Karis v Digital CC Management Pty Ltd - [2022] FCA 685

FEDERAL COURT OF AUSTRALIA
Karis v Digital CC Management Pty Ltd [2022] FCA 685

File number: WAD 60 of 2022

Judgment of: BANKS-SMITH J

Date of judgment: 13 June 2022

Catchwords: PRIVATE INTERNATIONAL LAW - urgent ex parte interlocutory application for the grant of an anti-suit injunction in relation to proceedings commenced in the District Court of Massachusetts in the United States of America - bitcoin trading business - falling out between former proponents of business - alleged agreements included term that agreements governed by laws of Western Australia - proceeding instituted by applicant in Federal Court of Australia - relief sought by applicant includes statutory claims asserting misleading or deceptive conduct - consideration of principles for anti-suit injunction - orders granted on interim basis

Legislation:
Competition and Consumer Act 2010 (Cth) s 138, Schedule 2 (Australian Consumer Law) ss 4, 18, 31, 236, 237

Judiciary Act 1903 (Cth) s 39B

Cases cited:
Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724

Babcock & Brown DIF III Global Co-Investment Fund LP v Babcock & Brown International Pty Ltd [2016] VSC 623

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

Herold v Seally (No 2) [2017] FCA 543

Ocean Dynamics Charter Pty Ltd v Hamilton Island Enterprises Limited [2015] FCA 460

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

Division: General Division

Registry: Western Australia

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs: 52

Date of hearing: 13 June 2022

Counsel for the Applicant: Mr MNC Harvey QC and Ms S Kearney

Solicitor for the Applicant: Monaco Lawyers

Counsel for the Respondents: The Respondents did not appear

ORDERS

WAD 60 of 2022

BETWEEN:
ALEXANDER KARIS

Applicant

AND:
DIGITAL CC MANAGEMENT PTY LTD (ACN 168 145 300)

First Respondent

DIGITAL CC HOLDINGS PTY LTD (ACN 167 754 725)

Second Respondent

EUGENI YURIEVICH TSVETNENKO

Third Respondent

ORDER MADE BY:

BANKS-SMITH J

DATE OF ORDER:

13 JUNE 2022

UPON THE APPLICANT GIVING THE USUAL UNDERTAKING AS TO DAMAGES THE COURT ORDERS THAT:
1.The first respondent is restrained until further order from taking any further step in proceeding 1:22-cv-10335 DJC in the United States District Court for the district of Massachusetts, United States of America, other than those steps as may be required to have the proceeding dismissed or stayed until further order.
2.The applicant serve the first respondent as soon as practicable with a copy of:
(a)this order;
(b)the interlocutory application dated 30 May 2022;
(c)the affidavit of Mr Karis affirmed on 27 May 2022 and annexure AXK-1;
(d)the affidavit of Mr Mingace affirmed on 7 June 2022;
(e)the applicant's submissions dated 8 June 2022; and
(f)any transcript of the ex parte hearing on 13 June 2022.

3.There is liberty to apply.
4.Costs are reserved.
5.Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), and r 1.32 and r 1.36 of the Federal Court Rules 2011 (Cth), these reasons…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FCA 685
Decision Date: 13 June 2022

CaseChat Overview and Summary

The applicant, Ms Karis, applied for an anti-suit injunction to restrain the first respondent, Mr Digital, from pursuing proceedings against her in the United States District Court for the District of Massachusetts. The dispute arose from a falling out between Ms Karis and Mr Digital over a bitcoin trading business. Ms Karis alleged that Mr Digital had breached agreements that were governed by Western Australian law. The court was tasked with determining whether to grant the injunction and, if so, what its terms should be.

The court considered the principles governing anti-suit injunctions, including the need to protect the jurisdiction of the Federal Court of Australia, the balance of convenience, and the existence of a serious issue to be tried. The court found that Ms Karis had established a serious issue to be tried and that the balance of convenience favoured granting the injunction. The court also considered that the parties had agreed that Western Australian law would govern their agreements, and that the Federal Court of Australia was therefore the appropriate forum for the resolution of their dispute.

Accordingly, the court granted the injunction on an interim basis, restraining Mr Digital from taking any further steps in the Massachusetts proceedings other than those required to have the proceeding dismissed or stayed until further order. The court also ordered that Ms Karis serve various documents on Mr Digital, including a copy of the court's order and reasons for judgment. The court reserved costs and granted liberty to apply.

The final orders of the court were that Mr Digital was restrained from taking any further steps in the Massachusetts proceedings other than those required to have the proceeding dismissed or stayed until further order. Ms Karis was ordered to serve various documents on Mr Digital, and costs were reserved. The reasons for judgment were published from chambers, and entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The first respondent is restrained until further order from taking any further step in proceeding 1:22-cv-10335 DJC in the United States District Court for the district of Massachusetts, United States of America, other than those steps as may be required to have the proceeding dismissed or stayed until further order.

2. The applicant serve the first respondent as soon as practicable with a copy of:

(a) this order;

(b) the interlocutory application dated 30 May 2022;

(d) the affidavit of Mr Mingace affirmed on 7 June 2022;

(e) the applicant's submissions dated 8 June 2022; and

(f) any transcript of the ex parte hearing on 13 June 2022.

3. There is liberty to apply.

4. Costs are reserved.

5. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), and r 1.32 and r 1.36 of the Federal Court Rules 2011 (Cth), these reasons for judgment in support of the orders made today are published from Chambers.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	WAD 60 of 2022
Judgment of:	BANKS-SMITH J
Date of judgment:	13 June 2022
Catchwords:	PRIVATE INTERNATIONAL LAW - urgent ex parte interlocutory application for the grant of an anti-suit injunction in relation to proceedings commenced in the District Court of Massachusetts in the United States of America - bitcoin trading business - falling out between former proponents of business - alleged agreements included term that agreements governed by laws of Western Australia - proceeding instituted by applicant in Federal Court of Australia - relief sought by applicant includes statutory claims asserting misleading or deceptive conduct - consideration of principles for anti-suit injunction - orders granted on interim basis
Legislation:	Competition and Consumer Act 2010 (Cth) s 138, Schedule 2 (Australian Consumer Law) ss 4, 18, 31, 236, 237 Judiciary Act 1903 (Cth) s 39B
Cases cited:	Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724 Babcock & Brown DIF III Global Co-Investment Fund LP v Babcock & Brown International Pty Ltd [2016] VSC 623 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Herold v Seally (No 2) [2017] FCA 543 Ocean Dynamics Charter Pty Ltd v Hamilton Island Enterprises Limited [2015] FCA 460 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Division:	General Division
Registry:	Western Australia
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	52
Date of hearing:	13 June 2022
Counsel for the Applicant:	Mr MNC Harvey QC and Ms S Kearney
Solicitor for the Applicant:	Monaco Lawyers
Counsel for the Respondents:	The Respondents did not appear

ORDER MADE BY:	BANKS-SMITH J
DATE OF ORDER:	13 JUNE 2022