Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

Facts: The plaintiff (Pl) (NSW corporation) commenced proceedings in the NSWSC, alleging the tort of negligent misrepresentation by the defendant (D) (an accountant in Missouri, USA). Pl had a North American subsidiary. D (Mr Voth) gave some tax advice to the subsidiary, which the Pl relied on to its financial loss (Pl’s reliance occurred in NSW). The financial loss comprised of the Pl being unable to claim certain deductions under AU tax law concerning withholding tax on dividends. There is no exclusive jurisdiction clause because there was no contract. Originating process was served on D in Missouri on the basis of tort damage suffered in NSW. D applied for a permanent stay of proceedings on the ground of forum non conveiens (FNC).

Issue 1: Was NSW a clearly inappropriate forum?

Held: Yes, NSW was a clearly inappropriate forum. There was a substantial connection with USA law; acts and omissions occurred in USA; D’s lawyer resides and works in USA, so USA professional standards apply; evidence is in USA; D has undertaken not to raise the limitation bar in USA proceedings. Though there were some factors militating against a stay (damage sustained in NSW; unable to get lawyer fees), a stay was granted.

In determining whether the local court is a clearly inappropriate forum, "the discussion by Lord Goff in Spiliada of relevant 'connecting factors' and 'a legitimate personal or juridical advantage' provides valuable assistance".

Factors/connections to Missouri

• Tort committed in Missouri

• Professional accounting standard applicable in Missouri would be relevant in NSW

• D carried professional practice in Missouri

• Tax laws of the US would be material in determining any liability so long as D is concerned

Factors/connections to NSW

• NSW Pl suing for damage suffered entirely in NSW

• AU tax law relevant in determining the extent of loss

• In Missouri, a successful Pl does not recover legal costs

• In NSW, the interest on damages was considerably more attractive than interest on damages of Missouri

Principle: An Australian court will decline to exercise its jurisdiction as a matter of discretion, if it is a ‘clearly inappropriate forum’ - i.e. proceedings would be oppressive (“seriously and unfairly burdensome prejudicial or damaging”), or vexatious (“productive of serious and unjustified trouble and harassment”) so far as the defendant is concerned. 

Summary of principles in Voth concerning a stay of proceedings on FNC grounds: 

• If the court has jurisdiction, P prima facie has a right to be heard.

• If D wants the NSW forum to stay proceedings, the onus is on D to show that not granting a stay (and proceedings to hear the dispute) would be vexatious or oppressive.

• Determining this turns on whether the local court would be a clearly inappropriate forum

• In determining the appropriateness of the local forum, must consider various factors, such as the advantages and disadvantages.

Issue 2: Where the tort of negligent misstatement occurred? 

Held: The tort of negligent misrepresentation is said to occur where the representation was directed to and where it can reasonably be expected to be received by the Pl.

• If a statement is directed from place A to place B (where it is known/anticipated that it will be received by Pl) → loci delicti is place B (whether or not it is there acted upon). 

• If a statement is directed to place B (where it ought reasonably to be expected that it will be brought to the attention of Pl), even if it is brought to attention in some third place (Place C) →  loci delicti is still place B