Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd [2000] FCA 498 | Case summary

REASONS FOR JUDGMENT 1 There are before the Court two applications made under O 8, subr 2(2) of the Federal Court Rules ("the Rules") for leave to serve originating process in the Netherlands under that Order. Those applications have been made in the course of a proceeding which has already been on foot for some time. (Strictly speaking, it is more accurate to say, for reasons which I will soon mention, that there two separate proceedings, each of which has already been on foot for some time, but, as a matter of convenience, I will generally refer below to the two separate proceedings as though they were one only.) 2 By way of introduction to my dealing with those two applications, I should refer to the history thus far of the proceeding in which they have been made. 3 Some of that history is already set out in my reasons for an interlocutory judgment which I gave in the proceeding on 26 October 1999: see Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd [1999] FCA 1458 (unreported). In the succeeding six paragraphs of these reasons, I will summarise so far as is relevant for present purposes the stage which that history had reached at the time of my earlier judgment. 4 At the time of my earlier judgment, there were five parties to the proceeding. There were, first and secondly, Aussie Home Security Pty Limited ("AHS") and Australian Home Loans Limited ("AHL") (together, "the Aussie parties"). They were the applicants in the proceeding. There were, thirdly and fourthly, Sales System Australia Pty Limited ("SSA") and Australia Holdings Pty Limited ("Australia Holdings") (together, "the Ball parties"). They were the first two respondents to the Aussie parties' application and were also cross-claimants. Fifthly, there was Philips Electronics Australia Limited ("Philips"). It was the third respondent to the Aussie parties' application and the sole cross-respondent to the Ball parties' cross-claim. (Philips was also a cross-claimant itself, but I will ignore hereafter the existence of that cross-claim for present purposes.) 5 (It is because the Ball parties have cross-claimed against Philips that I said above that, strictly speaking, there were before the Court two separate proceedings. According to O 5, r 11 of the Rules, a proceeding arises from a cross-claim filed in respect of an originating process (like an application), which proceeding is separate from the proceeding which arises from the originating process itself.) 6 Also at the time of my earlier judgment, two categories of allegations were being made against Philips which it is necessary to mention for present purposes. First, the Aussie parties (in their statement of claim) and the Ball parties (in their cross-claim) were both alleging against Philips breaches by it of subs 52(1) and pars 53(a) and (c) of the Trade Practices Act 1974 (Cth) ("the Act"), together with resulting damage. Secondly, the Aussie parties alone were alleging (in their statement of claim) breach by Philips of a common law duty of care owed to them by it to take all reasonable steps to ensure that a certain home security system supplied by it was not defective, together with resulting damage. 7 Focusing particularly now on the allegations that Philips had breached subs 52(1) of the Act, the Aussie parties were alleging in their statement of claim that SSA had proposed to AHS an arrangement pursuant to which SSA would supply to AHS for retail sale a home security system (called in the statement of claim "the System") to be manufactured by Philips. The Aussie parties were further alleging that, in or about August 1997, SSA, together with Philips, had made a number of representations to the Aussie parties relating to the System. Those representations had included: "(b) that the System would be successfully modified for Australian conditions, to include, amongst others, a digital dialling function and smoke detection function; (c) that the modifications to the System would not affect its performance and reliability; (d) that the System, in its modified form, would function efficiently; (e) that the System, in its modified form, would represent state of the art technology; [and] (f) that the System, in its modified form, would operate as successfully and reliably as it was, in its unmodified form, operating throughout Europe and North America…." In their cross-claim, the Ball parties were alleging against Philips the making to them by it of representations similar to those which had been alleged by the Aussie parties to have been made to them, both by SSA and by Philips. 8 The Aussie parties and the Ball parties were both alleging that, by making the representations to which I have just referred, Philips had breached subs 52(1) of the Act. In making those allegations, the Aussie parties and the Ball parties were both relying on, among other things, s 51A of the Act. Subsection 51A(1) of the Act provides that, for the purposes of (relevantly) subs 52(1) of the Act, where a corporation makes a representation with respect to any future matter and it does not have reasonable grounds for doing so, the representation shall be taken to be misleading. Subsection 51A(2) of the Act provides that, for the purposes of the application of subs 51A(1) in relation to a proceeding concerning a representation made by a corporation with respect to a future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making that representation. 9 For present purposes, it is sufficient to say that the effect of my earlier interlocutory judgment was to confine the subs 52(1) cases being made against Philips both by the Aussie parties and by the Ball parties to ones relying solely on s 51A of the Act in order to make them out. 10 Subsequently to my earlier interlocutory judgment, I gave leave both to the Aussie parties and to the Ball parties to re-plead their respective allegations, a leave of which the Aussie parties and the Ball parties both availed themselves. 11 The Aussie parties, as well as filing an amended statement of claim, to which I will refer in a moment, filed an amended application, naming as the fourth respondent to their application an entity said to be called "Philips Electronics NV" and to have the following address: "Groenewoudseweg 1, 5621BA Eindhoven, The Netherlands". "NV" is, incidentally, an abbreviation of the Dutch words "naamloze vennootschap", meaning literally "anonymous partnership", but actually denoting a limited company: see Chorus et al (eds), Introduction to Dutch Law for Foreign Lawyers 2nd, rev. ed. 1993 at p.131. (I should note now that it may be that the correct name (at least in English) of the fourth respondent is "Royal Philips Electronics NV" (my emphasis), but, whether that be so or not, on the hearing of the present applications, I gave leave to the Aussie parties to amend their court documents accordingly.) 12 In their amended statement of claim, the Aussie parties alleged against Philips Electronics NV the following matters relevant for present purposes: first, it was the holding company of Philips (par 5A(b)); secondly, the conduct of Philips which had breached subs 52(1) and pars 53(a) and (c) of the Act and had caused damage to the Aussie parties had been engaged in by Philips as agent for Philips Electronics NV within the scope of Philips' actual or apparent authority, so that that conduct was deemed, for the purposes of the Act, to have been engaged in also by Philips Electronics NV (par 5A(c)); thirdly, those representations with respect to future matters which had been made by (relevantly) Philips had also been made by Philips Electronics NV and the latter had no more had reasonable grounds for their making than had the former (pars 7 and 9); fourthly, Philips Electronics NV had been "knowingly involved" (presumably, "knowingly concerned" was meant) in Philips' contraventions of subs 52(1) and pars 53(a) and (c) of the Act "within section 75 of that Act" (no doubt, "75B" was meant) (par 10A); and, fifthly, Philips Electronics NV had breached a duty of care which it owed to the Aussie parties under the general law in connection with the design and manufacture of the system (pars 25 and 26). (Perhaps not surprisingly, given the quality of the Aussie parties' pleadings generally in the proceeding, there was no allegation of the suffering of damage by the Aussie parties as a result of the breach of duty of care by Philips Electronics NV.) 13 As for the Ball parties, they, like the Aussie parties, filed an amended claim document, naming as the second cross-respondent to their amended cross-claim, "Philips Electronics NV", a name which, on the hearing of the present applications, I gave to them leave to amend, similar to that which I gave to the Aussie parties. The amendments made by the Ball parties' amended cross-claim in respect of their allegations concerning the Act mostly mirrored those which had been made by the Aussie parties by their amended statement of claim (even including the mistaken references to "knowingly involved" and to s "75" of the Act) (pars 3A(ii) and (iii); 4; 7; and 8A). The Ball parties also took the opportunity of pleading for the first time breaches of a duty of care under the general law, which duty was said to have been owed to the Ball parties both by Philips and by Philips Electronics NV and to have been one to take all reasonable steps to ensure that "the Products", as defined in a certain agreement (which were effectively the same as "the System" referred to in the Aussie parties' statement of claim), were not defective. The Ball parties also pleaded the suffering of damage as a result of those breaches. 14 Subsequently to the filing by the Ball parties of their amended cross-claim, I gave them leave to file a further amended cross-claim, naming as the third cross-respondent to their further amended cross-claim another entity, "Philips Consumer Electronics BV". "BV" is, incidentally, an abbreviation of the Dutch words "besloten vennootschap met beperkte aansprakelijkheid", meaning literally "enclosed partnership with limited liability", but actually denoting a private company: see Chorus et al at p. 140. 15 That further amended cross-claim merely repeated, as against Philips Consumer Electronics BV, almost all of those allegations against Philips Electronics NV which had already been added by the amended cross-claim to those in the cross-claim. Not surprisingly, however, it was not alleged that Philips Consumer Electronics BV was also the holding company of Philips; instead, it was alleged that Philips Electronics NV was the holding company both of Philips Consumer Electronics BV and of Philips. 16 The Ball parties then sought leave under O 8, subr 2(2) of the Rules to serve their further amended cross-claim on Philips Electronics NV and Philips Consumer Electronics BV in the Netherlands under that Order. 17 Implicit in that application for leave, although not made explicit on the hearing of it, was the proposition that a cross-claim, at least in so far as it is made against a person who or which has not previously been a party to the proceeding in which it is made, is an "originating process" for the purpose of O 8, subr 2(2) of the Rules. Sackville J accepted the correctness of that proposition in Midori International Pty Ltd v Prentice [1999] FCA 170 (1 March 1999, unreported). It appears to me that Sackville J's conclusion in that respect was, not only not plainly incorrect (a state of affairs which alone would have caused me not to adopt it), but correct. I therefore adopt Sackville J's conclusion, noting as I do so that its correctness appears also to be supported by the provisions of O 5, r 11 of the Rules, on which rule Sackville J did not rely in his reasons for judgment. 18 When the Ball parties' application for leave under O 8, subr 2(2) of the Rules came on for hearing, the Aussie parties, who were present, themselves sought, at the outset of that hearing, leave of two different types. 19 First, they sought leave to file a further amended application and a further amended statement of claim. The proposed further amended application would join as the fifth respondent "Philips Consumer Electronics BV", whose address, like that of Philips Electronics NV, was shown as "Groenewoudseweg 1, 5621BA Eindhoven, The Netherlands". The proposed further amended statement of claim would merely repeat, as against Philips Consumer Electronics BV, all of the allegations against Philips Electronics NV which had already been added by the amended statement of claim to those in the statement of claim, including the allegation that Philips Electronics NV was the holding company of Philips. (How Philips Electronics NV and Philips Consumer Electronics BV could both be the holding company of Philips is not easy to see, at least if the term "holding company" was being used in the proposed further amended statement of claim in its ordinarily accepted sense.) I granted that leave when sought. 20 Secondly, the Aussie parties sought leave under O 8, subr 2(2) of the Rules to serve their further amended application and further amended statement of claim on Philips Electronics NV and Philips Consumer Electronics BV in the Netherlands under that Order. 21 It is convenient to mention now that, in so far as the Aussie parties sought leave under O 8, subr 2(2) of the Rules to serve their further amended statement of claim, as opposed to their further amended application, on Philips Electronics NV and Philips Consumer Electronics BV in the Netherlands under that Order, that application for leave was misconceived. It is not correct (as it would have been in proceedings commenced in, say, the Supreme Court of New South Wales), to describe a statement of claim in a proceeding in this Court as an originating process (whether for the purpose of O 8, subr 2(2) of the Rules or otherwise), although an application (or a cross-claim against a new party) is properly to be so described. 22 However, O 8, r 3 of the Rules provides generally for the grant of leave by the Court to serve outside Australia court documents other than originating process. I will therefore treat the Aussie parties' application to serve their further amended statement of claim on Philips Electronics NV and Philips Consumer Electronics BV in the Netherlands as having been made under O 8, r 3 of the Rules and will grant or refuse such leave automatically, depending on whether I grant or refuse leave in respect of the further amended application. 23 With my account of the history of the making by the Ball parties and by the Aussie parties of their respective applications for leave under O 8, subr 2(2) of the Rules now complete, I turn to those applications themselves. 24 Order 8, subr 2(2) of the Rules imposes, as conditions precedent to the Court's granting of leave to serve originating process outside the Commonwealth under that Order, that the Court be satisfied: first, that "the proceeding" is one "in which the Court has jurisdiction" (which, in the context, obviously means jurisdiction ratione materiae only and not jurisdiction ratione personae as well) (par (a)); secondly, that "the proceeding" is one "to which rule 1 applies" (par (b)); and, thirdly, "that the applicant has a prima facie case for the relief which he seeks", which I take to mean that the party seeking leave has a prima facie case for the relief which that party is seeking in the proceeding generally (par (c)). 25 In so far as submissions were made either by the Ball parties or by the Aussie parties in support of their respective applications for leave, those submissions were limited to seeking to persuade me of the existence of a prima facie case for the relief sought by them in the proceeding generally against Philips Electronics NV and Philips Consumer Electronics BV. However, provided that I am satisfied as to that matter, it will obviously be necessary for me to consider as well, although without such assistance as I might have gained from submissions on those matters either by the Ball parties or by the Aussie parties, whether I am also satisfied as to the other two matters mentioned in O 8, subr 2(2). 26 Before turning to the evidence relied on by the Ball parties and by the Aussie parties respectively in order to establish the existence of a prima facie case for the relief sought by them in the proceeding generally against Philips Electronics NV and Philips Consumer Electronics BV, it is convenient to say something about the nature of that relief, a topic which I have not yet mentioned. 27 For the Aussie parties, one finds the relief sought by them against Philips Electronics NV and Philips Consumer Electronics BV specified in their further amended application (see O 4, r 3 of the Rules). In the case of the Ball parties, one finds the relief sought by them against Philips Electronics NV and Philips Consumer Electronics BV specified in their further amended cross-claim. (There is, of course, no document filed together with a cross-claim which is the equivalent of the application which is filed together with a statement of claim. It is instead the cross-claim itself which specifies the relief claimed: see O 5, subr 2(2) of the Rules, applying to a cross-claim O 4, r 3 of the Rules.) 28 In the case both of the Aussie parties and of the Ball parties, there are sought against Philips Electronics NV and Philips Consumer Electronics BV declarations of their respective breaches of subs 52(1) and pars 53(a) and (c) of the Act and "damages". 29 As to the Aussie parties' claims for damages, their further amended application expressly mentions s 82 of the Act and so I naturally read their claims for damages as encompassing damages for breaches both of the Act and of a common law duty of care. (I ignore, for the purpose of the present application at least, the failure of the Aussie parties actually to plead resulting damage in connection with their allegations of breach by Philips Electronics NV and Philips Consumer Electronics BV of the particular common law duty of care which the Aussie parties specify. That failure was, I am confident, due to mere carelessness, since there would be no point in pleading duty of care and breach thereof without also pleading resulting damage. I note that, in Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1994) 58 FCR 365, Lindgren J said (at 374) that the Court should not be astute, when considering whether a party seeking leave to serve originating process outside Australia has a prima facie case for a particular type of relief, to conclude that that party does not have such a prima facie case "merely because an amendment to its statement of claim may be shown to be necessary or desirable". I note also that French J expressed agreement with that view in Chapman v Travelstead (FCA, 12 June 1998, unreported) at 10.) 30 As to the Ball parties' claims for damages, their further amended cross-claim did not expressly mention s 82 of the Act, as it should have done if damages were being sought under the Act: see O 4, par 3(1)(b) of the Rules. Nevertheless, I am prepared, for the purpose of the present application at least, to read the Ball parties' claims for damages as encompassing damages for breaches of the Act, as well as for breaches of a common law duty of care. The failure to mention s 82 of the Act was, I am confident, also due to mere carelessness, since, in the body of their further amended cross-claim, the Ball parties did plead resulting damage from the breaches of the Act by Philips Electronics NV and Philips Consumer Electronics BV. 31 In addition to their claims for declarations and damages, the Ball parties also claimed "indemnity" from Philips Electronics NV and Philips Consumer Electronics BV in respect of any damages awarded to the Aussie parties against the Ball parties. 32 It is accepted in the cases that, where (as here) a party seeking leave to serve originating process outside the Commonwealth under O 8 of the Rules relies on multiple causes of action in the proceeding, it is sufficient that that party "ma[k]e out a prima facie case for relief on one (and not necessarily all) of the causes of action relied upon by it": see Caterpillar Inc v John Deere Ltd [1999] FCA 1503 (Carr, Sundberg and Kenny JJ, 1 November 1999, unreported) at [34]. 33 Consistently with that approach, the Ball parties and the Aussie parties both confined their submissions of the existence of a prima facie case for the relief they seek in the proceeding generally to their claims for damages against Philips Electronics NV and Philips Consumer Electronics BV arising out of breaches by them of subs 52(1) of the Act, together with resulting damage. I will confine my consideration of their respective applications for leave accordingly. 34 So far as the requirement of a prima facie case for relief on a particular cause of action is concerned, in Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539, a Full Court of this Court (Beaumont, Drumond and Sundberg JJ) referred with implicit approval to a number of earlier single Judge decisions dealing with that requirement, saying (at 549), "In Merpro Montassa Ltdv Conoco Specialty Products Inc (1991) 28 FCR 387 at 390, in a passage which has been cited with approval on many occasions, Heerey J said: 'the requirement of 0 8, r 2(2)(c) has to be met at the outset of the proceedings. It does not suggest the kind of scrutiny that would occur in a submission of no case to answer following the closure of an applicant's case at trial ... It may be therefore that a court at this stage might draw inferences more readily in favour of an applicant, bearing in mind, amongst other things, that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a prima facie case at trial.' In Western Australia v Vetter Trittler Pty Ltd (In liq) (1991) 30 FCR 102 at 110, after setting out this passage, French J said that 'a prima facie case is made out if, on the material before the court, inferences are open which if translated into findings of fact, would support the relief claimed'. In WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476 Beaumont J said: 'Such a preliminary question [sic, whether a prima facie case exists] should not call for a substantial inquiry. The kind of evidence adduced on a preliminary inquiry of this kind should be in proportion to the nature of such an interlocutory issue ... [The] purpose is to determine by way of a mini rather than a mega trial whether the applicant has a prima facie case.'" I will adopt the approach to the prima facie case requirement adopted in the above decisions. 35 Dealing first with the evidence of the Ball parties concerning a prima facie case, they relied on five affidavits sworn for the purpose of their application: three by solicitors, which affidavits annexed company searches, one for Philips and one for each of two Dutch companies, Royal Philips Electronics NV (my emphasis) and Philips Consumer Electronics BV; one by a translator, which affidavit annexed translations from Dutch into English of the company searches of Royal Philips Electronics NV and Philips Consumer Electronics BV; and one by Mr Lloyd Ball, a principal of the Ball parties. The Ball parties also relied on an affidavit sworn by Ms Jennifer Anne Exner, which affidavit had been relied on by the Aussie parties in the dispute resolved by my earlier interlocutory judgment. Ms Exner's affidavit had annexed her expression of opinion as to the quantum of economic loss which had been suffered by the Aussie parties as a result of the conduct of Philips. 36 The three company searches evidenced the following matters: a company said to be called "Philips Electronics NV", whose address was said to be unknown, was said in the company search of Philips to be the ultimate holding company of Philips; there existed a Dutch limited liability company called "Koninklijke [in English, 'Royal'] Philips Electronics NV", which also used the trading name "Royal Philips Electronics"; and there existed a Dutch private company called "Philips Consumer Electronics BV", which also used the trading name "Philips Sound and Vision" and whose sole shareholder was another Dutch private company called "Philips Electronics Nederland BV". Like Royal Philips Electronics, Philips Sound and Vision had an address in Eindhoven in the Netherlands, but those addresses were different from one another. The address of the former company was, however, shown as "Groenewoudseweg 1, 5621BA Eindhoven", the same address as that first shown for "Phillips Electronics NV" in the Aussie parties' amended application. The two Dutch companies had no executive directors in common. While Royal Philips Electronics had thirty-four authorised representatives and Philips Sound and Vision forty-three, they had only one authorised representative in common. 37 Turning now to Mr Ball's evidence, he gave evidence of having attended, on 22 August 1997, a meeting at the warehouse of Philips in a suburb of Sydney. According to Mr Ball, persons present at the meeting apart from himself included four persons from AHL, including a Mr Greg Stonier, and two persons from Phillips. Two persons also participated in the meeting by video link. They were Messrs Jos Bruins and Paul de Bresser, each of whom was in Eindhoven, the Netherlands, at the time. Correspondence annexed to Mr Ball's affidavit supports the conclusions that, at the relevant time, Mr de Bresser was Product Manager of "Philips Sound & Vision", which, it will be recalled, is a trading name of Philips Consumer Electronics BV, and that Mr Bruins was also employed by Philips Sound and Vision. According to Mr Ball, among the things said at the meeting by Mr de Bresser were the following: "Philips can modify the System for Australia. Philips has been able to modify equipment for other countries' legal requirements because such modifications were simple and involve[d] no redesign. … The System can be pre-programmed to ring the customer or [presumably, 'on' was intended] any of 6 telephone numbers to inform that the alarm had [sic] triggered. … Any modifications that need to be made to the system for Australian conditions will not affect the performance of the system. The system in Australia will function as successfully and reliably as it has been in its unmodified form in Europe and North America." Also according to Mr Ball, among the things said at the meeting by Mr Bruins were the following: "Philips are selling and marketing the System in Europe including Belgium, Germany, the Eastern Block [sic] countries and also in North America. The alarm system has sold in the thousands through retail channels and has a very successful track record. … Philips would have to change the radio frequency because the radio frequency in Europe is different to that in Australia. The radio frequency in Australia is dedicated as a security frequency which provides an additional benefit of there being less opportunity for interference from other RF products. Australia is the only country with a dedicated frequency for security. RF products will be the future for the security industry. The system in its modified form will represent state of the art technology. … The features of the System make it very easy to use. State of the art technology of the system makes it very easy to install and it also provides monitoring capabilities. The system also provides a wireless remote and has had high consumer acceptance." Further, according to Mr Ball, a representative of the Aussie parties said at the meeting that the system would be required "to be capable of being professionally monitored by a back to base system. A smoke detector is also required to function in the system". According to Mr Ball, Mr Bruins commented, "Philips can manufacture the system with those components and a smoke detector could be provided as part of the system. The analogue dialler would need to be redesigned and manufactured as a digital dialler to enable the system to be professionally monitored." 38 It appears further from Mr Ball's evidence that: subsequently to the meeting referred to above, Australia Holdings entered into two agreements: first, an agreement with Philips that Australia Holdings should be Philips' exclusive distributor for Australia of the system; and, secondly, an agreement with AHS that AHS should be Australia Holdings' exclusive sub-distributor for Australia of the system, with Australia Holdings to supply and install the system for customers both of AHS and AHL; that, subsequently to entering into those agreements, SSA began installing the system in purchasers' homes; that the system did not work properly; that installations of the system ceased and a product recall was made; that repairs to the system were attempted, but were unsuccessful; that existing customers requested refunds and proposed customers cancelled purchases; that a further recall occurred; and that ultimately attempts to cure the problems were abandoned. 39 I am satisfied that the above evidence establishes a prima facie case against Philips Consumer Electronics BV that it made, by its officers, Messrs de Bresser and Bruins, representations to the Ball parties with respect to future matters of the type pleaded in the further amended cross-claim, that those representations were acted on by the Ball parties and that the Ball parties suffered resulting damage. There is thus made out by the Ball parties, as against Philips Consumer Electronics BV, a prima facie case by them for damages for breach of subs 52(1) of the Act, given, as I have already mentioned, the Ball parties' reliance on s 51A of the Act. That being so, it is unnecessary to consider whether such a prima facie case is made out as against Philips Consumer Electronics BV on any other basis. 40 However, I am unsatisfied as to the existence of an equivalent prima facie case against Royal Philips Electronics NV, as against which there is no relevant evidence other than that it is (assuming it to be the company intended to be referred to in the company search of Philips) the ultimate holding company of Philips. 41 Turning now to the evidence of the Aussie parties said to establish the existence of a prima facie case for damages against Philips Electronics NV and Philips Consumer Electronics BV arising out of breaches by them of subs 52(1) of the Act, together with resulting damage, the Aussie parties relied on two affidavits sworn for the purpose of their application for leave: one by a solicitor, annexing copies of the translations from Dutch into English of the company searches of Royal Philips Electronics NV and Philips Consumer Electronics BV, which translations the Aussie parties had obtained from the Ball parties; and another by Mr Gregory James Stonier, the former executive director of AHL (obviously, the Mr Greg Stonier referred to by Mr Ball in his affidavit as having been present at the meeting at the Philips warehouse in Sydney on 22 August 1997). The Aussie parties also relied on the Exner affidavit to which I have already referred. I should add here that, in response to a direct question from me, counsel for the Aussie parties expressly disavowed any reliance on the evidence being relied on by the Ball parties on their leave application (apart, obviously, from the Dutch to English translations of the two Dutch language company searches and the Exner affidavit). 42 Mr Stonier's affidavit, despite being thirty-five paragraphs long and having an exhibit of almost three hundred pages in length, was not of as much assistance as one might have expected in establishing a prima facie case by the Aussie parties on their subs 52(1) claim against Philips Electronics NV and Philips Consumer Electronics BV. He did, however, depose to the making of a number of representations by named individuals at three meetings which he had attended between 22 August 1997 and 30 September 1997. 43 First, at a meeting which seems plainly to be the same meeting referred to by Mr Ball in his affidavit (although Mr Stonier makes no reference to any participation therein by Messrs de Bresser and Bruins and identifies the participants as being individuals "of" AHL, SSA and Philips), Mr Stonier records only a statement by Mr Mike Ryan of Philips to the following effect: "Philip's [sic] in market research is recognised as the fourth largest brand name in the world behind Coke, McDonald[']s and Microsoft. The Philip's [sic] home security system is manufactured in Europe and is marketed as the Philisafe Sentinel. The system has a home monitoring facility that is pre-programmed to dial you at work, mobile [sic] or a friend's place to advise you that the alarm has been activated. The Philips system can easily be modified for the Australian marketplace." 44 Next, Mr Stonier records that, at a subsequent meeting at AHL's offices, again with participants identified as being either "of" or "from" AHL, SSA and Philips, Mr Ryan was asked on behalf of the Aussie parties, "How does the system adapt to Australian conditions?", and replied, "It is likely that a technical expert from Philips in Holland will visit Australia to explain the system to us. I know that the system can be modified to accommodate a digital dialler which would work in with the Australian telephone system. The system is currently sold in Holland, Germany, Vienna [sic] and Canada." 45 Finally, Mr Stonier records that, at a subsequent meeting at Philips' offices in Sydney in which "Jos De Bruins" (plainly, a reference to Mr Jos Bruins) and "Paul De Brosser" (plainly, a reference to Mr Paul de Bresser) participated, as well as individuals from AHL, SSA and Philips, Mr De [sic] Bruins made a statement to the following effect: "The product is manufactured in Milan, Italy for the majority of its components with back up facilities in the Taiwan manufacturing plant. Production is currently 50,000 with the ability to double production by simply putting in additional shifts. During the initial production there are [sic] problems encountered with power supplies and senses [sic] however these have all been rectified and it is no longer an issue. The product is marketed throughout Europe as a do-it-yourself system. The European market basically brands from do-it-yourself through to professionally installed systems. Professionally installed systems are much more expensive. The product was originally marketed through general retailers which didn't really work. The product is now being sold by more specialist retailers. The product retails for approximately 800-1,000 Dutch guilders for the small units and 1,600-2000 Dutch guilders for larger houses. Enhancements to the product in the future may include a car alarm accessory whereby the car alarm would be integrated with the paging unit so as to advise you if your car has been stolen." 46 According to Mr Stonier, he asked Mr De [sic] Bruins at the meeting where the system had been used and was told by him, "The product … has been available in Europe for the past 12 months. It was first released in Holland, Belgium and France and later Germany and Scandinavia. There are plans to roll out in Russia and Poland. The system is not being sold in the United States of America." 47 (I should add here that among the things which Mr Stonier exhibited to his affidavit were copies of handwritten notes which he asserted he had taken during the course of the second and third of the three meetings. Those notes did not contain any potentially relevant information additional to that which I have set out above.) 48 Of the two named individuals to whom Mr Stonier attributes in his affidavit the making of representations which were apparently thought by him to be relevant for present purposes, namely, Messrs Ryan and Bruins, in par 3 of his affidavit, Mr Stonier describes the first of them as "Business Unit Manager, … of Philips Electronics Australia Limited (Philips Australia)" and the second of them as "Global Manager, … of Philips Electronics NV and Philips Consumer Electronics BV (collectively Philips Holland)". Then, in pars 5 and 8 of his affidavit, when Mr Stonier purports to repeat the things said by Mr Ryan which I have set out in pars 43 and 44 above, Mr Stonier describes Mr Ryan as speaking "on behalf of Philip's [sic] Australia and Philips Holland". Then, in par 9 of his affidavit, Mr Stonier says, "I understood that Mike Ryan was speaking on behalf of Philip's [sic] Australia and Philip's [sic] Holland as Philip's [sic] Holland was the holding company of Philip's [sic] Australia and was responsible for the design, manufacture and supply of the system, and was the provider of the technical expertise in relation to the system". 49 Dealing first with the representations attributed by Mr Stonier to Mr Bruins, I am unable, accepting for present purposes that Mr Bruin said the things attributed to him by Mr Stonier, to treat any of those things as establishing, even at a prima facie level, the making, whether by Philips Electronics NV, by Royal Philips Electronics NV or by Philips Consumer Electronics BV, of any representations of the type alleged in the further amended statement of claim to have been made (see par 7 above). Furthermore, even if I had been, I would not have acted on Mr Stonier's assertion attempting to connect Mr Bruins to Philips Electronics NV. Mr Stonier gave no basis for such an assertion, nor is any to be found in any of the Aussie parties' evidence otherwise, although there is to be found a basis for connecting Mr Bruins to Philips Consumer Electronics BV. 50 Dealing next with the representations attributed by Mr Stonier to Mr Ryan, it does appear to me to be open, accepting for present purposes that Mr Ryan said the things attributed to him by Mr Stonier, to treat at least some of those things as establishing, at least at a prima facie level, the making, at least by Philips, of at least some representations of the type alleged in the further amended statement of claim to have been made. 51 The question is, however, whether the evidence also establishes, even at a prima facie level, legal responsibility for the making of those representations in either Philips Electronics NV, Royal Philips Electronics NV or Philips Consumer Electronics BV. Mr Stonier's evidence was that he "understood" Mr Ryan to be speaking, not only on behalf of Philips, but also on behalf of Philips Electronics NV and Philips Consumer Electronics BV. I am unable to see how Mr Stonier's understanding of the matter assists me for present purposes. If, rather than focusing on Mr Stonier's understanding, I focus instead on the matters which he asserts gave rise to that understanding, they were three in number: first, that Philips Electronics NV and Philips Consumer Electronics BV were the holding company of Philips; secondly, that Philips Electronics NV and Philips Consumer Electronics BV were responsible for the design, manufacture and supply of the system; and, thirdly, that Philips Electronics NV and Philips Consumer Electronics BV were the provider of the technical expertise in relation to the system. 52 As to the first of those matters, there was no evidence before me on the Aussie parties' application for leave that either Philips Electronics NV, Royal Philips Electronics NV or Philips Consumer Electronics BV was the holding company of Philips (let alone that more than one of them was, an assertion which I find it difficult to understand). As to the second of those matters, there was no evidence before me on the Aussie parties' application for leave that either Philips Electronics NV or Royal Philips Electronics NV was responsible for the design, manufacture and supply of the system, although there was evidence before me which established, at least at a prima facie level, that Philips Consumer Electronics BV was so responsible. As to the third of those matters, there was no evidence before me on the Aussie parties' application for leave that either Philips Electronics NV or Royal Philips Electronics NV was the provider of the technical expertise in relation to the system, although there was evidence before me which established, at least at a prima facie level, that Philips Consumer Electronics BV was such provider. 53 Does the existence of evidence which establishes, at least at a prima facie level, that Philips Consumer Electronics BV was responsible for the design, manufacture and supply of the system and was the provider of the technical expertise in relation to the system also establish, at least at a prima facie level, legal responsibility in Philips Consumer Electronics BV for the representations attributed by Mr Stonier to Mr Ryan, accepting for present purposes that Mr Ryan said the things attributed to him by Mr Stonier? 54 I am unable to see how that is so. The mere facts (assuming they be facts) that Philips was seeking, at the time of the making of those representations, to sell a system which was designed, manufactured and supplied by Philips Consumer Electronics BV and in relation to which Philips Consumer Electronics BV was supplying the technical expertise do not appear to me to establish at a prima facie level that, when an employee of Philips spoke about the system, he was doing so on behalf of Philips Consumer Electronics BV, nor do I have any other evidence before me that would permit me to conclude, even at a prima facie level, either that Philips, through Mr Ryan, was speaking (or even purporting to speak) on behalf of Philips Consumer Electronics BV within the scope of some authority to do so, either actual or apparent (to adapt the language of subs 84(2) of the Act) or that Philips Consumer Electronics BV was knowingly concerned in any contravention of subs 52(1) of the Act resulting from Mr Ryan's representations. 55 For those reasons, I am not satisfied that the Aussie parties have established a prima facie case against either Philips Electronics NV, Royal Philips Electronics NV or Philips Consumer Electronics BV of breach of subs 52(1) of the Act, together with resulting damage, and, that being so, I must dismiss their application for leave to serve in the Netherlands their further amended application and further amended statement of claim. 56 I return now to my consideration of the Ball parties' application for leave. I have already mentioned (see pars 24 and 25 above), the necessity for me to be satisfied that the proceeding arising from (relevantly) the Ball parties' further amended cross-claim is both a proceeding in which this Court has jurisdiction ratione materiae and one to which O 8, r 1 applies. Those requirements, like the requirement that the party seeking leave have a prima facie case for the relief which is being sought in the proceeding generally, appear to me to have been drafted on the assumptions: first, that the only party or parties from which relief is being sought in the proceeding is or are extraterritorial; and, secondly, that only one cause of action is being relied on in the proceeding. When either or both of those assumptions is or are incorrect, questions necessarily arise as to the application of the three requirements. 57 It appears to me to be self-evident that, in deciding whether one is satisfied that the three requirements have been met, one ignores any intraterritorial party or parties from which relief is being sought in the proceeding generally and treats each extraterritorial party as if it were the sole party from which relief is being sought in the proceeding generally. Further, I have already mentioned that when multiple causes of action are being relied on against an extraterritorial party, it is sufficient that the party seeking leave make out a prima facie case for the relief which is being sought in the proceeding generally on only one of those causes of action (see par 32 above). Obviously, it will be necessary for the party seeking leave also to satisfy the Court that the proceeding, in so far as it involves that cause of action, is both a proceeding in which this Court has jurisdiction and one to which O 8, r 1 applies. 58 What, however, of any of the other causes of action being relied on against the extraterritorial party in the proceeding? Is it necessary for the party seeking leave to establish, as a condition precedent to obtaining leave, that the proceeding, in so far as it involves those other causes of action, is also both a proceeding in which this Court has jurisdiction and one to which O 8, r 1 applies? 59 In Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31 at 35, Wilcox J expressed the view that it was necessary for a party seeking leave under O 8, r 2(2) to establish that every cause of action being relied on in the proceeding was one to which O 8, r 1 applied. At the same time, he also expressed the view that it was necessary to establish a prima facie case on every cause of action being relied on in the proceeding generally. There was obviously a linkage between those two views and, indeed, in Liftronic Pty Limited v Montgomery Elevator Company (1996) ATPR ¶41-458, Sackville considered (at 41,587) that a negative answer to the question whether it was necessary to establish a prima facie case on every cause of action being relied on in the proceeding generally necessarily implied a negative answer to the question whether it was necessary to establish that every cause of action being relied on in the proceeding generally was one to which O 8, r 1 applied. Accepting that that is so, since a negative answer to the question whether it is necessary to establish a prima facie case on every cause of action being relied on in the proceeding generally has now been given by a Full Court of this Court in the Caterpillar case, necessarily rejecting Wilcox J's affirmative answer to that question in Tycoon, it would seem to follow that the Caterpillar case requires that a negative answer should also be given to the question whether it is necessary to establish that every cause of action being relied on in the proceeding generally is one to which O 8, r 1 applies. 60 On the other hand, it seems difficult to accept the proposition that the Court is not required to be satisfied, as to every cause of action being relied on in the proceeding generally, that the Court has jurisdiction with respect to it. 61 Applying to the present application by the Ball parties the approach which I have just described, I will first consider whether the proceeding arising from their further amended cross-claim, in so far as it involves a claim of breach by Philips Consumer Electronics BV of subs 52(1) of the Act, together with resulting damage, is a proceeding to which O 8, r 1 of the Rules applies. If it is, I will then consider whether the Court has jurisdiction with respect to all of the causes of action relied on by the Ball parties against Philips Consumer Electronics BV in their further amended cross-claim. 62 As to the question whether the proceeding arising from the Ball parties' cross-claim, in so far as it involves a claim of breach by Philips Consumer Electronics BV of subs 52(1) of the Act, together with resulting damage, is a proceeding to which O 8, r 1 of the Rules applies, it appears to me to be unnecessary to do any more than refer again to the Sydbank case (see par 34 above). 63 Paragraph (a) of O 8, r 1 of the Rules deals with a case "where the proceeding is founded on a cause of action arising in the Commonwealth". In Sydbank, the Full Court, following long established authority, treated par (a) as requiring, not that every element of a cause of action take place in Australia, but only that the act on the part of the respondent which gives the applicant "his cause of complaint" take place in Australia. They then applied that test to a claim of breach of subs 52(1) of the Act, in which the conduct complained of was said to have involved both acts and omissions. The acts concerned were said to have consisted of the making of representations by an individual over the telephone, he being in Denmark at the time and the person to whom the representations were being made being in Australia at the time. The Judge below had treated those representations as having been made in Australia, a conclusion which the Full Court agreed (at 547) had been open to him, relying on, among other things, the facts that the representations were heard in Australia and that it was there that they would be, and were, acted on. 64 That reasoning is equally applicable to the representations made by Messrs de Bresser and Bruins of Philips Consumer Electronics BV, so that the proceeding arising from the Ball parties' further amended cross-claim, in so far as it involves a claim of breach by Philips Consumer Electronics BV of subs 52(1) of the Act, together with resulting damage, is a proceeding to which O 8, par 1(a) of the Rules applies. 65 (Given my approach already outlined (see par 61 above), it is unnecessary for me to elaborate on the conclusion which I am about to express, but I will add that, if it had been necessary for me to be satisfied that every cause of action relied on by the Ball parties against Philips Consumer Electronics BV in the proceeding arising from their further amended cross-claim had fallen within O 8, r 1 of the Rules, I would also have been satisfied that their common law negligence claim fell within that rule.) 66 Next, as to the question whether the Court has jurisdiction with respect to all of the causes of action relied on by the Ball parties against Philips Consumer Electronics BV in their further amended cross-claim, I have already identified those causes of action as being the claim of breach, together with resulting damage, of subs 52(1) of the Act, and the claim of breach, together with resulting damage, of a duty of care under the general law, which duty was said to have been one to take all reasonable steps to ensure that the system was not defective. 67 (I ignore for present purposes the reference in the prayers for relief in the Ball parties' further amended cross-claim to an "indemnity", since, despite such reference to it, the Ball parties pleaded no facts in their further amended cross-claim which, if true, would give them such a cause of action and I am here concerned only with causes of action disclosed by the facts pleaded in their further amended cross-claim.) 68 As to the claim of breach, together with resulting damage, of subs 52(1) of the Act, there can obviously be no question as to the Court's jurisdiction. As to the claim of breach, together with resulting damage, of a duty of care under the general law, the Court will only have jurisdiction with respect to that claim if it falls within the Court's accrued jurisdiction. 69 As to that issue, I have no difficulty in concluding that the Ball parties' common law negligence claim does fall within the Court's accrued jurisdiction, because there is significant overlap between the facts relied on in support of that claim and the facts relied on in support of their subs 52(1) claim: see the discussion of the accrued jurisdiction in Re Wakim; Ex parte McNally (1999) 163 ALR 270 at 311-12, [140] (Gummow and Hayne JJ). In that connection, I draw attention to one of the particulars given in the further amended cross-claim of the circumstances in which (relevantly) Philips Consumer Electronics BV came under a duty of care to the Ball parties, namely, that it had made the representations which are fundamental to the Ball parties' subs 52(1) case. 70 Thus, subject to two further matters, I will grant the Ball parties' application for leave to serve their further amended cross-claim on Philips Consumer Electronics BV in the Netherlands under O 8 of the Rules. That further matter is that O 8, subr 2(3) of the Rules requires a party seeking leave under O 8, subr 2(2) of the Rules to adduce evidenceshowing: first, "in what country … the person to be served is, or probably may be found"; and, secondly, whether that country is or is not one with which Australia is a party to a convention as to service abroad of judicial documents. 71 As to the first of those matters, the company search of Philips Consumer Electronics BV shows that it, being a Dutch company, is "in" the Netherlands. As to the second of those matters, although it was not actually exhibited, I have before me a document dated 29 September 1998, supplied to me by the Ball parties and emanating from the Commonwealth Attorney-General's Department. That document was supplied to me after the hearing in response to a request by me during the hearing for material which would disclose the position so far as the Netherlands was concerned. The document asserts that the Netherlands is a country with which Australia is a party to a convention as to service abroad of judicial documents, the convention concerned being the Convention between the United Kingdom and the Netherlands regarding Legal Proceedings in Civil and Commercial Matters of 1932 (see ATS 1935 No 4). 72 In the result, I will grant the Ball parties' application for leave to serve their further amended cross-claim on Philips Consumer Electronics BV in the Netherlands under O 8 of the Rules. I will, however, refuse their application for leave to serve their further amended cross-claim on Royal Philips Electronics NV in the Netherlands under O 8 of the Rules. As to the Aussie parties' application for leave to serve their further amended application and further amended statement of claim on Royal Philips Electronics NV and Philips Consumer

Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd

At a glance

Court

Decision date

Before

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Judgment (11 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (10)

Cited By (2)