Titan Enterprises (Qld) Pty Ltd v Cross - [2016] FCA 890

FEDERAL COURT OF AUSTRALIA
Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 890

File number: QUD 411 of 2016

Judge: EDELMAN J

Date of judgment: 5 August 2016

Catchwords: PRACTICE AND PROCEDURE – application to issue international subpoenas to foreign corporations – proposed recipients in the United States and Singapore – whether the Court should exercise its discretion to issue the subpoenas –whether appropriate attempts have been made to contact proposed addressees

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

Foreign Evidence Act 1994 (Cth)

Cases cited:
Australian Competition and Consumer Commission v PT Garuda Indonesia and Another (No 9) [2013] FCA 323

Ceramic Fuel Cells Limited (In Liq) v McGraw-Hill Financial, Inc [2016] FCA 401

CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345

Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 2 WLR 453; [1986] Ch 482

Rawson Finances Pty Ltd v Commissioner of Taxation [2016] FCAFC 95

Stemcor (A/sia) Pty Ltd v Oceanwave Line SA [2004] FCA 391

Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 664

Date of hearing: 5 August 2016

Registry: Queensland

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Category: Catchwords

Number of paragraphs: 33

Counsel for the Applicants: Mr B Gardiner

Solicitor for the Applicants: Mullins Lawyers

Counsel for the First Respondent: The First Respondent did not appear

Counsel for the Second Respondent: The Second Respondent did not appear

ORDERS

QUD 411 of 2016

BETWEEN:
TITAN ENTERPRISES (QLD) PTY LTD

First Applicant

RIGEL CONSTRUCTIONS PTY LTD

Second Applicant

RIGEL ERECTORS PTY LTD

Third Applicant

AND:
DALE CROSS

First Respondent

ADAM CLIFFORD HARMON

Second Respondent

JUDGE:

EDELMAN J

DATE OF ORDER:

5 AUGUST 2016

THE COURT ORDERS THAT:
1.The applicants’ amended interlocutory application dated 3 August 2016 be adjourned.
2.Costs reserved.

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

REASONS FOR JUDGMENT
EDELMAN J:
Introduction

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…

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: [2016] FCA 890
Decision Date: 5 August 2016

CaseChat Overview and Summary

In the matter of Titan Enterprises (Qld) Pty Ltd versus Cross, the Federal Court was asked to decide whether it should issue international subpoenas to two foreign corporations, one based in the United States and the other in Singapore. The application was made by Titan Enterprises, seeking to compel the production of documents from the corporations in question as part of the litigation. The case arose from an earlier decision in which the Court had found that Titan Enterprises had contravened Australian consumer law.

The primary legal issue the Court had to address was whether it should exercise its discretion to issue the subpoenas, given the potential for breach of international law or international comity. The Court considered whether the applicants had made appropriate attempts to communicate with the proposed recipients of the subpoenas. In this instance, only three days before the application, Titan Enterprises had emailed one of the corporations to inform it of the intended subpoena. However, no response had been received, which was a significant factor in the Court’s decision.

The Court concluded that, in light of the absence of communication with the proposed recipients, it should not exercise its discretion to issue the subpoenas. The Court noted that the issuance of subpoenas with the force of a sovereign state to entities or persons in other states should not be done lightly. It emphasised the importance of evidence of communication, or substantial attempts at communication, with the proposed recipients. The Court also highlighted other concerns about the content and purpose of the proposed subpoenas but did not differentiate between issues of power and discretion. The Court decided to adjourn the application administratively and reserved the matter of costs.

Orders

Orders of the court

1. The applicants’ amended interlocutory application dated 3 August 2016 be adjourned.

2. Costs reserved.

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

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 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. 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.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	QUD 411 of 2016
Judge:	EDELMAN J
Date of judgment:	5 August 2016
Catchwords:	PRACTICE AND PROCEDURE – application to issue international subpoenas to foreign corporations – proposed recipients in the United States and Singapore – whether the Court should exercise its discretion to issue the subpoenas –whether appropriate attempts have been made to contact proposed addressees
Legislation:	Federal Court Rules 2011 (Cth) rr 24.01, 24.12, 10.44, 10.51(3), 10.64 Foreign Evidence Act 1994 (Cth)
Cases cited:	Australian Competition and Consumer Commission v PT Garuda Indonesia and Another (No 9) [2013] FCA 323 Ceramic Fuel Cells Limited (In Liq) v McGraw-Hill Financial, Inc [2016] FCA 401 CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345 Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 2 WLR 453; [1986] Ch 482 Rawson Finances Pty Ltd v Commissioner of Taxation [2016] FCAFC 95 Stemcor (A/sia) Pty Ltd v Oceanwave Line SA [2004] FCA 391 Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 664
Date of hearing:	5 August 2016
Registry:	Queensland
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	33
Counsel for the Applicants:	Mr B Gardiner
Solicitor for the Applicants:	Mullins Lawyers
Counsel for the First Respondent:	The First Respondent did not appear
Counsel for the Second Respondent:	The Second Respondent did not appear