X v Y and Z

[2017] NSWSC 1214

Supreme Court

New South Wales

Medium Neutral Citation:	X v Y & Z [2017] NSWSC 1214
Hearing dates:	8 September 2017
Date of orders:	08 September 2017
Decision date:	08 September 2017
Jurisdiction:	Equity
Before:	Pembroke J
Decision:	See paragraph [29]
Catchwords:	INJUNCTIONS – foreign defendants – jurisdiction to grant EQUITY – personal orders – in personam – to take effect ‘everywhere in the world’ PROCEDURE – grounds for service outside the jurisdiction – foreign defendants – no voluntary submission – irrelevant to jurisdiction STATUTE – Court Suppression & Non-Publication Orders Act – exercise of discretion
Legislation Cited:	Court Suppression & Non-Publication Orders Act 2010 (NSW)
Cases Cited:	Australian Competition and Consumer Commission v Chen [2003] FCA 897 Humane Society International Inc v Kyodo Senpaku Kaisha Limited [2006] FCAFC 116 Macquarie Bank Limited v Berg [1999] NSWSC 526 National Australia Bank v Dessau [1988] VR 521
Category:	Principal judgment
Parties:	X – plaintiff Y – first defendant Z – second defendant
Representation:	Counsel: R G McHugh SC with J R Williams and Ms B Ng – for the plaintiff No appearance for the defendants   Solicitors: Ashurst Australia – for the plaintiff No appearance for the defendants
File Number(s):	2017/271185

EX TEMPORE Judgment

1. This is an ex parte application by the plaintiff for the continuation and expansion of orders made by Stevenson J on 6 September. That application was also ex parte.

2. The plaintiff is a firm which has a large number of partners. The evidence indicates that some person has been effectively impersonating senior officers of the plaintiff and causing to be published confidential information on platforms owned or controlled by the defendants. That evidence satisfied Stevenson J that interlocutory injunctions should be granted against the defendants. I am equally satisfied that it is appropriate, at this interlocutory stage, to continue those injunctions, and to refine and expand them.

3. The defendants have not appeared today. The orders of Stevenson J included orders that the defendants, by themselves, their servants and agents ‘be restrained from publishing the Offending Material’ on certain platforms, websites or otherwise and requiring them to ‘cause the offending material to be removed’ from those platforms and websites.

4. Stevenson J made orders for the service of the summons, a confidential affidavit, and his orders, by facsimile transmission to a number belonging to the defendants; by email to the address of a person called Nathan Burman, who appears to be a senior employee of an entity owned or controlled by the defendants; and by hand delivery to Mr Burman. His Honour did not require service of the bulky confidential exhibit that was tendered at the hearing.

5. The orders relating to service appear to have been satisfactorily performed. It is evident, in any event, that Mr Burman has acknowledged receipt of the documents that his Honour required to be served. It is irrelevant that an attempt to deliver a number of pages of the confidential exhibit by facsimile transmission to the nominated fax number was unsuccessful at the time. As I said, there was no requirement to serve that document.

6. On 7 September, Mr Burman sent an email to the solicitor for the plaintiff stating, ‘Thanks for sending through. Have forwarded to relevant teams’. Later on 7 September, he sent another email stating, ‘Can confirm all have been received by email’. Later on 7 September, the solicitor for the plaintiff sent an email to a Mr Grant from Baker & McKenzie stating as follows:

I refer to our telephone discussion, and note you act for Y and Z. I have arranged for a folder containing exhibit YPH1 to be delivered to you this afternoon. I enclose two letters which I was about to send to your clients when you called for your attention.

7. One letter was addressed to Mr Burman, whose title is ‘Head of PR and Communications,’ and the other to the defendants. I should mention that one of the defendants is a corporation that appears to have its place of business in California; and the other is a corporation that appears to have its place of business in the Republic of Ireland.

8. The letters set out and attached the orders made by Stevenson J, and requested that the defendants:

Please ensure you comply with the orders forthwith. If you continue to fail to comply with the orders, we will draw these matters to the Court's attention tomorrow.

9. This morning, an email was received from, or on behalf of, the defendants which set out a number of supposed complaints or objections relating to matters concerned with service, jurisdiction and the substance of the orders made. Precisely who sent the email is not evident from its terms or its header.

10. The email commences by acknowledging that the defendants have received a letter dated 6 September 2017 from the solicitors for the plaintiff. It then states that neither defendant voluntarily submits to the jurisdiction of New South Wales. This may be so, but it is beside the point. That is because an issue of voluntary submission only arises if a foreign defendant has not been validly served in accordance with the rules of this Court.

11. Those rules provide that an originating process may be served outside of Australia without leave in a number of cases. Several of those cases apply on the facts of this case. They include circumstances where the claim is for ‘other relief in respect of a breach of a contract,’ or ‘an injunction to compel or restrain the performance of any act in Australia,’ or when the ‘claim is founded on a cause of action arising in Australia,’ or any combination of the above. Among other things, the injunction sought to compel or restrain the performance of certain conduct everywhere in the world. That necessarily includes Australia.

12. This Court, therefore, has jurisdiction. And whether or not the defendants choose to voluntarily submit to that jurisdiction is a matter that does not presently arise. As I have mentioned, the orders for service made by Stevenson J have been complied with.

13. The second matter raised by the email is a complaint that the defendants have not received a complete copy of the exhibit. I have already stated that that was not required and is not necessary. It is clear, however, that it has now been provided to Baker & McKenzie and presumably also to Mr Burman in the office of the Australian entity that is owned or controlled by the defendants.

14. The third matter raised by the email is that the defendants state that, until determination of the proceedings, they have ‘withheld’ a certain account so that it cannot ordinarily be accessed from Australia. Unfortunately, this is only a half-measure. The evidence before me has indicated that the formal process of ‘withholding’ an account, in accordance with the practices and procedures of the defendants, will not prevent access to that account or any information that may be published through it.    

15. Evidence was given that earlier this morning, it was possible to access a relevant internet page using a web proxy server which purports to be based in the United States of America with a certain IP address. That page was not restricted or withheld. It contained the same offending information that had been accessible in Australia and which had caused the original application to be made.

16. The next complaint is that this Court can only restrain a party to ensure compliance with the laws of New South Wales and, that therefore, a restraint of publication of offending material outside New South Wales exceeds ‘the proper limits of use of the injunctive power of the Court’.

17. This appears to be based on a misconception. It appears to derive from a decision called Macquarie Bank Limited v Berg [1999] NSWSC 526. That was a defamation case, however, and involves principles which are unique to the law of defamation, and quite unlike those that apply when this Court is exercising its equitable in personam jurisdiction to restrain a defendant from breaching its duty to the plaintiff.

18. I should point out that the underlying cause of action against the defendants is based upon its apparent knowledge and facilitation of what appear to be clear breaches of duty in relation to the use of confidential information by a person or persons who may be employed by the plaintiff.

19. The defendants appear to have allowed the offending information to be published on its platforms notwithstanding the rules of its operating systems that expressly provide that users ‘may not publish or post other people's private and confidential information without their express authorisation and permission’.

20. The fact that courts of equity have long exercised jurisdiction to make in personam orders restraining foreign defendants from breaching duties to a plaintiff is exemplified by numerous decisions. One of those is Australian Competition and Consumer Commissionv Chen [2003] FCA 897 in which Sackville J referred at paragraph [40], to:

the well-established proposition that, apart from a few exceptional cases such as those relating to title to foreign land... a court of equity will not consider itself to be debarred from interceding, if it is otherwise appropriate to do so, merely because it appears that the property to which the claims of the plaintiff relate is situate abroad or that the acts he seeks to have performed or enjoined, as the case may be, will, if they take place at all, take place outside the jurisdiction.

21. Sackville J also added reference to the observations of Brooking J in National Australia Bank Ltd v Dessau [1988] VR 521 at 522, who said:

The jurisdiction is grounded not on any pretension to the exercise of judicial power abroad but on the circumstance that the defendant, being amenable to the Court’s jurisdiction, can be personally directed to act or not to act.

22. More recently, the Full Federal Court in Humane Society International Inc v Kyodo Senpaku Kaisha Limited [2006] FCAFC 116 at [16] had no difficulty with this well-known proposition. The Chief Justice and Finkelstein J said:

There are many cases where parties out of the jurisdiction have been subjected to an injunction regarding their conduct abroad. The cases to which we have referred show that if a person is properly served in accordance with the court’s exorbitant jurisdiction, that person (so far as the jurisdiction of the court is concerned) is in the same position as a person who is within its territorial jurisdiction.

23. There are, of course, sometimes discretionary reasons why the Court will not grant an injunction against a foreign defendant. But there is no such obvious reason in this case, at least as the evidence currently stands.

24. I should return to the email from the defendants. The next matter referred to in that email is that, it states that the defendants had already investigated and ‘suspended’ certain accounts after determining that they violated the defendants' terms of service.

25. Once again, this gives rise to a question as to the effectiveness of the processes of ‘suspension’ or ‘withholding’, both of which are mentioned in the email. It seems appropriate that a more effective means of achieving the intention that lies behind the Court's orders, is to require the ‘removal’ of the relevant accounts. This will be addressed in the form of orders that I am about to pronounce.

26. A further complaint concerns the breadth of the injunction granted by Stevenson J. The Court is always concerned to ensure that injunctions are practical, reasonable and appropriate to the particular facts in question. I am satisfied, on the evidence that has been presented, that not only was the injunction granted by Stevenson J appropriate in the circumstances, but it is necessary for me to make further orders which have the effect of expanding and refining the injunction in order to ensure that the interests of the plaintiff are protected in the interim period before a final hearing.

27. Finally, the email requests that the matter be stood over for a period so that the defendants can ‘properly investigate the matter, consider their position and have a proper opportunity to seek legal advice’. I am not satisfied that any significant adjournment should be granted given that Baker & McKenzie appears to be acting in some capacity in relation to the claims against the defendants. And the evidence reveals that the orders so far made have not been fully effective to ensure that the interests of the plaintiff are protected.

28. For those reasons I propose to make further orders until15 September 2017 or earlier determination of these proceedings and to bring the matter back for mention before the duty judge next Wednesday 13 September for the allocation of a final hearing date. My intention is that on that date the Court will know whether the defendants propose to appear and contest the orders sought by the plaintiff. That will be relevant to the allocation of a final hearing date, when it should occur and how long should be allowed. If the defendants maintain their current position and do not appear then I would expect that a final hearing date before a judge of this court could be allocated within a few days, on the basis of a hearing that should take three hours or less.

29. I therefore make the detailed orders set out in the Short Minutes of Order as against the defendants everywhere in the world. The orders include an order pursuant to Sections 8(1)(a) and (e) of the Court Suppression & Non-Publication Orders Act 2010 (NSW). I am amply satisfied that, given the content of the offending information and the identity of the plaintiff, the suppression order is in the public interest, notwithstanding the importance of open justice. I am less convinced that it is necessarily in the public interest to suppress the identity of the defendants. That matter should be addressed at the final hearing.

30. Service of these further orders, together with the further affidavits and exhibits that were read and tendered before me this morning, should be effected by email and facsimile to the defendants at the addresses and numbers already used. Service should also be effected on Baker & McKenzie. I do not suggest that service on Baker & McKenzie is necessarily effective service on the defendants but in the practical world it will be useful, and in the interests of justice, that they be provided with the documents so that they and their clients can make a decision as soon as possible about their role in relation to the proceedings.

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Decision last updated: 11 September 2017