CHEVALIER WHOLESALE PRODUCE LIMITED V JOES FARM PRODUCE LIMITED HC AK CIV-2010-404-4229

CHEVALIER WHOLESALE PRODUCE LIMITED V JOES FARM PRODUCE LIMITED HC AK CIV-2010- 404-4229 17 November 2011IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2010-404-4229BETWEEN CHEVALIER WHOLESALE PRODUCELIMITEDPlaintiffAND JOES FARM PRODUCE LIMITEDFirst DefendantAND MICHAEL JOESecond DefendantHearing: 10 November 2011Counsel: M C Black for PlaintiffS Khan for DefendantsJudgment: 17 November 2011 at 3:00 PMJUDGMENT OF ASSOCIATE JUDGE BELLThis judgment was delivered by me on 17 November 2011 at 3:00pmpursuant to Rule 11.5 of the High Court Rules..Registrar/Deputy RegistrarSolicitors:Craig Griffin Lord (Chris Lord), PO Box 9040 Auckland 1149, for plaintiffEmail: chris@cgl.co.nzGandhi Lala Lawyers (J K Gandhi) P O Box 24-380 Auckland 1345, for defendantsEmail: jsaswin@gandhilala.co.nzFortune Manning (Shafraz Khan) P O Box 4239 Auckland 1140Email: shafraz.khan@fmlaw.co.nzCopy for:Michael C Black, P O Box 19984 Auckland 1140Email: mcblack@xtra.co.nzCase Officer:Vivianne.Katia@justice.govt.nz[1] The defendants apply for the dismissal or stay of the proceeding, and also for leave to file a statement of defence out of time.[2] The plaintiff is a New Zealand wholesale supplier of fruit and produce. The first defendant is a Fiji company which carries on a wholesale business in Suva selling fruit and vegetables. Mr Joe, the second defendant, is the director of the first defendant. The plaintiff supplied the first defendant with fruit and produce from 2003 to 2005.[3] In this proceeding the plaintiff claims the sum of $394,849.70 as the amount outstanding for fruit and produce supplied, plus interest charges, bank fees and collection costs said to have fallen due. For its claim, the plaintiff relies on adocument called "credit account application form" which contains terms andconditions of trade. Mr Joe signed the form on behalf of the first defendant. The terms and conditions of trade contain a personal guarantee by Mr Joe.[4] Although the proceeding began in July 2010, the plaintiff did not serve the first defendant until April 2011. The plaintiff had to apply for an order for substituted service on Mr Joe. In ordering substituted service, I provided that Mr Joe could have 30 working days after service to file a statement of defence.[5] As recorded in a case management conference minute of 22 June 2011, Mr Gandhi, appearing for both defendants, advised the court that the defendants intended to challenge the jurisdiction of this court to hear the proceeding. The defendants have not filed a protest to jurisdiction under r 5.49. The defendants have applied under r 5.49(3). I treat that application as effective, notwithstanding the absence of any appearance to protest the jurisdiction.[6] The application is governed by r 6.27 to 6.29 of the High Court Rules. InWing Hung Printing Co Ltd v Saito Offshore Pty Ltd,1 the Court of Appeal has given authoritative guidance how rr 5.49 and 6.27 to 6.29 should be applied in these cases. Without repeating what the Court of Appeal said, I follow its decision. Under r 6.291 Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2011] 1 NZLR 754 (CA) at [20]-[72].the plaintiff must show that it has a good arguable case that its claim is within one or more of the paragraphs in r 6.27. Once it establishes that, it must show that the court should assume jurisdiction because there is a serious issue to be tried, New Zealand is the appropriate forum for the trial, and any other relevant circumstances support an assumption of jurisdiction.2Good arguable case under rule 6.27(2)[7] The plaintiff needs to establish that there is a good arguable case that its claim falls wholly within one or more of the paragraphs in r 6.27. The grounds under r 6.27(2)(b) in the notice of proceeding the plaintiff relied on to serve the defendants overseas without requiring leave of the court were:(a) The contract was made or entered into in New Zealand;(b) The contract was wholly or in part performed in New Zealand; and(c) The contract was, by its terms or implication, to be governed by New Zealand law.[8] In McConnell Dowell Constructors Ltd v Lloyd's Syndicate 396,3 the Court of Appeal held that a plaintiff could rely on grounds outside those set out in the notice, if there was no prejudice to the defendant.Place of formation of contracts[9] As to formation of the contract under r 6.27(2)(b)(i), the plaintiff's evidenceis that it supplied the first defendant with fresh produce from 2003. The defendants'director says that the contract for supply was not formed in New Zealand but wasmade in Fiji. He says that it was entered into through discussions with the plaintiff'srepresentatives while on visits to Fiji.2 Rule 6.28(b) –(d).3 McConnell Dowell Constructors Ltd v Lloyd's Syndicate 396 [1988] 2 NZLR 257 (CA) 270.[10] In response, the plaintiff attaches to its affidavit the credit account application form with the terms and conditions of trade. The plaintiff says that it sues on that document as setting out its terms. It also contains the second defendant's writtenguarantee. The defendants signed the form in December 2005.[11] There are separate contractual arrangements that require separate consideration: the supply between the plaintiff and the first defendant, and thesecond defendant's guarantee. The supply arrangements ran from 2003 to September 2005. The plaintiff does not sue for any supply later than September 2005. The plaintiff supplied the defendant under orders placed by the first defendant. Each order placed and accepted was a separate contract, albeit on a running account basis. There is no evidence that the first defendant was bound to buy from the plaintiff. It could choose whether, what and how much to order. Likewise there is no evidence that the plaintiff was legally bound to meet every order the first defendant placed (even if it was commercially advantageous to do so). Each order by the first defendant was an offer, which resulted in a contract on acceptance. There is no evidence how each order was accepted. The onus is on the plaintiff to show that each contract was made in New Zealand. There could be acceptance in New Zealand if the postal rule applied. That is the rule that, when negotiations are by post, the contract is formed at the place where the acceptance is posted - Byrne v van Tienhoven.4 Written communications between the parties appear to have been by fax. For instantaneous communications, such as by fax, there is acceptance at the place where the offeror receives the acceptance of the offer – Entores Ltd v Miles Far East Corporation.5 In the absence of any evidence that the first defendant'sorders were accepted by post, the plaintiff has not shown a good arguable case that the sales were made in New Zealand.[12] The plaintiff counters this by referring to its terms of trade. They include:2.1 Any instructions received by Chevalier Wholesale Produce from the customer for the supply of produce shall constitute a binding contract and acceptance of the terms and conditions contained herein.4 Byrne v van Tienhoven (1880) 5 CPD 344.5 Entores v Miles Far East Corporation [1955] 2 QB 327 (EWCA). See also Brinkivon Ltd vStahag Stahl und Stahlwarenhandels-Gesellschaft GmbH [1983] 2 AC 34 (HL).The plaintiff says that these terms apply retrospectively, so that an order sent by the first defendant to the plaintiff in New Zealand constituted the formation of a contract in New Zealand. In some cases, terms of a contract may apply retrospectively. The example normally cited is where parties proceed on the basis of an intended agreement with the expectation that once the terms are fully agreed they will be applied retrospectively, as in Trollope and Colls Ltd v Atomic Power Constructions Ltd.6 That is not the case here. The circumstances in which the credit account application form was signed were that the plaintiff gave the defendants time to pay debts that had built up. There is no evidence of negotiations to set the terms of trade. Clause 2.1 applies to any new orders placed by the first defendant, but it does not change the effect of contracts the parties have already made. There is nothing in the terms and conditions of trade that shows an intention to disturb rights that had already accrued. Clause 2.1 does not change the place of acceptance of contracts already made.[13] More generally, the terms and conditions of trade signed in December 2005 might be at best an agreed variation of earlier agreements for supply to operate prospectively, that is, on any parts of earlier agreements that remained unperformed. In so far as it relates to past sales, it is not a new contract between the plaintiff and the first defendant. Rule 6.27(2)(b) does not apply to agreements varied in New Zealand, if they were not otherwise made or entered into in New Zealand. The plaintiff has not shown a good arguable case that the sales were made in New Zealand.[14] The matter is otherwise with the guarantee by the second defendant. There is no evidence that Mr Joe had given the plaintiff a guarantee before. The plaintiff'sgeneral manager, Mr Janssen, says that the contract was drafted in New Zealand andfaxed to Fiji for the defendants' signing and return. The copy of the credit accountapplication form put in evidence shows that it was faxed from the defendants on 12 December 2005. As the guarantee was given by fax, the postal rule does not apply. This document is the basis for the plaintiff's claim against the seconddefendant. The contract of guarantee constituted by the signing of the credit account application form containing the guarantee provision was formed when the6 Trollope and Colls Ltd v Atomic Power Constructions Ltd [1963] 1 WLR 333 (EWHC).defendants faxed the signed form back to the plaintiff in New Zealand. It is the receipt of the fax in New Zealand that completes the formation of the contract. The guarantee was given in New Zealand.[15] Mr Joe denies that the documents he signed were intended to have contractual effect. He says that he signed the document on the assurance that the form was required for internal record keeping, that he did not receive any explanation what the document entailed and he had no time to take legal advice about it. This was a commercial agreement. These matters as to signing raised by Mr Joe do not appear to give him a defence that he did not enter into an agreement, whatever the proper law of the contract. The plaintiff has a good arguable case that the guarantee contract with the second defendant was made in New Zealand.Place of performance[16] R 6.27(2)(b)(ii) applies to contracts to be wholly or partly enforced in New Zealand. As to performance, the defendants refer to the plaintiff's invoices, whichshow that the plaintiff supplied on a cif basis, so that delivery took place in Fiji. They also show that on one occasion, in July 2009, the plaintiff accepted payment into a bank account in Fiji.[17] I accept that delivery took place in Fiji. However, it is also clear that payment was to be made in New Zealand. The first defendant was required to pay the plaintiff for supplies it received. As the debtor, it was required to send payment to the plaintiff. The plaintiff does not have an office or agency in Fiji. Its invoices provided details of a New Zealand bank account into which payment was to be made. The 2009 payment into an account in Fiji does not alter the fact that under the sale agreements the place of payment was in New Zealand.[18] Similarly the guarantee signed by the second defendant was to be performedin New Zealand, as the second defendant's guarantee of the first defendant'sperformance entailed guarantee of payment in New Zealand. The plaintiff has shown a good arguable case of performance in part in New Zealand under r 6.27(2)(b)(ii).Law governing the contract[19] Rule 6.27(2)(b)(iv) applies to a contract that by its terms or by implication was to be governed by New Zealand law. In the absence of an express choice of law in a contract, the proper law of the contract is that system of law with which the contract is most closely connected. This is an objective test, not a search for theparties' subjective implicit intentions. The Laws of New Zealand7 explains the matter:118. No express choice of proper lawIf the parties to a contract have not expressly chosen a system of law as the proper law of the contract, the Court must determine the proper law by examining the contract and the surrounding circumstances.English and Australian Courts approaching this task have usually first sought to infer an implied choice from the contract and the surrounding circumstances. If a choice cannot be inferred in this way, then the proper law will be the system of law with which the transaction has the closest and most real connection.However, it has been argued that the New Zealand Courts have not followed overseas Courts in delineating between these two separate stages – that is, the search for a subjective, implicit choice by the parties and the search for the system of law with which the contract is, objectively, most closely connected. Rather, in the absence of an express choice New Zealand Courts determine the proper law from the terms of the contract and the surrounding circumstances, and the substance of this process appears to be a search for the legal system with the closest and most real connection with the transaction.The New Zealand and English Courts have considered the following factors in determining the proper law when there is no express choice:the place where the contract was made;the place where the contract is to be performed;the nature and location of the subject-matter of the contract;the currency in which payment is to be made;the place of the parties' residence or business;the terminology of the contract;the form of the documents;7 Laws of New Zealand Conflicts of Laws: Choice of Law at [118].a connection with a previous transaction;a choice by the parties that arbitration is to take place in a particular country;a choice by the parties that the Courts of a particular country are to have jurisdiction over the contract;the fact that the contract, or a particular term, is void or invalid under one system of law but valid under another.[20] Given this approach to finding the proper law of the contract, "by implication" in r 6.27(2)(b)(iv) should not be read down to apply only to a notional implied choice of New Zealand law. That would leave a residue of cases where it is not possible to say that the parties have by implication chosen New Zealand law, yet New Zealand's is still the legal system with which the contract is most closely connected. The clear intent of the rule is that leave to serve abroad should not be required for contracts governed by New Zealand law. The drafting of the rule reflects an older approach, under which the proper law of a contract was held to derive solely from the choice of the parties, whether express or implied. The move to determining the proper law without reference to the parties' deemed intentionsdoes not take contracts without express choice of law provisions outside the rule.[21] I deal with the sales made before December 2005. There is no evidence that the parties expressly chose New Zealand law to govern those contracts. If the terms and conditions of trade are excluded, the matter is evenly balanced between Fijian law and New Zealand law as the proper law of the contracts. There is no presumption favouring one system over the other. Any factor pointing to one system is matched by a factor pointing to the other. The plaintiff carries on business in New Zealand, the first defendant in Fiji. Neither has a place of business in the country of the other. Goods were sent from one country in exchange for payment in the other direction. There was performance in both countries. The currency of account and payment was the New Zealand dollar, but that matter alone is hardly decisive. It is consistent with the contractual requirement to pay in the country where the plaintiff carries on business.[22] The plaintiff relies on the terms and conditions of trade. Above, I indicated that at best they were a variation of the contracts between the plaintiff and the firstdefendant. In the absence of any provision that the terms are to apply retrospectively, any variation could apply only to unperformed provisions of the sale agreements. The only relevant unperformed provisions were the obligations to pay. Paragraph 5 of the terms provides among other things for payment of interest and enforcement costs. The plaintiff has an arguable case that paragraph 5 can be enforced. Paragraph 5 is set among other contractual provisions that refer to New Zealand law. In particular there are references to New Zealand legislation – the Consumer Guarantees Act 1993, the Commerce Act 1986 and the Fair Trading Act 1986. Aside from paragraph 14, the terms of trade are drawn for sales within New Zealand. Because of these factors New Zealand law governs the contract.[23] Paragraph 14 of the terms and conditions of trade reinforces this. That is the guarantee portion of the terms and conditions of trade. It says:14.1 If the customer is a company or trust, the director(s) or trustee(s) signing this contract, in consideration for Chevalier Wholesale Produce agreeing to supply produce and grant credit to the customer, also sign this contract in their personal capacity and jointly and severally personally guarantee and undertake to Chevalier Wholesale Produce the payment of any and all other monies now or hereafter owed by the customer to Chevalier Wholesale Produce. Any personal guarantee made by any party shall not exclude the customer in any way whatsoever from the liabilities contained in this contract. The guarantors and customer shall be jointly and severally liable under the terms of this contract.14.2 This contract is also fully enforceable under the Republic of Fiji Islands legal system and gives Chevalier Wholesale Produce Limited full power, entitlement and rights to recover all debt outstanding bythe "Customer".[24] "Contract" in 14.2 means the contract constituted by the terms and conditions of trade, encompassing both terms for sale to the first defendant and the seconddefendant's guarantee of payment by the first defendant.[25] The purpose of clause 14.2 is to provide that the contract is also fully enforceable in the courts of Fiji, as well as enforceable under New Zealand law. That is not a choice of Fijian law as the proper law of the contract. Instead, if the contract is to be enforced in the courts of Fiji, the contract itself provides that it is enforceable for those proceedings. In proceedings to enforce the contract in Fiji, a Fijian court would apply the law of Fiji, which would include appropriate choice oflaw rules to determine the proper law of the contract. Assuming that the rules of conflict of laws in Fiji are the same as New Zealand's, a Fijian court would also recognise that this guarantee is governed by New Zealand law and would apply New Zealand law under its choice of law rules.[26] Accordingly I conclude that the plaintiff has shown a good arguable case that New Zealand law governs the unperformed parts of the sales agreements and governs the guarantee.Other provisions[27] There are other provisions of r 6.27(2) that would allow the proceeding to be served abroad without requiring leave. Under (c) there has been a breach of contract in New Zealand because of non-payment in New Zealand. Under (h) the first defendant (as the debtor) is a proper person to proceedings properly brought against the second defendant (as the guarantor), even though both defendants are outside New Zealand. There are real issues between the plaintiff and second defendant which a New Zealand court ought to try. I do not see any prejudice to these defendants in these grounds being applied in addition. The plaintiff has a good arguable case that the present proceeding comes within r 6.27(2)(c) and (h).[28] Overall, the plaintiff has a good arguable case against both defendants that its claims are within at least one of the paragraphs in r 6.27.Serious question to be tried[29] Once it is established that the plaintiff has a good arguable case and that the claim falls wholly within one or more of the paragraphs under r 6.27 (see r 6.29(1)(a)(i)), the next question is whether the court should assume jurisdiction by reason of the matters set out in r 6.28(5)(b)-(d).[30] The first matter is whether there is a serious issue to be tried on the merits. As the Court of Appeal noted in Wing Hung Printing,8 this is a less stringent standard than the good arguable case criterion under r 6.29(a).9[31] Under r 6.27(2), the plaintiff has established that it has a good arguable case for most of the components of its causes of action against both defendants. To the extent that any part of those causes of action has not been considered above, I find that for the claims against both defendants there is a serious issue to be tried on the merits. For that I rely on the affidavit of Mr Janssen for the plaintiff showing theplaintiff's claim. The defendants did not submit that the serious issue test under r 6.28(5)(b) had not been satisfied, although they maintained that the defendants had defences. At this stage the evidence as to those defences is not strong enough for meto dismiss the plaintiffs' claims in their entirety.Is New Zealand the appropriate forum for the trial?[32] In considering the more appropriate jurisdiction in which a case should be heard, New Zealand courts apply the forum non conveniens test. In Spiliada Maritime Corporation v Consulex Ltd,10 Lord Goff quoted Sumner LJ in Société du Gaz v Société Anonyme de Navigation "Les Armateurs Francais":11The object under the words forum non conveniens is to find that forum which is the more suitable for the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends.Similarly, in Spiliada Lord Goff said:12The basic principle is that a stay will only be granted on the ground of forum non conveniens where the Court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice. ...8 At [40].9 See Seaconsar Far East Ltd v Bank Markazi [1994] 1 AC 438 (HL).10 Spiliada Maritime Corporation v Consulex Ltd [1987] 1 AC 460 (HL) at 475.11 Société du Gaz v Société Anonyme de Navigation "Les Armateurs Francais" [1926] SC HL 13 (HL) at 22.12 At 476.[33] Lord Goff said that the burden was on the defendant to persuade the court to grant a stay, that is, the party opposing the case being heard in England had to show that the case should be heard overseas. As the Court of Appeal made clear in theWing Hung decision, r 6.28(5)(c) puts the onus on the plaintiff to show that the proceeding should be heard in New Zealand. The defendants do not have to prove that the case should be heard in Fiji.[34] In Spiliada, Lord Goff held that the defendant must prove that the overseas forum is clearly more appropriate. However, in Wing Hung the Court of Appeal held that relevant factors favoured New Zealand although not by a great margin.13 Thatsuggests that the "clearly appropriate" test does not apply under r 6.28(5). One law area may be preferred by a narrow margin.[35] In deciding the more appropriate court, it is necessary to bear in mind that there are important competing considerations. The first is that it is undesirable to subject a foreigner who owes no allegiance to New Zealand, to the jurisdiction of a New Zealand court. This principle was stated in Société Générale de Paris vDreyfus Bros,14 but has been re-emphasised in New Zealand, including in the Wing Hung decision.15 Against that, there is also the principle that the courts of New Zealand should be available to the people of New Zealand to have their legal disputes determined. It is also a weighty matter to deny a New Zealand resident or business access to a New Zealand court.[36] The plaintiff's claim could also be heard in the courts of Fiji. The parties would receive a fair hearing there. There was no submission that the plaintiff would not be able to prove its claim in Fiji and would not receive justice in Fiji.[37] In opposing this proceeding being heard in New Zealand, the defendants raise these considerations:(a) The contract was made not only in New Zealand but also in Fijibecause it was formed when the plaintiff's representative visited Fiji.13 At [142].14 Société Generale de Paris v Dreyfus Bros (1885) 29 Ch D 239 (EWHC) at 242.15 At [27]-[29].(b) The contract was performed in Fiji because the goods were delivered in Suva and payment was made from Suva.(c) Although invoices were generated from Auckland, the invoices were delivered to the defendants in Fiji, not in Auckland.(d) There was no agreement, but during the course of trade the parties intended the laws of Fiji to apply.(e) The defendants do not have any business interest, assets or place of business in New Zealand.(f) Any judgment would have to be enforced in Fiji under Fiji'sreciprocal enforcement of judgments legislation.(g) The costs of this proceeding are likely to be higher in New Zealand than in Fiji.(h) The defendants will have to call witnesses from Fiji in its defence.[38] In determining whether Auckland or Suva is the appropriate place for theplaintiff's claims to be heard, it is helpful to identify what matters will be in issue. The following matters are likely to arise:(a) The defendants contest the amount of the plaintiff's claim. They saythat the invoices put in evidence by the plaintiff total $201,273.43, not $207,998.63 as pleaded by the plaintiff.(b) The first defendant denies liability for a list of invoices which it says were not included in the export shipments. These invoices run from 18 January 2004 to 11 May 2006. The value of these invoices is $208,476.02. They say that because these invoices were not cleared through the appropriate organs of the Fiji Government, Customs and the Reserve Bank of Fiji (which controls in-flow and out-flow of funds from Fiji) it cannot be liable for payment under those invoices.I note that the plaintiff says that it is not suing on the invoices listed inthe schedule to Mr Joe's affidavit. The plaintiff says that those invoices are part of a reciprocal commission arrangement between the plaintiff, the first defendant, and Morris Hedstrom, another supermarket in Fiji.(c) The first defendant also claims credits for commission due to it, for cassava and taro it supplied the plaintiff, and for payments it made.(d) The defendants contest the plaintiff's claims for interest, bank chargesand collection costs.(e) In any fresh proceeding in Fiji, there is likely to be a limitation issue, because the invoices in the plaintiff's evidence are more than six yearsold. That is not an issue in this proceeding because the plaintiff began it within time. Mr Black did note that letters of admission and payments by the defendants might allow the plaintiff to overcome any limitation issues, assuming that Fiji has a provision similar to s 25(4) of the Limitation Act 1950 or that Fiji will apply New Zealand law as the lex causae instead of Fiji law as the lex fori on limitation issues.[39] Evidence will be required from both Fiji and New Zealand. The plaintiff's witnesses are in New Zealand. The defendants' witnesses are in Fiji. There are no witnesses outside New Zealand or Fiji.[40] The defendants say that they will need to call witnesses who are officials of the Fijian Government, Customs and Reserve Bank officers. They may not be able to enter New Zealand because of the New Zealand Government's ban on entry bysome members of the Fijian Government.[41] Under the Evidence Act 2006 evidence may be given remotely from outside New Zealand. Section 188 of the Act provides generally for taking evidence overseas for use in civil proceedings in the High Court but s 188(6) goes on to add"This section does not limit sections 104 to 106". Those sections provide foralternative ways of giving evidence. In particular s 105 of the Evidence Act provides:105(1) A judge may direct under s 103 that the evidence of witnesses may be given in alternate ways so that :(a) The witness gives evidence ... from an appropriate place outside the courtroom, either in New Zealand or elsewhere...(3) The judge may admit evidence that is substantially in accordance with the terms of the direction under s 103 despite a failure to observe all of those terms.[42] There is no evidence that Fiji has similar provisions which would allow such evidence to be given long distance for proceedings in Fiji. While the defendants may wish to have their key witnesses give evidence in person in New Zealand, it is understandable that minor witnesses, who may give evidence simply on matters of record - such as records as to payment or orders placed – could give their evidence from Fiji without having to travel to New Zealand. The evidence of officials who might not otherwise be able to give evidence in person in New Zealand could be given that way.[43] There is no evidence as to the respective waiting time for cases to come on for hearing in Auckland and Suva respectively. However, this proceeding has already been started. If the parties co-operate in dealing with interlocutory matters efficiently, it is likely to be heard inside 12 months in New Zealand. On the other hand, if the plaintiff has to issue a proceeding in Fiji, it will have to start afresh and there will be a corresponding delay before this proceeding could be heard in Suva. There are efficiencies to be gained by making use of the current proceeding.[44] Any potential disadvantage to the plaintiff from the limitation issue could be overcome by making it a condition of any order staying this proceeding that the defendants should not run a limitation defence in Fiji. In Spiliada Lord Goff indicated that that was the way to address that issue.16[45] While Fijian commercial law is based on the common law and there is likely to be broad similarity between the law of New Zealand and the law of Fiji in this16 Spiliada v Cansulex [1987] 1 AC 460 (HL) at 487- 488.case, a New Zealand court is more likely to find it easier to apply New Zealand lawto the plaintiff's claims for interest, bank charges and collection costs. A New Zealand judge may have a better understanding of the reasonableness or otherwise of charges claimed, where reasonableness is in issue.[46] On costs, each party is likely to incur heavier costs in litigating abroad than at home. Each party is likely to use lawyers not only in its own country but also in the country where the case is heard.[47] The matter is finely balanced, but my assessment is that New Zealand is the more appropriate forum for these reasons:(a) The supply contracts and the guarantee are governed by New Zealand law. While there may be only minor differences between New Zealand law and Fijian law, there is an advantage if the court hearing the case applies its own law rather than the law of another jurisdiction.(b) A New Zealand court is in a better position to assess the merits of theplaintiff's claim for interest, bank charges and recovery costs.(c) It is more efficient to make use of the present proceeding which is already on foot than to start a fresh proceeding in Fiji.(d) It seems unlikely that officials of the Fiji Government will be required to give evidence in this proceeding, because of the concession by theplaintiff that the invoices referred to in Mr Joe's affidavit are not inissue. But if officials of the Fiji Government do have to give evidence, arrangements can be made under ss 103 and 105 of the Evidence Act for them to give evidence remotely, without having to travel to New Zealand. I understand that the costs of arranging evidence remotely may be cheaper if arranged from New Zealand than from Fiji.(e) On costs, it should be possible to accommodate the defendants if they are successful. While the 2B measure would be the ordinary measure of costs which the defendants could claim if the defendants were resident in New Zealand, the court should recognise that litigating from off-shore, the defendants will ordinarily bear heavier costs. The court should be prepared to depart from the normal scale to reflect their higher costs. For example matters that would be under Band B for time allocation could require longer time allocations. Further the plaintiff should pay the defendants' costs of witnesses giving evidenceremotely in any event.Other relevant circumstances – Rule 6.28(5)(d)[48] If the plaintiff were to sue in Fiji, it would obtain a judgment within the jurisdiction where the defendants reside and carry on business. That judgment would be enforceable as a judgment of the courts of Fiji. If the plaintiff obtains a judgment in New Zealand against the Fijian defendants, it will be enforceable only if the plaintiff can register the judgment in Fiji under Fiji's reciprocal enforcement of judgments legislation. That may turn on whether the courts of Fiji consider that New Zealand has jurisdiction under Fiji's rules for recognising the jurisdiction of foreigncourts.17 Generally, when courts consider whether to accept jurisdiction, questions of recognition and enforceability of a judgment overseas are not taken into account. The plaintiff may be taking a risk in suing in New Zealand instead of in Fiji. The risk is that although it obtains a judgment in New Zealand, it may find that the judgment is not enforceable in Fiji. That is not something I am required to consider now. It is for the plaintiff to assess any risk of enforcing a New Zealand judgment in Fiji.17 A corresponding provision is s 6(3)(a) of New Zealand's Reciprocal Enforcement ofJudgments Act 1934.[49] There are no other factors that the parties have drawn to my attention that are relevant under r 6.28(5)(d).[50] Not only has the plaintiff a good arguable case that its claims fall within one or more of the paragraphs of r 6.27, but it has also established that the court should assume jurisdiction. Accordingly, I dismiss the defendants' application under r 5.49,but direct that the plaintiff is to pay the costs of arrangements for the defendants'witnesses to give evidence remotely from Fiji and that if the court awards any costs to the defendants, it is appropriate to take into account the extra costs incurred in litigating from outside New Zealand, as grounds for departing from the normal scales for costs.[51] The findings in this interlocutory decision are not final determinations of the rights of the parties in the substantive issues. At a hearing on the substantive issues, the parties will be entitled to present further evidence and argument contrary to any findings I have made.Further directions[52] Up until now, the defendants have objected to a New Zealand court hearing this case. In objecting to the New Zealand courts hearing this case, they have not submitted to the jurisdiction of the New Zealand courts. There is no provision in theplaintiff's terms and conditions of sale requiring the defendants to submit to the jurisdiction of the New Zealand courts.[53] Now that this court has decided that this proceeding should be heard in New Zealand, the defendants can elect whether to defend this proceeding. If they file a defence after this court has held that the proceeding should be heard in New Zealand, that will be a submission to the jurisdiction of the New Zealand court. That submission may have consequences if the plaintiff wishes to enforce the judgment in Fiji later.[54] The argument has shown that the plaintiff's pleadings could be improved bygiving particulars of the transactions on which it relies. An amended statement ofclaim could conveniently set out in a schedule what it has charged the defendants and which credits it says they are entitled to. Any statement of defence shouldlikewise identify which of the plaintiff's charges are not accepted, the grounds whynot and should identify the basis for any credits not acknowledged by the plaintiff.[55] I direct the plaintiff to file and serve an amended statement of claim within ten working days of this decision. The defendants are to file and serve theirstatements of defence within twenty working days of receiving the plaintiff'samended statement of claim. If the defendants do not file and serve a statement of defence within that time, the plaintiff will be entitled to proceed on the basis that the proceeding is not defended.[56] The defendants are to pay the plaintiff costs on the application on the 2B basis.[57] If the defendants file a statement of defence, the registrar is to allocate a case management conference.[58] Leave is reserved to the parties to file a memorandum seeking further directions if required.[59] The standard period for a party to apply for a review of this interlocutory decision is five working days. As the defendants are outside New Zealand, they may require more time in which to receive advice and give instructions. Under r 2.3 I extend the time for the defendants to apply for a review to fifteen working days after the date of this decision.......................................R M BellAssociate Judge