Prasad v Google LLC

Introduction 1 At the first case management hearing on 24 January 2020, the applicants made an oral application to transfer the proceeding to the Supreme Court of Victoria. The second respondent (Google Australia) does not oppose the application. 2 For the following reasons, I have determined to transfer this proceeding to the Supreme Court of Victoria, and to order that the costs of the proceeding in this Court be reserved.

Background 3 This proceeding is an interlocutory application under r 7.22 of the Federal Court Rules 2011 (Cth) for an order for preliminary discovery to enable the applicants to identify a prospective respondent to a proposed proceeding alleging defamation, and misleading or deceptive conduct in contravention of the Australian Consumer Law. The applicants allege that the impugned publications were contained in emails that were sent from a Gmail address to persons located in New South Wales and Victoria. The applicants allege that they are unable to identify the person associated with the Gmail address, and they seek discovery from the respondents so that they may do so. 4 The first respondent (Google LLC) is incorporated under the laws of Delaware in the United States, and the applicants seek leave of the Court to serve it. Google Australia, the second respondent, has appeared by filing a notice of address for service. 5 On 23 January 2020, which was the day prior to the first case management hearing, the solicitors for Google Australia proffered proposed orders that raised the question whether the Court had jurisdiction in this proceeding. In response, on the morning of the hearing, the applicants filed brief written submissions addressing jurisdiction. 6 In Court on 24 January 2020, I informed counsel for the applicants that I required more comprehensive submissions on the question of jurisdiction before I would consider the application for leave to serve Google LLC. I did not intend to make any criticism of the applicants' written submissions, which were commendably succinct. However, in circumstances where no publication of the emails in one of the Territories appeared to have been alleged, and where it was not self-evident that the alleged publications occurred in the course of trade or commerce, I raised a number of issues on which I sought assistance from the applicants. 7 After a short break, the applicants made an oral application to transfer the proceeding to the Supreme Court of Victoria, and I made orders that the applicants file submissions in support of their transfer application and for the application to be determined on the papers.

The power to make an order transferring the proceeding 8 This Court has power to transfer a proceeding to the Supreme Court of Victoria under s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-vesting Act), which provides - (4) Where: (a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and (b) it appears to the first court that: (i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court; (ii) having regard to: (A) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (B) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross-vesting of jurisdiction; and (C) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (D) the interests of justice; it is more appropriate that the relevant proceeding be determined by that Supreme Court; or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory; the first court shall transfer the relevant proceeding to that Supreme Court. 9 The present application, although interlocutory, is a "proceeding" within the definition of that term in s 4 of the Federal Court of Australia Act 1976 (Cth), which is a very wide definition: Fiorentino v Irons [1997] FCA 1425; 79 FCR 327 at 330-331 (Foster J). The term "proceeding" is defined by s 3 of the Cross-Vesting Act only to the extent that it does not include a criminal proceeding. What is excluded from the term "proceeding" is indicative of its breadth. There is no apparent reason to treat the meaning of the word "proceeding" in the Cross-vesting Act in any narrow way that is not supported by the text of the legislation, and it should be given a beneficial interpretation consistent with the objects of the legislation: see, Blake v Norris (1990) 20 NSWLR 300 at 308 (Smart J). I conclude that the applicants' application under r 7.22 is a "proceeding" for the purposes of the Cross-vesting Act.

Power to transfer the proceeding 10 There is a question whether this Court has power to transfer a proceeding under s 5(4) of the Cross-vesting Act in circumstances where there may be some doubt as to whether the Court has jurisdiction in the proceeding. By jurisdiction, I am not referring to territorial jurisdiction, or long-arm jurisdiction, insofar as the application against Google LLC is concerned. Rather, I am concerned with whether the Court has jurisdiction pursuant to s 39B(1A) of the Judiciary Act 1903 (Cth) to entertain the application for preliminary discovery, which question may be informed by whether there is a bona fide basis to allege that the Court has jurisdiction to hear the proposed claims alleging defamation, and misleading or deceptive conduct in contravention of the Australian Consumer Law. 11 In Amalia Investments Ltd v Virgtel Global Networks NV (No 2) [2011] FCA 1270; 198 FCR 248, Greenwood J dismissed an application to transfer that proceeding from this Court to the Supreme Court of Queensland. In that case, the applicants had conceded that the claims raised by their proposed amended statement of claim did not attract federal jurisdiction. At [101]-[102], Greenwood J concluded that the Court did not have jurisdiction to make the transfer order and dismissed the proceeding - I strike out the Federal Court proceeding on the ground that the proceeding fails to regularly engage the jurisdiction of this Court as the proceeding raises no element of federal jurisdiction. Because the proceeding raises no element of federal jurisdiction, s 5(4) of the Cross-vesting Act is not engaged and although the proceeding is a pending proceeding as a question of fact, s 5(4) operates on the premise or assumption that the principal proceeding regularly engages the jurisdiction of the Federal Court. Since s 5(4) is not engaged, there is no power to transfer the proceeding to the Supreme Court of Queensland and the transfer application must be dismissed. 12 This approach accords with the earlier decision of Gummow J in McIntosh v National Australia Bank Ltd [1988] FCA 72; 17 FCR 482. In that case, Gummow J considered a different statutory power to transfer a proceeding under the Trade Practices Act 1974 (Cth), and stated at [8] that, "to remit or transfer a proceeding is to exercise jurisdiction in respect of it" (citations omitted). 13 McIntosh v National Australia Bank was considered and distinguished in two later decisions of the Court, namely The Bell Group Ltd v Westpac Banking Corp [2000] FCA 439; 104 FCR 305, and Johnson Tiles Pty Ltd v Esso Australia Limited (No 4) [2001] FCA 421; 113 FCR 42, which both considered applications to transfer proceedings under s 5(4) of the Cross-vesting Act. 14 In Bell v Westpac, Carr J granted an application to transfer the proceeding from this Court to the Supreme Court of Western Australia. Carr J found that the Court had jurisdiction to hear the proceeding and therefore expressly did not decide, at [148], whether the Court would have had jurisdiction to transfer the proceeding in circumstances where it did not have jurisdiction to determine the proceeding. Nonetheless, Carr J reasoned, at [209]-[211], that the complexity of the question of the Court's jurisdiction, and the risk of a jurisdictional challenge on appeal, supported transferring the proceeding to the Supreme Court of Western Australia, in which those jurisdictional concerns would not arise. 15 In Johnson Tiles v Esso, Merkel J made an order transferring the proceeding from this Court to the Supreme Court of Victoria. As in Bell v Westpac, Merkel J found that the Court had jurisdiction to hear the proceeding and therefore expressly did not decide, at [15(4)] and [15(13)], whether the Court would have had jurisdiction to transfer the proceeding in circumstances where it did not have jurisdiction to determine the proceeding. Nonetheless, Merkel J did note remaining doubts as to the Court's jurisdiction in making the transfer order and stated, at [15(3)], that - …the risk of absence of jurisdiction in the present matter is less in the Supreme Court than it is in the Federal Court. It is appropriate that this Court should facilitate the hearing of the dispute in a venue with the least risk of absence of jurisdiction to determine it. 16 More recently, in Nandutu v University of Sydney [2018] FCA 1118, Robertson J granted an application to transfer the proceeding from this Court to the Supreme Court of New South Wales. At [25], when considering an alternative ground for making the transfer order, Robertson J noted the "apparently tenuous nature of the applicant's federal claims" as supporting the making of the transfer order. 17 Finally, in Shields v Williams [2019] FCA 413, Derrington J granted an application, made by consent, to transfer the proceeding from this Court to the Supreme Court of Queensland. Derrington J addressed the issue of jurisdiction, at [3], as follows - If the jurisdiction of this Court were not regularly invoked, it has been said that there would be no jurisdiction to make an order for transfer: Amalia Investments Ltd v Virgtel Global Networks NV (2011) 198 FCR 248. However, … "[i]t is sufficient that the moving party claims that he or she has a legal remedy in the court where the proceedings have commenced to enforce the right, duty or liability in question": Abebe v Commonwealth (1999) 197 CLR 510, 528 [32]. 18 Derrington J's reference in the above passage to the reasons of Gleeson CJ and McHugh J in Abebe v Commonwealth [1999] HCA 14; 197 CLR 510 is to the principle that once an applicant makes a non-colourable, bona fide allegation in this Court that attracts jurisdiction, then the Court is seized with jurisdiction to deal with the controversy and will always retain that jurisdiction. This principle was addressed by the Full Court (Allsop CJ, Besanko and White JJ) in Rana v Google Inc [2017] FCAFC 156; 254 FCR 1, at [21]-[22], as follows - Generally, non-colourable assertion of a federal issue is enough to attract federal jurisdiction: Felton at 374 per Barwick CJ; Moorgate at 476; Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219; Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 389-391 per Dixon J. Upon the existence of federal jurisdiction, the matter remains within federal jurisdiction regardless of how the federal issue or issues within it are ultimately resolved: Moorgate at 476. It remains federal even if the federal claim is struck out: Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481-482. Nor does dismissal of the federal claim mean that a court exercising federal jurisdiction somehow loses jurisdiction over the balance of the matter: Burgundy Royale at 219; Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at [85] per French J. The same is true if the federal claim is effectively abandoned: see Moorgate. Indeed, a matter remains in federal jurisdiction even if a party is added and no federal claim is made against that party, provided it is all part of the same matter, the same controversy: Re Wakim at [145] per Gummow and Hayne JJ. The position is summarised in Macteldir Pty Ltd v Dimovski (2005) 226 ALR 773 at [36] as follows: It is a fundamental tenet of federal jurisdiction that once a federal claim is made, even a bad one, and even one that is abandoned, or struck out, the whole matter in which that claim is made is, and remains, federal jurisdiction… (citations omitted) The exception to this principle is where the federal claim that is made is "colourable" in the sense that it was "made for the improper purpose of fabricating jurisdiction" such that it was not made bona fide. In such a case, federal jurisdiction is not attracted: Burgundy Royale at 219. 19 The principle was recently applied by Lee J in Oliver v Nine Network Australia Pty Ltd [2019] FCA 583, at [17]-[18], in the context of considering the Court's jurisdiction to hear and determine a defamation proceeding. 20 In the present case, I am satisfied that the Court has power to make an order to transfer this proceeding to the Supreme Court of Victoria under s 5(4) of the Cross-vesting Act. Rule 7.22 itself provides for the Court's power to determine the applicants' interlocutory application for preliminary discovery. Rule 7.22 is framed using the terms "prospective applicant" and "prospective respondent", which are defined in rule 7.21, as follows - prospective applicant means a person who reasonably believes that there may be a right for the person to obtain relief against another person who is not presently a party to a proceeding in the Court. prospective respondent means a person, not presently a party to a proceeding in the Court, against whom a prospective applicant reasonably believes the prospective applicant may have a right to obtain relief. 21 Rule 7.22(1) then relevantly provides for the conditions that a prospective applicant must satisfy to make an application, and r 7.22(2) provides for the orders that the Court may make if it is satisfied of the matters in r 7.22(1), as follows - (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant satisfies the Court that: (a) there may be a right for the prospective applicant to obtain relief against a prospective respondent; and (b) the prospective applicant is unable to ascertain the description of the prospective respondent; and (c) another person (the other person): (i) knows or is likely to know the prospective respondent's description; or (ii) has, or is likely to have, or has had, or is likely to have had, control of a document that would help ascertain the prospective respondent's description. (2) If the Court is satisfied of the matters mentioned in subrule (1), the Court may order the other person: (a) to attend before the Court to be examined orally only about the prospective respondent's description; (b) to produce to the Court at that examination any document or thing in the person's control relating to the prospective respondent's description; and (c) to give discovery to the prospective applicant of all documents that are or have been in the person's control relating to the prospective respondent's description. 22 In the present case, I am satisfied that - (1) The applicants are within the definition of "prospective applicant" in r 7.21, being persons who "reasonably believe" that there "may be" a right for them to obtain relief against the unidentified prospective respondent. (2) There "may be" a right for the applicants to obtain relief against the unidentified prospective respondent, so as to satisfy r 7.22(1)(a). While the Court is not currently satisfied about its jurisdiction in relation to the proposed defamation, and misleading or deceptive conduct claims, I am satisfied that there is just enough in the material to conclude that there "may be" a right for the applicants to obtain relief against the unidentified prospective respondent in respect of those causes of action. (3) The other conditions in r 7.22(1) are satisfied, such that the Court's discretion under r 7.22(2) is enlivened. 23 The conclusions above have been reached without hearing full argument, and do not bind a court that might in due course hear the applicants' application for preliminary discovery. Further, the conclusion drawn at this preliminary stage that there "may be" a right for the applicants to obtain relief is necessarily formed without hearing from any respondents to the proposed substantive claims. 24 I conclude that the Court has jurisdiction to hear and determine the applicants' interlocutory application for preliminary discovery. Whether upon a more detailed examination the Court would have made the orders sought is not an issue that I have considered. Further, I have not determined whether the Court would have jurisdiction in relation to the proposed substantive claims for defamation, and misleading or deceptive conduct in contravention of the Australian Consumer Law. The applicants have elected not to make further submissions in relation to the Court's jurisdiction in relation to those proposed causes of action, and instead have made this application for the transfer of the proceeding to the Supreme Court of Victoria, which is not opposed by Google Australia. 25 Given that the Court has jurisdiction to hear the applicants' interlocutory application for preliminary discovery, the Court has power to transfer this proceeding to the Supreme Court of Victoria under s 5(4) of the Cross-vesting Act.

Reasons to transfer the proceeding 26 The next question to be determined is whether it appears that the present circumstances enliven s 5(4) of the Cross-vesting Act, such that I should make an order transferring the proceeding to the Supreme Court of Victoria. 27 Although the Supreme Court of Victoria would not have power to make orders under r 7.22 of the Federal Court Rules, prima facie, it likely has power to make orders substantially in the terms that the applicants seek under the corresponding rule, namely Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 32.03. Upon the proceeding being transferred, the applicants may need to seek leave of the Supreme Court of Victoria to amend their process so that it is in a form that complies with the requirements of the Supreme Court (General Civil Procedure) Rules relating to service outside Australia. 28 The applicants submit that the transfer of the proceeding is in the interests of justice on the grounds that if this proceeding is transferred - (1) there would be no need for further submissions on the jurisdictional issues, which would involve significant costs and delay; (2) there would be no uncertainty regarding the disposition of the jurisdictional issues; and (3) the Supreme Court of Victoria would have jurisdiction to hear and determine the applicants' application for preliminary discovery, and the applicants could serve that application for preliminary discovery on the first respondent, Google LLC (being an overseas entity). 29 The question raised by the transfer application calls for what might be described as "a 'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute": Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714. It is both necessary and sufficient for the making of a transfer order that, in the interests of justice, the transferee court is more appropriate: BHP Billiton Ltd v Schultz [2004] HCA 61; 22 CLR 400, [14]. 30 I consider that it is in the interests of justice for this proceeding to be transferred to the Supreme Court of Victoria. The transfer of this proceeding will likely avoid unnecessary costs and delay, and also potential uncertainty arising from jurisdictional issues (in the sense considered by Carr J in Bell v Westpac and Merkel J in Johnson Tiles v Esso). Further, other courts have previously found that the parties' consent supports the making of a transfer order in the interests of justice: Central Queensland Development Corporation Pty Ltd (formerly Bluechip Development Corporation (Gladstone) Pty Ltd) v BMT & Assoc Pty Ltd [2015] WASC 195, [21]; Pittini v Metcash Food and Grocery Pty Ltd [2019] NSWSC 80, [13]. In circumstances where the transfer application is not opposed by Google Australia, it can be inferred that there are advantages, and that there are no relevant disadvantages, to the transfer of the proceeding, such that it is in the interests of justice to do so.

Conclusion 31 For the above reasons, I have determined to transfer this proceeding to the Supreme Court of Victoria, and I shall reserve the costs in this Court. I certify that the preceding thirty one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wheelahan.