Oceanic Sun Line Special Shipping Co v. Fay [1988] HCA 32

Facts: P (Dr Fay), a QLD resident, made a booking in NSW for a cruise of the Greek islands on a vessel owned by a Greek company. Upon payment of the fare, Pl was handed an ‘exchange order’ stating that it would be exchanged for a ticket when he boarded the vessel. In Athens, P obtained his ticket with a printed condition that the courts of Greece should have jurisdiction in any action against the owner. Pl was injured on the cruise, and sued D (Oceanic Sun Line Special Shipping) in negligence in NSWSC. The case went to the HCA.

D argued for a permanent stay of the proceedings on the basis of 2 discretionary grounds:

1. Foreign jurisdiction clause on the ticket;

2. NSW was a clearly inappropriate forum for this litigation.

The clause stated:  “any action against the Carrier must be brought only before the courts of Athens, Greece, to the jurisdiction of which the Passenger submits himself, formally excluding the jurisdiction of all and other court or courts of any other country or countries …”. The exchange order contained no such condition.

Issue 1: Was it an exclusive or non-exclusive jurisdiction clause?

Held: Whether the clause provides for exclusive or non-exclusive jurisdiction depends on the proper law of the clause. A question regarding whether a contract has come into existence at all is a question for the forum. Whether there is consensus ad idem and an intention to create legal relations is governed by the lex fori.

Issue 2: Should there be a stay of the proceedings?

Held: The action should not be stayed. Applying NSW law as the law of the forum, the foreign jurisdiction clause on the ticket is not a contract term, rather it is a provision a party of the contract sought unilaterally to add.

Note: The case came back to trial in NSW, but settled before the trial took place on terms very unfavourable to P due to another provision that maximum liability was $5,000 USD, and this was the final offer of settlement with each party bearing their own costs. Furthermore, D had no assets in Australia or New Zealand. If the case had gone to trial, there would be an issue of choice of law, either in tort or in contract.

Note: Brennan J’s dicta here was applied by Rein J in Venter v Illona, in applying Australian (forum) law to determine whether or not certain standard terms had been incorporated.

Issue 3: Was NSW a clearly inappropriate forum?

Held: D had failed to demonstrate that NSW was a clearly inappropriate forum. The Spiliada test was rejected by the court here.

Held (Deane J): “A party who has regularly invoked the jurisdiction of a competent court has a prima facie right to insist upon its exercise and to have his claim heard and determined.” Discretion to decline jurisdiction depends on D showing AU proceedings would be ‘vexatious’ or ‘oppressive’ to it, so AU proceedings are ‘clearly inappropriate’.

Question: What does “vexatious” and “oppressive” mean?

Held (Deane J): ‘Vexatious’ means “productive of serious and unjustified trouble and harassment”. ‘Oppressive’ means“seriously and unfairly burdensome, prejudicial or damaging”. Deane J agreed with the caution uttered by Lord Wilberforce in The Atlantic Star (at 92), against construing "oppressive" and "vexatious" too rigidly.

Held (Brennan J): Brennan J considered that they should be understood in the rather strict sense.

Issue 4: What was the proper law of the contract? 

Held: The objective proper law of the contract of carriage was Greek law. Although there was no exclusive jurisdiction clause and no express choice of Greek law, it was a cruise on a Greek registered ship, leaving and departing a Greek port, owned by a Greek corporation and almost entirely in Greek territorial waters.