Qantas Airways Limited v Nick Rohrlach

1. [1]

   HIS HONOUR: Before the Court are two applications:

   1. (1)

      one by the plaintiff (Qantas or the Company) for an anti-anti-suit injunction restraining the first defendant (Rohrlach or the Employee) from moving the Singapore High Court for an order restraining Qantas from prosecuting proceedings which it has commenced in this Court against Rohrlach and the second defendant (Virgin); and

   2. (2)

      one by Rohrlach to stay the proceedings in this Court.

2. [2]

   In the proceedings in this Court, Qantas seeks to enforce against Rohrlach a restraint covenant, and it makes a claim against Virgin for interference with contractual relations.

3. [3]

   For his part, Rohrlach has commenced proceedings in the High Court of Singapore seeking a negative declaration that he is not bound by the restraint (the Singapore Proceedings). He has joined Virgin as a defendant, although they are in the same interest.

4. [4]

   References to “the proceedings” will be, unless the context otherwise indicates, references to the proceedings in this Court.

5. [5]

   The applications were heard together.

6. [6]

   They largely turn on whether an exclusive jurisdiction clause in the written employment agreement dated 17 December 2015, under which Qantas employed Rohrlach in the position of “Executive Manager Strategy and Customer – Jetstar” (the Agreement), captures the proceedings.

7. [7]

   Qantas argues that the clause does not apply to its claim against Rohrlach. If this is correct, Rohrlach accepts that Qantas is entitled to succeed in its application and Rohrlach’s application for a stay must fail.

8. [8]

   If, however, the exclusive jurisdiction clause does cover Qantas’ claim, Qantas accepts that it should be enforced unless there are strong reasons why it should not be. Qantas argued, albeit faintly, that there are such strong reasons.

9. [9]

   For the reasons which follow, I have concluded that Qantas’ claim is caught by the exclusive jurisdiction clause and that it should be enforced. Accordingly, Qantas’ application will be dismissed and the proceedings in this Court will be stayed until further order.

The Employment Agreement

1. [10]

   By letter dated 17 December 2015, Qantas offered Rohrlach a formal offer of employment. The offer was made expressly conditional on Rohrlach signing the Agreement, which he did. His starting salary and other benefits under the Agreement were not insignificant. His employment also made him eligible for incentive opportunities, including the acquisition of rights over shares in Qantas which is listed on the Australian Stock Exchange.

2. [11]

   Clause 1.6 of the Agreement, read with Item 11 of Schedule 1, records that Rohrlach was initially to be based in Singapore. Until late-2017, he was based in Singapore.

3. [12]

   Clause 13 includes a post-employment restraint of six months, or three months from the date the employment contract comes to an end. In it, the employee acknowledges that the restraints are reasonable and are not greater than is necessary to protect the Qantas group. Qantas initially did, but does not now, rely on this provision. Clause 13.4(e) provides that Qantas holds the benefit of the clause on trust for the other members of the Qantas Group.

4. [13]

   The exclusive jurisdiction clause is to be found in cl 16.1 of the Agreement, which provides:

5. [14]

   Clause 17.1 defines “Qantas Group” as follows:

The Assignment Letter

1. [15]

   On 6 September 2017, Qantas offered Rohrlach an “overseas assignment” in Japan on terms and conditions in a letter (the Assignment Letter) and a Restraint Deed Poll (the Deed Poll).

2. [16]

   Rohrlach signed his acceptance of the Assignment Letter on 8 November 2017. He did not formally execute the Deed Poll but accepts that he is bound by its terms.

3. [17]

   He moved to Japan. His designation was “Chief Executive Adviser and Executive Director, Jetstar Japan”.

4. [18]

   Paragraph 1 of the Assignment Letter provides:

5. [19]

   Paragraph 5 provides:

6. [20]

   Paragraph 14 includes the following:

7. [21]

   Paragraph 18 provides:

8. [22]

   Paragraph 19 provides:

The Deed Poll

1. [23]

   The Deed Poll, in its entirety, appears as a Schedule to these reasons. For convenience, the following provisions in it are set out here:

Rohrlach’s Employment Ends

1. [24]

   On 18 December 2020, intending to join Virgin (one of Qantas’ competitors), Rohrlach gave notice of his resignation. He was placed on so-called “gardening leave” until 17 March 2021, when his employment ended. He has said that he will not start with Virgin before 3 May 2021.

2. [25]

   On 15 January 2021 Qantas wrote to Rohrlach and Virgin, expressing concern about Rohrlach's proposed commencement with Virgin. Qantas demanded that, in accordance with the restraints, Rohrlach not commence with Virgin until 18 September 2021.

3. [26]

   At that time, Qantas was relying on both the restraint in the Agreement itself and the restraint in the Deed Poll. I interpolate that it is plain that the exclusive jurisdiction clause covers a claim for enforcement of the restraint in the Agreement itself. This, it may safely be inferred, is why Qantas no longer seeks to rely on that restraint.

4. [27]

   By letter dated 21 January 2021, Rohrlach denied the restraints are enforceable. By letter dated 29 January 2021, Qantas foreshadowed commencing the proceedings if undertakings were not received. By letter dated 25 February 2021, Qantas indicated it would commence the proceedings if appropriate undertakings were not received by 1 March 2021.

5. [28]

   On 1 March 2021, Rohrlach commenced the Singapore Proceedings by suing out a Writ of Summons in that jurisdiction.

6. [29]

   On 5 March 2021, Qantas commenced these proceedings by approaching the Commercial List Duty Judge, Stevenson J. His Honour granted an injunction, until further order, restraining Rohrlach from taking any step in the Courts of Singapore to restrain or seek to restrain the prosecution by the plaintiff of these proceedings.

7. [30]

   At this point it is appropriate to set out, albeit briefly, the legal principles which apply to construing the exclusive jurisdiction clause, to the grant of an anti-suit injunction, and to the ordering of a stay.

Construction

1. [31]

   The question of whether the submission to the exclusive jurisdiction of the Courts of Singapore in cl 16.1 applies to proceedings brought to enforce the restraint in the Deed Poll, is one of contractual construction. Strictly, under the terms of the Agreement, this falls to be determined according to the laws of Singapore. However, the parties do not suggest that applying the laws of Singapore would yield a different result from that which results from applying the laws of this State.

2. [32]

   In a commercial contract, the meaning of the words chosen by the parties is determined objectively by reference to its text, context, and purpose, the question being what a reasonable person would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole and so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust: see Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 589 [22]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22]; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 at 559 [82]; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at 528 [15]; Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117.

3. [33]

   Although the Agreement, Assignment Letter, and Deed Poll provide for and concern employment, they have an undoubtedly commercial flavour.

4. [34]

   The remuneration and other benefits are significant and Rohrlach’s employment makes him eligible for significant potential incentives including receiving shares. There are provisions, including the restraints, which are manifestly intended to protect Qantas’ commercial interests.

5. [35]

   I do not think that the proper construction of the exclusive jurisdiction clause is to be approached any differently from the way that it would be approached if those instruments were strictly commercial arrangements. In any event, the contestants did not suggest otherwise. Some other approach which would lead to a different result is not readily identifiable.

6. [36]

   In the well-known passage in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165, Gleeson CJ said:

7. [37]

   This approach applies equally to the construction of an exclusive jurisdiction clause: Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) (2010) 79 ACSR 383 at 398 [60] (Babcock & Brown).

8. [38]

   On its proper interpretation, an exclusive jurisdiction clause may bind a party with respect to proceedings against a non-party: Babcock & Brown at 400 [71]-[72].

Stays and Anti-Suit Injunctions

1. [39]

   Section 67 of the Civil Procedure Act 2005 (NSW) confers on the Court a power to stay proceedings. The power is expressed in discretionary terms, but it is a discretion that must be exercised judicially and in accordance with established principles: Babcock & Brown at [81].

2. [40]

   Where parties to a contract have agreed by an exclusive foreign jurisdiction clause to submit to the exclusive jurisdiction of a foreign court, such a clause does not operate to exclude the forum court’s jurisdiction. However, the court will hold the parties to their bargain, and grant a stay of proceedings, unless the party seeking that the proceedings be heard can show that there are strong reasons against doing so. There is a strong bias in favour of granting a stay of proceedings in the event that there has been a submission to the exclusive jurisdiction of a foreign forum. In considering such an application the court should take into consideration all the circumstances of the particular case, but the application is not to be assimilated to cases where a stay is sought on the principle of forum non conveniens, nor is it a matter of mere convenience: see Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87 at 97; Huddart Parker Ltd v Ship “Mill Hill” (1950) 81 CLR 502 at 508–9; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association Ltd (1997) 41 NSWLR 117; Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418; Incitec Ltd v Alkimos Shipping Corp [2005] FCA 191; Owners of Cargo lately laden on board ship or vessel Eleftheria v The Eleftheria (Owners) [1969] 2 All ER 641 at 645; Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577 at 582, 585 and 589–91; Global Partners Fund Ltd v Babcock & Brown Ltd (in liq) (2010) 267 ALR 144 at 166 [118]; Babcock & Brown at [81]. See more recently: Australian Health and Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419 at 438 and following.

3. [41]

   The power to grant an anti-suit injunction is an aspect of the power which authorises the Court to stay its own proceedings. In some cases, the power to grant anti-suit injunctions should not be exercised without the Court concerned first considering whether its own proceedings should be stayed: CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 390 (Cigna). The counterpart of the Court’s powers to prevent its own processes from being abused is its power to protect the integrity of those processes once set in motion. In some cases it is that counterpart power of protection that authorises the grant of anti-suit injunctions: Cigna at 391. The inherent power to grant anti-suit injunctions is not confined but is to be exercised when the administration of justice demands it, or where an anti-suit injunction is necessary to protect the Court’s own procedures or processes: Cigna at 392.

4. [42]

   In addition, in the exercise of the power deriving from the Chancery Court, the Court may make orders in restraint of unconscionable conduct or the unconscientious exercise of legal rights. Thus, if there is a contract not to sue, an injunction may be granted to restrain proceedings brought in breach of that contract, whether in Australia or abroad. Similarly, an injunction may be granted in aid of a promise not to sue in a foreign jurisdiction, constituted for example by an agreement to submit to the exclusive jurisdiction of the courts of the forum: Cigna at 392.

Construction

1. [43]

   The thrust of Qantas’ argument is that whilst it accepts the exclusive jurisdiction clause binds Qantas and Rohrlach in relation to the Agreement and the Assignment Letter, it puts that it does not apply to enforcement of the Deed Poll.

2. [44]

   It argues that the Deed Poll is a self-contained instrument which stands apart from the Agreement and the Assignment Letter. It points to the fact that some of the persons who are intended to be beneficiaries of the Deed Poll (i.e. members of the Qantas Group) are not themselves parties to the other instruments.

3. [45]

   It argues that the Deed Poll does not incorporate the terms of the other instruments or provide that they govern its operation.

4. [46]

   It argues that there is no sensible reason to apply the exclusive jurisdiction clause, which is in an instrument governed by the laws of Singapore, whereas the Deed Poll is governed by the laws of Japan. It argues that the parties would not have expected the original clause to apply where Singapore law no longer applies.

5. [47]

   These submissions are unsustainable.

6. [48]

   The Deed Poll is not a standalone instrument. It is one of a coherent and congruently operating suite of three agreements.

7. [49]

   The opening paragraph of the Assignment Letter provides that the assignment is on the terms and conditions of the letter and the Deed Poll. Clause 1 of the Assignment Letter expressly provides that Rohrlach will continue to be employed on the terms and conditions of the Agreement as varied by the Assignment Letter. Paragraph 14 of the Assignment Letter records that Rohrlach will be subject to any post-employment obligations under the Agreement and the Deed Poll. By paragraph 7(b) of the Deed Poll, definitions in the Assignment Letter are incorporated in the Deed Poll.

8. [50]

   The Deed Poll has independent binding effect in its own right, but as between Qantas and Rohrlach, the Assignment Letter itself provides that he will be subject to the restraints in the Deed Poll, and it is not in issue that the exclusive jurisdiction clause covers the Assignment Letter.

9. [51]

   There is no real constructional choice to be made here. Clause 16.1 of the Agreement is an agreement in unrestricted terms to submit to the exclusive jurisdiction of the Courts of Singapore. This clause was part of the offer which Qantas made. It may be inferred that it saw the submission as being in its commercial interests.

10. [52]

    The submission that Qantas’ construction is supported by the fact that the Deed Poll is for the benefit of non-party beneficiaries is undermined by the facts that each of those beneficiaries is a Qantas associate and that the Agreement itself provides that the restraints in it are for the benefit of the Qantas Group (which is defined in not dissimilar terms in the Deed Poll).

11. [53]

    The submission that the choice of Japanese law in the Deed Poll supports Qantas’ construction is undermined by the fact that the Deed Poll contains no submission to the jurisdiction of the Courts of Japan.

12. [54]

    One consequence of upholding Qantas’ construction is that there would be a binding submission to jurisdiction for one part of the party’s contractual dealings but none in relation to another part. Qantas could not sue anywhere but in Singapore under the Employment Contract, but could go elsewhere, as it seeks to here, if it sued exclusively under the Deed Poll. This gives rise to incongruent operation between different components of one overall contractual arrangement. Added to this, it is unlikely that they intended that different disputes should be resolved before different tribunals or that there should be a firm jurisdictional choice for one category of dispute while leaving another dispute about the same subject matter (a restraint) at large.

13. [55]

    The result is that, in my view, the exclusive jurisdiction clause applies to the claim which Qantas seeks to make in the proceedings.

Enforcement

1. [56]

   The starting point is that Qantas and Rohrlach should be held to their bargain unless there are strong reasons for not doing this.

2. [57]

   Qantas put the following as reasons not to enforce the clause:

   1. (1)

      the choice of jurisdiction by the parties is not a clear one;

   2. (2)

      the causes of action have no connection with Singapore and all the parties are in Australia;

   3. (3)

      the proceedings will have to be conducted remotely and the parties will be separated from their lawyers;

   4. (4)

      this Court is in a position to give the parties a final hearing earlier than what would appear to be the position in Singapore. Qantas adduced expert evidence that the likely approach of the Singapore Court would be that Qantas should seek interim injunctions to protect the position before allocating a final hearing; and

   5. (5)

      there may be difficulties experienced in enforcing in Australia injunctions which the Singapore Court might make.

3. [58]

   I do not find these reasons convincing:

   1. (1)

      the choice of jurisdiction is clear;

   2. (2)

      there is no challenge to the jurisdiction of Singapore. That the causes of action may have no connection with that jurisdiction has little to say as to the appropriateness of enforcing an express submission to jurisdiction. It is to be remembered that the restraint upon which Qantas relies is governed by the laws of Japan;

   3. (3)

      that the proceedings have to be conducted remotely and that the parties will be separated from their Australian lawyers are matters of mere inconvenience. Remotely conducted proceedings have been the order of the day for more than a year now;

   4. (4)

      both Rohrlach and Virgin have undertaken to this Court that they will cooperate fully with Qantas in seeking to have the proceedings in Singapore conducted expeditiously. There is every reason to be confident that the Courts of Singapore will dispose of the proceedings no less efficiently than would this Court, whatever the procedure that Court considers is the appropriate one to be followed. I record that I informed the parties that I was in a position to fix the matter for final hearing on an estimate of three days on 27 April 2021. I fixed the matter provisionally to start at that time to protect the position on the contingency that Qantas succeeded, given the heavy demands on the Commercial List diary. That provisional fixture will be vacated; and

   5. (5)

      both Rohrlach and Virgin have undertaken to this Court (which undertakings the Court accepts) that they will comply with any orders of the Singapore Court as if they were orders of this Court. These proceedings will be stayed until further order with liberty to apply on seven days’ notice, which will facilitate enforcement of the undertakings should that transpire to be necessary. In addition, Virgin has undertaken that it will formally consent to the jurisdiction of the Singapore Court in the Singapore proceedings in which, if Qantas wishes to enforce the Deed Poll and claim damages against Virgin, it will bring cross-claims.

4. [59]

   The plaintiff’s motion filed 5 March 2021 is dismissed.

5. [60]

   These proceedings are stayed until further order with liberty to apply on seven days’ notice.

6. [61]

   The injunction ordered on 5 March 2021 is dissolved.

7. [62]

   I provisionally order the plaintiff to pay the costs of the first defendant and the second defendant of these proceedings. This order will solidify seven days after the publication of these reasons unless a party notifies my Associate and the other parties in writing that some different order is sought, stating, in brief terms, the reasons why, in which event I will make directions for disposition of any issues as to costs.

8. [63]

   The exhibits are to be returned.