Bolin Technology Co Ltd v BirdDog Technology Ltd

Case [2024] FCA 286

FEDERAL COURT OF AUSTRALIA

Bolin Technology Co Ltd v BirdDog Technology Ltd [2024] FCA 286

File number(s): VID 58 of 2024
Judgment of: ANDERSON J
Date of judgment: 26 March 2024
Catchwords:

PRACTICE AND PROCEDURE – where respondent in Federal Court proceeding has filed proceedings in the United States (US Proceeding) – where respondent seeks a permanent or temporary stay of Federal Court proceeding on the basis that this Court is a clearly inappropriate forum – where connecting factors and legitimate personal or juridical advantages to proceeding commenced in Australia – application dismissed

PRACTICE AND PROCEDURE – where “anti-anti-suit injunction” sought by applicant in Federal Court proceeding restraining anti-suit application in US Proceeding – where there is a real possibility that applicant may not be able to bring its claims under the Australian Consumer Law in the US Proceeding – application granted

PRACTICE AND PROCEDURE – where broader anti-suit injunction sought by applicant restraining the respondents from continuing US Proceeding – where injunction not necessary for protection of Federal Court proceeding – where US Proceeding not vexatious or oppressive – application dismissed

Legislation:

Competition and Consumer Act 2010 (Cth) ss 5(1)(c), 5(1)(g), Sch 2 (Australian Consumer Law)

Goods Act 1958 (Vic), s 58

Cases cited:

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345

Henry v Henry (1996) 185 CLR 571

Home Ice Cream Pty Ltd v McNabb TechnologiesLLC (No 2) [2018] FCA 1093

Karpik v Carnival plc (The Ruby Princess) (Stay Application) [2021] FCA 1082

Kraft Foods Group Brands LLC v Bega Cheese Limited [2018] FCA 549

Morris v McConaghy Australia Pty Ltd (No 3) [2018] FCA 606

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197

Puttick v Tenlon Ltd (2008) 238 CLR 265

Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491

Reinsurance Australia Corp Ltd v HIH Casualty and General Insurance Ltd (in liq) (2003) 254 ALR 29

Sterling Pharmaceuticals Pty Ltd v Boots Co (Aust) Pty Ltd (1992) 34 FCR 287

TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 129
Date of hearing: 7 March 2024
Counsel for the Applicant: Mr D A Hughes and Dr C Harris
Solicitor for the Applicant: King & Wood Mallesons
Counsel for the Respondents: Ms H Tiplady
Solicitor for the Respondents: K&L Gates

ORDERS

VID 58 of 2024
BETWEEN:

BOLIN TECHNOLOGY CO., LTD

Applicant
AND:

BIRDDOG TECHNOLOGY LIMITED (ACN 653 360 448)

First Respondent

BIRDDOG AUSTRALIA PTY LTD (ACN 612 531 245)

Second Respondent

ORDER MADE BY:

ANDERSON J

DATE OF ORDER:

26 MARCH 2024

THE COURT ORDERS THAT:

1.The Respondents’ interlocutory application dated 22 February 2024 be dismissed.

2.The Respondents pay the Applicant’s costs of the Respondents’ interlocutory application dated 22 February 2024.

3.The Respondents file and…

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Details
AGLC
Bolin Technology Co Ltd v BirdDog Technology Ltd [2024] FCA 286
Case
[2024] FCA 286
Decision Date

CaseChat Overview and Summary

Bolin Technology Co Ltd brought an action against BirdDog Technology Ltd and BirdDog Australia Pty Ltd in the Federal Court of Australia, asserting claims under the Australian Consumer Law. BirdDog sought a permanent and temporary stay of the proceeding, arguing that the appropriate forum was the United States, where a related proceeding had been filed. The court considered the factors relevant to determining whether Australia was a clearly inappropriate forum and whether the proceeding was vexatious or oppressive. BirdDog's application for a permanent stay was dismissed as it had not shown that Australia was a clearly inappropriate forum. The application for a temporary stay was also dismissed, as the US proceeding was at an early stage, and there was no significant risk of injustice or multiplicity of proceedings.

The court found that BirdDog had not satisfied the heavy burden of proving that Australia was a clearly inappropriate forum. The court noted that the proceeding was not vexatious or oppressive, and there was no evidence that the US court was unable to provide adequate protection of BirdDog's rights. The court also found that BirdDog's application for an anti-anti-suit injunction was successful, as there was a real possibility that BirdDog might not be able to bring its ACL claims in the US proceeding. The court granted an injunction restraining BirdDog from taking any further steps to restrain the hearing of Bolin's claim in the Australian proceeding. However, the court dismissed BirdDog's application for a broader anti-suit injunction, as it was not necessary for the protection of the Australian proceeding, and the US proceeding was not vexatious or oppressive.

Orders

Orders of the court

1. Upon the usual undertaking for damages, the Respondents be restrained from taking any further step in the proceeding commenced by it against the Applicant in the United States District Court for the Central District of California or elsewhere:

(a) to restrain or seek to restrain the hearing of the Applicant’s claim in this proceeding, or any other aspect of this proceeding, whether by way of an application for an anti-suit injunction or other form of relief; and

(b) to otherwise interfere with the Applicant’s claim for relief in this proceeding.

2. The Applicant’s interlocutory application dated 22 February 2024 otherwise be dismissed.

3. The costs of the Applicant’s interlocutory application dated 22 February 2024 be reserved.

4. These orders be entered forthwith.

5. There be liberty to apply on reasonable notice.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

BirdDog relies on the affidavit of Ryan Keech sworn on 21 February 2024; the affidavit of Daniel Charles Miall affirmed on 22 February 2024; and the affidavit of Alex Kozinski, Former Chief Judge of the United States Court of Appeals for the Ninth Circuit sworn on 4 March 2024.FACTUAL BACKGROUND BirdDog BirdDog is a vendor of streaming video technology, including pan, tilt and zoom robotic remotely controlled video cameras. The First Respondent, BirdDog Technology Limited (BirdDog Technology), is incorporated in Australia, listed on the Australian Securities Exchange, and has its principal place of business in Victoria. The Second Respondent, BirdDog Australia Pty Ltd (BirdDog Australia), is a wholly owned subsidiary of BirdDog Technology. It also has its principal place of business in Victoria. BirdDog’s headquarters are in Melbourne. BirdDog’s employees live in Victoria, and the United States, amongst other places. Daniel Miall is the Chief Executive Officer and co-founder of BirdDog Technology and BirdDog Australia. He lives in Melbourne.Bolin Bolin is a company organised under the laws of the People’s Republic of China and manufactures pan, tilt and zoom (PTZ) cameras. It has its principal place of business in Shenzhen, People’s Republic of China. In its submissions before this Court, BirdDog refers to a further company described as “Bolin LLC”. Bolin submits that no such company exists, and instead, this is a reference to a company that distributes Bolin’s cameras in the United States, 2082 Technology Pty Ltd. Hereafter in these reasons, I will refer to this company as 2082/Bolin LLC. 2082/Bolin LLC is incorporated in California. Its principal place of business is in California. It is alleged by BirdDog in the US Proceeding, and BirdDog says it will allege in this proceeding if this proceeding is not stayed, that Bolin and 2082/Bolin LLC operate as a “united enterprise”, and that both companies are engaged in the same work. Mr Lo is the Chief Executive Officer and co-founder of each of Bolin and 2082/Bolin LLC. He lives in California. His wife, Jennifer Lee, a defendant in the US Proceeding, also lives in California. Neither Bolin nor 2082/Bolin LLC own any real property in Australia.The Dispute The nature of the dispute is identified in Bolin’s Statement of Claim filed on 24 January 2024 and the affidavits of Mr Guo and Mr Miall, which may be summarised as follows. Bolin manufactures PTZ cameras in China. BirdDog Technology and BirdDog Australia are Australian companies that sell PTZ cameras. Bolin has manufactured PTZ cameras for BirdDog since 2018. There is some inconsistency in the evidence as to the contractual arrangements between Bolin and BirdDog for the manufacture of PTZ cameras. In summary:(a)In his affidavit at [13], Mr Guo deposes that, in around September 2017, Bolin and BirdDog entered into discussions about Bolin manufacturing cameras for BirdDog. On 4 September 2017, Bolin and BirdDog concluded a non-disclosure agreement (NDA) to discuss a proposal for Bolin to manufacture BirdDog-related products and product development. The parties to the agreement are described as Bolin and “BirdDog Pty Ltd”. Bolin’s address is identified as Shenzhen. The governing law of the NDA is Victoria.(b)In his affidavit at [14], Mr Guo deposes that these negotiations were successful and Bolin began, from 2018, developing, manufacturing and supplying PTZ cameras to BirdDog. (c)In his affidavit at [16]-[22], Mr Guo deposes that, between 2018 and 2021, BirdDog issued approximately 90 purchase orders to Bolin, and both parties established a set of practices and processes for the order, manufacture, payment and delivery of PTZ cameras. In summary:(i)BirdDog would send a purchase order for the PTZ cameras from its office in Victoria to Bolin’s office in Shenzhen.(ii)Bolin would communicate acceptance of the Purchase Order either through email, WeChat message or by commencing manufacture of the specified products.(iii)Upon acceptance of the Purchase Order, Bird Dog would pay a non-refundable deposit.(iv)Bolin would use the deposit, and where required its own capital, to purchase the necessary components and materials to manufacture the camera products.(v)The manufacture of the camera products involved a research and development process, which occurred in Bolin’s facilities in Shenzhen.(vi)Prior to the final products being shipped, BirdDog and Bolin would agree to the final unit price for the product, and BirdDog would pay Bolin the outstanding balance of the purchase order prior to shipment and delivery of the products.(vii)Upon receipt of full payment from Bird Dog’s Australian bank account into Bolin's nominated Chinese bank account, Bolin would ship the products to BirdDog. (d)A letter dated 1 January 2021, sent from “Bolin Technology” to “BirdDog Australia”, and styled as a “Manufacturing Agreement and Warranty Statement”, refers to the prior relationship of BirdDog and Bolin. The letter states that “Bolin has an understanding and agreement, established over more than 3 years of working together including a history of production, with BirdDog to manufacture BirdDog branded cameras and controllers (products) on behalf and under the instruction of BirdDog”. The letter further states that the relevant products are assembled with a combination of BirdDog-supplied componentry and Bolin-supplied componentry, with the finished product sold under the BirdDog brand. The letter states that Bolin delivers finished goods to BirdDog’s “logistic centre of choice”. The address of the sender at the bottom of the letter is in Shenzhen.(e)In his affidavit at [12], Mr Miall deposes that, between June 2021 and May 2023, “BirdDog and the Bolin Parties [a defined term said to refer to ‘Bolin LLC and Bolin Ltd’] entered into various oral and written contracts (the Contracts) pursuant to which the Bolin Parties agreed to produce and deliver to BirdDog various cameras”. Mr Miall does not clarify which documents are said to constitute the “written contracts” to which he refers. He further states that, to negotiate these contracts, he attended in person meetings with Mr Lo and Ms Lee in Los Angeles, Las Vegas, Shenzhen and Amsterdam: at [18]. He also deposes that he met with Mr Lo virtually and, on almost all occasions, Mr Lo was at either his home or his office in Los Angeles: at [19].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The US Proceeding is not at such an advanced state as would justify staying the present proceeding. At this stage, the US Court has determined an interlocutory dispute relating to writs of attachment and, at the time of the hearing, would shortly hear further interlocutory motions to dismiss the proceeding. These appear to be preliminary interlocutory disputes in the proceeding. I therefore also do not consider that the state of the US Proceeding establishes that this Court is a “clearly inappropriate forum” for this proceeding, or that the proceeding before this Court is “vexatious or oppressive”.Conclusion For the above reasons, BirdDog has not established that Australia is a “clearly inappropriate forum”, nor has it established that the proceeding before this Court is “vexatious or oppressive”. As a consequence, BirdDog’s application for a permanent stay will be dismissed.BIRDDOG’S APPLICATION FOR A TEMPORARY STAY OF THE PROCEEDING BirdDog’s submissions In the alternative, by its written submissions, BirdDog applies for this proceeding to be temporarily stayed pending the determination of the US Proceeding. BirdDog, in applying for a temporary stay, relies on its submissions made in support of a permanent stay. BirdDog submits that having regard to the relevant considerations as identified in Sterling Pharmaceuticals Pty Ltd v Boots Co (Aust) Pty Ltd (1992) 34 FCR 287 (Sterling) at 291 (Lockhart J) (which are set out further at [85]), the interests of justice would be best served by ordering a temporary stay. In particular, BirdDog submits that it would be undesirable for this Court to make findings in respect of the same sub-stratum of facts, and some of the same legal issues, as the US Court will make in the US Proceeding. On the hearing of BirdDog’s application, counsel for BirdDog made submissions in support of a further alternative order – namely, that this proceeding be stayed for a period of 90 days. Counsel submitted that this would leave time for the motions to dismiss filed by Mr Lo, 2082/Bolin LLC and Ms Lee to be heard and determined, for issues regarding service to be agitated and determined, and to allow the issue of the jurisdiction of the US Court to hear Bolin’s claims under the ACL to be determined by the US Court. Consideration It was not in dispute between the parties that this Court has the power to control its own proceedings, and that power extends to enabling it to order a temporary stay of a proceeding, including where another proceeding is pending in another court, and it is desirable that that proceeding is determined first: Sterling at 290-291. The relevant considerations to be taken into account in determining whether a temporary stay is appropriate include: which proceeding was commenced first; the public interest; the undesirability of two courts competing to see which of them determine the common facts first; that the law should strive against permitting multiplicity of proceedings in relation to similar issues; how far advanced the proceedings are in each court; circumstances relating to witnesses; and generally balancing the advantages and disadvantages to each party: Sterling at 290-291.

Ratio Decidendi

Legal Principle Established

Bolin submits that BirdDog cannot satisfy its heavy onus that Australia is a “clearly inappropriate forum”. Bolin submits that Australia is clearly the appropriate forum for this proceeding and, as a consequence, BirdDog's interlocutory application for a permanent stay should be refused. Consideration The power to stay this proceeding if Australia is a “clearly inappropriate forum” is discretionary. In Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 (Oceanic), Deane J stated, at 247-8, that the power to stay a proceeding on “inappropriate forum grounds” involved a “subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression”. Nonetheless, his Honour stated that the power should “only be exercised in a clear case”: Oceanic at 248. In the subsequent case of Voth, Mason CJ, Deane, Dawson and Gaudron JJ stated that the jurisdiction to grant a stay is to be exercised with “extreme caution”: at 554. The rationale for the exercise of the power to stay is the avoidance of injustice between the parties: Voth at 554. BirdDog bear the onus of establishing that Australia is a “clearly inappropriate forum”: Oceanic at 248; Voth at 564; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (Renault) at [78], [82] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). In determining whether Australia is a “clearly inappropriate forum”, the focus is “upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum”: Voth at 565, quoted in Puttick v Tenlon Ltd (2008) 238 CLR 265 (Puttick) at [27] (French CJ, Gummow, Hayne and Kiefel JJ). In determining whether Australia is a “clearly inappropriate forum”, the Court may take into account relevant “connecting factors” and “legitimate personal or juridical advantage[s]”: Voth at 564-5. In CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (CSR) at 400-1, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ stated that, where different issues are involved in local and foreign proceedings but the different proceedings arise out of the same sub-stratum of fact, the question is whether, in the context of the whole controversy, the proceedings are “vexatious or oppressive” in the sense that they are “productive of serious and unjustified trouble and harassment” or “seriously and unfairly burdensome, prejudicial or damaging”: see also Henry v Henry (1996) 185 CLR 571 (Henry) at 587 (Dawson, Gaudron, McHugh and Gummow JJ). As Deane J said in Oceanic at 245:Notions of vexation and oppression in this context involve an essential element of injustice. If the action has a significant connection with the territorial jurisdiction of the local court (e.g. domicile of the defendant, locus of the relevant transactions, applicable law) and regularly instituted proceedings in that court involve some legitimate and substantial advantage to the plaintiff (e.g. effective enforcement of any judgment) which would not be available in proceedings in the foreign tribunal which the defendant claims is the appropriate one for their determination, it is difficult to imagine circumstances in which it could properly be held by the local court that it was such an inappropriate forum for the proceedings that their continuance would be oppressive or vexatious to the defendant.