Claim against Trivago
28 Amoma's sole asset in Australia is said to be its claim against Trivago. Trivago is apparently a re-seller of hotel rooms. Amoma advertised hotel rooms on the online platform operated by Trivago. This court has found in a civil penalty proceeding brought by the ACCC that Trivago engaged in misleading conduct under the Australian Consumer Law by making false or misleading representations on its platform: Australian Competition and Consumer Commission v Trivago N.V. [2020] FCA 16 (Moshinsky J) (Trivago liability proceeding). As a result, Trivago was ordered to pay pecuniary penalties: Australian Competition and Consumer Commission v Trivago N.V. (No 2) [2022] FCA 417 (Moshinsky J). Amoma seeks the recovery of loss which it and its estate has suffered as a result of Trivago's misleading conduct.
29 The plaintiff on behalf of Amoma proposes to file a proceeding against Trivago in the Supreme Court of Victoria, where the rules of the court enable the plaintiff to file the writ and not serve it for up to 12 months. This, it is said, would enable the proceeding to be commenced so as to stop the running of time for the purpose of any limitation period, while enabling the plaintiff to continue to investigate the viability of the claim. The plaintiff says it will rely on s 137H of the Competition and Consumer Act 2010 (Cth), which provides that a finding or admission of any fact is prima facie evidence of that fact if it is made in a proceeding involving a contravention of Chapter 2, 3 or 4 of the Australian Consumer Law (amongst other types of proceedings). Such contraventions were found by Moshinsky J in the Trivago liability proceeding.
30 The plaintiff submits that there is a risk that with each day that passes, part of the claim may become statute barred. The plaintiff thus seeks recognition as soon as possible to enable the writ to be filed promptly, thereby reducing the potential reduction in the value of the claim of Amoma and its bankrupt estate.
31 In these circumstances the plaintiff seeks an order, pursuant to s 6 of the CBIA and Art 21(1)(d) of the Model Law, that it may, as appropriate, examine witnesses, take evidence and obtain delivery of information concerning Amoma's assets, affairs, rights, obligations or liabilities insofar as they relate to the proposed proceeding on behalf of the plaintiff and defendant against Trivago. The plaintiff also seeks an order, pursuant to s 6 of the CBIA and Art 21(1)(g) of the Model Law, and subject to the exceptions for which s 8 of the CBIA provides, that all powers available to liquidators or administrators under the provisions of the Corporations Act are available to it, as if it were appointed under that Act, insofar as they relate to the proposed proceeding against Trivago. Finally, in relation to the proposed proceeding, the plaintiff seeks an order pursuant s 6 of the CBIA and Art 21(1)(g) and (e) of the Model Law, that it is authorised to, and has standing to, commence and conduct a proceeding on behalf of the plaintiff and Amoma against Trivago.
32 Trivago has appeared on the hearing of this application as an interested party in the proceeding, in opposition to the relief sought by the plaintiff that would enable it to examine witnesses, take evidence and obtain information concerning Amoma's affairs relating to the proposed proceeding against Trivago and to have all powers available to liquidators or administrators under the Corporations Act insofar as they relate to the proposed proceeding.
33 Trivago contends that it is a party whose interests may be affected by the relief sought as it is the prospective defendant to the litigation foreshadowed by the plaintiff.
34 Trivago's position is that, properly construed, Art 21 requires that a party seeking relief under that provision must demonstrate to the Court that the relief is necessary for the Court's discretion to grant the relief to be enlivened. That is to say, the plaintiff needs to prove that the specific relief sought is necessary to ensure that the foreign representative has sufficient ability to carry out its functions so that creditors' interests can be advanced. Trivago submits that the plaintiff has not done so because the relief sought is not in fact necessary in the circumstances.
35 Noting that post recognition relief under Art 21 is discretionary, Trivago submits that it is apparent from the chapeau to Art 21 that the legislature did not intend for foreign representatives to be conferred all the powers available to a liquidator as a matter of course. This, it is said, is reflected in the authorities which make it clear that courts are required to make a determination as to whether the relief sought under Art 21 is necessary before exercising the discretion to grant it. Trivago submits that this threshold has not been met in this application. Trivago refers in this regard to Wong (Trustee), in the matter of Mackellar (Bankrupt) v Mackellar [2020] FCA 1151 at [61] (Derrington J); Duncan (Trustee) v Shrestha, in the matter of Shrestha [2022] FCA 1601 at [46] (O'Sullivan J); Onix Capital SA at [78] (Gleeson J); and Appleyard, in the matter of Crawford Farms Ltd v Crawford Farms Ltd [2012] FCA 1373 at [28] (North J).
36 In Appleyard at [28], North J declined to grant the relief sought under Art 21(1)(g) on the basis that there were:
… no facts before the court which indicate the circumstances which call for [the foreign representative] to exercise any powers or functions beyond those which fall within the order to be made under Art 21(1)(e).
37 Trivago notes that while relief in the form sought by the plaintiff has been granted in a number of cases, those it has identified have involved individual debtors in the jurisdiction or debtor corporations which have businesses, directors or other significant assets in the jurisdiction: Onix Capital SA; Ackers; Kellow (No 2).
38 Having regard to the fact that Amoma's sole asset in Australia is a claim against Trivago, the basis of which has been fully articulated in a draft pleading, Trivago submits that there is no suggestion that other alternative claims may be available.
39 Trivago submits that the plaintiff will seek to file the claim promptly, and once it does it will have the full benefit of all the usual court processes in litigation including discovery and interrogatories. Thus Trivago says that in these circumstances it is difficult to contemplate any legitimate reason for the foreign representative to exercise any other powers that might be available to a liquidator. And, should it transpire that such powers are required, Trivago says it will remain open to the foreign representative to seek Art 21 relief at the appropriate time.
40 It is Trivago's position that there is simply no evidence before the Court to support a conclusion that relief of such breadth is required by the foreign representative at the present time. Trivago also notes that foreign representatives are not officers of the court and subject to the obligations to which a locally appointed liquidator would be subject.
41 The plaintiff contends that as a prospective defendant Trivago cannot be heard to oppose orders that give the plaintiff powers equivalent to those of an Australian liquidator. The plaintiff submits that it is appropriate for the Court to confer those powers on the plaintiff which holds the office of a liquidator and is to be recognised as such. It is said that the essence of the CBIA and the Model Law is to confer equivalent powers on foreign insolvency practitioners, which they may exercise in Australia - just like Australian liquidators. The plaintiff submits that the Swiss insolvency proceeding is substantially similar to company liquidation under the Corporations Act, and that as with Australian liquidators the powers are to be exercised in the interests of creditors, and subject to the controls in the Australian corporations legislation.
42 The plaintiff's position is that it is efficient, and consistent with the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth), for the relevant powers to be conferred by orders made at the time of recognition, thus alleviating the need for the liquidator to come back to court later. The plaintiff points to the fact that such powers have been conferred routinely by this Court at the time of making recognition orders, and without requiring any specific evidence of how the powers are proposed to be exercised: see eg Onix Capital SA, order 4 and 5; Ackers at 297 [59]; Kapila, order 6; Kellow (No 2), orders 5 and 6, [39]-[41]; Hanna, order 1(d)(i) and (ii); Zetta Jet orders 7 and 8.
43 The plaintiff also contends that if, after the orders are made, any issue arises whereby any person (including Trivago) is concerned that the powers may be exceeded or exercised improperly, that person has liberty to apply to modify or terminate the orders under Art 22(3) of the Model Law.
44 Contrary to Trivago's submissions, the plaintiff submits that the orders it seeks are necessary. The word "necessary" in this context does not mean "essential", rather it is to be "subjected to the touchstone of reasonableness": Onix Capital SA at [78]. The powers include, inter alia, the power to conduct liquidators' examinations - power that is conferred by statute on Australian liquidators, and which it is said would be reasonable to confer on the plaintiff following recognition. In this regard the plaintiff notes that there are well-established principles that govern the exercise of the examination powers: see, for example, Evans and Others v Wainter Pty Ltd (2005) 145 FCR 176 at 216-217 [252] (Ryan, Lander and Crennan JJ). It is submitted that even in the context of existing litigation, liquidators can conduct examinations or seek the production of documents - for example to gather evidence, to test evidence, to assess quantum, to assess likelihood of recovery, and to investigate if the claims are covered by insurance.
45 Insofar as Trivago relies on the observations of North J in Appleyard, the plaintiff notes two relevant distinguishing features, First, that the proceeding in question was not a foreign main proceeding. And secondly, that all the liquidator was doing in that case was selling a piece of land. In the present circumstances, however, it is said to be incumbent on the plaintiff to consider what steps it might take. These might include discovery, interrogatories and issuing summonses for examination, and all these steps are well regulated and would involve applications to the court.
46 It is the plaintiff's position that it is not required in its evidence to describe the particular steps it might take to obtain information absent Amoma's assets. It is sufficient, for the relevant orders to be made, that the court knows that the chose in action exists and that a proceeding will be brought. The plaintiff submits that its proposed orders 7 and 8 are for a reasonable purpose, which is ancillary to the primary relief being granted and to the steps that the liquidator proposes to take.
47 The plaintiff notes that as the relevant Victorian rule of the court would enable the writ to be filed without service for up to 12 months, the interlocutory steps referred to in Trivago's submissions (discovery and interrogatories) would not be available until after service. The powers sought by the plaintiff, as liquidator, would enable investigations to be conducted in Australia in relation to the claim and its viability. The plaintiff submits that it is reasonable for the powers to be conferred on the plaintiff, as a liquidator, without having to reveal what, if any, steps are proposed to be taken and that apart from Trivago, no other creditor (or person) complains about the proposed orders.
48 In all the circumstances I accept that it is necessary, having regard to the nature of Amoma's asset in Australia (being its claim against Trivago), that the plaintiff should have orders in relation to that claim which would enable it to examine witnesses, take evidence and obtain delivery of information, and to have the powers available to liquidators or administrators under the provisions of the Corporations Act, subject to relevant exceptions. I consider that it is reasonable and necessary for the plaintiff to have the same powers available to it to other that any other liquidator in Australia would have in similar circumstances. It is significant in this respect that the powers extended by such orders would be limited insofar as they relate to the proposed proceeding.
49 Accordingly, orders in the form of orders 7 and 8 as set out at the commencement of these reasons will be made. It is not contested by Trivago that the plaintiff should have an order authorising it to commence a proceeding against Trivago on behalf of Amoma, and so there will also be an order in the terms of order 9 as set out at the commencement of these reasons.
50 The plaintiff also seeks an order that its powers as provided for in the orders to be made may be exercised by its case manager in relation to Amoma. Such an order is not opposed by Trivago, and I am satisfied that there is utility in an order in these terms.
51 The plaintiff also seeks an order that the requirement for notice under r 15A.7 of the Corporations Rules be dispensed with. I am satisfied that there is no utility in further advertising. Trivago is before the court, and no other party has sought to appear: see Chong, in the matter of CNA Group Ltd v CNA Group Ltd [2015] FCA 1148 at [29] (McKerracher J).