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Wolf v Strauss [2011] TOCA 4; AC 14 of 2010 (30 September 2011)

IN THE COURT OF APPEAL OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

APPEAL NO. AC 14 of 2010
[CV 277 of 2009]

BETWEEN:

1. JUERGEN WOLF
2. BRIGITTA WOLF
Appellants

AND:

1. FRANZ STRAUSS
2. GUDRUN STRAUSS
Respondents

Coram: Burchett J
Salmon J
Moore J

Counsel: Mrs Stephenson for the Appellants
Mr Niu for the Respondents

Date of hearing : 19 September 2011
Date of judgment: 30 September 2011

JUDGMENT OF THE COURT

INTRODUCTION

[1] This is an appeal by Juergen and Brigitta Wolf filed on 27 July 2010 from an order of Shuster J of 21 June 2010. Franz and Gudrun Strauss commenced proceedings against the appellants on 3 December 2009 in the Supreme Court of Tonga. As the plaintiffs (and now the respondents in this appeal) they alleged they had lent the appellants two amounts (EUR 10,000 and EUR 180,000) in 2006, the loan monies had not been repaid in accordance with the loan agreements, and they were entitled to judgment for the entire amount of the loans plus interest. It appears not to be an issue in these proceedings (at least at this interlocutory stage) that the monies had been lent and not repaid in the way contemplated by the parties at the time of the loans.

[2] The appellants applied, in effect, for an order that the Supreme Court proceedings be stayed on the basis that any proceedings to recover the sums lent should be heard and determined in a German court. It was the dismissal of that application by Shuster J by an order of 21 June 2010 that has given rise to this appeal. His Honour determined the matter should be heard in Tonga "because the alleged agreement to provide the Defendant with his loan in EUROS is silent as to the place of trial. Further the property purchased by the Defendant is located here in the Kingdom of Tonga."

[3] We can proceed on the basis, at this interlocutory stage, that the following is uncontroversial. The respondents reside in Dortmund, Germany. The appellants are business people who operate the Seaview Restaurant and Lodge ("the Seaview") and reside in Nuku'alofa, Tonga though they are citizens of Austria.

[4] The appellants seek an order that Tonga is not the appropriate forum to hear this matter, that it should be heard in Germany and the order of Shuster J of 21 June 2010 should be set aside.

CONSIDERATION ON APPEAL

[5] Before considering whether the primary judge erred, it is convenient to discuss the principles which should be applied in determining whether proceedings in a court in Tonga should be stayed because the legal controversy between the parties more appropriately should be heard in a court of another country. We should immediately observe that an application of the type made to Shuster J in the present case does not raise a question of whether the Supreme Court of Tonga has jurisdiction to hear the dispute (it does have jurisdiction in this case because, we assume, the defendants were present in Tonga when the initiating process was served and were therefore subject to the Supreme Court's jurisdiction). Rather the question is whether the Supreme Court should exercise an undoubted discretion it has to stay the proceedings on the basis that they should be heard and determined elsewhere. The first step in determining such an application is to ascertain whether the Supreme Court of Tonga is an inappropriate forum or the forum non conveniens because there is another forum which is clearly more appropriate. If there is a clearly more appropriate forum elsewhere, the second step is to consider whether the Supreme Court should nonetheless exercise its discretion against staying the proceedings because it is in the interests of justice to allow the plaintiffs to continue the proceedings in Tonga.

[6] The leading authority on forum non conveniens is Spiliada Maritime Corp. v Cansulex Ltd [1987] AC 460. The law was summarised by Lord Goff of Chieveley at 476 – 478:

(a) The stay will only be granted on this ground where the court is satisfied that there is some other available forum which has competent jurisdiction where the case may be tried more suitably for the interests of all parties and the ends of justice.

(b) The burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay. The evidential burden, however, rests on the party who asserts the existence of certain matters that will assist in persuading the court to exercise its discretion.

(c) The burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In all the English cases where a stay has been granted, there has been another clearly more appropriate forum.

(d) The court will first look to see what factors indicate that another forum would be more appropriate or is a forum "with which the action had the most real and substantial connection", including the availability of witnesses, the law governing the relevant transaction and the places where the parties respectively reside or carry on business.

(e) The stay will ordinarily be refused if the court concludes there is no other available forum which is clearly more appropriate.

(f) The stay will ordinarily be granted if the court concludes that there is some other available forum clearly more appropriate to hear the matter. However the stay may nonetheless be refused if, having regard to the interests of justice, it is appropriate for the stay not to be granted.

[7] The authorities identify other matters in addition to those just referred to in 6(d) above including where the relevant events occurred. The principles in Spiliada apply in Tonga. As to their application see, for example, the judgment of Ford CJ in Gough Finance Limited v Westpac Bank of Tonga [2004] Tonga LR 279. His Honour observed at 282:

The discretion is to be exercised having regard to the common-law principles that have been developed in this area of the law but foremost amongst the considerations must always be the "forum conveniens", as it has been historically referred to, and the overall interests of justice.