NELSON HONEY & MARKETING (NZ) LTD v WILLIAM JACKS & COMPANY (SINGAPORE) PRIVATE LTD [2015] NZHC 1215

NELSON HONEY & MARKETING (NZ) LTD v WILLIAM JACKS & COMPANY (SINGAPORE) PRIVATE LTD [2015] NZHC 1215 [3 June 2015]IN THE HIGH COURT OF NEW ZEALANDNELSON REGISTRYCIV-2014-442-000079[2015] NZHC 1215BETWEEN NELSON HONEY & MARKETING (NZ)LIMITEDPlaintiffAND WILLIAM JACKS AND COMPANY(SINGAPORE) PRIVATE LIMITEDDefendantHearing: 14 May 2015Appearances: P J Bellamy for PlaintiffO D Peers for DefendantJudgment: 3 June 2015JUDGMENT OF ASSOCIATE JUDGE MATTHEWSIntroduction[1] Nelson Honey & Marketing (NZ) Limited (Nelson Honey) is a company registered in New Zealand, which carries on business in Nelson as a supplier of honey. William Jacks and Company (Singapore) Private Limited (William Jacks) is a company incorporated in Singapore which, since November 2010, has purchased honey from Nelson Honey.[2] In this proceeding Nelson Honey says that after receiving a purchase order from William Jacks, it despatched two consignments of honey to a warehouse in Auckland, for which William Jacks has not paid. Both consignments were exported from New Zealand by William Jacks to Shanghai, and both arrived in Shanghai. William Jacks says that there are faults with the honey, some of which is said to have froth on the surface and some discolouration, and it also says that labelling required by the terms of the contract was missing from jars contained in the secondconsignment. On 30 October 2013 William Jacks rejected the goods. Nelson Honey does not accept that rejection and sues for the cost of the consignments.[3] This proceeding was served on William Jacks in Singapore in November 2014 without leave of the Court. In January 2015, William Jacks filed an appearance under protest to jurisdiction under r 5.49 of the High Court Rules. It then filed an application for dismissal of the proceeding or, in the alternative, a stay of the proceeding, under r 5.49(3). Nelson Honey opposes this application.Relevant High Court Rules[4] This application invokes rr 6.27-6.29 of the High Court Rules.1 Rule 6.27 sets out the circumstances in which originating documents may be served out of New Zealand, without leave of the Court. The circumstances of relevance to the present proceeding are set out in subparagraph (b):(2) An originating document may be served out of New Zealand without leave in the following cases:...(b) when a contract sought to be enforced or rescinded, dissolved, annulled, cancelled, otherwise affected or interpreted in any proceeding, or for the breach of which damages or other relief is demanded in the proceeding –(i) was made or entered into in New Zealand; or(ii) was made by or through an agent trading or residing within New Zealand; or(iii) was to be wholly or in part performed in New Zealand; or(iv) was by its terms or by implication to be governed by New Zealand law;...[5] Rule 6.28 provides a mechanism by which parties may seek leave to serve an originating document outside New Zealand, where not expressly permitted by r 6.27. Rule 6.28(5) provides that:1 The combined effect of these rules was considered by the Court of Appeal in Wing Hung Printing Co Ltd v Satio Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 [Wing Hung] at [20]-[49].(5) The court may grant an application for leave if the applicant establishes that -(a) The claim has a real and substantial connection with New Zealand; and(b) there is a serious issue to be tried on the merits; and(c) New Zealand is the appropriate forum for the trial; and(d) any other relevant circumstances support an assumption of jurisdiction.[6] Rule 6.29(1) provides the Court with a discretion whether to assume jurisdiction, where service has been effected out of New Zealand without leave, andthe Court's jurisdiction is protested under r 5.49. Where this arises, as here, the Court must dismiss the proceeding unless the party effecting service establishes:(a) that there is –(i) a good arguable case that the claim falls wholly within 1 or more of the paragraphs of rule 6.27; and(ii) the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d); or(b) that, had the party applied for leave under rule 6.28, –(i) leave would have been granted; and(ii) it is in the interests of justice that the failure to apply for leave should be excused.[7] Rule 6.29(2) applies where service has been effected under r 6.28, that is withleave, and the Court's jurisdiction is protested under r 5.49 on the basis that leavewas wrongly granted under r 6.28. In this circumstance the Court must dismiss the proceeding unless the party effecting service establishes that in the light of the evidence now before the Court, leave was correctly granted.[8] This proceeding was served without leave, under r 6.27. Therefore, r 6.29(1) applies, not r 6.29(2). Accordingly, the Court must dismiss this proceeding unless Nelson Honey establishes one of two positions. I set these positions out to avoid repetitive references to the interlocking subparagraphs of rr 6.27, 6.28 and 6.29.[9] Position 1 (r 6.29(1)(a)) –(a) that there is a good arguable case that the claim falls wholly within one or more of the paragraphs of r 6.27;2 and(b) the Court should assume jurisdiction by reason of the following matters:3 there is a serious issue to be tried on the merits;4 and New Zealand is the appropriate forum for the trial;5 and any other relevant circumstances support an assumption of jurisdiction.6Or[10] Position 2 (r 6.29(1)(b)) –(a) had Nelson Honey applied for leave under r 6.28, leave would have been granted, which requires Nelson Honey to establish that:7 the claim has a real and substantial connection with New Zealand;8 and there is a serious issue to be tried on the merits;9 and New Zealand is the appropriate forum for the trial;10 and any other relevant circumstances that support an assumption of jurisdiction;11 and2 High Court Rules, r 6.29(1)(a)(i).3 Rule 6.29(1)(a)(ii).4 Rule 6.28(5)(b).5 Rule 6.28(5)(c).6 Rule 6.28(5)(d).7 Rule 6.29(1)(b)(i).8 Rule 6.28(5)(a).9 Rule 6.28(5)(b).10 Rule 6.28(5)(c).11 Rule 6.28(5)(d).(b) It is in the interests of justice that the failure to apply for leave should be excused.12[11] It will be observed that two of the factors which must be established by Nelson Honey under the first of these positions are a good arguable case, and a serious issue to be tried. In Wing Hung the Court of Appeal commented:13 To find a serious issue to be tried on the merits the Court must be satisfied there is a serious legal issue to be tried and that there is a sufficiently strong factual basis to support the legal right asserted. In approaching these questions the Court will not determine credibility issues where there are conflicting affidavits other than in exceptional cases where one version can be demonstrated by objective evidence to be untenable. The serious issue standard is less stringent than the good arguable case criterion. In practice it may be difficult to draw a distinction between the two standards. The good arguable case test does not require a plaintiff to establish a prima facie case, recognising that disputed questions of fact cannot be readily resolved on affidavit evidence. On the other hand there must be a sufficiently plausible foundation established that the claim falls within one or more of the headings in r 6.7(2). The Court should not engage in speculation.12 Rule 6.29(1)(b)(ii).13 Wing Hung, above n 1, at [37]-[42] (citations omitted). In its judgment, the Court of Appeal discusses these concepts in greater detail, with references to the relevant authorities provided and discussed.Has Nelson Honey established Position 1?First issue: Is there a good arguable case that the claim falls wholly within one or more of the paragraphs of r 6.27?[12] Nelson Honey relies on r 6.27(2)(b)(i) and (iii). It is convenient to deal first with paragraph (iii): was the contract to be wholly or in part performed in New Zealand?[13] The contract was for the supply of honey. The evidence establishes the following propositions:(a) The honey sold by Nelson Honey was grown, processed, placed in jars, labelled and packed for delivery in New Zealand.(b) The contract required delivery of the packed goods by Nelson Honey, at its own expense, to the warehouse of a shipping agent in New Zealand. The honey passed into the possession of William Jacks on delivery to that warehouse. Therefore, all delivery required by the contract took place in New Zealand.(c) Risk in the honey passed to William Jacks on delivery to the warehouse in New Zealand.(d) Payment for the honey was to be made to the bank account of Nelson Honey in New Zealand.(e) The events which are said to give rise to William Jacks' cancellation of the contract, that is the delivery of faulty product and incorrect labelling, occurred, if they occurred at all, in New Zealand.[14] Mr Peers accepts that the honey was produced in New Zealand and shipped from this country, but says that in all other material respects the contract wasperformed in Singapore. He says that the honey bore William Jacks' labels, businessmeetings were held in Singapore, and payment was made from Singapore. He says Nelson Honey was well aware that the honey was for sale in the Chinese and Asian markets and not in New Zealand.[15] I do not accept that apart from the honey being produced in New Zealand and shipped from this country, all material aspects of the contract were performed in Singapore. Certainly, the honey bore labels specifically designed for William Jacks, but labelling occurred in New Zealand. There were some business meetings in Singapore, though they occurred some years ago. Payment was to be made from Singapore, but it was received in New Zealand. Further, William Jacks did not send the honey from Auckland to Singapore; it sent it to Shanghai.[16] I am satisfied that this proceeding was properly served out of New Zealand without leave pursuant to r 6.27(2)(b)(iii), as it was certainly in part performed in this country, if not wholly so.[17] It is not, therefore, necessary to determine, for the purpose of deciding whether leave to serve the proceeding out of New Zealand was required under r 6.27, whether the contract was made or entered into in New Zealand pursuant to r 6.27(2)(b)(i).Second issue: should the Court assume jurisdiction?[18] As I have set out above at [9](b), before the Court will assume jurisdiction Nelson Honey must establish:(a) there is a serious issue to be tried on the merits, and(b) New Zealand is the appropriate forum for the trial, and(c) any other relevant circumstances which support an assumption of jurisdiction.[19] The first point requiring consideration is whether there is a serious issue to be tried on the merits. This issue poses no difficulty; indeed William Jacks did not submit otherwise. Nelson Honey supplied honey pursuant to a contract,14 it wasdelivered in accordance with Nelson Honey's contractual obligations, and it has not been paid for. Allegations which will evidently be raised by way of defence,14 Whether it was supplied pursuant to a distribution agreement, as alleged by William Jacks, or pursuant to an isolated contract, as submitted by Nelson Honey, is discussed below at [22]-[43].concerning the quality of the honey and the labelling of honey jars, also appear to raise serious questions for trial.15[20] The next point to be considered is whether New Zealand is the appropriate forum for the trial. In Wing Hung, the Court of Appeal said that in considering this issue it will be guided by existing authority, including the matters canvassed by the House of Lords in Spiliada Maritime Corporation v Cansulex Ltd ("The Spiliada").16The Court of Appeal went on to say:17[45] In considering whether another forum is more appropriate, the Court looks for the forum with which the proceeding has the most real and substantial connection. Relevant factors include issues of convenience or expense, availability of witnesses, the law governing the relevant transaction and the places where the parties resided or carried on business.[46] We accept that other relevant considerations also bear on the issue of appropriate forum. These include the cautious approach already discussed to the subjection of foreigners to the jurisdiction of a New Zealand court; whether other related proceedings are pending elsewhere; whether the New Zealand court would provide the most effective relief or whether a foreign court is in a better position to do so; whether the overseas defendants will suffer an unfair disadvantage if a New Zealand court assumes jurisdiction; and any choice of jurisdiction previously agreed by the parties.[21] I will discuss the criteria I find relevant in this case thus: whether there was an agreed choice of jurisdiction; convenience, expense and availability of witness; and where the contract was entered into.Agreed choice of jurisdiction[22] I deal first with an issue which assumed considerable prominence in argument, that is the submission by William Jacks that the honey was supplied under an exclusive distribution agreement entered by the two companies in late 2010 or early 2011. It is common ground that a proposed exclusive distribution agreement15 These issues are presently raised in a claim by William Jacks against Nelson Honey in the High Court in Singapore.16 Wing Hung, above n 1, at [43], citing Spiliada Maritime Corporation v Cansulex Ltd [The Spiliada] [1987] AC 460 (HL).17 At [45] and [46] (citations omitted).passed through several drafts at around that time, and that the following clause appears in the last two of these drafts:5.2 This agreement shall be governed by and construed in accordance with the Laws of the [sic] Singapore and Recipient consents to the exclusive jurisdiction of Singapore courts for any dispute arising out of the agreement.[23] These draft agreements also contain the following provisions of relevance:(a) An operative clause in these terms:Upon signing of this Agreement, the Supplier appoints WILLIAM JACKS & CO (SINGAPORE) PTE. LTD as its exclusive distributor for the territory of Singapore, Malaysia & Brunei for all Nelson Honey range of products (hereinafter referred to as the"PRODUCTS').(b) Two further relevant provisions, providing:1.1 - This agreement shall come into force and remain binding from the date of first order, December 1st 2010 until December 1st2012 and shall be subject to annual review thereafter. Upon mutual acceptance, this agreement shall be renewed unless terminated as provided for hereunder....5.3 – This agreement may be modified only by a further writing that is duly executed by both parties.(c) One other draft also stipulated that "Providing sales targets and payments are met, this agreement is valid to September 2012".[24] Evidence in support of this application was initially given, for William Jacks, by Low Kean Jin, the regional director of William Jacks. Mr Low deposes that hehas direct knowledge of the matters relevant to his company's application fordismissal or stay. He affirmed his initial affidavit on 12 March 2015. On 30 April Mr Low affirmed a second affidavit. By that point Mr Low had made contact with Ms Guan Yoke Ching who no longer works for William Jacks, but did work for the company in 2010. Ms Ching dealt with Mr Bone, then the general manager of Nelson Honey.[25] Mr Low annexed a number of documents including the three draft versions of a distribution agreement to which I have referred, none of which are signed, minutes of a meeting in Singapore between representatives of William Jacks and Mr Bone,and an exchange of emails. The emails were sent by a firm by the name of Natures Farm Pte Limited, which is a wholly owned subsidiary of William Jacks.[26] Mr Low expresses the belief that although a distribution agreement was not in fact ever signed, the parties did agree to the essential terms of the contract set out in the drafts, through a series of negotiations. He notes that the first order of honey took place within the timeframe of the negotiations.[27] Mr Low also notes that William Jacks has ordered products by way of purchase order as provided for in clause 4.1 of the second and third versions of the draft agreement, has paid the purchase prices by way of direct wire transfers of funds in New Zealand dollars, as provided for in clause 4.4 of those drafts, and that purchase orders submitted have provided for a 60 day payment term which is also consistent with clause 4.4. Mr Low states further his belief that the agreement was not signed due to the fact that Ms Ching had left the company before it was signed and there was no-one following up on the documentation. He says it is usuallyWilliam Jacks' practice to have supply and distribution agreements in place with allof its suppliers, and for those agreements to include a term that the agreement, and any dispute arising under it, is governed by Singapore law.[28] Because this evidence came in in an affidavit in reply, two further affidavits were filed for Nelson Honey. The first is a second affidavit of Mr Bone. On the question of whether an exclusive marketing agreement was entered into, Mr Bonesays that Ms Ching made it clear that the agreement had to be approved by "HQ" asshe described it. He refers to an email from Ms Ching dated 24 January 2011 inwhich she says "Would appreciate if you could forward me the agreement in your letterhead for me to present to my HQ for approval." Earlier, on 6 December 2010,Ms Ching had stated by email "Noted on your comments to the agreement. If can, appreciate that you put it on your letter head, so that I can forward to my head office for review."[29] This follows from the same advice in the earliest email produced by Mr Low, which is from Ms Ching to Mr Bone on 7 September 2010, and which includes the following sentence:I am afraid the agreement could not be signed off before you go as we need to send to our HQ for vetting before signing. I will first review and will get back to you should there be anything that is left out.[30] Mr Bone says that once he had a final draft of the exclusive distribution agreement document, he would have taken it to Mr Cropp, the managing director of Nelson Honey, to run it past him before it was signed. He says he does not know whether Mr Cropp would have sought advice before giving him permission to sign, but if he did it would have been from Mr Paul Le Gros, the company solicitor and board chairman.[31] Mr Le Gros says in his affidavit that in the latter part of 2013 he went to Singapore to meet Mr Low with a view to trying to achieve a commercial settlement of the issues that had arisen between their companies. No mention was made of there being any exclusive distribution agreement. Indeed, the existence of such an agreement was not raised until Mr Low's second affidavit was filed in May 2015.Eighteen months of correspondence and discussion about the unpaid invoices had taken place without any mention of there being an exclusive distribution agreement.[32] Mr Le Gros expresses the view that Mr Low knew nothing about such an agreement until the drafts were recently uncovered. He also says that had the document been seen by him he would not have allowed its execution because it concedes jurisdiction of disputes to the courts in Singapore. Finally, Mr Le Gros says that any exclusive distribution right in a proposed distribution agreement must be approved by the board before being sent in final format to the customer concerned.[33] On the evidence as presented Mr Peers submits, first, that although various amendments were made as the draft agreement evolved, the second revision included, for the first time, clause 5.2. For clarity, clause 5.2 provides:This Agreement shall be governed by and construed in accordance with the Laws of Singapore and Recipient consents to the exclusive jurisdiction of Singapore courts for any dispute arising out of the Agreement.[34] Mr Peers submits that Mr Bone did not suggest that this clause be removed and it remained in the third revised version. He notes that the minutes of a meetingwith Mr Bone and representatives of Natures Farm in Singapore on 6th September 2010 set out a number of issues discussed and includes a note – "Any dispute to be in accordance to Singapore law".[35] Mr Peers says that the parties had reached agreement in principle over the terms of a distribution agreement by January 2011 when the third draft was considered, and amendments suggested by Mr Bone did not relate to clause 5.2. Mr Peers describes as a formality Ms Ching obtaining approval from head office.[36] Mr Peers then submits that William Jacks waived any right it might have to argue that there was no distribution agreement because they commenced a trading relationship as envisaged by the draft agreement. I have referred to Mr Low'sevidence on this point. Mr Peers says that acceptance can occur through conduct.18He also says that Mr Bone was the general manager of Nelson Honey, travelled toSingapore to meet William Jacks' representatives on several occasions, including theinitial meeting to discuss a proposed distribution agreement in September 2010, and at all material times was held out by Nelson Honey, and held himself out, as having full authority to bind the company.[37] The last draft of the proposed exclusive distribution agreement has not at any point been signed by either company. I am not satisfied that it was accepted by conduct. All three elements of conduct referred to by Mr Low are relatively standard steps in agreements to purchase goods. If goods are to be purchased there must be a purchase order for the goods required. Any funds transferred from one country to another are ordinarily transferred electronically (indeed, the reference to direct wire transfer in the last two drafts has now been superseded by later technology). The application of a 60 day payment period, and that period being recorded in purchase orders, is scarcely sufficient to show that an exclusive distribution agreement forNelson Honey's goods, covering three countries, was put into effect even though notsigned.[38] There are five other difficulties standing in the way of William Jacks'contention, also. First, it was expressly recorded by its negotiating representative,18 Canterbury FM Broadcasting Ltd v Daniels (1988) 2 NZBLC 103,535 (HC).Ms Ching, that the document must be approved by her headquarters. There is no evidence that the approval of the headquarters was ever given or, for that matter, that it was ever sought. There is no foundation for Mr Peers' submission that obtaining approval of William Jacks' head office was a formality.[39] Secondly, the document was never executed by Nelson Honey, nor, on the evidence, was approval given for it to be executed. The evidence is, in fact, that approval would not have been given.[40] Thirdly, the document would only have applied to sales for goods destined to Singapore, Malaysia and Brunei. The goods in issue in this case were destined for China.[41] Fourthly, the term specified in the last draft expired in December 2012, and clause 5.3 provides that the document may only be modified by "a further writing that is duly executed by both parties". There is no evidence this ever occurred.[42] Fifthly, although the parties have traded some 22 times since the beginning of 2011, Mr Low, the regional director of William Jacks, seems to have known nothing about the alleged distribution agreement until he received a copy of Mr Cropp'saffidavit, which was not sworn until 16 April 2015. It then seems he undertook asearch of William Jacks' records. It does not seem an unreasonable inference thatthe regional manager would have known that his company had the benefit of an exclusive distribution agreement for three countries, if indeed that were so.[43] For these reasons I reject the contention that there is an exclusive distribution agreement in force between Nelson Honey and William Jacks, in the terms of the final draft produced to the Court. It follows that there is no agreement between the parties that the law of Singapore applies to their subsequent contracts for sale and purchase of honey, or that the courts of Singapore have exclusive jurisdiction over any disputes arising between them.Convenience, expense and availability of witnesses[44] Whether the case is tried in New Zealand or Singapore, representatives of one party or the other will have to travel. For William Jacks, it is said that it will call expert evidence on the condition of the honey, requirements as to the quality and appearance of honey for the purposes of sale in China, and the requirements for labelling of product to be sold in China. No doubt this will also include evidence onWilliam Jacks representatives' observations when they inspected the honey on delivery in Shanghai. Conversely, Nelson Honey says that it will call expert evidence from persons in New Zealand in relation to the honey and evidence on MrBone's observations of the honey in Shanghai.[45] While the honey was in storage in Shanghai, and after Mr Bone had inspected it, it was evidently removed from the premises where it was stored and has not been returned. William Jacks maintains this was unlawful. It seems that William Jacks knows who removed the honey because it has produced in evidence a translation of a claim which either has been, or is intended to be, filed in court in China against the perpetrator. An English translation of this document describes the defendant as Wang Ming.[46] Wang Ming "and his entourage" are said to have gone to the plaintiff'swarehouse and forcibly taken away not only manuka honey, but also other products, without consent. This occurred, perhaps surprisingly, with the police from a named public security bureau on site. This is said to have severely violated the ownership and other property rights of Natures Farm which is named as the plaintiff.[47] On the scant information presently available in relation to this incident, little can be made of it, beyond observing that the legality of the actions complained of must be at least moot, given the presence of the police while it was going on. Its present relevance, however, is that William Jacks does not have the honey and therefore cannot make it available to any experts in Singapore or Shanghai, or for that matter elsewhere, to test, or assess it in terms of marketability in accordance with any health and product standards that may apply to sale of such goods in China.[48] However, Nelson Honey retains in Nelson a quantity of honey from every batch it produces and it therefore has some honey from the batch from which the product sold to William Jacks was drawn. Therefore, it is possible for this batch to be tested and assessed in Nelson. It appears from this that, at least as matters stand at present, any experts William Jacks intends to call in relation to the condition of the honey will need to come to New Zealand to assess it.[49] Nelson Honey also says that testing equipment of the quality available in New Zealand is not available overseas, and that a significant percentage of its staff would need to be absent in Singapore for a trial in that country which, given that it only has some 20 people working, would be unsustainable.[50] On the information available to me, I think this issue is finely balanced, but the balance lies slightly in favour of Nelson Honey.Where was the contract entered?[51] Nelson Honey maintains that the contract was made in New Zealand. William Jacks maintains it was made in Singapore. The contract is subject to the provisions of the United Nations Convention on Contracts for the International Sale of Goods (the Convention).19 This has the force of law in New Zealand by virtue of s 4 of the Sale of Goods (United Nations Convention) Act 1994. The Convention is reproduced as a schedule to that Act.[52] The effect of arts 18(2), 21 and 24 of the Convention is that acceptance of a contract to which the Convention applies is only effective on communication to the offeror. A decision on whether the contract was made in Singapore or in New Zealand rests, therefore, on where acceptance of the contract was received. That in turn depends on which party made the offer which was accepted, thereby forming a contract. On this point, counsel present different interpretations of the facts disclosed in the affidavits.19 United Nations Convention on Contracts for the International Sale of Goods 1489 UNTS 59 (opened for signature 11 April 1980, entered into force 1 January 1988).[53] The evidence is principally within the first affidavit of Mr Bone. He says that some time early in 2013 he received a telephone call from Mr Yeo of Natures Farm asking if Nelson Honey could fill a large order. They discussed the particulars of the order and established a price. Mr Bone thinks he sent an email confirming these details. He then received a purchase order for honey to the value of $206,300.[54] At some point he had received from Mr Yeo the timeframes he required for shipment of the honey. He talked this over with the production staff at the firm and learned that they could not meet the timeframe Mr Yeo wanted by dispatching the honey in one shipment. After discussing this with Mr Cropp, the managing director of Nelson Honey, it was decided to suggest that the order be split. This was suggested to Mr Yeo and he agreed. There were discussions about the composition of each shipment and each date of dispatch.[55] An amended purchase order was then sent from Natures Farm to Nelson Honey. It provided for the order to be split into two consignments, the first to be ready for air freighting to its destination by 22 March and the second to be ready to be shipped to its destination by sea freight, by 19 April. This revised purchase order is contained in an email from Natures Farm to Nelson Honey on 27 February.[56] On 5 March Mr Yeo emailed Mr Bone about the revised purchase order, asking him to confirm whether the order for air shipment in particular could be fulfilled by 22 March. The next day Mr Bone confirmed that the order would be met, and Mr Yeo acknowledged his advice.[57] Nelson Honey argues that the acceptance which formed the purchase contract occurred in one of two ways. Either it occurred by way of a telephone call between Natures Farm and Nelson Honey prior to receipt of the revised purchase order, inwhich Nelson Honey's proposal to split the order into two parts was accepted orally,or it occurred when the revised purchase order was received in Nelson. Nelson Honey says whichever of those is established on the evidence, acceptance took place in New Zealand, when the communication of acceptance by William Jacks was received by Mr Bone.[58] Conversely, William Jacks argues that neither of those events was the final step by way of acceptance that created the contract. This is because on 5 March Mr Yeo emailed Mr Bone seeking confirmation that the first air shipment could be fulfilled by 22 March, and Mr Bone responded positively. That email was received in Singapore. Mr Peers argues that these emails would not have been necessary had acceptance of the delivery terms already been agreed, and a contract thus concluded.[59] Article 19 of the Convention provides:(1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.(2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.(3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time ofdelivery, extent of one party's liability to the other or the settlement ofdisputes are considered to alter the terms of the offer materially.[60] Applying Article 19(1), the response to the initial purchase order contained modifications and was thus a rejection of the offer, and a counter-offer. By virtue of Article 19(3), the modifications proposed by Nelson Honey related to the time of delivery and were therefore material. As a result, the position established under Article 19(1) is not altered by Article 19(2).[61] The next communication from Nelson Honey was to the effect that the initial purchase order could be accepted if the delivery dates were changed, and new delivery dates were established which were acceptable to both sides. The subsequent purchase order reflected those dates, and was received in New Zealand.[62] This establishes, at least to the level of a good arguable case,20 that acceptance occurred on receipt of the revised purchase order in New Zealand. The subsequent email exchange in relation to meeting the date did not alter the terms20 As required by r 6.29.which were contained in the revised purchase order. It is not clear why Mr Yeo made a further inquiry about Nelson Honey meeting the date for the first shipment because on the evidence this had been established in the conversation which led to the revised purchase order being sent.[63] If the evidence in relation to all the steps that were taken by the representatives of both companies were the subject of evidence at trial, a definite position would be established, but on this application it is necessary only for Nelson Honey to demonstrate that it has a good arguable case and, in my opinion, it has done so on the evidence as it stands. There is, therefore, a good arguable case that the contract was made in New Zealand.[64] For the foregoing reasons I conclude that New Zealand is the country with which the transaction has the closest and most real connection, and the New Zealand High Court is therefore the appropriate forum for the trial of this proceeding.Other relevant factors?[65] The third point to be considered in relation to whether Nelson Honey has established position 1, as set out in paragraph [9] (and derived from r 6.29(1) and r 6.28(5)(b) to (d)) is whether there are any other relevant circumstances which support an assumption of jurisdiction. On the information before the Court on this application I find that there are no other factors which support an assumption of jurisdiction by the Court.Conclusion in relation to position 1[66] For the reasons given, I find that there is a good arguable case that the claim by Nelson Honey falls wholly within one or more of the paragraphs of r 6.27. I have also found that there is a serious issue to be tried on the merits and that New Zealand is the appropriate forum for the trial.[67] The Court is conscious that it has an overall discretion on whether or not to assume jurisdiction over a proceeding where the defendant is outside New Zealand. The Court does not lightly exercise its discretion to assume jurisdiction over foreignparties.21 The ultimate issue is whether there are sufficient grounds for the Court properly to assume jurisdiction.22 The factors which the Court must consider, and which I have discussed in this judgment do to an extent overlap, but in this case, in my view, they lead to a clear conclusion that this Court should assume jurisdiction over this proceeding.[68] I have not overlooked two further issues raised in argument. First, it appears to be accepted by counsel that the law to be applied to this dispute would be materially similar whichever jurisdiction was to decide it, and each court could provide effective relief to Nelson Honey should it be successful in its claim.[69] Secondly, related proceedings are pending in the High Court in Singapore, a factor relied on by Mr Peers in his argument. However, as Mr Bellamy pointed out, that proceeding was issued after this proceeding was filed and served on William Jacks. William Jacks has chosen the court in Singapore as the forum within which to sue Nelson Honey for damages it maintains it has suffered as a consequence of the alleged breach of contract by Nelson Honey which would form the basis of its defence to the claim in New Zealand.[70] I am not persuaded that the filing by William Jacks of that proceeding in its own country, is a decisive factor in favour of declining jurisdiction. It was equally open to William Jacks to file a defence and a counterclaim in the New Zealand High Court. It elected to sue in Singapore. The counterclaim would raise the same issues as are foreshadowed as William Jacks' defence to Nelson Honey's claim for theunpaid contract price. A decision on the assumption of jurisdiction by this Court should, in my view, be governed by the factors I have identified, and not by the election of William Jacks to select a different forum for its own claim, particularly when, for the reasons discussed, the connection of this contract with Singapore is that Singapore is the principal place of business of William Jacks, but otherwise is tenuous at best.21 Wing Hung Printing Company Ltd & Ors v Saito Offshore Pty Ltd at [23] and [27] andPoynter v Commerce Commission [2010] NZSC 38 at [43].22 Wing Hung, above n 1, at [30].[71] In the analysis of the High Court Rules contained in paragraphs [4] to [11] of this judgment, I have established two alternative positions which Nelson Honey must establish. Having found that Nelson Honey has established Position 1, it is unnecessary to discuss whether it has established Position 2. It will be observed, however, that in order to establish the second position, Nelson Honey would also be required to establish that the claim has a real and substantial connection with New Zealand. I would have had no hesitation in finding that factor to be established, were it necessary to do so, principally for the reasons set out in paragraphs [12] to [17].Outcome[72] The application to dismiss this proceeding or, in the alternative, to stay it, is dismissed.[73] Mr Peers sought costs on a 2B basis if William Jacks were successful. I take from that an acceptance that an award of costs on that basis would be appropriate in the inverse position. Mr Bellamy did not make a submission on costs. My provisional view is that costs should be awarded to Nelson Honey on a 2B basis, with disbursements fixed, if necessary, by the Registrar.[74] If Mr Bellamy disagrees and seeks costs on a different basis, he may file and serve a memorandum within five working days. In that event Mr Peers may file and serve a memorandum in response within a further three working days, both memoranda being confined to a maximum of three pages. Unless Mr Bellamy follows this course costs are awarded as indicated._______________________J G MatthewsAssociate JudgeSolicitors:P L Law Limited, Nelson.Buddle Findlay, Christchurch.