Migration International Group Pty Ltd ABN 36 632 311 847 v Mahr EDV GmbH - [2023] NSWCATCD 122 - NSWCATCD 2023 case summary — Zoe

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Migration International Group Pty Ltd ABN 36 632 311 847 v Mahr EDV GmbH

[2023] NSWCATCD 122

NCAT Consumer and Commercial|2023-08-09|Before: Hayne J, McHugh JJ, Gummow JJ, Rolfe J, Kiefel CJ, Gleeson JJ, Edelman J, Allsop CJ, Yates JJ, Brennan J, Deane J, Gaudron J, Mason CJ, Gaudron JJ

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At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2023-08-09

Before

Hayne J, McHugh JJ, Gummow JJ, Rolfe J, Kiefel CJ

Catchwords

148 FCR 126 at [17] Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27
238 CLR 265 Regie National des Usines Renault SA v Zhang [2002] HCA 10
174 CLR 509 at [27] Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213

Source

Original judgment source is linked above.

Catchwords

148 FCR 126 at [17] Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27238 CLR 265 Regie National des Usines Renault SA v Zhang [2002] HCA 10174 CLR 509 at [27] Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213

Judgment (15 paragraphs)

[1]

ation v ACCC [2017] FCAFC 224; 258 FCR 190 at 235 [149] Voth v Manildra Flour Mills Ply Ltd (1990) 171 CLR 538 at 564 per Mason CJ , Deane, Dawson and Gaudron JJ, and 572 per Brennan J Williams v Spautz [1992] HCA 34; 174 CLR 509 at [27] Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213; (2020) 103 NSWLR 140 at 156 [72]‑[74] Texts Cited: Levingston, The Law of Tribunals, The Federation Press Sydney 2016 Category: Principal judgment Parties: Migration International Group Pty Ltd (Applicant) Mahr EDV GmbH (Respondent) Representation: Counsel: Mr S Hoare (Respondent)

[2]

[7]

Facts

The material facts (as defined by the courts and CATA s62(3)(a)) are set out in the following paragraphs.
MIGPL is a corporation carrying on business in Australia which was incorporated on 18/3/19. It is the owner of several business names, relevantly including Migration International Group (MIG) and Sydney Migration International (SMI). There is another corporation with a similar name Sydney Migration International Group Pty Ltd ABN 27 160 068 404 (SMIG) which is not a party to the Agreement (described later).
MEDV is a German corporation based in Dusseldorf Germany which supplies electronic cloud storage services on computer servers located in its data centres in Germany.
MEDV sent an unsigned draft Agreement to MIGPL in Sydney for its approval. MIGPL signed the Agreement and returned it to MEDV in Germany.
There is a dispute about the date and place of formation of the relevant Agreement (identified later): 1. MIGPL contends the Agreement was made in Sydney when and where the Agreement was received from MEDV and it was signed by MIGPL in Sydney. There is a dispute about the date on which the signed Agreement was returned to MEDV but nothing turns on that dispute. 2. MEDV contends the Agreement was made when and where the signed Agreement was received by it in Germany.
The essence of the Agreement relevant to the issue in dispute is that MEDV agreed to supply its services to MIGPL under a document titled "Commission for cloud services" which incorporates several documents: 1. General Terms and Conditions of Mahr EDV GmbH (the GTaC); 2. Service Level Agreement (SLA) of Mahr EDV GmbH (the SLA) which relevantly at [1] provides: 3. "Mahr EDV exclusively uses German locations for the storage of data in Germany" 4. Price List of Mahr EDV GmbH (the PL); 5. Data Processing and non disclosure agreement for Mahr EDV GmbH (the DPA) (not relevant to the dispute) ; 6. Framework Agreement of Mahr EDV GmbH (the FA); All of which I collectively refer to as the Agreement.
The relevant terms and conditions of the Agreement are set out in the GTaC: "8.2 The legal venue is the location of Mahr EDV's registered offices, provided that the client is a "Kaufmann" (merchant). The local court of Charlottenburg is exclusively competent for all disputes which fall under the jurisdiction of the local courts, provided that the client is a merchant. 8.3 All contractual relationships between the parties are governed by German law." being in summary what are referred to as foreign law and jurisdiction clauses.
Relevantly, the Agreement also describes the Services supplied by MEDV which includes: Hosted Exchange, Windows Server Updates, and Monitoring, see (Exhibit 1/1 pp53, 54); all of which were provided on the MEDV computer servers located in its data centres in Germany.
There is evidence that the Monitoring Service also involved MEDV installing software on the MIGPL computers in Sydney, which MIGPL contends is evidence of Services provided in NSW for FTA s79K(1)(a), but I do not agree for the reason explained later.
It is not in dispute that MEDV also delivered certain computer goods (the Goods) to MIGPL in Sydney though the first listed delivery below must have been to a different entity as that delivery was before MIGPL was incorporated: 1. 25/3/18 - computer lap top; 2. 3/3/21 - computer laptop and accessories; 3. And various other computer equipment and accessories over the last 5 years until 14/7/21; but this is not determinative of the current dispute as the delivery of the Goods does not appear to have been under the Agreement for Services.
It is also not in dispute that on various dates MEDV delivered invoices addressed to MIGPL by its registered business name SMI, in Sydney in each month from about 12/6/20 to 1/5/21. Again this is not determinative of the current dispute.
The Agreement has in the meantime come to an end which is the basis of the MIGPL claim for money under FTA s79N.

[8]

The law

MIGPL brought its claim in this Tribunal under FTA which has a number of relevant definitions (summarised): ss 79D and 79E have very wide definitions and I find MIGPL was a Consumer with a Consumer Claim. "Services" are defined very broadly by s79F as including (i) "any other rights… or facilities that are …are … provided, granted or conferred in trade or commerce". Similarly, "Supply" is also defined broadly by s79G as relevantly meaning, in respect of services, (a) "providing, granting or rendering services for valuable consideration" or (b) "agreeing to supply services". I find there was a supply of services. FTA s79L requires a claim to be brought within three years of the date of supply, and I find the claim was within time.
FTA s79N provides for a remedy in money arising from an alleged breach once proved. Without considering more, prima facie the Tribunal would appear to have jurisdiction under FTA to determine the MIGPL application.
However, MEDV challenges the jurisdiction of the Tribunal and contends jurisdiction is to be determined by application of FTA s79K (Supply or agreement made, or supply intended to be made, in New South Wales) which provides: "(1) The Tribunal has jurisdiction to hear and determine a consumer claim only if: (a) the goods or services to which the claim relates were supplied in New South Wales, or (b) a contract or other agreement to which the claim relates contemplated that the goods or services would be supplied in New South Wales (whether or not they were so supplied), or (c) a contract or other agreement to which the claim relates was made in New South Wales (whether or not the goods or services were supplied in New South Wales). (2) The Tribunal has such jurisdiction whether or not: (a) a contract or other agreement to which the claim relates confers jurisdiction on any other court or tribunal (whether in New South Wales or elsewhere), or (b) the rules of private international law require a law other than the law of New South Wales to be applied to the hearing or determination of the claim."
FTA s79K(1) (a) to (c) clearly provides that the Tribunal has no other jurisdiction under FTA, and only if one of those alternative provisions is satisfied, s79K(2) leaves open the possibility of this Tribunal exercising jurisdiction even where there are German law and jurisdiction clauses. This also raises the forum non-conveniens issue.
This Tribunal's jurisdiction is defined by CATA s28(1): "such jurisdiction and functions as may be conferred or imposed on it by or under this Act or any other legislation" and the MIGPL application is confined to the FTA remedies and no other applicable legislation has been identified by MIGPL arising from the alleged breach of the Agreement, for example under the Australian Consumer Law (NSW) (ACL), or other statute that may create rights which are not available under German law which could be relevant to a forum non-conveniens issue, assuming for the moment there is jurisdiction under FTA s79K(1).
In the first instance the matter involves consideration of FTA s79K(1), discussed in the following paragraphs. FTA s79K(1)(a) and (b) - where were the Services provided?
Mr Hoare contends for MEDV that FTA s79K(1)(a) and (b) are concerned with the location "where" the Services are supplied.
In this matter the material facts show the Services provided by MEDV were located on its computer servers located at the German datacentres which were accessed electronically by MIGPL. This is made clear by the SLA at [1]: "Mahr EDV exclusively uses German locations for the storage of data in Germany".
As I have said earlier, MIGPL contends that by MEDV installing software on the MIGPL computers in Sydney for the purposes of the "Monitoring" Service part at least of the MEDV Services were provided in NSW for FTA s79K(1)(a). This raises the facts in Facebook Inc v Australian Information Commissioner [2022] FCAFC 9 at [28] - [65] and [69], [74] per Allsop CJ, Perram and Yates JJ, which included rejection of the Facebook contention that there was an absence of physical indicia in Australia. The Full Court found jurisdiction in Australia because Facebook carried on business in Australia by the installation, operation and removal of cookies on Australian users' devices and management of the Facebook login occurred in Australia; Facebook collected and held personal information in Australia; the information was monetised; and the conduct involved extracting value from information about people: at [3] per Allsop CJ "The place of these activities and these acts that are carried on and done by Facebook Inc in Australia in the overall commercial enterprise of Facebook Inc need not be precisely identified at this stage: and at [8] per Allsop CJ "…the acts or activity in Australia need not be intrinsically commercial in themselves if they involve acts within the territory that amount to, or are ancillary to, transactions that make up and support the business, citing Valve Corporation v ACCC [2017] FCAFC 224; 258 FCR 190 at 235 [149].
However, I distinguish the current matter from Facebook on the material facts as there was no evidence that the "Monitoring" Service was more than a mere monitoring activity, which reported to MEDV in Germany.
There is also no evidence that the parties "contemplated" the supply of the Services in NSW to MIGPL. I also find MEDV did not supply the Services in NSW, and it follows that MIGPL has failed to satisfy FTA s79K(1)(a) and (b).

[9]

FTA s79K(1)(c) - where was the Agreement made?

This provision is concerned with the place where the Agreement was made. Often, the question of where the Agreement is made is closely related to "when" it was made, although they are different questions.
In Mrjana v Imagine Education Australia Pty Ltd [2016] NSWCATAP 232 at [27], the Appeal Panel said (in relation to "when" but perhaps meaning "where"): "…when is a contract 'made' or to put it another way, when is the process of formation of the contract completed".
The Appeal Panel at [28] referred to Tallerman & Co Ply Ltd v Nathan's Merchandise (Vic) Pty Ltd (1957) 98 CLR 93 at 111 per Dixon CJ and Fullagar J, who held: "The general rule is that a contract is not completed until acceptance of an offer is actually communicated to the offeror, and a finding that a contract is completed by the posting of a letter of acceptance cannot be justified unless it is to be inferred that the offeror contemplated and intended that his offer might be accepted by the doing of that act."
MIGPL characterized the offer as coming from MEDV in Germany and the offer in the unsigned Agreement was made to MIGPL in Sydney, and MIGPL signed it in Sydney. On this basis MIGPL contends the Agreement was made when and where it was accepted by MIGPL and when it was signed by MIGPL in Sydney.
The questions of "when" and "where" an agreement was made was decided in a case involving telexes in Entores Limited v Miles Far East Corporation [1955] 2 QB 327 at 334 per Denning LJ: "The contract is only complete when the acceptance is received by the offeror: and the contract is made at the place where the acceptance is received."
There has been developments in the methods of distant and instantaneous communication since the 1950's and the law has developed accordingly from: telexes in Entores Limited, and Mendelson-Zeller Co Inc v T & C Providores Ply Ltd [1981] 1 NSWLR 366 at [369] per Rogers J; telephones in Aviet v Smith and Sear/s Ply Ltd (1956) 73 WN (NSW) 274; facsimile machines in Reese Brothers Plastics Limited v Hamon-Sobelco Australia Pty Ltd [1988] 5 BPR 97352; through to the contemporary use of emails governed by the Electronic Transactions Act 2000 (NSW) (ETA).
For email transmissions, ETA s13B relevantly provides in sub-s (1) that, unless otherwise agreed, an: "electronic communication is taken to have been received at the place where the addressee has its place of business" which in this matter is Germany for MEDV. Subsection (2)(a) continues to provide for a presumption that: "a party's place of business is the location indicated by that party, unless another party demonstrates that the party making the indication does not have a place of business at that location" which again is Germany for MEDV.
Mrjana was later considered in Cheng v Feng [2020] NSWCATCD 8 at [38] where another Tribunal Appeal Panel held in relation to "where" the agreement is made (emphasis added): "With respect to section 79K(1)(c), in Mrjana v Imagine Education Australia Ply Ltd [2016] NSWCATAP 232 at [33] to [34] the Appeal Panel of the Tribunal concluded, after reviewing the relevant authorities, that in circumstances where a contract is made by electronic communication, it is made at the location at which the acceptance of the offer of contract is received from the offeree by the offeror. In this case, the consumer's evidence is compelling that this was in NSW because that is the IP address of the computer from which the offer to supply services was made and to which its acceptance was communicated. The consumer has submitted into evidence a "What is my IP Address" search result that establishes that this was the case. Mr Forbes' submission that the contract was made in California is misconceived. A contract is not 'made' for the purposes of section 79K where its generic form is drafted. It is made upon the communication of the acceptance of an offer of contract by an offeree to the offeror.
There was no evidence that MEDV's IP address in the current matter was in NSW and not in Germany, and I infer it was in Germany.
MEDV contends the agreement was made when and where it received the document, being in Germany. I agree and find that the Agreement was made at MEDV's office in Germany being the place where it was received by MEDV.
I find that MIGPL also fails under FTA s79K(1)(c).

[10]

FTA s79K(2)(a) - the German law and jurisdiction clauses

Only if I am wrong in the earlier analysis of the "Monitoring" Service, are the matters in s79(2) to be considered, as discussed in the following paragraphs.
The material facts identify the law and jurisdiction clauses [8.2] and [8.3] in the Agreement. The parties are in dispute about whether or not they operate to exclude the jurisdiction of this Tribunal.
There was a dispute about the meaning of the German Commercial Code (GCC), but there was no expert evidence concerning that issue and apply the common law principle that in the absence of any evidence to the contrary, the German law is presumed to be the same as the law of NSW. For the purposes of the discussion, applying NSW law and the FTA, MIGPL is a consumer, and MEDV is a supplier which supplied the Services in trade or commerce. The debate about whether or not the meaning of "merchant" under the German law leads to a different outcome does not appear to me to determine the NSW jurisdiction issue and is instead an issue for determination in any German proceedings.
In Akai Pty Ltd v the People's Insurance Co Ltd (1996) 188 CLR 418, at 427 per Dawson and 427 per McHugh JJ, citing Huddart Parker Ltd v The Ship "Mill Hill" (1950) 81 CLR 502, and held: "the law has always been solicitous when parties do contract to submit their disputes to the exclusive jurisdiction of the courts of another country they should be held to their bargain".
Their Honours referred to Oceanic Sun Line Shipping Co v Fay (1988) 165 CLR 197 and held that that in the absence of "countervailing reasons", proceedings will be stayed in the face of an exclusive jurisdiction clause (at 224 per Brennan J) and that a stay will be granted in such circumstances unless "the plaintiff adduces strong reasons against doing so" (at 259 per Gaudron J). Dawson and McHugh JJ then referred at 428-9 to The Elefheria [1969] 2 All ER 461 at 465 which set out relevant principles (not repeated here).
Further, in Akai at 445 per Toohey, Gaudron and Gummow JJ cited with approval the approach of Dixon J in Huddart and held where there is a foreign jurisdiction clause: "the courts being with a firm disposition in favour of maintaining that bargain unless strong reasons be adduced against a stay, it being the policy of the law that the parties who have made such a contract be kept to it".
On application of these principles I find that MIGPL's claim should be dismissed as MIGPL has not discharged the onus of proving why it should not be bound by the German law and jurisdiction clauses in the Agreement.

[11]

FTA s79K(2)(b) - private international law and forum non-conveniens

Finally, and although not necessary following my findings on FTA s79K(1) and {2} I have also considered the principles of private international law and forum non-conveniens: see the discussion in Levingston, The Law of Tribunals, The Federation Press, Sydney 2016 at [A.3.4] explaining forum non-conveniens as a rule of private international law establishing a discretionary power to decline jurisdiction when the convenience of the parties and justice would be better achieved by resolving the dispute in another forum.
This was summarised by the High Court in Oceanic Sun Line at 247-248 per Deane J: "…[t]he power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to [them]."
This principle was approved in Voth v Manildra Flour Mills Ply Ltd (1990) 171 CLR 538 at 564 per Mason CJ , Deane, Dawson and Gaudron JJ and at 572 per Brennan J.
The 'clearly inappropriate forum' test applies in NSW: Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; 171 CLR 538 at 557-561 per Mason CJ, Deane, Dawson and Gaudron JJ; Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; 165 CLR 197 at 247-248; James Hardie Industries Pty Ltd v Grigor (1998) 45 NSWLR 20. The principles and authorities are also conveniently set out in Garsec Pty Ltd v His Majesty the Sultan of Brunei [2008] NSWCA 211. In Puttick v Tenon Ltd [2008] HCA 54; 238 CLR 265 the High Court declined an invitation to reconsider the test in Voth v Manildra Flour Mills [1990] HCA 55; 171 CLR 538. The rationale is to avoid injustice in the sense that it would be oppressive or vexatious to allow the current proceeding to continue: Amwano v Parbery [2005] FCA 1804; 148 FCR 126 at [17] per Finkelstein J, citing Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; 171 CLR 538 at 555-556.
The question for the Tribunal (if MIGPL had proved the matters in FTA s79K) would have been whether or not MEDV can show that the Tribunal is a 'clearly inappropriate forum': Strohschneider v Ehlert and the Estate of Ehlert [2008] SADC 54; in the sense that a hearing would be productive of injustice, because it would be oppressive in the sense of being seriously and unfairly burdensome, prejudicial or damaging, or vexatious in the sense of being productive of serious and unjustifiable trouble and harassment: Voth v Manildra Flour Mills Pty Ltd (1989) 15 NSWLR 513; Regie National des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491 at [78], [79], [82].
Other matters for consideration include convenience to the parties, ease of travel, use of written statements and video technology for cross-examination: CE Heath Underwriting and Ins (Aust) Pty Ltd v Barden (Unreported, NSWSC, Rolfe J, 19 October 1994, BC9403144); the apparent strength or weakness of the applicant's case, parallel proceedings, multiplicity of proceedings, duplicate proceedings and the risk of an inconsistent decision: Agar v Hyde [2000] HCA 41; 201 CLR 552 at [51], [56]-[61]; Incitec v Alkimos Shipping [2004] FCA 698; 138 FCR 496 at 506-508 per Allsop J.
An applicant regularly invoking the Tribunal's jurisdiction has the prima facie right to insist on its exercise: Amwano v Parbery [2005] FCA 1804; 148 FCR 126 per Finkelstein J at [17], citing Adeange v Nauru Phosphate Royalties Trust (unreported, VSC, Hayne J, 8 July 1992). This principle is subject to MIGPL establishing that this tribunal has jurisdiction as described in FTA s79K(1) and (2), which it has not done.
A respondent claiming forum non-conveniens is required to apply promptly for a stay: Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; 165 CLR 197 at 248. MEDV has done this.
Even where the Agreement contains a foreign law and jurisdiction clause, a stay of proceedings will not be granted if the effect of the stay will be to deprive a plaintiff of a legitimate advantage such as the benefit of a statutory right: Akai Pty Ltd v People's Insurance Co Ltd [1996] HCA 39; 188 CLR 418; Best Australia Ltd v Aquagas Marketing Pty Ltd (1988) 83 ALR 217 at 223-234. As I said earlier, MIGPL has not identified any statutory right in NSW of which it would be deprived if the dispute went before the German Court.
On application of the principles set out, in summary (and if I am wrong about FTA s79K) I find that the Tribunal is to dismiss the MIGPL as this Tribunal is such an inappropriate forum that continuation of the MIGPL proceedings here would be oppressive to the MEDV because of availability of the foreign forum, to whose jurisdiction MEDV is amenable and which would entertain the particular proceedings at the instigation of MIGPL; and there is no evidence of any statutory right available to MIGPL in NSW which would not be available in Germany.

[13]

Costs

MEDV claims its costs under CATA s60 which provides: "(1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal." adopting the usual rule that costs follow the event, and contends for the usual order for "costs to be agreed or assessed."
In my opinion and based on the reasons explained above each party should pay their own costs, and specifically there should be no costs order against MIGPL as the issue in dispute was complex, the application was not frivolous or vexatious, nor otherwise misconceived or lacking in substance, and was arguable. I have also considered as relevant the fact that in this Tribunal parties usually represent themselves although leave was granted for legal representation because of the complexity of the legal issues.
The MEDV application for costs is dismissed.

Migration International Group Pty Ltd ABN 36 632 311 847 v Mahr EDV GmbH

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Catchwords

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Catchwords

Judgment (15 paragraphs)

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Legislation Cited (3)

Cases Cited (28)