.

14 14 existence of the 2012 agreement, and that there is real doubt that any Texas judgment would be recognised in Queensland. 23 Connection with Queensland [43] I accept that the dispute has a connection with Queensland, since Central has its registered office and its principal place of business in Queensland, and the underlying subject matter of the dispute concerns petroleum tenements located in Queensland (as well as in the Northern Territory). That is not to deny the connection with Texas, given that is where Geoscience is based, where two of the primary witnesses for Geoscience (Mr Pande and Mr McGinnis) are located, and where it appears the contentious meetings (in particular, the meeting at which Geoscience alleges Mr Shortt signed the 2012 agreement) took place. But this is not a balancing exercise. The applicable law [44] In deciding whether the local forum is clearly inappropriate, the extent to which the law of that forum is applicable in resolving the rights and liabilities of the parties is a material consideration. Gaudron J observed, in Oceanic Sun Line (at 266), that the selected forum should not be seen as an inappropriate forum if it is fairly arguable that the substantive law of the forum is applicable in the determination of the rights and interests of the parties. 24 [45] Geoscience devoted a significant proportion of its written submissions to this issue, arguing that the weight of authority favours the view that the dispute as to whether the parties entered into the 2012 agreement will be determined by the proper law of the alleged agreement, which is Texas law, given the governing law clause in the alleged 2012 agreement. 25 [46] Central contends that it is, at the least, fairly arguable that the issue will be decided by Queensland law, relying upon a decision earlier this year of the Full Federal Court in Trina Solar (US) Inc v Jasmin Solar Pty Ltd (2017) 247 FCR 1. That submission must be accepted, in light of this decision. At first instance 26 Edelman J (then of the Federal Court) referred to the absurdity of applying the proper law of a disputed contract to determine whether a person is bound by that contract, observing (at [86]) that: The basal reason why a person is bound by the proper law contained in a contract is because that person has manifested a consent to be bound. The question of whether a person has manifested consent to be bound cannot be governed by matters contained within the very contract about which the person disputes having manifested agreement 23 Central s written submissions dated 6 September 2017 at [60] and following. 24 Adopted with approval in Voth at 566 per Mason CJ, Deane, Dawson and Gaudron JJ. 25 Geoscience s written submissions, dated 8 June 2017, at [33]-[63]. 26 Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd (2015) 331 ALR 108.

15 15 [47] As Edelman J noted at [89] the Australian authority on this point is limited, but includes Brennan J (at 225) and Gaudron J (at 260) in Oceanic Sun Line observing, albeit by way of obiter in that case, that the law of the forum applies to determine questions as to the existence of a contract. [48] On appeal, all members of the Full Federal Court reached the same view. 27 Greenwood J considered that the observations of Brennan J and Gaudron J in Oceanic Sun Line must inform the answer to the question, notwithstanding academic writing supporting the notion that the putative proper law applies to questions of whether the parties have reached consensus ad idem (which is what Geoscience emphasises in its submissions). Beach J (with whom Dowsett J agreed) saw no good reason not to follow the obiter observations of Brennan and Gaudron JJ (at [134]) and observed, at [130], that: it is counter-intuitive to suggest that the choice of law to assess consensus ad idem should be that set out in an agreement that an entity says it is not a party to because there was no consensus ad idem. That would be to assume what was to be proved. As his Honour [Edelman J at first instance at [7]] described it: a party cannot pick itself up by the bootstraps provision when there has been no determination that it binds the other party, and at [149] that: [t]he rationale for applying the putative proper law of the contract is that it accords with the intent of the parties, but that is the very matter in issue in the present context. [49] On this application I do not need to reach a final determination on the relevant law that governs whether the parties entered into the 2012 agreement. But, quite clearly, having regard to the Full Federal Court s decision in Trina Solar, it is reasonably (indeed, strongly) arguable that Queensland law applies, which is a very significant factor in favour of refusing a stay. 28 Stage the Texas proceedings have reached [50] It seems a significant amount of work has been undertaken in relation to the Texas proceeding, but that has not progressed beyond the question of the jurisdiction of the Texas court (although there may be some overlap, in a practical sense). [51] The appeal by Central against the ruling that the Texas court has jurisdiction was heard in May Mr Gunn, an independent Texas lawyer who has provided an expert report, outlines the available processes for review, beyond the Court of Appeals decision that is currently reserved, and estimated timeframes (acknowledging that such 27 Greenwood J at [43] and [46], Beach J at [121], [127]-[136] and [149], with whom Dowsett J agreed at [1]. 28 Voth at 566.

16 16 estimates are necessarily conjectural). Mr Gunn says the present appeal may not be determined until the end of this year, or perhaps next year; and if subsequent reviews are undertaken, the appeal is almost certain to last into 2018 and could easily last into Once the issue of jurisdiction, which is the subject of the appeal, is resolved, assuming that is favourable to Geoscience, there may be a delay of 9 to 12 months before the trial commences. 29 Mr McDougald, Geoscience s Texas lawyer, says the timeline estimates in Mr Gunn s report are pessimistic, although not unreasonable. 30 [52] In contrast, in so far as this proceeding is concerned, Central submits it concerns a relatively narrow point; in respect of which there are only three relevant witnesses (Mr Shortt, Mr Pande and Mr McGinnis); which could be dealt with reasonably quickly with the benefit of case management in this court, and that there is merit in doing that for the reasons outlined below, in relation to the question of the enforceability of any Texas judgment in Australia. Central also submits that Geoscience could advance by way of counterclaim all the causes of action it sues on in the Texas proceeding (although potential issues with limitation periods were alluded to by counsel for Geoscience 31 ). [53] Mr Pande of Geoscience says that if the issue of the jurisdiction of the Texas courts is resolved in Geoscience s favour, Geoscience will continue to prosecute the Texas proceedings, even if its present application to set aside, or stay, the Queensland proceedings is unsuccessful. Mr Pande says that while he is concerned by the prospect of two proceedings being run in separate jurisdictions (given matters such as the duplication of legal costs, the added stresses of litigation, the possibility of conflicting judgments and the incentives that each side would then have to ensure that one proceeding is determined first), he is committed to the pursuit of the Texas proceedings. 32 [54] As against that, for reasons explained further below, in dealing with the issue of the enforceability in Australia of any judgment of a Texas court against Central, Central argues that it is in the interests of the parties to know at an early stage whether or not any such judgment would be recognised or enforceable in Australia a matter Central submits can only be determined by an Australian court because if it would not, that may determine whether Central participates, on the merits, in the Texas proceedings. It is to that issue that I turn next. Enforceability of any judgment against Central in the Texas proceedings 29 Gunn (15 August 2017) at [57]-[71] of Mr Gunn s report. 30 McDougald (15 September 2017) at [11]. 31 T Pande (15 September 2017) at [5].

17 17 [55] The enforceability of any judgment Geoscience may obtain against Central in the Texas proceedings took on particular significance at the hearing of this application, because of the issue raised at paragraphs [37]-[40] above and paragraph [60] below. [56] The Foreign Judgments Act 1991 (Cth) makes provision for the enforcement of certain foreign judgments in Australia, but that does not extend to judgments of any courts of the United States of America, 33 the recognition and enforcement of which is therefore governed by the common law principles. [57] As summarised in Nygh s Conflict of Laws at [40.2]: 34 To entitle a foreign judgment to recognition at common law, four conditions must be satisfied: (a) the foreign court must have exercised a jurisdiction that Australian courts recognise; (b) the foreign judgment must be final and conclusive; (c) there must be an identity of parties; and (d) if based on a judgment in personam, the judgment must be for a fixed debt. [58] The term jurisdiction in the first condition does not refer to the jurisdiction of the foreign court under its own rules, but jurisdiction in the international sense, by which is meant a competence that is recognised under Australian law. 35 Jurisdiction in this sense can arise in one of two ways: first, by the presence or residence of the defendant in the jurisdiction of the foreign court (in a practical sense, here, by service on the defendant while present in that jurisdiction) or, second, by the voluntary submission by the defendant to that jurisdiction. 36 [59] The authorities clearly support the proposition that it is for an Australian court to determine this question it is not bound by the determination as to jurisdiction by a foreign court. 37 The principle was articulated in clear terms by Staughton LJ in Jet Holdings Inc v Patel [1990] 1 QB 335 at 344: 33 See s 5 of the Foreign Judgments Act 1991 (Cth) and s 3 and the schedule to the Foreign Judgments Regulations 1992 (Cth); Jani-King Franchising Inc v Jason [2013] QSC 155 at [4] per Martin J; see also Davies, Bell and Brereton, Nygh s Conflict of Laws in Australia, 9 th ed (2014) at [41.6]. 34 By reference to Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at [18] per Bleby J (Vanstone and Anderson JJ agreeing); see also Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583 at [146]-[147] per Sackar J. 35 Doe v Howard [2015] VSC 75 at [57] per J Forrest J; Nygh s Conflict of Laws in Australia at [40.4]. 36 Nygh s Conflict of Laws in Australia at [40.5]. 37 See Nygh s Conflict of Laws in Australia at [40.45]; Harris v Harris [1947] VLR 44 at 48-49; Jet Holdings Inc v Patel [1990] 1 QB 335 at per Staughton LJ (Nichols LJ agreeing); Adams v Cape Industries plc [1990] Ch 433 at 550; Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at [18] per Bleby J (Vanstone and Anderson JJ agreeing); Telesto Investments Ltd v UBS AG (2013) 94 ACSR 29 at [261] per Sackar J; see also de Santis v Russo [2002] 2 Qd R 230 at [9] per McPherson JA; and Wong v Jani-King Franchising Inc [2014] QCA 76 at [20] per Holmes JA (as her Honour then was).

18 18 Where the objection to enforcement is based on jurisdiction that is rule it is to my mind plain that the foreign court s decision on its own jurisdiction is neither conclusive nor relevant. If the foreign court had no jurisdiction in the eyes of English law, any conclusion it may have reached as to its own jurisdiction is of no value. To put it bluntly, if not vulgarly, the foreign court cannot haul itself up by its own bootstraps. 39 [60] There is no dispute that Central was not served in the United States; it was served in Australia. As to the second basis, Central submits that the only argument that could be made that Central has submitted to the jurisdiction of the Texas court depends on the clause as to jurisdiction in the alleged 2012 agreement. Central submits that there is no other basis on which it could be said to have submitted, by its actions, to the Texas courts jurisdiction. Central s involvement in the Texas proceeding to date has been limited to challenging the jurisdiction of the Texas court. 40 Counsel for Geoscience confirmed that it was not being contended by Geoscience that in any steps taken by Central in relation to the Texas proceeding, it had gone beyond that. 41 [61] However, what Geoscience did contend is that, having entered (in effect) a conditional appearance, and challenging the jurisdiction of the Texas court, once that issue is decided by the Texas court, Central is bound by the finding as to jurisdiction reached by that court. That is, that an issue estoppel arises, as to the issue of the jurisdiction of the Texas court. Geoscience relies on the decision of Jacobson J in Armacel Pty Ltd v Smurfit Stone Container Corporation (2008) 248 ALR 573 for this proposition. [62] Central submits that applying to the foreign court to protest its jurisdiction cannot amount to submission to the foreign court s jurisdiction, and says that s 11 of the Foreign Judgments Act 1991 is decisive on that point. Section 11 provides, in relation to judgments of foreign courts to which part 2 of the Act does not apply, including judgments of United States courts, that the foreign court: is not taken to have had jurisdiction to give the judgment merely because the judgment debtor: (a) (b) entered an appearance in proceedings in the court; or participated in proceedings in the court only to such extent as was necessary; 38 A reference to rule 43(1) in Dicey & Morris, The Conflict of Laws, 11 th ed (1987), that [a] foreign judgment is impeachable if the courts of the foreign country did not, in the circumstances of the case, have jurisdiction to give that judgment in the view of English law in accordance with the principles set out in rules 37 to 41 inclusive. 39 Emphasis added. 40 White (17 July 2017) at [108] and White (14 September 2017) at [5]; Gunn (15 August 2017) at [52] and [82] of Mr Gunn s report. 41 T

19 19 for the purpose only of one or more of the following: (d) (e) contesting the jurisdiction of the court; inviting the court in its discretion not to exercise its jurisdiction in the proceedings. [63] I accept Central s submission in this respect. For the following reasons, I do not accept that Armacel is authority for the contrary proposition contended by Geoscience. [64] In Armacel the parties had entered into a technology licence agreement, under which Armacel licensed Smurfit to use an industrial process in the United States. Smurfit commenced proceedings in a US District Court, seeking negative declaratory relief that it had no remaining obligations under the agreement. Armacel brought a motion for the dismissal of the proceeding on the ground of want of jurisdiction, based on a clause in the agreement which Armacel contended was an exclusive jurisdiction clause, under which Smurfit agreed to submit to the exclusive jurisdiction of New South Wales. The US court dismissed Armacel s motion, holding that the clause provided for the selection of New South Wales as a non-exclusive forum. In the meantime, one month after the US proceedings were commenced, Armacel commenced proceedings in the Federal Court of Australia against Smurfit, claiming damages for misleading and deceptive conduct, and breach of the licensing agreement. Smurfit applied to stay those proceedings, on the basis, inter alia, that the decision of the US District Court was a final and conclusive one on the merits, giving rise to an issue estoppel precluding Armacel from contending that the jurisdiction clause was exclusive. [65] Jacobson J found that the US District Court s decision was a final and conclusive one, on the merits, in respect of the same question the construction of the jurisdiction clause in the licensing agreement and as such it gave rise to an issue estoppel, barring Armacel from contending that the relevant clause was an exclusive jurisdiction clause. His Honour accepted, consistent with previous authority, 42 that a decision given in an interlocutory context can nonetheless be final for this purpose. That much is uncontroversial. What is controversial, for present purposes, is whether a foreign court s decision as to it having jurisdiction is binding on a local court. [66] In order to understand the parameters of Armacel it is necessary to delve further into two decisions referred to by Jacobson J. The first is DSV Silo-und Verwaltungsgesellschaft mbh v Owners of the Sennar [1985] 1 WLR 490 (The Sennar). In that case Lord Diplock stated the principle that issue estoppel can be created by the judgment of a foreign court if that court is recognised in English private international law as being a court of competent Jurisdiction (at 493). That phrase, court of 42 Castillon v P&O Ports Ltd [2008] 2 Qd R 219 at [49]-[57] per Holmes JA (as her Honour then was); see also DSV Silo-und Verwaltungsgesellschaft mbh v Owners of the Sennar [1985] 1 WLR 490 (The Sennar) at