Saffari v Amazon.com Inc

Case [2022] FCA 535

FEDERAL COURT OF AUSTRALIA

Saffari v Amazon.com Inc [2022] FCA 535

File number: NSD 195 of 2021
Judgment of: CHEESEMAN J
Date of judgment: 12 May 2022
Catchwords:

PRACTICE AND PROCEDURE – service – where the application for leave to appeal in respect of two interlocutory decisions of the Federal Circuit Court of Australia (now the Federal Circuit and Family Court of Australia) - where applicant is self-represented – where the first respondent (Amazon) is a foreign company based in the United States of America – where the second respondent, Jeffrey Bezos, one of 17 governors of Amazon, is outside the jurisdiction – where the applicant contends that service on the legal representatives of the fourth respondent in Australia, Amazon Commercial Services Pty Ltd, an Australian subsidiary of Amazon, is effective service on Amazon and Mr Bezos – whether service may be deemed pursuant to
r 10.48(b) of the Federal Court Rules 2011 (Cth) – whether service has been effected – whether service may be deemed - Held: application dismissed.

PRACTICE AND PROCEDURE – where applicant seeks an order for default judgment against Amazon and Mr Bezos for the relief in the statement of claim filed in the Circuit Court – where applicant contends that Amazon and
Mr Bezos are in default as they are aware of the proceedings by reason of having the relevant Court documents in their possession – whether orders entering default judgment should be made – Held: application dismissed. 

PRACTICE AND PROCEDURE – where applicant seeks alternative relief in the form of: first, substituted service orders and second, an order for service to be effected in accordance with the methods available under the Hague Convention pursuant to Division 10.4 of the Federal Court Rules 2011 (Cth) – whether relief as to the mode of service should be granted where the applicant has not sought leave to serve out of Australia under r 10.43(2) of the Federal Court Rules 2011 (Cth) - Held: application dismissed.

Legislation:

Corporations Act 2001 (Cth), ss 9, 109X

Federal Circuit Court of Australia Act 1999 (Cth), s 17A

Federal Court of Australia Act 1976 (Cth), ss 24(c), 24(1A), 24(1D)(ca), 37M

Federal Circuit Court Rules 2011 (Cth), rr 6.17, 13.10

Federal Court Rules 2011 (Cth), rr 10.23, 10.24, 10.43, 10.48, 10.49, 35.11(a), 35.12, 35.15, 35.16
Cases cited:

Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304; 332 ALR 396

Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243

Dometic Australia Pty Ltd v Houghton Leisure Products [2018] FCA 1573; 135 IPR 403

Federal Commissioner of Taxation v Zeitouni [2013] FCA 1011; 306 ALR 603

Kosmos Capital Pty Ltd v Turiya Ventures LLC [2019] FCA 528

Pollis v Zombor [2019] FCA 856

Ross v Cotter [2015] FCA 310

Saffari v Amazon.com Inc [2021] FCCA 340

Saffari v Amazon.com Inc (No 2) [2021] FCCA 341

Sanum Investments Limited v ST Group Co Ltd (No 2) [2019] FCA 1047

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AGLC
Saffari v Amazon.com Inc [2022] FCA 535
Case
[2022] FCA 535
Decision Date

CaseChat Overview and Summary

Saffari commenced proceedings against Amazon, Bezos, and two other respondents in the Federal Circuit Court of Australia, alleging breaches of contract, competition law, privacy law, and tortious duty. The Circuit Court dismissed the proceedings against Amazon, Bezos, and one of the other respondents on the basis that they had not been served within the required time frame. Saffari subsequently applied for leave to appeal to the Federal Court of Australia and sought alternative relief, including orders for deemed service, default judgment, and substituted service under the Hague Convention. The court had to determine whether the service on Amazon and Bezos was effective, whether default judgment could be entered, and whether alternative relief in the form of substituted service should be granted.

The court found that the service on Amazon and Bezos was not effective as it did not comply with the Federal Court Rules 2011. The court held that service on a foreign company based outside Australia requires strict adherence to the rules, and Saffari's attempts at service were insufficient. The court also found that default judgment could not be entered as Saffari had not demonstrated that Amazon and Bezos were aware of the proceedings and had chosen not to participate. Additionally, the court held that alternative relief in the form of substituted service was not appropriate as Saffari had not sought leave to serve out of Australia under the relevant rule. The court dismissed Saffari's application with costs.

The court dismissed Saffari's interlocutory application filed on 20 August 2021, with costs. The orders were entered in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The applicant’s interlocutory application filed on 20 August 2021 is dismissed with costs.

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

Background

Background to the litigation

No part of the relief sought by Mr Saffari on this interlocutory application is directed to Mr Thibodeaux or Mr Braeuniger.BACKGROUNDCircuit Court proceedings Mr Saffari, who has been self-represented throughout, commenced proceedings against the respondents in the Circuit Court on 31 July 2019. Amazon, Mr Bezos and Mr Thibodeaux did not at any time appear in the Circuit Court proceedings. As noted above, Mr Braeuniger appeared in the Circuit Court proceedings and his solicitors, Dentons, filed an address for service in those proceedings. The proceedings appear to have been first allocated to his Honour Judge Dowdy. Pursuant to an order of Judge Dowdy on 27 September 2019, Mr Saffari filed a document styled as "draft statement of claim". Then, on 20 January 2020, without leave, Mr Saffari filed a document styled as “statement of claim”. This document annexed various documents including primary documents, such as emails and printed copies of webpages. Mr Saffari’s claims against the respondents were variously expressed as claims for breaches of contract, competition law, privacy law and tortious duty related to the withdrawal of his self‑published book from the Amazon Kindle platform. At some point the proceedings came to be listed before his Honour Judge Street. The Circuit Court proceedings appear to have been fixed for hearing on 24 February 2021 of Mr Saffari’s application for summary judgment against Mr Braeuniger (which had been filed on 18 February 2021) and of the application for summary dismissal by Mr Braeuniger (which had been filed on 31 October 2019). The hearing on 24 February 2021 before Judge Street culminated in two sets of orders being made with two separate reasons for judgment being delivered. By those orders, Judge Street dismissed the proceedings commenced by Mr Saffari against Amazon, Mr Bezos and Mr Thibodeaux (PJ) and against Mr Braeuniger (PJ2). The proceedings against Amazon, Mr Bezos and Mr Thibodeaux were dismissed on the basis that the proceedings had not been served within 12 months as required by r 6.17 of the Federal Circuit Court Rules 2001 (Cth) and accordingly the proceedings were stale as against Amazon, Mr Bezos and Mr Thibodeaux. Judge Street noted that Mr Saffari believed that he had taken steps to effect service but found that the steps taken by Mr Saffari were not in accordance with the relevant rules. Judge Street declined to extend the time for the validity of the “application”. Later on the same day, Judge Street made further orders which included, first, an order refusing an oral application by Mr Saffari for leave to amend what was described as the proposed amended statement of claim and second, an order summarily dismissing the proceedings against Mr Braeuniger pursuant to s 17A of the Federal Circuit Court of Australia Act 1999 (Cth) and r 13.10 of the Circuit Court rules. Mr Braeuniger was represented by counsel at the hearing on 24 February 2021. Application for leave to appeal Mr Saffari commenced proceedings in this Court by filing an application for leave to appeal and a supporting affidavit on 10 March 2021 (the leave documents). The leave documents did not include a copy of the judgments in respect of which leave to appeal is sought as required under rr 35.12(2)(a) and (b) and 35.15 of the Rules. Mr Saffari annexed the orders made by Judge Street dismissing the proceedings as against Amazon, Mr Bezos and Mr Thibodeaux but not the orders dismissing the proceedings against Mr Braeuniger to his application seeking leave to appeal. Mr Saffari filed an amended application on 12 April 2021. The amended application makes reference to but does not annex documents including an order of Judge Street dated 24 February 2021 and a transcript of the hearing before Judge Street on 24 February 2021. There is no evidence before the Court that suggests that a version of the amended application, other than the version filed, has been served that is compliant with the requirements in rr 35.12(2)(a) and (b) and 35.15 of the Rules. Service of leave documents

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Mr Saffari submits that the rules governing service and service on corporations are a means to an end directed to ensuring that parties have been provided with relevant Court documents so that they are aware of the case against them and to ensure that a party is not held to account without knowing of the case against them. He contends, that “the rules governing service are not sacred rituals that must be performed even if it means repeating a process that has already been performed successfully”. Default judgment Mr Saffari seeks an order that the Court enter default judgment against Amazon and Mr Bezos in respect of the relief sought in the statement of claim filed in the proceedings below. As noted above, Mr Saffari seeks to rely on evidence in respect of the OAIC investigation for the purpose of this interlocutory application to establish that Amazon and Mr Bezos have been aware of these proceedings and have chosen not to participate in these proceedings. I have admitted the evidence in relation to the OAIC investigation for the purpose of this interlocutory application. Mr Saffari contends that Amazon and Mr Bezos are in possession of the relevant Court documents because of the Morneau Letter and therefore have knowledge of the proceedings. Further that it should be inferred that they intend to be in default either “because the matter is trivial to them” or because they wish “to end the matter without appearance to limit any damage to Amazon’s reputation”. Mr Saffari argues that Dentons is “taking instructions” from Amazon and Mr Bezos’ legal teams in Seattle. In support of this contention, Mr Saffari relies upon Dentons’ involvement in the investigation conducted by the OAIC regarding the privacy complaint made by Mr Saffari. Mr Dalzell, a partner of Dentons, has provided an affidavit which addresses Dentons’ role in the OAIC investigation. The respondent in the OAIC investigation is Amazon Australia Services Inc., a foreign company based in Wilmington, Delaware, USA (AAS). Dentons are the legal representatives of AAS in relation to the OAIC investigation. AAS is not a party to these proceedings. Dentons’ Privacy Team is instructed by Jeff Morneau, Associate General Counsel, Books, on behalf of AAS in relation to the OAIC investigation. Mr Morneau is located in Seattle. Mr Dalzell, who is acting in these proceedings for Mr Braeuniger wrote the initial letter from Dentons to the OAIC on 21 June 2021 confirming that Dentons had been retained by AAS and seeking an extension of time for AAS to reply to a notice issued by the OAIC. Since that initial letter, the OAIC investigation has been handled on behalf of AAS by Ben Allen, a partner in Dentons’ Privacy Team. Service out pursuant to Hague Convention or by substituted service In the event that Mr Saffari does not obtain orders in respect of deemed service, he applies in the alternative for orders that Amazon and Mr Bezos “be served again as per Rule 10.42” by one of three nominated “methods of service” or that the “method of service be in the form of the [Hague Convention] as per Division 10.4 of the [Rules]”.

Ratio Decidendi

Legal Principle Established

For substituted service, it is also necessary for an applicant to demonstrate that the method of service proposed is one which, in all reasonable probability, if not certainty, will be effective to bring knowledge of the process to the intended recipient: Pollis v Zombor [2019] FCA 856 at [13] (O’Bryan J). Service on companies under the Corporations Act Section 109X of the Corporations Act permits service of documents, including legal process, on companies by post to the registered offices of the company, and also by personal service on one director of the company. Section 109X applies in respect of service “on a company”. Company is relevantly defined as a company registered under the Corporations Act: s 9 “company”. The section is facilitative – it does not prevent service by any other mode of service: s 109X(6). MR SAFFARI’S SUBMISSIONS Mr Saffari’s affidavit includes material that is essentially by way of submission. I have read his material of that nature as a submission and treated it as supplementing his written submissions. Mr Saffari’s submissions are directed in part to voicing his opposition to Mr Braeuniger’s representatives being heard on this application and being permitted to file evidence. Mr Braeuniger sought to be heard on the present application. The principal argument on which his representatives relied was that their participation was desirable for the purpose of assisting the Court. Without any criticism of Mr Saffari, counsel for Mr Braeuniger submitted that it would be of assistance to the Court in the circumstances of this application because Mr Saffari is self-represented, the service issues are technical, the evidentiary materials were at risk of being incomplete in material respects unless supplemented (particularly in respect of corporate searches for relevant entities in Australia and overseas) and further that Mr Braeuniger should be afforded an opportunity to respond to Mr Saffari’s allegations in respect of the role of his legal representatives. Mr Braeuniger’s representatives further pointed to the overlap between the grounds of appeal in the draft notice of appeal directed to Mr Braeuniger and those directed to the remaining parties to demonstrate that they had an interest in being heard on the application. Over Mr Saffari’s objection, I granted leave for Mr Braeuniger’s representatives to file and serve evidence (including corporate searches in respect of the various entities referred to by Mr Saffari) and written submissions for the assistance of the Court. I concluded that to do so would facilitate the overarching purpose in s 37M of the FCA Act in respect of the interlocutory application. To the extent that the submissions filed by Mr Braeuniger traverse beyond the matters which arise in the interlocutory application (which is directed to obtaining relief against Amazon and Mr Bezos) I have disregarded them. Mr Saffari makes the following submissions in relation to the corporate relationships between Amazon and ACS (and their officers and representatives):(a)ACS, as a wholly-owned subsidiary, is an extension of its parent company, that is Amazon, and accordingly is not treated as an individual company;(b)Amazon is a shadow director of ACS and controls and dictates the policies of ACS;(c)Amazon is at law a director relying on ss 9 (definition “director”), 46 and 187 of the Corporations Act and s 4A of the Competition and Consumer Act 2010 (Cth) and Standard Chartered Bank of Australia Ltd v Antico (No 1) (1995) 38 NSWLR 290, Standard Chartered Bank of Australia Ltd v Antico (No 2) (1995) 38 NSWLR 328, Australian Securities Commission v AS Nominees Ltd [1995] FCA 1663; 62 FCR 504 , CSR Ltd v Wren (1997) 44 NSWLR 463 at 485; (d)Amazon, as the parent company of its wholly-owned subsidiary, has the same obligations as the director of the subsidiary including duty of care, liabilities and damages;(e)Amazon has a centralised control over all of its subsidiaries including in Australia;(f)ACS and Amazon are economically integrated and financially interdependent;(g)ACS and Amazon are administratively interdependent with an overlapping employment structure with a “Common Group Persona”;(h)Amazon appoints managers to their storefront subsidiaries in different countries and refers to them as Country Managers;(i)In Australia, a Country Manager is referred to as a Resident Director under the Corporations Act;(j)Amazon, in its capacity as a shadow director, appointed Mr Braeuniger as a Resident Director of ACS in August 2017; and (k)Amazon then removed Mr Braeuniger from his position as a Resident Director in October 2019 and transferred him to Europe.