Sportec Pty Ltd v Leatherman Tool Group Inc [2024] QDC 188

COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - Consumer protection - Misleading or deceptive conduct or false representations - Misleading or deceptive conduct generally - Conduct: what constitutes - where the plaintiff contends the defendant's sending of an electronic communication from a location in the U.S. and acted upon in Australia is in the circumstances alleged 'conduct' in Australia under s. 18 ACL - where the plaintiff contends, alternatively, that even if there was no 'conduct' by the defendant, the defendant carries on business in Australia, and s 5(1)(g) CCA applies - whether there is an arguable case that the defendant has engaged in conduct to which s. 18 ACL applies

Alexanderson v Adamson [2021] QDC 108

Bendigo and Adelaide Bank Limited v Scriven [2020] QSC 43

Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 190 ALR 1

Craig Williamson Pty Ltd v Barrowcliff [1915] VicLawRp 66; [1915] VLR 450

East West Airlines Ltd v Turner [2010] NSWCA 53; (2010) 78 NSWLR 1

Edington v Board of Trustees of the State Superannuation Scheme [2012] QSC 211

Fingelton v The Queen [2005] HCA 34; (2005) 227 CLR 166

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; (2022) 276 CLR 519

Hooper v Robinson [2002] QDC 80, Alexanderson v Adamson [2021] QDC 108

Lipohar v The Queen (1999) CLR 485

Masson v Parsons (2019) CLR 554

Palmer Leisure Coolum Pty Ltd v Magistrates Court of Queensland [2019] QSC 8

Startune Pty Ltd v Ultra-Tune Systems (Aust) Pty Ltd [1991] 1 Qd R 192

The Star Entertainment Qld Limited v Wong [2021] QSC 67

Valve Corporation v ACCC [2017] FCAFC 224; (2017) 258 FCR 190

Vautin v BY Winddown Inc (No. 2) [2016] FCA 1235

Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538

Competition and Consumer Act 2012 (Cth), ss. 5(1)(g), 86(1) and 86(2)

Uniform Civil Procedure Rules 1999 (Qld), rr. 16, 16(a), 127(1), 127(2), 129F, 144, 144(2), 144(5), 144(6) and 144(7)

D. Pearce Statutory Interpretation in Australia (9th Edn)

M. Leeming, Authority to Decide: The Law of Jurisdiction (2nd Edn)

• [1] The plaintiff (Sportec) sells sport and street technology goods online in Australia under the name SportsGPS. The defendant (Leatherman) is a U.S. incorporated company which carries on the business of making Leatherman tools. Sportec sues Leatherman for damages suffered by reason of misleading or deceptive conduct allegedly engaged in by Leatherman in breach of s. 18 of the The Australian Consumer Law (ACL).
• [2] Sportec served the proceedings on Leatherman under rule 129F Uniform Civil Procedure Rules 1999 (Qld) (UCPR). Leatherman does not challenge the validity of service. Leatherman nonetheless filed a Conditional Notice of Defence (Conditional Notice) and then applied under rule 16(a) UCPR seeking a declaration that the proceeding has not, for want of jurisdiction, been properly started. Leatherman contends that there is a want of jurisdiction because Sportec cannot establish that Leatherman has engaged in conduct to which s. 18 ACL applies. It submits that:

(a) The conduct pleaded against Leatherman was not conduct within Australia, and is therefore outside the scope of conduct to which the Competition and Consumer Act 2012 (Cth) (CCA) and s. 18 ACL applies; and

(b) The extension of the scope of the CCA by s. 5(1)(g) CCA, to conduct outside Australia by bodies corporate carrying on business in Australia, is not applicable to Sportec's claim because Leatherman does not carry on business in Australia (together, the conduct issues).

• [3] Leatherman submits further that the application should be heard and determined on a final basis on the evidentiary record before the Court. Sportec submits that the application should be approached as an interlocutory application for summary dismissal and should only succeed if it can be established that its case is so deficient as to amount to an abuse of process in the General Steel_[1]_ sense.
• [4] For the reasons that follow, I conclude that:

(a) The application should be heard and determined in the manner contended for by Sportec; and

(b) Leatherman has failed to establish that Sportec's case is so deficient on the conduct issues as to sustain summary dismissal as an abuse of process.

• [5] By its amended statement of claim, Sportec alleges as follows.
• [6] Sportec carries on the business of online retailing of sport and street technology goods in Australia under the name "SportsGPS". Leatherman is incorporated in the United States (U.S.) and manfactures Leatherman branded pocket survival tools and related products. Amazon Commercial Services Pty Ltd (Amazon CS), is incorporated in Australia. It operates an e-commerce platform through its website, www.amazon.com.au (the Amazon platform).
• [7] Sportec and Amazon CS are parties to a written contract by which Sportec is granted access to the Amazon Platform. That contract includes an anti-counterfeiting policy which, in broad terms, prohibited the sale of inauthentic products, including products which are fakes, or which infringe another party's intellectual property. Breach of that term authorises Amazon CS to suspend or terminate access to the Amazon platform.
• [8] From September 2018 until September 2023, Sportec held an account with Amazon CS by which Sportec could sell products, including Leatherman goods, to customers.
• [9] In around early September 2023, Leatherman "sent an email or, alternatively, an electronic communication to Amazon (August Communication)" [2] which stated that, in summary:

(a) Sportec had cut through an "RFID" tag, which is used to verify the authenticity of Leatherman products;

(b) That act made the products sold by Sportec inauthentic and counterfeit; and

(c) The Sportec products were being sold in breach of the Amazon anti-counterfeiting policy.

• [10] Each of those statements (the respresentations) were misleading or deceptive in that:

(a) The cutting of the RFID tags did not alter the packaging of the Leatherman products it sold, nor make them inauthentic;

(b) The Leatherman products it sold were genuine; and

(c) The sale of Leatherman products by Sportec was not a breach of the Counterfeiting Policy.

• [11] The result of the representations made by Leatherman was that Amazon CS removed the Sportec Leatherman products, deactivated the Sportec Account, and withheld some $10,000. The account was reactivated in January 2024. Sportec claims damages of some $90,000 for lost profit, and an injunction restraining Leatherman from making similar representations.
• [12] Sportec served the claim and statement of claim outside Australia without leave pursuant to rule 129F UCPR. That provision allows service outside Australia without leave, relevantly, where a claim arises under an Australian enactment and any loss or damage to which the claim relates was sustained in Queensland. It seems uncontentious that the proceedings were served under the Hague Convention[3] and the related rules in the UCPR in Division 4, Part 7 of Chapter 4.
• [13] Rule 127(1) UCPR provides for a person served outside Australia to apply to the Court to dismiss or stay the proceedings or set aside service of the originating process. Rule 127(2) UCPR provides:

(2) Without limiting subrule (1), the Court may make an order under this rule if satisfied -

(a) service of the originating process is not authorised by these rules; or

(b) the court is an inappropriate forum for the trial of the proceeding; or

(c) the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense, and trouble of defending the claim.

• [14] Leatherman has not brought an application under that rule.

• [15] On 19 August 2024, Leatherman filed the Conditional Notice which stated that Leatherman:

...disputes the jurisdiction of this court to entertain the Plaintiff's claim against the Defendant without the Defendant's consent for the following reasons:

1. This Honourable Court does not have jurisdiction to hear the claim because the representations alleged to have been made in the Amended Statement of Claim were not made in Australia.

• [16] The Conditional Notice was filed under rule 144 UCPR, which relevantly provides:

(2) A defendant who proposes to challenge the jurisdiction of the court or to assert an irregularity must file a conditional notice of intention to defend.

(3) Rule 139 (1) (b) does not apply to a conditional notice of intention to defend.

(4) If a defendant files a conditional notice of intention to defend, the defendant must apply for an order under rule 16 within 14 days after filing the notice.

(5) The conditional notice of intention to defend becomes an unconditional notice of intention to defend if -

(a) the defendant does not apply for an order under rule 16 within the 14 days; or

(b) for a defendant who applies for an order under rule 16 within the 14 days - the application is determined and the order is not made.

(6) Within 7 days after a conditional notice of defence becomes an unconditional notice of intention to defend, the defendant must file a defence.

(7) A defendant who files an unconditional notice of intention to defend is taken to have submitted to the jurisdiction of the court and waived any irregularity in the proceeding.

• [17] Consistent with the requirements of r. 144(4) UCPR, Leatherman filed an application for an order under r. 16 UCPR on 30 August 2024. Rule 16 UCPR relevantly provides:

(a) declare that a proceeding for which an originating process has been issued has not, for want of jurisdiction, been properly started; or

(b) declare that an originating process has not been properly served; or

(c) set aside an order for service of an originating process; or

(d) set aside an order extending the period for service of an originating process; or

(f) set aside service of an originating process; or

(h) set aside or amend an order made under rule 126(1) or 129G(1); or

(i) make another order the court considers appropriate.

• [18] The application sought two substantive orders:

(a) By paragraph 1, a declaration that the proceeding has not, for want of jurisdiction, been properly started; and

(b) By paragraph 2, an order that the claim and statement of claim be set aside.

• [19] Leatherman submits that the proceedings should be set aside for want of jurisdiction. The word jurisdiction is a protean term that is used in a variety of senses, and takes its colour from the context. When applied to courts, its primary meaning is the authority of a court to decide a matter or, put another way, the authority of the court to resolve a controversy through the exercise of judicial power.[4]
• [20] Courts have authority to decide a matter when two conditions are met[5]:

...when the exercise of judicial power resolves a justiciable controversy of a kind which falls within the Court's limits, and when the person bound by the exercise of judicial power are amenable to its exercise. In short, the court must have subject matter jurisdiction and personal jurisdiction in order to have authority to decide any particular proceedings.

• [21] That distinction is reflected in Lipohar v The Queen (1999) CLR 485, where the joint judgment observed at [79] (footnotes omitted):

"Jurisdiction" may be used (i) to describe the amenability of a defendant to the court's writ and the geographical reach of that writ, or (ii) rather differently, to identify the subject matter of those actions entertained by a particular court, or, finally (iii) to locate a particular territorial or "law area" or "law district". The distinction between (i) and (ii) was drawn by Mason A-CJ, Wilson and Dawson JJ in Flaherty v Girgis. In passages in their joint judgment in Thompson v The Queen, Mason CJ and Dawson J used the term "jurisdiction" in all three of these senses.

• [22] Similarly, in Masson v Parsons (2019) CLR 554, Edelman J observed, at [57]:

... First, there is "jurisdiction", which means an authority to decide. Federal jurisdiction is therefore a federal authority to decide. It has a personal dimension concerning the persons over whom authority to decide is exercised. It has a territorial dimension concerning the geographical area within which authority to decide can be exercised. And it has a subject matter dimension concerning the issues in respect of which authority to decide can be exercised.

• [23] In my respectful view, the tripartite articulation in those cases can sit comfortably with the subject matter/personal jurisdiction dichotomy, with territorial jurisdiction having a place in both.
• [24] As to personal jurisdiction, amenability to the authority of a court primarily turns on physical presence in the court's territorial jurisdiction. The scope of personal jurisdiction can then be extended by statutory provisions conferring jurisdiction over persons not present in the geographical jurisdiction of the court. Rule 129F UCPR is such a provision. The rules as to legal service of a claim define the limits of a court's personal jurisdiction beyond physical presence in the territorial jurisdiction of the court.
• [25] As to subject matter jurisdiction, territorial jurisdiction can inform the scope of causes of action otherwise within the subject matter jurisdiction of a court. The conduct issues give rise to issues of territorial jurisdiction in the "subject matter" sense.
• [26] First, Sportec submits that it has a cause of action against Leatherman despite Leatherman doing the act of sending the email or electronic communication from a location in the U.S. because it alleges that the August Communication was communicated to and received by a recipient in Australia (being Amazon CS). It relies on authorities supporting the view that such facts can give rise to conduct within Australia for the purposes of identifying "conduct" under s. 18 ACL. Leatherman submits that there is no evidence of conduct within Australia by Leatherman.
• [27] Second, Sportec submits, alternatively (though presently does not plead), that it has a cause of action against Leatherman even if there was no conduct by Leatherman in Australia, because Leatherman carries on business in Australia. Sportec relies on s. 5(1)(g) CCA, which extends the scope of conduct which can give rise to claims, inter alia, under s.18 ACL by applying that section to conduct outside Australia where conduct is engaged in by persons carrying on business in Australia. That is an example of the express extension of the territorial reach of legislation.[6] Section 5(1) CCA provides, relevantly:
  1. Extended Application of this Act to conduct outside Australia

(c) The Australian Consumer Law (other than Part 5-3)

extends to the engaging in conduct outside Australia by:

(g) bodies corporate incorporated or carrying on business within Australia;

• [28] Leatherman does not dispute that this Court has (personal) jurisdiction over Leatherman arising from service out of Queensland and Australia in accordance with the rules and the Hague Convention. Rather, Leatherman submits that the Court lacks (subject matter) jurisdiction based on its submissions on the conduct issues. Leatherman filed its Conditional Notice based on a challenge to the Court's subject matter jurisdiction. In the course of considering Leatherman's submissions, I considered that a question arose as to whether a Conditional Notice challenging subject matter jurisdiction is within the scope of r. 144 UCPR. In my view, it is not.
• [29] Rule 144(7) UCPR identifies the consequence of filing an unconditional notice of intention to defend (Unconditional Notice) as being that a defendant is "taken to have submitted to the jurisdiction of the court and waived any irregularity in the proceeding". 'Jurisdiction' in that context means submission to jurisdiction of the court over the defendant: that is, acceptance of a court's personal jurisdiction in the proceeding over the particular defendant. The text of r. 144(7) UCPR is inconsistent with 'jurisdiction' in r. 144(7) UCPR being used in its subject matter sense, because parties cannot, by submission or agreement, extend the subject matter jurisdiction of a court.[7] The exception which proves the rule is where there is a specific provision for that to occur in a statute. [8]
• [30] Given that conclusion, 'jurisdiction' in r. 144(2) UCPR should also be construed as referring only to personal jurisdiction, not subject matter jurisdiction. That follows for three reasons:

(a) First, ordinarily the same word would be expected to be used with the same meaning within the same rule, indeed there "ought to be very strong reasons present before the Court holds that words in one part of a section have a different meaning from the same words appearing in another party of the same section"[9];

(b) Second, rr. 144(2) and 144(7) UCPR are complementary. Rule 144(7) UCPR provides that if an Unconditional Notice is filed, then the defendant submits to jurisdiction. The strong inference is that alternative form of notice under r. 144(2) is concerned with the contrary position, that being where the defendant seeks to contend that the defendant is not subject to the personal jurisdiction of the court.

(c) Third, that construction is reinforced by the machinery provisions in rr. 144(5) and (6) UCPR. Those provisions demonstrate that the consequence of not vindicating the challenge to jurisdiction raised by the Conditional Notice is that that notice filed becomes an Unconditional Notice, with the consequence in r. 144(7) UCPR. If a Conditional Notice could validly raise a challenge to subject matter jurisdiction, but no order is applied for under r. 144(4) UCPR, it could not have the effect of confirming subject matter jurisdiction if it did not otherwise exist.

• [31] The construction I propose also sits comfortably with r. 16 UCPR. A Conditional Notice is not a pre-condition to an application under r. 16(a) UCPR. As will be seen, I consider that r. 16(a) UCPR covers challenges to subject matter jurisdiction, so that express provision is made for that issue in the rules. And rr. 16(b) and (c) UCPR provide relief apt to respond to the issues which would arise on an application under r. 16 dictated by r. 144.
• [32] There are two cases I have identified to the which support the contrary view: Hooper v Robinson [2002] QDC 80, Alexanderson v Adamson [2021] QDC 108.
• [33] Hooper v Robinson did not turn on the validity of a Conditional Notice raising subject matter jurisdiction, nor the scope of permissible challenge to jurisdiction under r. 144 UCPR, because Judge McGill SC concluded that the Conditional Notices filed in that case were, in substance, Unconditional Notices. His Honour did conclude, however, that the applicants could have challenged subject matter jurisdiction by a Conditional Notice. He observed at [12] to [14]:

[12] The jurisdiction of a court may be restricted or limited in various ways. The jurisdiction of the District Court of Queensland is limited in terms of the amount of money for which judgment may be given by s68 of the District Court Act 1967. Its jurisdiction is also subject to territorial limitations arising both from the territorial limits of the legislative capacity of the Parliament of Queensland and the express terms of its constituent legislation. The former is concerned with limitations on the sort of claim which can be entertained, and the sort of relief which can be granted, by the court. The latter is concerned with limitations on the persons against whom a claim can be entertained. The latter limitation can always be waived; anyone can submit to the jurisdiction of a court if desired, but ordinarily the consent of the party the subject of the proceeding cannot give to a court jurisdiction to entertain a claim, or grant relief, of a kind which the court does not have jurisdiction to entertain or grant. [There is a limited statutory exception to this rule in s72 of the District Court Act 1967.]

[13] All courts have some territorial restrictions on jurisdiction, but it is always open to a person sought to be made a party to proceedings before such a court to submit to the jurisdiction of the court. In a traditional system where jurisdiction was activated by the issue of a writ, that submission was effected by the defendant's appearing before the court in response to the writ. Originally that involved physical appearance, but more recently it was achieved by filing a written entry of appearance.

[14] The provisions for a Conditional Notice of Intention to Defend are concerned with providing a mechanism by which a defendant can dispute whether the court has jurisdiction to entertain a claim against that defendant. Although it is possible to use the mechanism to dispute the jurisdiction of the court to entertain the particular claim the subject of the proceeding, it is unnecessary to do so and it is sufficient to bring the matter to the attention of the court by any means which are effective for that purpose. A court of limited jurisdiction must always be astute to ensure that it has jurisdiction to entertain the matter before it, regardless of how the party proceeded against raises that question, or indeed whether that party does so.

• [34] His Honour's analysis up to the underlined sentence is consistent with my own. However, the underlined sentence opines that a challenge to subject matter jurisdiction may, though not must, be brought by the mechanism of filing a Conditional Notice. However, the case as ultimately framed by his Honour did not concern any issue of jurisdiction.
• [35] In Alexanderson v Adamson, a Conditional Notice was filed seeking a stay of the proceedings on forum non conveniens issues. The applicant also brought an application to stay the proceedings under r. 16(g) UCPR or in the implied jurisdiction of the court. The defendant's substantive complaint was that the Family Court was a more appropriate forum than the District Court for determination of a debt claim commenced in the District Court, given pending proceedings in the Family Court involving the same issues. The substance of Judge Muir's decision (as her Honour then was) concerned the resolution of that issue. However, her Honour did make the following observations at [14] to [15]:

[14] Before moving to consider the appropriate test, it is necessary for me to address the respondent's preliminary submission that the conditional notice of intention to defend is ineffective as a means of challenging the forum chosen by the respondent; that is, the District Court. For reasons which I will come to, I accept that the test referred to in the conditional notice of defence, of whether the Family Court is the appropriate jurisdiction, is not the correct test in this case. But I do not accept the respondent's submission that the filing of a conditional notice to defend by the applicant in this matter was otherwise misconceived.

[15] As the High Court determined in Voth v Manildra Flower Mills [1990] HCA 55; [1990] 171 CLR 538, a stay can be granted where the defendant can show that the selected forum is 'clearly inappropriate'. With reference to Voth, the annotations to the UCPR r 144 observe that a conditional notice of intention to defend is probably still required as such an application may be thought to be a challenge to the jurisdiction of the court and the orders which may be made under r 16 include a stay of proceedings. I accept that this reasoning is supported by the authorities and is correct on a plain reading of the UCPR r 16 and r 144.

• [36] Both of the above judgments provide some support for the proposition that a valid Conditional Notice to defend can rely on challenges to jurisdiction other than those to personal jurisdiction. However, neither case considered the issues of construction set out above. Further, as to Adamson, that case concerned the exercise of the court's discretion as to whether to exercise jurisdiction.[10] And there is no compelling reason why a Conditional Notice should be available in such a situation, given that a defence might, in some cases, be necessary to assess the forum non conveniens issues, and because such an argument assumes valid assumption of jurisdiction of the Court over the dispute.
• [37] There are also relevant cases dealing with the scope of the irregularity as referred to in r. 144(2) UCPR. These tend to support the construction I advance. In Palmer Leisure Coolum Pty Ltd v Magistrates Court of Queensland [2019] QSC 8, Ryan J held that the allegation that a claim and statement of claim comprised an abuse of process was not an irregularity within the meaning of r. 144(2) UCPR.
• [38] In Bendigo and Adelaide Bank Limited v Scriven [2020] QSC 43, the defendant sought to set aside a judgment entered against him in default of defence. In that case the plaintiff financier had given notice of intention to seek default judgment. The defendant had then filed a document titled "Conditional Notice of Intention to Defend" in which he complained about the lack of particulars in the statement of claim, and the lack of clarity as to the issues. The defendant made an application for an order pursuant to r. 16 UCPR within the time specified in r. 144(4) UCPR. The defendant had sought, in that application, an order directing the plaintiff to provide further and better particulars of the statement of claim and for the default judgment to be set aside. The defendant submitted the relief sought fell within r. 16(i) UCPR, which permits the court to "make another order the court considers appropriate."
• [39] Davis J held that the alleged shortcomings of the statement of claim were not "irregularities", as contemplated by r. 144(2) UCPR. His Honour concluded (at [43] to [44]):

[43] The relief identified in each of paragraphs 16(a) to 16(h) all, one way or another, result in the claim not proceeding. The term "another order" in r 16(i), in my view, refers to some similar or like order: an order that fulfils the purpose of r 144 which is to prevent the plaintiff from litigating the claim without the defendant firstly submitting to the court's jurisdiction.

[44] The term "irregularity" in r 144 is limited to those irregularities which are such as to justify a defendant not submitting to the jurisdiction of the court. Rule 16(i) must be read accordingly. There are various rules which enable a challenge to be mounted to allegedly defective pleadings. Rules 16 and 144 are not intended to provide such a process. The application filed by the defendant was not an application "for an order under rule 16".

• [40] In my respectful view, Davis J's analysis in respect of irregularities is consistent with the construction which I advance of the scope of jurisdiction in r. 144(2).
• [41] I consider that it is open to me to construe r. 144 UCPR in the manner articulated in paragraphs [29] and [30]. In my view, a Conditional Notice can only validly challenge the personal jurisdiction of the court over the defendant, not the subject matter jurisdiction of the court over the proceedings. The Conditional Notice filed by Leatherman appears to me to be invalid. I considered this issue as part of my consideration of Leatherman's substantive submissions. No application was before me challenging the validity of the Conditional Notice. I therefore do not make any order arising from this conclusion.
• [42] In any event, in most cases, whether a Conditional Notice is valid will have little substantive consequence. The purpose of a Conditional Notice is primarily to prevent the entry of default judgment pending the resolution of challenges to the regularity of service. The same result can be obtained by agreement with the other party or, failing that, by order of the Court on application by the defendant. Where personal jurisdiction is not challenged by the defendant, nothing is lost by bringing such an application.

• [43] 'Jurisdiction' in r. 16(a) UCPR has been consistently interpreted as meaning (or including) 'jurisdiction' in its subject matter sense. That is plainly correct. The plain purpose of the rule is to create a statutory process for challenging subject matter jurisdiction at the start of proceedings. Notably also, rr. 16(b) and (c) UCPR make express provision for orders dealing with challenges to jurisdiction in the personal jurisdiction sense. This supports a wider reading for 'jurisdiction' in r. 16(a) UPCR.
• [44] There are some other characteristics of r. 16 UCPR to note:

(a) First, all the orders in r. 16 UCPR are discretionary. There is no identification in the statute of issues relevant to the exercise of the discretion, though it plainly should be exercised in the interests of justice in the particular case; and

(b) Second, r. 16(a) UCPR provides for the Court to make a declaration. At general law, a declaration cannot be interlocutory or interim.[11] That position can be altered, of course, by statutory provision. Modern statutes are replete with provisions creating interim declarations. However, I see nothing which would justify approaching r. 16(a) UCPR in that manner.

• [45] Sportec contended that Leatherman's application should be approached by the Court as an interlocutory application analogous to an application for summary dismissal. Sportec contended that, to succeed, Leatherman had the onus to establish want of jurisdiction to the standard required under the General Steel and statutory summary judgment tests. It relies on Agar v Hyde (2001) 201 CLR 552 at 576 and Edington v Board of Trustees of the State Superannuation Scheme [2012] QSC 211. Sportec further submitted that the evidence does give rise to an arguable case both for the pleaded and unpleaded bases of jurisdiction, and that the application should therefore be dismissed.
• [46] Leatherman submitted that the hearing before the Court was a final hearing of the issue of want of jurisdiction. It submitted that it had led its evidence in chief by its affidavits and made its witnesses available for cross examination. It submitted that the Court ought to determine the two issues of conduct and carrying on business on a final basis, and on the evidentiary record before it. Counsel for Leatherman frankly conceded he could locate no authority supporting this approach, though that of itself is not decisive. Although it was not specifically addressed, the implication of a final hearing would be that the onus would be on Sportec to establish, on the balance of probabilities, that Leatherman either engaged in conduct in Australia, by making the August Communication, or carried on business in Australia.
• [47] The proper characterisation of the hearing under r. 16(a) UCPR is not a straightforward matter. Rule 16(a) UCPR suggests that a hearing under that rule will be a final hearing because, as already noted, a declaration cannot be made on an interlocutory basis absent statutory provision to that effect. However, that does not necessarily assist in determining the nature of the hearing called for by the rule. Even Sportec appears to accept that if Leatherman establishes that Sportec's case is hopeless in the General Steel sense, it is entitled to a declaration which finally determines the matter.
• [48] Also relevant is the obligation imposed on every court to consider for itself whether it has jurisdiction in relation to a proceeding brough in the court. However, what is required to establish jurisdiction varies significantly from case to case, depending on the nature of the jurisdictional issue and the scope of the jurisdiction of the court.[12] On occasion it will be a simple matter to determine if jurisdiction is properly established. A good example is this Court's jurisdiction to hear and determine all personal actions where the sum sought is less than the monetary limit.[13] There, jurisdiction is demonstrated by the filing of a proceeding which advances a claim within the monetary limit.[14]
• [49] In other cases, it might depend on complex factual questions which are highly contestable. An example is whether a claim is one for damages in respect of a 'dust-related condition'. That issue arose in East West Airlines Ltd v Turner [2010] NSWCA 53; (2010) 78 NSWLR 1 where the issue before the Court of Appeal NSW was, inter alia, whether smoke of a particular kind was 'dus'" such that the Dust Diseases Tribunal had jurisdiction over the claim as a 'dust-related condition'. That matter was dealt with by the Tribunal as part of the trial of the proceedings, a circumstance which was plainly sensible in the circumstances of that case. There was no criticism of that approach in the appeal.
• [50] While the duty to consider jurisdiction is sometimes described as the first duty of a court, or "preliminary jurisdiction", it does not necessarily have to be done first. A court has jurisdiction sufficient to consider its own jurisdiction; and when and how a court should determine a challenge to jurisdiction is a matter for that court and, amongst other things, can be deferred until trial.[15]
• [51] In Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 190 ALR 1, Merkel J, after a comprehensive review of the authorities, observed (as to when a jurisdictional challenge should be determined) at [186] to [187]:

[186] The timing issue was considered by Katz J in Khatri v Price [1999] FCA 1289; (1999) 95 FCR 287; 166 ALR 380 at [14] where his Honour observed:

Because any Australian court is a court of limited jurisdiction, its "first duty", when there has been a purported invocation of its jurisdiction, is to satisfy itself that it has the jurisdiction purportedly invoked: Federated Engine-Drivers and Firemen's Association of Australasia v BHP Co Ltd [1911] HCA 31; (1911) 12 CLR 398 at 415 (Griffith CJ). In making his well-known statement, Griffith CJ gave, as a reason for the existence of such a "first" duty, "if only to avoid putting the parties to unnecessary risk and expense". That reason appears to imply that the duty is one which must be fulfilled "first" in the sense that the court concerned must determine the question of its jurisdiction before hearing any evidence or argument on issues which would arise in the proceeding if it did have the jurisdiction purportedly invoked. However, in spite of that reason's having been given by Griffith CJ, the duty has not been generally understood to be "first" in that sense. The duty has been generally understood instead as permitting the court concerned to exercise a discretion (subject, obviously (if the court is not the High Court), to appellate or supervisory review, whichever is appropriate) to postpone determining the question of its jurisdiction until after it has heard the whole case, provided, however, that having done so, it then "first" determines that question.

[187] In my view the court is not under a duty to forthwith determine if it has jurisdiction to proceed with the hearing of the present proceeding as soon as that was raised as a bona fide issue. In the usual course a court must satisfy itself that it has jurisdiction in the proceeding but the time at which it does so is a matter for the court. In many cases it may be desirable for the court to deal with the jurisdictional issue as a preliminary issue but it is not under an unqualified duty to do so. Ultimately, it is for the court to determine, in interests of the justice, the time at which and the manner in which a jurisdictional issue is to be determined.

• [52] Plainly then, while a challenge to subject matter jurisdiction should be dealt with, each case will depend on its own circumstances as to when and how that is to be done in the course of the proceedings.
• [53] Another factor is the discretionary character of the power conferred by r. 16(a) UCPR. That discretion arises by the use of "may" in the chapeau provision, and by the character of the power to make a declaration, itself always discretionary. Questions of the appropriateness and efficiacy of determining an allegation of want of jurisdiction under r. 16(a) UCPR could, in my view, properly consider the issues identified by Merkel J.
• [54] I consider that I have a discretion as to how to approach the determination of the application, both by reference to first principles, and by reference to the language of the rule. In my view, that discretion ought to be exercised consistent with Sportec's submission that I ought only to make the declaration sought if I am satisfied that its case on both conduct issues is hopeless in the General Steel sense.
• [55] First, while the two issues raised by Leatherman might be able to be technically characterised as issues of territorial limits informing the scope of subject matter jurisdiction, they are, in substance, issues which go to the existence of the cause of action sued upon, in that each conduct issue goes to whether there is conduct capable of being conduct in breach of s. 18 ACL. There is no question that the District Court has jurisdiction over claims for damages and injunctions arising out of misleading or deceptive conduct under s. 18 ACL: see s. 86(2) CCA. The question of whether particular conduct, otherwise misleading or deceptive, was conduct which occurred in Australia (or by a person carrying on business in Australia) is closely related to the conduct element of the cause of action and, in my view, ought to be approached in a similar manner; i.e. that Sportec is entitled to have the issue determined at trial unless it can be shown, on an interlocutory basis, to lack any real prospect of success.
• [56] Further, Mr Hastie submitted that the conduct issues, though involving territorial issues, are not true jurisdictional issue. I think this submission is correct. It seems to me that both conduct issues are issues of a kind which this Court could conclusively determine pursuant to the jurisdiction conferred by ss. 86(1) and (2) CAA on the Court to hear and determine "any matter arising under this Act in respect of which a civil proceeding has...been instituted": see Bray v F Hoffman-La Roche Ltd at [197]. They are not issues which can be characterised as going to jurisdiction in the sense of comprising pre-conditions to the existence of jurisdiction of the court over the subject matter of the proceedings. They should not be treated in the same manner as jurisdictional facts which are statutory pre-conditions to a court's jurisdiction. It is doubtful that the duty to decide such matters is the same as for statutory pre-conditions to jurisdiction. [16] Indeed such matters ought ordinarily to be dealt with at trial rather than in some form of preliminary hearing on substantive jursidiction. In my view, in this case, they are more appropriately dealt with at trial.
• [57] There is support for that conclusion to be found in r. 127(2)(c) UCPR. That applies to issues of the kind raised by the conduct issues, and arguably could apply more broadly to challenges based on want of jurisdiction. That rule has been authoritatively construed as contemplating a test for prospects of success that is analogous to that called for in summary judgment: Agar v Hyde (2001) 201 CLR 552 at [60], and in respect of r. 127(2)(c) UCPR specifically, see The Star Entertainment Qld Limited v Wong [2021] QSC 67 at [40] to [43], not challenged on appeal in Wong v Star Entertainment Qld Limited [2021] QCA 277. While Leatherman did not have to bring its application under that rule, the availability of that option suggests a similar approach should be adopted to an application under r. 16(a) UCPR, at least where it is an issue of the kind raised here.
• [58] Second, the issues which are raised by Leatherman are complex factual issues, the resolution of which might depend on nuanced inferences and detailed factual findings. Further, Leatherman presently has a monopoly on key documents which might inform those issues and has not been required to either plead to the statement of claim or particularise any defence, nor provide disclosure or complete other interlocutory steps on those issues. That remains so even if one assumes as truthful the evidence of Mr Anderson of Leatherman. In my view it is unfair to Sportec to resolve these issues on a final basis in the absence of Sportec having the benefit of pleadings and interlocutory steps (highlighting the inutile nature of permitting Conditional Notices where there are subject matter jurisdiction challenges, I might add).
• [59] I am fortified in that view by the analysis of Merkel J of the almost identical issues in Bray v F Hoffman-La Roche. There, like here, his Honour was dealing with the submission that jurisdictional issues related to the location of conduct or the existence of business within Australia should be determined on a final basis on application by the defendants. His Honour observed:

[173] Plainly, there are significant difficulties in dealing with the so-called jurisdictional issue at this stage. The facts relevant to whether the HLR and BASF foreign respondents engaged in contravening conduct in Australia, or were carrying on business in Australia, are inherently within their knowledge and not within the applicant's knowledge. In a practical sense the applicant would not be able, properly, to contest those factual issues on a final basis without resort to the court's discovery procedures. At this stage resort to those procedures is premature as the issue of whether the relevant respondents have been duly served and are to remain parties to the proceeding, and are therefore subject to the court's jurisdiction in respect of those procedures, is awaiting determination on the same motions that raise the jurisdictional issues.

• [60] Notably, Leatherman seeks a final determination of the conduct issues without any resort to the Court's interlocutory procedures. It sought by this application to impose that outcome unilaterally. It would be wrong to permit that, in this case.
• [61] For those reasons, I consider that I would only exercise my discretion in favour of Leatherman if Leatherman can make out that Sportec's case on the conduct issues was so hopeless as to justify summary disposal on the General Steel basis. For the reasons which follow, I am not satisfied that Sportec's case on the conduct issues is hopeless.

• [62] Both parties relied on Valve Corporation v ACCC [2017] FCAFC 224; (2017) 258 FCR 190, a decision of the Full Court of the Federal Court. The judgment is of great assistance on both of the conduct issues, which were fully considered in a similar context. It is convenient to set out an analysis of the relevant parts of that case first.
• [63] Valve Corporation was a company incorporated the state of Washington in the U.S. It operated an online delivery platform by which video games were made available for purchase on the internet, including to consumers in Australia. The ACCC brought proceedings alleging that Valve had engaged in conduct in breach of s. 18 ACL by wrongly stating, in various dealings with Australian customers, that consumer guarantees contained in the ACL did not apply to the contract between Valve and its Australian customers. Valve argued, relevantly, that any such conduct which it did engage in was not conduct to which the ACL applied, because Valve engaged in no conduct in Australia and did not carry on business in Australia under s. 5(1)(g).
• [64] On the conduct in Australia issue, the Court articulated the basis in law for the constraint contended for by Valve as follows:
  1. Applying general principles of statutory construction, the substantive provisions of Div 1 of Pt 3-2 are presumed to regulate only conduct in Australia: see Jumbunna Coal Mine, No Liability v Victorian Coal Miners' Association [1908] HCA 95; (1908) 6 CLR 309 at 363 per O'Connor J; Barcelo v Electrolytic Zinc Company of Australasia Ltd [1932] HCA 52; (1932) 48 CLR 391 at 423-425 per Dixon J; Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society [1934] HCA 3; (1934) 50 CLR 581 at 600-601 per Dixon J. This is, of course, subject to contrary provision, such as s 5 of the Competition and Consumer Act, which extends the operation of the Australian Consumer Law to conduct engaged in outside of Australia in certain circumstances.
• [65] This of course begs the question as to how to determine if conduct is conduct in Australia where the conduct involves posting or communicating a representation from a computer located outside Australia where that representation has an effect in Australia. The Court articulated the issues as follows:
  1. The second issue is whether, on the assumption that the relevant representations were made, the primary judge erred in concluding that Valve had made those representations (and thus engaged in conduct) in Australia. This issue is raised by ground 4 of the notice of appeal. The parties proceeded on the basis that it was necessary for the ACCC to establish either that Valve engaged in the relevant conduct for the purposes of ss 18 and 29(1)(m) of the Australian Consumer Law in Australia or that Valve carried on business in Australia and was thus subject to the extended operation of the Australian Consumer Law pursuant to s 5 of the Competition and Consumer Act. The second of these alternatives is discussed under issue 3, below.
• [66] After reviewing authority, the Court made the following statement of principle on the location of conduct issue:
  1. In light of the above statements of principle, we consider that where it is alleged that a respondent has, by making representations on the internet, engaged in conduct that is misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law, or made false or misleading representations in contravention of s 29 of the Australian Consumer Law, and an issue arises as to the place of the representations, it is necessary to ask where in substance the representations were made. If the respondent is based overseas and has a relationship with customers in Australia, it is likely that representations addressed to those customers will be taken to have been made in Australia, being the place where the customer accesses and reads the representations on his or her computer. This is likely to be the case even if the representations are available to be accessed by consumers in other countries around the world. A distinction is to be drawn between the conduct proscribed by ss 18 and 29 and the causation of loss or damage. It is not necessary, for the purposes of these provisions, to establish loss or damage. It follows that, for the purposes of determining the place where the representations were made, it is not necessary to determine whether any loss or damage was suffered and, if so, the place of that loss or damage. The approach we have outlined is both consistent with the general principles discussed in the cases and reflective of the consumer protection purpose of the statutory provisions.
  2. In the present case, the first, second and third representations (based on the SSA) were made both on the Steam website and the Steam Client. While the SSA was uploaded in Washington State and could be accessed and read by people anywhere in the world, the context in which it was available to be accessed and read by consumers in Australia included that: Valve had approximately 2.2 million subscribers in Australia; consumers had to establish an account with Steam before they could purchase a game; and, as part of the process of establishing an account and purchasing a game, the consumer had to agree to the SSA. Thus, in the present case, there was a direct relationship between Valve and consumers in Australia, and the SSA was a document that Valve required consumers to agree to before they could open an account and purchase a game. We do not consider that a distinction should be drawn between accessing the SSA on the Steam website and accessing it on the Steam Client. In circumstances where Valve had a direct relationship with a large number of Australian consumers, and Valve required consumers to agree to the SSA before they could open an account and purchase a game, the first, second and third representations were made in Australia when consumers in Australia accessed and read the SSA on their computers. This is where, in substance, for the purposes of ss and , the representations were made.

• [67] The Court then turned to the issue of whether Valve carried on business in Australia under s. 5(1)(g) CCA, and made the following observations as to general principle:
  1. As set out above, s 5(1)(g) of the Competition and Consumer Act provides that the Australian Consumer Law extends to the engaging in conduct outside Australia by bodies corporate "carrying on business within Australia". The expression "carrying on business" is not defined in the Act, but "business" is defined in s 4(1) as including a business not carried on for profit. The meaning of the expression "carrying on business" in the context of s 5(1) of the Trade Practices Act (which was in similar terms to the current provision) was considered in Bray. In that case, Merkel J said at [60]:

The expression "carrying on business" is not defined although s 4(1) defines "business" as including a business not carried on for profit. As was pointed out by Gibbs J in Luckins v Highway Motel (Carnarvon) Pty Ltd [1975] HCA 50; (1975) 133 CLR 164 at 178 the expression "may have different meanings in different contexts". The present context is s 5(1), which gives effect to the legislature's view that comity, for the purposes of the [Trade Practices Act], requires that a particular nexus with Australia exist (that is, citizenship or residence by a person or incorporation or the carrying on of business in the case of a body corporate) if certain Parts of the [Trade Practices Act] are to apply to conduct engaged in outside of Australia by those persons or bodies corporate. As is clear from the judgments in Meyer Heine [Pty Ltd v China Navigation Company Ltd [1966] HCA 11; (1966) 115 CLR 10] it was open to the legislature, as a matter of power and comity, to impose a lesser nexus requirement (for example, intended and actual anti-competitive consequences in Australia) but it chose not to do so. In that context the expression should be given its ordinary or usual meaning.

1. After noting that the expression has often been considered in the context of service of process on, or enforcement of a foreign judgment against, a company that has a presence in or is carrying on business within the jurisdiction, Merkel J said (at [62]) that carrying on business will usually involve "a series or repetition of acts" (citing Thiel v Commissioner of Taxation [1990] HCA 37; (1990) 171 CLR 338 at 350 per Dawson J) ...
2. After setting out the above passage, Merkel J said at [63] that while the purpose of profit is unnecessary in the present context (by reason of the definition of "business" in s 4(1)), the definition set out above could otherwise be adopted as sufficient for the purposes of the case before him without adopting it as a definition that is necessarily applicable in all cases. We would take the same approach. His Honour went on to say that: in the context of s 5(1), he saw no reason for importing the additional requirement that to carry on business in the jurisdiction the foreign company must also have a place of business in the jurisdiction; a place of business is not a requirement of comity; and importing such a requirement would impermissibly supplement the corporate requirement of carrying on business with the additional requirement of corporate presence or residence. We agree with these observations.

1. Although Gebo Investments concerned different statutory provisions, we consider the discussion of principles regarding carrying on business generally to be of assistance for present purposes. We do not, however, see the reference to "human instrumentalities" in the last sentence of [33] as laying down an inflexible rule or condition as to the circumstances in which an overseas company may be taken to be carrying on business in Australia. We would instead place emphasis on the statement at [31] of Gebo Investments that the case law makes clear that the territorial concept of carrying on business involves acts within the relevant territory that amount to, or are ancillary to, transactions that make up or support the business.

• [68] The Court found that Valve was carrying on business in Australia because of its large Australian customer base (over 2 million accounts), its large hardware establishment in Australia, and its contracts for data support with Australian suppliers.

• [69] Leatherman relies on the evidence of its Marketplace Platform Manager, Mr White. He identifies himself as the person responsible for monitoring brand infringements in online marketplaces where Leatherman products might appear. His role includes making complaints on online platforms about alleged brand infringements. He is located in Portland, Oregon.
• [70] He swears that between August 2023 and September 2023, he made a number of complaints to Amazon through its online complaints portal (the Portal), including the August Communication.[17] He exhibits various documents linked to the portal, which appear to demonstrate that the portal communicates with an Amazon entity located in the U.S. He explains the process of making a complaint on the Portal, though does not detail the words entered for the complaint related to the August Communication. However, I infer Mr White included the words pleaded by Sportec as the August Communication in the complaint about Sportec.
• [71] He swears he had never heard of Amazon CS, nor had he had any dealings with it, to his knowledge. He only ever dealt with Amazon.com Inc, located in the U.S.
• [72] Based on that evidence, Leatherman's submission is simple. As Mr White dealt with Amazon in the U.S. and did not communicate with Amazon CS, his conduct was entirely in the U.S. Applying the Valve Corporation approach, Leatherman submits that the conduct, in substance, occurred entirely in the U.S. Leatherman also relies on Valve Corporation at [134] and submits that it is not enough if there was loss suffered in Australia from conduct. There must be conduct in Australia. So, Leatherman submits, it is irrelevant if the result of the communication to Amazon Inc was that it, in turn, communicated the August Communication to Amazon CS with consequences as alleged by Sportec.

• [73] Sportec referred to Valve Corporation and also relied on this passage from Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 at 568, adopted in Valve:

If a statement is directed from one place to another place where it is known or even anticipated that it will be received by the plaintiff, there is no difficulty in saying that the statement was, in substance, made at the place to which it was directed, whether or not it is there acted upon. And the same would seem to be true if the statement is directed to a place from where it ought reasonably to be expected that it will be brought to the attention of the plaintiff, even if it is brought to attention in some third place. But in every case the place to be assigned to a statement initiated in one place and received in another is a matter to be determined by reference to the events and by asking, as laid down in Distillers, where, in substance, the act took place.

• [74] Sportec submits it has a triable issue that the August Communication comprised conduct in Australia.
• [75] First it submits Amazon operates globally, and the mere fact that the complaint was lodged on the Amazon Inc website does not mean the complaint was not made to Amazon CS. Sportec impliedly concedes it cannot presently prove that with certainty. However, it submits that the true nature of what occurred would require a better understanding of Amazon's internal processes. That is not something which can be understood or explored in the present application.
• [76] However, it submits that there is an inference on the material that the representations were made to Amazon AU, given that Sportec had only ever dealt with Amazon AU, only ever sold products in question through that company's website in Australia, and only dealt with Amazon AU in relation to the complaint by Leatherman.
• [77] Second, Sportec invokes the statement from Voth, set out above, by submitting that it must have been known or anticipated that the August Communication would be received in Australia, because the complaint identified the Amazon store where the products were offered for sale (which was in Australia) and Sportec's identity (a company selling only in Australia).
• [78] Third, Sportec submits that, however it occurred, the August communication ended up with Amazon CS in Australia, who acted on it to cause the loss.

• [79] On the evidence before the Court, such as it is, Sportec's case that there was conduct in Australia is not strong.
• [80] Mr White's evidence tends to support the conclusion that he directed the August Communication to Amazon Inc in the U.S. The gravamen of Sportec's response is that even if that is true, it would have been known or anticipated (presumably by Mr White) that the communication would be received by a party in Australia - being Amazon in its Australian incarnation, or Sportec, or both - given the circumstances of the sales which were the subject of Mr White's complaint.
• [81] Sportec's submissions rely on the passage from Voth set out above. However, Sportec does not deal with the full statement; in particular, the requirement that the statement must be directed (presumably by the statement maker, in this case Mr White) from the place they are located in, to the other place. On the evidence before the Court, it is arguable that Mr White directed his statement to Amazon US, and that it was a consequence of that communication that it was passed onto Amazon CS and Sportec. There is merit in Leatherman's argument that Sportec is complaining about consequences in Australia of the communication directed to Amazon US, not about conduct of Leatherman in making a statement directed to Australia. The distinction arises in Voth itself. At p. 567, the Court observed:

One thing that is clear...is that it is some act of the defendant, and not its consequences, that must be the focus of attention...

• [82] The facts in Voth appear analogous to this case, because while the negligent advice alleged in that case was acted on by companies in Australia, it was directed to a subsidiary in the U.S. by the accountant/defendant located in the U.S. The High Court concluded there was no negligent act or omission in Australia in those circumstances for the purposes of determining the proper law of the tort.
• [83] The argument Leatherman credibly makes is that the August Communication was directed to Amazon Inc. What Amazon Inc. did with the communication is a consequence of the communication, not part of it.
• [84] However, while the case presently appears unpersuasive, that conclusion depends on assuming as accurate and complete, Mr White's evidence on the subject. It also assumes that there will be no other evidence arising from interlocutory steps which impact on the issue. I do not think either assumption can properly be made at this stage of the proceedings.[18] Further, I do not think that the failure to cross examine Mr White on the application has any significance in that regard, because cross examination without the benefit of disclosure would have been speculative, given the nature of the application.
• [85] That would not avail Sportec if the argument that there was conduct in Australia appeared incredible or without any foundation. However, that is not the case. The August Communication did end up with an Australian emanation of Amazon Inc. in circumstances where that was a plainly foreseeable outcome to a person in Mr White's position. There is a real prospect that, after interlocutory steps and full examination at trial, Sportec might ultimately be able to establish relevant conduct in Australia. Accordingly, I am unpersuaded, that at this stage of the proceedings, Sportec's case on conduct in Australia is so hopeless as to make the proceedings an abuse of process. For that reason, Leatherman's application must be dismissed.

• [86] Given my conclusion on the first conduct issue, it is not necessary to determine the second conduct issue. However, it can be dealt with reasonably briefly.

• [87] Leatherman relies primarily on Valve. It first distinguishes Valve on the basis that Leatherman does not have the physical presence in Australia which Valve had, in the form of servers or contracted storage support located in Australia. That point of distinction appears justified on the evidence of Mr Anderson, Leatherman's corporate legal director.
• [88] It next relies on Mr Anderson's evidence that Leatherman does not itself undertake any activity in Australia. Rather, it sells its products ex-works to a third party (to use a neutral term), Zen Imports Pty Ltd (Zen), an Australian company, which has exclusive rights to sell Leatherman products. Further, it distinguishes Valve on the basis that Leatherman's website, leatherman.com, is configured so that it cannot sell products outside of North America, seemingly to answer the proposition that it has Australian customers which it deals with directly.

• [89] Again, the persuasiveness of these submissions depend on assumption of the accuracy and completeness of the evidence of Mr Anderson. For the same reasons as raised in respect of the conduct in Australia evidence, I do not think that assumption can properly be made at this stage of the proceedings.
• [90] But further, even on Leatherman's evidence, there appears to be an arguable case that Leatherman does carry on business in Australia. That case arises from the analogy of the facts of this case with those considered by Rares J in Vautin v BY Winddown Inc (No. 2) [2016] FCA 1235. I adopt Sportec's summary of that case as follows.
• [91] Mr Vautin bought a yacht manufactured by a U.S. based manufacturer. He advanced a claim under the ACL against the manufacturer. He bought the yacht from the manufacturer's Australian distributor. The U.S. manufacturer had no business establishment in Australia, other than through its dealer and (as here) the sales were made ex-works in Florida.
• [92] The case concerned the validity of service out of the jurisdiction, and his Honour adopted the approach of whether there was a prima facie case established to engage the scope of the power to serve out of the jurisdiction. His Honour concluded a prima facie case was established based, in part, on the obligations under the distribution agreement directly engaging the manufacturer, being to:

(a) Furnish the manufacturer's warranty to customers;

(b) Provide services facilities, under that warranty, to any owner of a yacht manufactured by the manufacturer; and

(c) Promote the manufacturer's products using certain approved materials.

• [93] Sportec relied on the similarities in the nature of the obligations of Leatherman and the manufacturer in Vautin in relation to the terms and operation of the license and Distribution Agreement with Zen. As to the license agreement:

(a) Zen is licenced to use Leatherman's intellectual property in Australia: clause 2(A);

(b) The billing statements which Zen issues to its customers must "...identify the seller of the purchased merchandise as Leatherman Tool Group Inc": clause 3(D);

(c) Zen is required to report certain complaints or inquiries it receives from customers to Leatherman: clause 3(E);

(d) Zen is required to align all its activities, including in respect of pricing and promotions, to Leatherman's strategies and "marketplace activities": clause 3(F);

(e) Zen is obliged to achieve certain sales targets: clause 4; and

(f) Leatherman has the right, upon reasonable notice, to enter Zen's premises to examine, inter alia, its operations: clause 7(C).

(a) Zen is Leatherman's exclusive distributor within Australia: clause 1.1;

(b) Leatherman has, or is expected in the future to have, customers and accounts in Australia with whom it is entitled to deal with, and sell to, directly: clause 1.3;

(c) Leatherman reserves, to itself, the right to sell on "3rd party marketplace customers" in Australia, such as Alibaba and eBay: clause 1.3.3;

(d) Zen is obliged to use its best efforts to sell Leatherman's products in Australia, and must achieve certain sales goals: clause 5.1; and

(e) Zen is required to market and promote Leatherman's products in accordance with certain guidelines: clause 5.1.

• [95] The provisions of those agreements demonstrate that Leatherman retrains tight oversight and control over the sale of its products in Australia. Zen is not entitled to proceed as it wishes. Rather, it is arguable that, as a matter of substance, Zen is conducting Leatherman's business in Australia: Clause 3D of the licensing agreement is a notable example. Further, some of the provisions raise the clear suggestion that evidence might exist that Leatherman is itself conducting operations with customers directly in Australia.
• [96] Sportec also relies on the provision by Leatherman of warranties direct to Australian customers, and the analogy with that factor in Vautin.
• [97] Valve and Vautin demonstrate that whether a company is carrying on a business in Australia can be a subtle and fact sensitive inquiry. In this case there is ample evidence that that conclusion might be reached at trial, in respect of Leatherman, at least at this stage of the proceedings. Sportec's argument in that regard cannot be characterised as so hopeless as to justify summary dismissal.

• [98] In my view, the declaration sought by Leatherman under r. 16(a) UCPR should only be made in respect of the conduct issues if Leatherman could demonstrate, in the absence of disclosure and other interlocutory steps, that Sportec's case on both grounds was so hopeless as to justify summary termination on the General Steel basis. It has failed to do so. The application is dismissed.

[1] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

[4] M. Leeming, Authority to Decide: The Law of Jurisdiction (2nd Edn) at pp 2-3, and see the cases cited there.

[5] Leeming Authority to Decide pp 2-3 and see footnote 3 in chapter 6.

[6] Pearce & Geddes Statuory Interpretation in Australia (9th Edn) at 5.12.

[7] Leeming Authority to Decide at 6.4, and see Fingelton v The Queen [2005] HCA 34; (2005) 227 CLR 166 at [196]

[8] See for example s. 72 District Court Act.

[9] Craig Williamson Pty Ltd v Barrowcliff [1915] VicLawRp 66; [1915] VLR 450 at 452 cited in Pearce & Geddes Statuory Interpretation in Australia (9th Edn) at 4.7 There is no suggestion that the rule was introduced and amended at different times so as to suggest that approach to construction should be easily put aside.

[10] For a party served out of the jurisdiction, that is a matter for which specific provision is made in Rule 127 UCPR.

[11] P. W. Young, Declaratory Orders (2nd Edn) at [2403]; Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; (2022) 276 CLR 519 at [53].

[12] Leeming, Authority to Decide at 2.5; pp 35 to 47.

[13] Becalmed at $750,000 since at least 2010.

[14] Startune Pty Ltd v Ultra-Tune Systems (Aust) Pty Ltd [1991] 1 Qd R 192 at 197

[15] Leeming, Authority to Decide at p. 44

[16] See Bray at [189] to [198]. This case is also similar in that respect to East West Airlines Ltd v Turner, where the issue was dealt with as part of the trial.

[18] Though I do not suggest Mr White has not been truthful.