FEDERAL COURT OF AUSTRALIA
Vautin v BY Winddown, Inc
[2016] FCA 632
File number: NSD 546 of 2016 Judge: RARES J Date of judgment: 11 May 2016 Legislation: Australian Consumer Law ss 3(1)(b), 3(10), 54, 259(3), 260, 271
Competition and Consumer Act 2010 (Cth) s 5(1)(g)
Federal Court Rules 2011 (Cth) rr 10.42, 10.43
Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Opened for signature 15 November 1965. 658 UNTS 163 (entered into force 1 November 2010)
Cases cited: Hope v Bathurst City Council (1980) 144 CLR 1
Lehman Brothers Australia Limited (in liq) v Lehman Brothers Special Financing Inc [2015] FCA 779
Date of hearing: 11 May 2016 Registry: New South Wales Division: General Division National Practice Area: Admiralty and Maritime Category: No Catchwords Number of paragraphs: 19 Counsel for the Applicant: Mr AM Stewart SC Solicitor for the Applicant: Banki Haddock Fiora Counsel for the Respondents: The Respondents did not appear ORDERS
NSD 546 of 2016 BETWEEN: WILLIAM VAUTIN
Applicant
AND: BY WINDDOWN, INC.
First Respondent
EAGLE YACHTS PTY LTD ACN 108 311 404
Second Respondent
JUDGE:
RARES J
DATE OF ORDER:
11 MAY 2016
THE COURT ORDERS THAT:
1.The applicant have leave to serve the following documents on the first respondent in the United States of America in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965:
(a)the originating application;
(b)the statement of claim;
(c)the applicant’s genuine steps statement; and
(d)this order.
2.The applicant serve a copy of the Court’s reasons for these orders when published as soon as possible by prepaid mail on the first respondent at its registered agent’s address being:
Corporate Creations Network Inc
3411 Silverside Rd #104
Wilmington DE 19810
United States of America
3.The costs of the interlocutory application filed on 18 April 2016 be reserved.
THE COURT NOTES:
4.The originating application is listed for a case management hearing at 9:30am on 15 June 2016.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)RARES J:
This is an application for leave to serve BY Winddown, Inc., the first respondent, in the United States of America pursuant to r 10.43 of the Federal Court Rules 2011 (Cth). Prior to 27 May 2015, that corporation was known as Bertram Yacht, Inc.
Background
Bertram manufactured yachts. On the material before me, Bertram had appointed the second respondent, Eagle Yachts Pty Limited as its exclusive dealer in Australia.
The proceedings arise out of the sale by Eagle Yachts to the applicant, William Vautin, of a 700 Bertram Enclosed Bridge motor yacht that Mr Vautin subsequently named Revive. The contract price was USD3 million in cash, plus USD75,000 for shipping costs, together with Mr Vautin delivering a trade-in Bertram 630 motor yacht worth a further AUD1.2 million amounting to a total consideration in the…
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- AGLC
- Vautin v BY Winddown, Inc [2016] FCA 632
- Case
- [2016] FCA 632
- Decision Date
CaseChat Overview and Summary
The court had to determine whether the ACL could be applied to conduct outside Australia by a body corporate carrying on business within Australia. The court also had to decide whether there was a prima facie case that Bertram was Mr Vautin's exclusive dealer in Australia and whether there was a course of business between Bertram and Eagle Yachts, which was Bertram's exclusive dealer for the purposes of sale to persons in Australia. Additionally, the court had to assess whether there was a contravention of the guarantee of acceptable quality under s 54 of the ACL and whether Mr Vautin had a right of action against Bertram pursuant to s 271(1) of the ACL.
The court held that the ACL could be applied to Bertram's conduct outside Australia if it was carrying on business in Australia. The court accepted that the course of trade between a manufacturer and its exclusive dealer within Australia would prima facie amount to carrying on business within Australia. The court also found that Mr Vautin was a consumer and that there was a prima facie case that the yacht was not of acceptable quality. The court concluded that there was a contravention of the guarantee of acceptable quality under s 54 of the ACL and that Mr Vautin had a right of action against Bertram pursuant to s 271(1) of the ACL.
The court granted the applicant leave to serve documents on Bertram in the United States in accordance with the Hague Service Convention. The court also ordered that a copy of the Court's reasons for these orders be served on Bertram by prepaid mail. The costs of the interlocutory application were reserved, and the originating application was listed for a case management hearing.
Orders
Orders of the court
1. The applicant have leave to serve the following documents on the first respondent in the United States of America in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965:
(a) the originating application;
(b) the statement of claim;
(c) the applicant’s genuine steps statement; and
(d) this order.
2. The applicant serve a copy of the Court’s reasons for these orders when published as soon as possible by prepaid mail on the first respondent at its registered agent’s address being:
Corporate Creations Network Inc
3411 Silverside Rd #104
Wilmington DE 19810
United States of America
3. The costs of the interlocutory application filed on 18 April 2016 be reserved.
THE COURT NOTES:
4. The originating application is listed for a case management hearing at 9:30am on 15 June 2016.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Mr Vautin argued that the ACL extended to the engaging in conduct outside Australia by a body corporate carrying on business within Australia pursuant to s 5(1)(g) of the Competition and Consumer Act. He argued that there was a prima facie case that Eagle Yachts was Bertram’s exclusive dealer in Australia and that there was a course of business, represented by the builder’s certification and first transfer of title, between Bertram and Eagle Yachts in respect of the yacht, dated 15 December 2011 that was annexed to Mr Doctor’s affidavit. He contended that these facts gave rise to a prima face case that Bertram carried on business in Australia by selling the products that it manufactured to Eagle Yachts, as its exclusive dealer for the purposes of sale to persons in Australia.Consideration I accept that argument for the purposes of this application. In Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9, Mason J, with whom Gibbs, Stephen, Murphy and Aickin JJ agreed, held that the popular meaning of the expression “carrying on business” implied a repetition of acts and activities that possessed something of a permanent character engaged in for the purpose of profit on a continuous and repetitive basis. The course of trade between a manufacturer and its exclusive dealer within the jurisdiction, who was expected to purchase from the manufacturer and then on-sell to persons within the area of exclusive dealership, in my opinion, prima facie is an activity that would appear to amount to the carrying on of business within Australia within the meaning of s 5(1)(g) of the Competition and Consumer Act. Mr Vautin appears to be a person who acquired Revive as a consumer. That is because luxury motor yachts, such as Revive, are goods of a kind ordinarily acquired for personal, domestic or household use or consumption within the meaning of s 3(1)(b) of the ACL, as is alleged in the statement of claim. That gave rise to the presumption in s 3(10) that Mr Vautin, unless the contrary be established, should be presumed to be a consumer in relation to Revive. Having regard to the nature of the defects alleged in the statement of claim, as appear to have been analysed by Mr Dovell in his report, I am satisfied that there is a prima facie case that at the time Revive was supplied to Mr Vautin it was not of an acceptable quality within the meaning of s 54 of the ACL because, on the evidence before me, she was not fit for the purposes for which goods of that kind are commonly acquired, nor was she free from defects, or safe or durable. In those circumstances, there would have been a contravention of the guarantee in s 54(1) of the ACL that provided that goods be of an acceptable quality if a person supplied them in trade or commerce to a consumer and the supply did not occur by way of public auction. Although Bertram did not directly supply Revive to Mr Vautin, Mr Vautin had a right of action against it pursuant to s 271(1) of the ACL if there were a failure to comply with a guarantee under s 54 that applied to a supply of goods to a consumer. That is because s 271(1) created a direct right of a person affected in relation to the goods to bring an action to recover damages against their manufacturer.