Titan Enterprises (Qld) Pty Ltd v Cross

Federal Court of Australia|2016-08-05|Before: Edelman J

The applicants' amended interlocutory application dated 3 August 2016 be adjourned.
Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 Titan Enterprises (Qld) and two related companies (collectively, Titan Enterprises) seek leave to effect international service of subpoenas to produce on four international companies: Google Inc. (Google), Yahoo! Inc. (Yahoo!), Microsoft Corporation (Microsoft) and Google Asia Pacific Pte Ltd (Google Asia Pacific). The application is unopposed although it is effectively ex parte. At the hearing of the application this morning I indicated to counsel that I was not prepared to grant the leave sought because there were deficiencies in the subpoenas, in the evidence, and there were legal matters that had not been addressed. Counsel sought, and was granted, two weeks to address these matters. The reasons why I was not prepared to grant leave were given orally, and briefly, this morning. Although the order I made was only to adjourn the application, there are difficult issues involved which need to be canvassed properly. I undertook to provide substantial reasons later today. These are those reasons.

Background to the proceeding and the application 2 In Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 664, I summarised the background to this proceeding in broad terms which I repeat below. 3 Titan Enterprises has brought this proceeding against two respondents, Mr Cross and Dr Harmon (the latter as both a primary wrongdoer and as an accessor or joint tortfeasor). The proceedings concerns a website, described as the "Beware of Titan Garages" website, which Titan Enterprises says is operated by the respondents. Affidavit evidence about that website, allegedly operated by Mr Cross, gives the impression that Mr Cross is, in a word, cross. Either his name is a coincidence or Mr Cross is a pseudonym. 4 Titan Enterprises alleges that Mr Cross and Dr Harmon have (i) infringed its copyright, (ii) infringed its registered marks, (iii) committed the tort of injurious falsehood, (iv) engaged in misleading or deceptive conduct, and (v) made false or misleading representations. Titan Enterprises seeks various remedies including injunctions, damages, additional damages, exemplary damages, interest, and costs. 5 Although Titan Enterprises has been in contact with Dr Harmon and his solicitors, it has failed to discover the physical address for service of Mr Cross. Despite apparently exhaustive searches it has only discovered two email addresses for Mr Cross. It does not know of his physical location or physical address for service. It is unaware of his physical appearance. 6 I previously granted Titan Enterprises leave to serve documents in this proceeding upon Mr Cross by substituted service. In my decision granting leave I described the numerous attempts that Titan Enterprises had made to obtain information about the identity and location of Mr Cross. These included an oral examination of Dr Harmon who said that he had "extensive correspondence" with Mr Cross via email over a period of approximately 18 months (ts 10) and non-standard discovery. But none of these efforts have advanced matters further. Any further information about the identity or location of Mr Cross has not been discovered. Mr Cross has not appeared. He has not instructed a solicitor to appear. He has not responded to any of the communications sent to him by Titan Enterprises or by the Court.

The power to issue subpoenas to entities outside Australia 7 The rules in the Federal Court Rules 2011 (Cth) which generally govern the power to issue subpoenas with leave of the Court (rr 24.01 and 24.12) are limited to recipients in Australia. Rule 10.44 has the effect of extending the power to issue subpoenas to recipients internationally. It provides: 10.44 Service of other documents (1) A party may apply to the Court for leave to serve a document filed in or issued by the Court, other than an originating application, on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country. Note 1 The law of a foreign country may permit service through the diplomatic channel or service by a private agent - see Division 10.5. Note 2 Rules 10.63 to 10.68 deal with service of local judicial documents in a country, other than Australia, that is a party to the Hague Convention. Note 3 The Court may give permission under subrule (4) on conditions - see rule 1.33. (2) An application under subrule (1) must be accompanied by an affidavit that includes the information mentioned in paragraphs 10.43 (3) (a) to (c). (3) If a document, other than an originating application, was served on a person in a foreign country without the leave of the Court, a party may apply to the Court for an order confirming the service. (4) For subrule (3), the party must satisfy the Court that: (a) the service was permitted by: (i) if a convention applies - the convention; or (ii) if the Hague Convention applies - the Hague Convention; or (iii) in any other case - the law of the foreign country; and (b) there is a sufficient explanation for the failure to apply for leave. 8 The reference to the Hague Convention is to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (the Hague Convention). 9 The most recent case, and the most comprehensive recent consideration, concerning the issuing of international subpoenas is Ceramic Fuel Cells Limited (In Liq) v McGraw-Hill Financial, Inc [2016] FCA 401 (Ceramic Fuel Cells). In that case, a subpoena was sought by Ceramic in order to ascertain the identity of persons who suffered losses allegedly as a result of the "A" credit rating assigned to mortgage-backed security collateralised debt obligations (CDOs) by Standard & Poor's (a collective description for the respondents). Ceramic wanted to notify those persons about the representative proceedings it had commenced. But the trustee of the CDOs, the US National Bank Association, had no presence in Australia. A subpoena was sought to obtain various categories of documents from the US National Bank Association. Standard & Poor's appeared on the application to assist the Court, but the effect of its submissions was essentially that the Court had no power to issue the subpoenas. So, in effect, the primary judge, Wigney J, had the benefit of opposing submissions. Justice Wigney granted leave to issue a subpoena but limited to the first category of documents which was not directed at obtaining evidence for use in the litigation. 10 As Wigney J explained, it was, and remains, controversial whether the Court has power to grant leave to issue a subpoena to a person outside Australia. Although some prior cases dealing with different rules of court had indicated that courts should not grant leave to serve international subpoenas, Wigney J held that in an appropriate case leave could be granted, having regard to international law and comity and the need to exercise care and restraint. The importance of care and restraint arises because an international subpoena can be dangerously misleading. Where, as in this case, the subpoena is not capable of enforcement it is, as Allsop J said in Stemcor (A/sia) Pty Ltd v Oceanwave Line SA [2004] FCA 391 [12], "an empty threat, or the equivalent of a mere request couched in imperative terms". 11 It is unnecessary to repeat all of Wigney J's reasons for reaching his conclusion that power exists in appropriate circumstances to issue an international subpoena. I have read those reasons closely and, with respect, they are compelling. In summary, in relation to the exercise of power to grant leave it is necessary to have regard to the need for compliance with international law (which, at least sometimes, can be considered without expert evidence: Australian Competition and Consumer Commission v PT Garuda Indonesia and Another (No 9) [2013] FCA 323, 413-414 [31]-[32], 417 [48] (Perram J)) and international comity. All the circumstances must be considered. Common factors include ([59]): (1) the nature of the subpoena; (2) the nature of the particular proceedings and (in the case of a subpoena to produce documents) the importance of the documents to the issues in those proceedings; (3) the attitude of the subpoenaed party (if known or ascertainable); (4) the foreign country involved; and (5) the law in, and attitude of, the foreign country regarding foreign subpoenas and whether they impinge upon the country's sovereignty. 12 His Honour also explained that the "absence of the means to enforce a subpoena served on a foreign addressee is better viewed as a discretionary reason why a subpoena should not be issued or served on a foreign addressee, rather than a reason why it should be found that the court does not have the power to issue or grant leave to serve such a subpoena" ([61]). Other discretionary factors will include whether or not the issuing party has exhausted all other avenues to obtain the documents sought. 13 The need for compliance with international law and international comity is an extremely important consideration not merely for the power to grant leave but also for the exercise of any discretion to do so. As Hoffmann J said in Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 2 WLR 453; [1986] Ch 482, 493, the court should not, save in exceptional circumstances, impose such a requirement [of producing documents under subpoena] upon a foreigner, and, in particular, upon a foreign bank. The principle is that a state should refrain from demanding obedience to its sovereign authority by foreigners in respect of their conduct outside the jurisdiction. 14 As Wigney J observed, those remarks were made in relation to subpoenas to produce documents that were directed to international banks in relation to their business outside the jurisdiction. However, they illustrate the importance of caution and restraint before an international subpoena is issued.

The subpoenas 15 Google, Yahoo! and Microsoft are well-known United States technology-based corporations that provide internet services which include email services and internet search services. Each of the three companies is located in the United States. The fourth company is Google Asia Pacific. It is a related company to Google and was described by counsel as a subsidiary although there is no evidence about its relationship with Google. It is a company incorporated in Singapore. 16 Google also provides a service whereby users can pay for a link to a particular website to appear in the Google search results when particular search terms are entered into the Google search engine (the Google AdWords service).

Google and Google Asia Pacific 17 The subpoenas addressed to Google and Google Asia Pacific seek documents relating to a Google AdWords account which directs internet traffic to the Beware of Titan Garages website. They are expressed as follows: Any documents which relate to a Google AdWords account used to direct internet traffic to the website located at www.bewareoftitangarages.com, including documents which: 1. were completed and provided to you (whether in hard copy or in electronic format) to establish the Google AdWords account, including but not limited to: a. the subscriber or account holder's name, date of birth and other identifying details; b. the subscriber or account holder's: i. user name or other identities; ii. mailing address and residential address or business address; iii. email and/or IP address; iv. telephone numbers, including mobile telephone or cell phone number and other contact information; v. other contact details; 2. were completed and provided to you (whether in hard copy or in electronic format) to facilitate, authorise or make payment of any account or invoice issued by you in relation to the Google AdWords account; 3. identify the billing information for the account, including the name of the bank account, account holder and/or credit card holder of the account from which payment has been made in relation to the Google AdWords account; 4. identify the bank and account number and/or credit card number (from which all but for the last 4 digits may be redacted) from which payment has been made in relation to the Google AdWords account; 5. record a change of the account holder's details, including any change of the information identified in 1-4 above and the date on which such change occurred; 6. the search terms AdWords chosen by the account holder; 7. the location/s or geographic area/s (if any) to which the AdWords campaign is or was targeted by the account holder; 8. the budget or limit (if any) set by the account holder in relation to the AdWords account; and 9. any other information which would assist in identifying the account holder, whether such records are in electronic or other form. 18 On 22 July 2016, the solicitors for Titan Enterprises sent an email to Google informing Google that Titan Enterprises intended to apply for leave to issue the subpoena. The solicitors explained the nature of the documents that were sought. They sought confirmation that Google was the appropriate recipient for the subpoena. 19 On 28 July 2016, a representative from the Google's Legal Investigations Support team replied, explaining that the information requested related to the services offered by Google Asia Pacific. The representative then explained the circumstances in which Google Asia Pacific discloses information. Google Asia Pacific generally requires formal legal process issued from a Singapore jurisdiction and served in accordance with Singapore law before it can disclose to law enforcement authorities information related to any Google Asia Pacific users. However, Google Asia Pacific may disclose some user information in the absence of Singapore legal process if the applicant can provide valid legal process for such disclosure under the laws of their jurisdiction, and if such disclosure can be made consistent with Singapore law and Google Asia Pacific policies. The representative explained that upon receipt of legal process, Google would notify the subscriber of the request so that the subscriber has an opportunity to object. If no objection is received, the representative explained that Google Asia Pacific would produce the responsive information to the extent available in their systems. 20 Curiously, despite this response Titan Enterprises persisted in its application to issue an international subpoena to Google. Counsel submitted that Google knew of the provision of the documents by its subsidiary but Google did not deny that it had access to its subsidiary's documents. In other words, the unusual course of an international subpoena should be taken to issue a subpoena to both parent and subsidiary simply because there was no express denial by a parent that it had access to the documents of its subsidiary. Titan Enterprises might wish to consider whether it persists in the application for this subpoena, once it engages in proper communication with Google Asia Pacific. 21 In relation to Google Asia Pacific, Singapore is not a signatory to the Hague Convention. Service on an addressee in Singapore requires service through diplomatic channels. This increases the importance of at least making some effort to contact Google Asia Pacific to ascertain its views about the issue of the subpoena. Indeed, a significant factor in Ceramic Fuel Cells was that there had been communications between the issuing party and the recipient. The recipient had expressed no particular concern about being subpoenaed by an Australian court. 22 Another obstacle faced by Titan Enterprises in the issue of an international subpoena is that discretion would not usually be exercised to issue the subpoena if other reasonable avenues had not been exhausted. I accept that there are substantial obstacles to the use of the Foreign Evidence Act 1994 (Cth) for these purposes: see Rawson Finances Pty Ltd v Commissioner of Taxation [2016] FCAFC 95. However, one potential avenue which counsel accepted had not been considered was the possibility of commencing legal process in Singapore or the United States in aid of the legal proceedings in Australia. 23 Another matter which gives rise to concern is that the documents are being sought for purposes which are not merely identification of the identity of a respondent. Counsel did not make any submissions about the novel extension of the issue of an international subpoena for the purposes of, essentially, evidence gathering. 24 Although some of the matters in the subpoenas might be confined to the question of identity of the respondent there might be a fine line between documents concerned with establishing the identity of a respondent and those concerned with furthering a case against a respondent. In any event, in some respects the subpoenas go beyond the former. Documents are sought to establish the level of involvement of Dr Harmon in the creation, funding or administration of the Google AdWords campaign. In his fast track response, Dr Harmon does not admit that the Beware of Titan Garages website is promoted by use of a Google AdWords service. Unlike the leave which was granted for the issue of an international subpoena in Ceramic Fuel Cells to ensure that a party complied with its statutory notice obligations, the subpoena in this case is concerned with gathering information for the purpose of prosecuting a domestic proceeding. 25 By itself, this concern about the use of an international subpoena to gather evidence is a substantial one. It would be necessary for cogent submissions to explain why that reason alone is outweighed by factors such as the following: (i) there is no suggestion that the proceeding will involve any allegation against the proposed recipients in any way, (ii) the documents sought are a confined category, and (iii) the matters which are the subject of the claim are concerned with activities engaged in within Australia, and counsel accepted that the subpoena would be redrafted in a manner which limits the documents sought to those electronic communications originating from Australia, or with an IP address in Australia.

Yahoo! 26 The subpoena addressed to Yahoo! seeks documents relating to the email address dalecrossoz@yahoo.com. This email address is owned by Mr Cross. It is one of the two email addresses that Dr Harmon used to communicate with Mr Cross. Titan Enterprises seeks to subpoena from Yahoo!: Any documents which relate to the email address or account dalecrossoz@yahoo.com (the Dale Cross Yahoo email address), including those which: 1. were completed and provided to you (whether in hard copy or in electronic format) relating to the name and identify of the account holder of the Dale Cross Yahoo email address, including but not limited to: a. the subscriber or account holder's name, date of birth and other identifying details; b. the subscriber or account holder's: i. user name, screen names or other identities; ii. mailing address and residential address or business address; iii. email and/or IP address; iv. telephone numbers, including mobile telephone or cell phone number and other contact information; v. other contact details; 2. identify the date on which the Dale Cross Yahoo email address was created; 3. identify the country from which the Dale Cross Yahoo email address was created; 4. were completed and provided to you (whether in hard copy or in electronic format) to facilitate, authorise or make payment of any account or invoice issued by you, if any; 5. identify the billing information for the account including the name of the bank account, account holder and/or credit card holder of the account from which payment has been made in relation to any such account or invoice; 6. record any change of the account holder's details, including any change of the information identified in 1-5 above and the date on which such change occurred; 7. any other identifying information, whether such records are in electronic or other form; 8. records the log details (excluding content) of all emails passing between the Dale Cross Yahoo email address and the following two email addresses, or either of them, since 1 January 2014, including detail of any email deleted from the subscriber's account and the date on which such deletion occurred: a. titancomplaint@bewareoftitangarages.com and b. adamharmon@hotmail.com. 27 In some respects, the claim by Titan Enterprises in relation to Yahoo! is simpler and potentially stronger than in relation to Google Asia Pacific. As Titan Enterprises submits, leave to issue this subpoena is sought only to identify Mr Cross. The issue of identification goes to the heart of the proceedings itself, not merely building a case against Mr Cross. Further, the United States is a signatory to the Hague Convention which provides for the proposed method of service by delivery from an Authorised Receiving Authority to the registered office of each addressee. 28 But, again, the solicitors have not taken sufficient steps to ascertain the attitude of Yahoo! or to exhaust other possible reasonable courses to obtain the documents. Approximately two weeks ago, on 21 July 2016, a solicitor for Titan Enterprises emailed Yahoo! attaching correspondence that was to the same effect as the correspondence to Google. Two days' later, a representative from Yahoo! replied saying that the solicitor's email was sent to an email address used only for delivery of legal process of law enforcement officials, and that non-law enforcement personnel should deliver legal process to a different address (that was provided). It does not appear that Titan Enterprises has attempted to contact Yahoo! via that alternate address to ascertain the attitude of Yahoo!. At a minimum, that step should be taken.

Microsoft 29 The subpoena addressed to Microsoft seeks documents recording email communications between Dr Harmon's email address, and two other email addresses operated by Mr Cross. Titan Enterprises seeks to subpoena from Microsoft: 1. Any documents which record email communications, since 1 January 2014, between the email address adamharmon@hotmail.com (Harmon Hotmail) and either or both of the following email addresses: a. titancomplaint@bewareoftitangarages.com and b. dalecrossoz@yahoo.com including IP logs, IP Addresses, Usage Lots and email content in relation to same. 2. Any document which record detail of any email described in paragraph 1 being deleted from the Harmon Hotmail, the date on which such deletion occurred and any attempt to retrieve such deleted email. 30 These documents are primarily sought for the purposes of advancing Titan Garages' claim. Titan Enterprises submits that these emails are relevant because they will explain the process by which complaints were posted on the Beware of Titan Garages website, the genuineness and original source of those complaints, the degree to which those complaints were edited by the respondents, and whether the website was developed and published for the purpose of damaging Titan Enterprises' businesses. Titan Enterprises says that these are matters relevant to their claims under the Australian Consumer Law and to shed light on flagrancy, and the extent to which Dr Harmon was involved in the activities. 31 Once again, the attitude of Microsoft is not clear. Only three clear days ago, on 2 August 2016, a solicitor for Titan Enterprises emailed Microsoft informing it of their intention to issue a subpoena, and requesting confirmation that Microsoft is the appropriate recipient of that subpoena. No response has yet been received.

Conclusion 32 The grant of leave to issue a subpoena, with the purported force of a sovereign state, to an entity or person in another state who is not bound by it should not be lightly undertaken. A critical consideration is whether its issue would breach international law or international comity (as that expression is explained in CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 396). At a minimum, this requires that there should usually be evidence of communication, or substantial attempts at communication, with the proposed recipient of the subpoena. The absence of that communication currently precludes the grant of leave in this case. 33 In the course of these reasons, I have explained other matters of concern about the content and purpose of the proposed subpoenas. I have not sought to differentiate between those matters which relate to the power to issue the subpoena and those which are concerned with discretion. There are, of course, other matters which militate in favour of the exercise of a discretion to exercise any power to grant leave to issue the subpoenas. These include the fact that the subpoena relates only to documents concerning a very small, identifiable number of Australian citizens and which (if so confined) relate to conduct originating in Australia. The number of documents sought is also limited. There is no suggestion that any of the potential recipients could be involved in the litigation in any way. And the solicitor for Titan Enterprises has given a personal undertaking as to costs as required by rr 10.51(3) and 10.64 of the Federal Court Rules. However, whether there is power to issue the international subpoenas and, if so, whether discretion should be so exercised, will depend upon a consideration of all of the circumstances including those addressed in these reasons. The application will be relisted administratively. I certify that the preceding thirty three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman.

Federal Court Rules 2011(Cth)rr 24.01, 24.12, 10.44, 10.51(3), 10.64

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