FEDERAL COURT OF AUSTRALIA

Cook Building and Development Pty Limited v Citicorp International Ltd [2015] FCA 703

THE COURT ORDERS THAT:

1.    Pursuant to rr 10.42 and 10.43 of the Federal Court Rules 2011 (Cth), Cook Building & Development Pty Ltd be granted leave to serve the Originating Application by Prospective Applicant for Order for Discovery filed on 3 June 2015, together with the four accompanying affidavits of David Matthew Elix sworn 2 June 2015, 24 June 2015, 30 June 2015 and 7 July 2015 respectively (‘the Documents’), on Citicorp International Ltd (‘Citicorp’), in the People’s Republic of China in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (‘the Hague Convention’).

2.    Pursuant to r 10.64 of the Federal Court Rules 2011 (Cth), the District Registrar in her capacity as a forwarding authority under the Hague Convention request the Central Authority of the People’s Republic of China to serve the Documents on Citicorp by sending them by post to its registered office, being 50/F Citibank Tower, Citibank Plaza, 3 Garden Road Central, Hong Kong.

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

EX TEMPORE REASONS FOR JUDGMENT

1    The applicant seeks the leave of the Court to serve the originating process and the affidavits accompanying it on Citicorp International Limited (Citicorp) in Hong Kong in the People’s Republic of China. Service pursuant to the grant of such leave is one way by which service of proceedings in a foreign country may be effective for the purposes of attracting the jurisdiction of this Court.

2    Having regard to its nature, the application has been made ex parte.

3    The proceedings in respect of which leave to serve is sought comprise an application pursuant to r 7.23 of the Federal Court Rules 2011 for pre-action discovery.

4    The application for leave to serve is made pursuant to r 10.43(2) of the Federal Court Rules. That subrule permits a party to apply to the Court for leave to serve an originating application on a person in a foreign country in accordance with, amongst other things, the Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (the Hague Convention).

5    Rule 10.43(3) and (4) provide:

(3)    The application under subrule (2) must be accompanied by an affidavit stating:

(a)    the name of the foreign country where the person to be served is or is likely to be; and

(b)    the proposed method of service; and

(c)    that the proposed method of service is permitted by:

(i)    if a convention applies — the convention; or

(ii)    if the Hague Convention applies — the Hague Convention; or

(iii)    in any other case — the law of the foreign country.

(4)    For subrule (2), the party must satisfy the Court that:

(a)    the Court has jurisdiction in the proceeding; and

(b)    the proceeding is of a kind mentioned in rule 10.42; and

(c)    the party has a prima facie case for all or any of the relief claimed in the proceeding.

6    The initial affidavit of the applicant’s solicitor which accompanied the application did not depose to matters satisfying the requirements of subr (3)(b) and (c). Accordingly, I adjourned consideration of the application in order to allow the applicant to file a further affidavit. The applicant’s solicitor has now filed four affidavits in support of the application addressing various matters which arise in particular under r 10.43. I proceed on the basis that an affidavit by an applicant’s solicitor may satisfy the requirement for an accompanying affidavit contained in r 10.43(3).

7    In his affidavit made on 30 June 2015, the applicant’s solicitor deposed that the proposed method of service on Citicorp as the prospective respondent is for the Central Authority of the State in which Citicorp is located, that is to say, the People’s Republic of China, to serve the documents which are the subject of the application on Citicorp personally by leaving them at, or by sending them by post to, Citicorp’s registered office. The solicitor deposes in this respect to searches indicating that Citicorp’s registered office is 50/F Citibank Tower, Citibank Plaza, 3 Garden Road Central, Hong Kong.

8    The applicant’s solicitor goes on to depose that Art 5 of the Hague Convention provides that the Central Authority of the State shall itself serve the documents or arrange for them to be served “by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its Territory” and that a document “may always be served by delivery to an addressee who accepts it voluntarily”.

9    As indicated, it is service personally or service by post on Citicorp’s registered office which is contemplated in the present case. The applicant’s solicitor deposes that the General Provisions of the Rules of the High Court of Hong Kong prescribe in Ch 4A Order 10 entitled “Service of Originating Process” the methods by which ordinary service may be effected in Hong Kong. However, that rule operates subject to any Ordinance relating to the manner of service of documents on bodies corporate. There is such an Ordinance, being the service of Documents on Companies Ordinance. Section 827 in Ch 622 of that Ordinance provides that:

A document may be served on a company by leaving it at or by sending it by post to a company’s registered office.

10    Accordingly, the applicant submits that the method of service it proposes is authorised both by the Hague Convention itself and the relevant law of the People’s Republic of China, with the consequence that the requirements of r 10.43(3) are satisfied.

11    The circumstances giving rise to the application are these. The applicant is a construction company. On 1 December 2014, it entered into a contract with Jabiru Satellite Limited (Jabiru) for the construction of an installation on a property at Mawson Lakes in South Australia. The contract is referred to as the “Stage One Contract”.

12    The applicant asserts that it has performed the greater part of the work required of it under the Stage One Contract and that it is owed some $1.2 million in respect of two progress payment claims.

13    The first affidavit of the applicant’s solicitor indicates that on 17 April 2015, Citicorp appointed receivers and managers to Jabiru and to each of the other entities within the NewSat Group, being a group of companies associated with NewSat Limited. On the same day, administrators were also appointed to each of the companies in the NewSat Group.

14    The applicant’s solicitor has deposed to matters said to give rise to the prospective claim of the applicant against Citicorp. The applicant points to circumstances indicating the Citicorp gave its approval for Jabiru to enter into the Stage One Contract and to circumstances indicating that it must have been aware at the time that the applicant would undertake substantial work on the Mawson Lakes property. The applicant contends that, in these circumstances, Citicorp allowed Jabiru to enter into the Stage One Contract and thereby allowed it to carry out substantial work on the Mawson Lakes property, improving its value and the value of the mortgages held by Citicorp, without disclosing to the applicant that the NewSat Group was in breach of covenants under its financing facilities.

15    The applicant contends that the effect of the breaches meant that Citicorp was, at the time that it entered into the contract, unlikely to advance funds to Jabiru to enable it to pay for the work performed under the Stage One Contract. It asserts that, had the true position in respect of the financial position of NewSat Group been disclosed to it before it entered into the Stage One Contract, it would not have entered into that contract, or, alternatively, would have sought security for payment of the amounts due to it under the Stage One Contract.

16    The applicant claims that, in these circumstances, Citicorp was in breach of a duty of care which it owed to it; alternatively, that it had engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law; alternatively, that Citicorp’s conduct was unconscionable, and, alternatively again, that Citicorp will be unjustly enriched if it is permitted to have the benefit of the increased value to the property occasioned by the work which it has carried out without being required to account to the applicant for the value of that work.

17    It is neither possible nor necessary for the Court to attempt an assessment at this stage of the viability of these contemplated causes of action, although it appears that some may not be as viable as others. It is sufficient that there is material before the Court from which inferences are open which, if translated into findings of fact, would support the relief claimed by the applicant: see Perdaman Chemicals & Fertilisers v Griffin Coal Mining Co Pty Ltd (2011) FCA 1425 at [14].

18    Before commencing the proceedings, the applicant seeks to ascertain the extent of Citicorp’s knowledge that it was, or would be, performing work under the Stage One Contract. It also seeks to ascertain the true nature and extent of the breaches by the NewSat Group of their finance facilities at relevant times with a view to establishing the awareness of Citicorp in December 2014 of the prospect that it may exercise its powers to appoint receivers and managers and/or administrators to the members of the NewSat Group.

19    I am satisfied in terms of Federal Court Rules r 10.43(4)(a) that the Court does have jurisdiction to hear the claims contemplated by the applicant. In particular, the Court has jurisdiction to hear the claims based on contraventions of the Australian Consumer Law.

20    I am also satisfied in terms of r 10.43(4)(b) that the proceeding is of a kind mentioned in r 10.42. I rely in particular in that respect on the decision of Besanko J in Gearhart United Pty Ltd v Omni Oil Technologies (Asia) [2010] FCA 401; (2010) 267 ALR 630, which also concerned an application for leave to serve overseas an application for pre-action discovery.

21    The Court’s power to make orders for pre-action discovery is contained in r 7.23 of the Federal Court Rules 2011, which provides:

7.23    Discovery from prospective respondent

(1)    A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:

(a)    reasonably believes that he or she may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and

(b)    after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and

(c)    reasonably believes that:

(i)    the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and

(ii)    inspection of the documents by the prospective applicant would assist in making the decision.

(2)    If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1) (c) (i).

22    The applicant’s solicitor has deposed to matters indicating that Citicorp does not have a registered office in Australia. It is a Hong Kong registered company, and it appears to be part of the well-known banking group carrying on business in Australia and known as “Citi”.

23    Rule 10.43(3)(c) requires that the Court must be satisfied that the applicant has a prima facie case for all or any of the relief which it claims in the application, namely, a prima facie case for an order for pre-action discovery. In that respect, I accept that the applicant has outlined, although in very general terms, the nature of the causes of action which it considers it has against Citicorp; that it has made reasonable inquiries to ascertain the information it seeks before deciding whether to institute proceedings against Citicorp; and that, despite those inquiries, it considers that it still does not have sufficient information to assess the strength of its apparent causes of action and therefore to decide whether to commence the substantive proceedings. It is reasonable to suppose that Citicorp will have documents which are directly relevant to the applicant’s proposed claims (being its banker customer file), and, specifically, documents of the kind identified by the applicant’s solicitor in para 163 of his affidavit of 2 June 2015. I am satisfied that inspection of those documents will assist the applicant to determine whether to commence a proceeding in this Court.

24    Accordingly, I am satisfied that the applicant has satisfied the requirements of r 10.43 for the grant of leave.

25    Finally, I have considered whether there are any discretionary matters pointing against the grant of leave. In this respect, I have considered whether there are alternative means by which the applicant may be able to achieve service on Citicorp. I accept, however, that the applicant has written to Citicorp by email and by facsimile, asking it to nominate solicitors within Australia who will have instructions to accept service. The applicant’s solicitor has not received any reply to those requests. There is no reason to suppose, on the material before the Court, that the solicitor’s correspondence has not come to the attention of responsible persons within Citicorp. There do not seem to be readily available alternative means by which the applicant can serve the proceedings on Citicorp.

26    In these circumstances, I grant the applicant the leave which it seeks pursuant to r 10.42.

Associate:

Dated: 9 July 2015