FEDERAL COURT OF AUSTRALIA

Vautin v BY Winddown, Inc (No 2) [2016] FCA 1235

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application, filed on 15 August 2016, be dismissed.

2.    The first respondent pay the applicant’s costs of the interlocutory hearing.

3.    The second respondent’s costs of the interlocutory hearing be its costs in the cause.

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:

1    On 11 May 2016, I granted the applicant, William Vautin, leave to serve the first respondent, BY Winddown, Inc. (which was formerly known as Bertram Yacht, Inc.), out of the jurisdiction in the United States of America under the 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): Vautin v BY Winddown, Inc [2016] FCA 632.

2    I said in my earlier reasons at [17] that I was not then making any findings of fact that were in any way determinative of the ultimate issues in the proceedings and that I was identifying what issues, at that stage of the controversy, appeared to exist between Mr Vautin and Bertram. I explained the circumstances in which the claim arose (at [2]-[9]).

3    In essence, Mr Vautin purchased from Eagle Yachts Pty Limited, the second respondent, the exclusive dealer in Australia appointed by Bertram, a yacht he subsequently named Revive for a contract price of USD3 million in cash, 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 order of well over AUD4 million. Mr Vautin took delivery of Revive in early March 2012.

4    Bertram has applied to set aside the service of the proceedings on it. Alternatively, Bertram sought a stay, on the grounds that, first, relief that is as good as that available to Mr Vautin here is available to him in the State of Florida in the United States of America, and, secondly, the limited warranty that Mr Vautin signed and returned to Bertram when he took delivery of the yacht, contained an exclusive jurisdiction clause requiring any proceedings to be brought in Miami-Dade County, in Florida and for the law of Florida (excluding its conflicts of law principles) to apply.

5    For the purposes of the present application, a deal of further evidence has become available than was before me when I granted leave to serve outside the jurisdiction and different arguments have been deployed by all of the parties to what had been put on the ex parte application. Having heard detailed and extensive argument by counsel for the parties, I have reached a conclusion as to the disposition of the present application.

The issues

6    There are three substantive issues to be decided. First, Mr Vautin accepted that he carries the onus of establishing jurisdiction in order to defeat Bertram’s application to set service on it aside. Relevantly, the Federal Court Rules 2011 provide in r 10.43(1)(a) that service of an originating application on a person in a foreign country is effective for the purpose of a proceeding, if and only if, (in a case such as this where leave is sought prior to service) the Court has given leave (as I did) to serve the person under r 10.43(2) in accordance with the Hague Convention and r 10.43(4) provides:

(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.

Note 1:    The law of a foreign country may permit service through the diplomatic channel or service by a private agent – see Division 10.5.

Note 2:    Rules 10.63 to 10.68 deal with service of local judicial documents in a country, other than Australia, that is a party to the Hague Convention.

Note 3:    The Court may give permission under subrule (4) on condition – see rule 1.33.

(emphasis added)

7    The table in r 10.42 provides that service out of the jurisdiction may be effected in proceedings of the kind specified in any of 24 items, including item 20, which reads:

Proceeding properly brought against a person who is served, or is to be served, in Australia, if the person to be served has been properly joined as a party.

8    Section 22 of the Federal Court of Australia Act 1976 (Cth) provides:

The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.

9    Mr Vautin argued that r 10.43(4)(c) of the Federal Court Rules should be construed so that jurisdiction would be established if he demonstrated a prima facie case against Eagle Yachts for any of the relief claimed in the proceedings regardless of whether he can establish, at the present time, a prima facie case against Bertram for any relief sought against it. During the course of argument, I referred to the provisions of item 20 in the table to r 10.42. That prompted counsel for Bertram to refer to the decision of Ryan, Kiefel and Gyles JJ in Costa Vraca Pty Ltd v Bell Regal Pty Limited [2003] FCAFC 305.

10    The second issue is whether, if a prima facie case under an item in the table to r 10.42 against Bertram is necessary, Mr Vautin has established that Bertram was a body “carrying on business within Australia” for the purposes of s 5(1)(c) and (g) of the Competition and Consumer Act 2010 (Cth) which provide that the Australian Consumer Law (other than Pt 5-3) extends to the engaging in conduct outside Australia by:

(g)    bodies corporate … carrying on business within Australia.

11    The argument proceeded on the basis that all parties accepted, for the purpose of this application, that Mr Vautin has a prima facie case that Revive was not of acceptable quality within the meaning of s 54 of the Australian Consumer Law, because of a variety of alleged defects from which she suffers, and that he would be able to recover damages under ss 271(1) and 272(1) from Bertram for breach of the statutory guarantee imposed on it by force of s 54(1) subject to establishing that it carried on business in Australia. Manufacturers of goods supplied to consumers in Australia are liable inter alia under ss 271(1) and 272(2) for damages if they fail to comply with the statutory guarantee of the goods being of acceptable quality within the meaning of s 54. The issue is whether, for that cause of action, Bertram was carrying on business in Australia.

12    The third issue is whether a stay should be granted on this basis of, first, the adequacy of the relief available against Bertram were it sued in Florida and, secondly, the Florida exclusive jurisdiction clause in the limited warranty.

13    I should also note that, for completeness, Bertram made a formal submission that the decision of the High Court in Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538 was wrongly decided. Clearly enough, that argument was not pursued before me and I need not say anything more about it as I am bound by the decision.

Background

14    Bertram is part of a group of companies owned by an Italian boat builder known as the Ferretti Group that apparently has subsidiaries in a large number of countries throughout the world.

15    The evidence that has become available for the purposes of this hearing includes the text of the dealer agreement entered into between Bertram and Eagle Yachts for the period 2005 to 2008, Bertram’s sales and service manuals for the years 2007 and 2009, and Bertram’s sales guides for the years 2011 and 2012. Relevantly, the parties accepted, for the purposes of the argument as to jurisdiction, that Bertram had appointed Eagle Yachts as its exclusive dealer in Australia in 2005. The dealer agreement conferred on Eagle Yacht the exclusive right to “sell, service and promote” Bertram’s products in Australia (cll 1 and 3). Bertram’s products were pleasure yachts manufactured by it in the United States and sold by Bertram ex-works to Eagle Yachts for resale within Australia, together with parts and accessories (cl 2).

16    Eagle Yachts’ responsibilities included that it would develop, to Bertram’s satisfaction, as Bertram in its sole and absolute discretion determined, sales of Bertram’s products in Australia and, in doing so, Eagle Yachts would make use to the greatest extent reasonable, of its own resources and of Bertram’s, advertising, sales promotion and merchandising material (cl 4.1). In the initial phases of the dealer agreement, Eagle Yachts had to sell a minimum of four boats in the year to 31 August 2006 and five in the succeeding year in order to comply with its obligations. Eagle Yachts had to provide a service facility within Australia that was equipped to provide service to owners of Bertram products (cl 4.2). Eagle Yachts had to identify itself clearly as a Bertram dealer in a way that Bertram had approved in advance (cl 4.3).

17    In addition, Eagle Yachts had to provide high quality and timely warranty service on all Bertram products, without regard to the dealership from which that product had been purchased and “to make all claims in accordance with Bertram’s warranty service policies, as set forth in” its relevant manuals and memoranda (cl 4.9). This meant that Eagle Yachts had to service Bertram yachts, which were ocean-going vessels that had been purchased overseas but arrived in Australia and required warranty service, for the purposes of Bertram’s overall conduct of its business.

18    Clause 5 excluded the relationship of agency between Bertram and Eagle Yachts. Bertram had to furnish, through Eagle Yachts, to first-use purchasers of each product (i.e. retail consumers), Bertram’s written limited warranty in effect at the time of the delivery of the product to Eagle Yachts (cl 6.4). Bertram would also establish and publish suggested retail prices for its products (cl 6.1). When Eagle Yachts purchased a yacht, it would buy it from Bertram on an ex-works basis so that property and risk would pass at Bertram’s factory door in Florida in the United States (cl 6.5).

19    Eagle Yachts had extensive obligations to give effect to Bertram’s advertising campaigns and promotional material in a manner that Bertram approved and in a way that would maintain the quality and reputation of Bertram’s and its products’ names (cl 7). Those requirements were, clearly enough, intended to deal with the preservation of Bertram’s goodwill in Australia.

20    The dealer agreement contained a notation that required a dealer to initial cl 9.3 to signify its agreement to its terms. That clause provided that the governing law would be that of the State of Florida, excluding its conflicts of laws principles, and that any disputes arising out of or relating to the subject matter of the dealer agreement would be litigated in the State or Federal Courts located in Miami-Dade County, Florida. It is not clear whether Eagle Yachts specifically agreed to cl 9.3, because in the version of the dealer agreement currently in evidence no dealer initials appeared to signify its acknowledgment of the application of the clause’s provisions.

21    Once the dealership agreement was on foot, Eagle Yachts branded itself as the “exclusive dealer in Australia for Bertram Yachts, Inc” on its letterhead and other promotional material. Although not presently relevant, on 28 October 2013 Eagle Yachts gave notice of termination of the exclusive dealership. The notice referred to a number of yachts for which Eagle Yachts had outstanding warranty claims and obligations which it expected Bertram to meet.

22    Mr Vautin signed, but did not date, Bertram’s limited warranty card underneath the following wording:

I have received a copy of and have read The Bertram Yacht Warranty and understood that said Warranty becomes effective upon receipt by Bertram Yacht, Inc of this Warranty Card completed and signed. I understand that there is no other Warranty by Bertram Yacht, Inc applicable to the above described boat purchased by me.

23    Mr Vautin did not indicate whether he had received his owner’s manual where requested on the card. The limited warranty appears to have been set out on the reverse of the card which Mr Vautin also signed. The reverse side contained a number of provisions in small print, to which it is not presently necessary to refer, other than to note that these included an entire agreement clause relating to Bertram’s limited warranty and, at its conclusion, the following words:

Choice of Forum and Law: To the extent permitted by law, jurisdiction and venue shall be solely and exclusively at Miami-Dade County, Florida, and Florida law excluding its principles of conflicts of laws will apply.

THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE.

24    Bertram is no longer manufacturing yachts. Bertram’s solicitor gave evidence on information and belief based on what a former vice-president of Bertram and Florida resident, Donald Jones told him. Mr Jones said that:

    he had retired in 2014;

    Bertram’s office was in Florida;

    all of Bertram’s personnel, including builders, were located in Florida or elsewhere in the United States;

    Bertram never held any shares in Eagle Yachts;

    Eagle Yachts never held any shares in Bertram;

    Bertram never had any employees or directors in common with Eagle Yachts;

    Bertram had no assets in Australia;

    Bertram had no business involving the sale or purchase of used or second hand vessels, although Eagle Yachts’ business did.

25    Bertram’s solicitor also obtained evidence on information and belief as to the applicability of United States’ Federal and Florida statutes and Florida common law provisions, relating to consumer warranties. Bertram offered an undertaking, through its solicitor, that, in the event that Mr Vautin were to commence proceedings against it in Florida that included a claim under the Magnuson-Moss Warranty Act 15 USC §2301 in relation to Revive, Bertram would not contend that that Act did not apply by reason that there was no privity of contract for sale directly between him and it for the purposes of that Act, that being an area of unsettled law in Florida as to whether such privity is required.

Bertram’s submissions – item 20

26    Bertram argued that r 10.43(4)(c) should be construed as requiring an applicant for service out of the jurisdiction to establish a prima facie case for all or any of the relief claimed in the proceeding against the person to be served outside the jurisdiction. It argued that this was a consequence of the ordinary principle of private international law that respected the rights of foreigners who, through the use of what are known as “long arm statutes”, could be subjected to the jurisdiction of courts in places other than where the foreigner was located.

27    It argued that Courts approach claims to exercise jurisdiction over foreigners with circumspection and that a construction of r 10.43(4)(c) that promoted such circumspection was consistent with its argument. It submitted that a number of judges, including myself, had expressed views in the course of granting or confirming orders for the service of foreigners out of the jurisdiction to similar effect: for example, what Carr J said in Bray v F. Hoffmann-La Roche Limited (2003) 130 FCR 317 at 333 [55] and what I had said in a passage I quoted from an earlier decision of my own (Lehman Brothers Australia Ltd (In Liq) v Lehman Brothers Special Financing Inc [2015] FCA 779 at [32]-[34]), in granting leave to serve out of the jurisdiction in Vautin [2016] FCA 632 at [16].

Consideration – item 20

28    I reject Bertram’s argument. In my opinion, the discretionary power conferred on the Court under r 10.43 to order service out of the jurisdiction is enlivened if the party applying has satisfied the Court of each of the three matters for which r 10.43(4) provides: namely that the Court has jurisdiction in the proceeding, that the proceeding is of a kind mentioned in r 10.42, and the party has a prima facie case for all or any of the relief claimed in the proceeding.

29    Here, it is not disputed that the proceeding falls squarely within the words of item 20 of the table in r 10.42 and, accordingly, r 10.43(4)(b) is satisfied. Importantly, s 22 of the Federal Court of Australia Act gives the Court power to grant all remedies to which any of the parties may be entitled in respect of a claim properly brought forward by that party, so far as possible, in order to avoid multiplicity of proceedings. In Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 161 Gibbs CJ, Stephen, Mason and Wilson JJ said that this power is:

… designed to ensure that the Court can grant relief which is appropriate to both legal and equitable claims and to avoid multiplicity of proceedings. Its effect is to enable the Court to dispose of all rights, legal and equitable, in the one action, so far as that is possible ...

30    It is evident that item 20 in the table to r 10.42 is based on s 22 and the importance of resolving controversies in a way, where possible, that binds all the parties to the particular controversy.

31    The word “proceeding” in r 10.43(4)(c) is defined in s 4 of the Act as meaning “a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding and also includes an appeal”. It is quite inappropriate to construe provisions conferring jurisdiction or granting powers to a Court by making implications or imposing limitations which are not found in the express words: Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.

32    Carr J said in Bray at 130 FCR at 333 [55] that the primary judge in that case had not erred in holding that it was sufficient for the purposes of the analogue of r 10.43(4)(c) that he could be satisfied that the applicant had a prima facie case for relief on the basis of any of the causes of action relied upon by the applicant against each of the foreign respondents in that case. However, his Honour was deciding the case on the basis of the arguments then raised. As I read Branson J’s reasons, particularly in discussing the discretion under that analogue rule in Bray 130 FCR at 356-357 [186]-[190], her Honour did not express a similar limitation: i.e. that there had to be a prima facie case against each of the foreign respondents.

33    In any event, Costa Vraca [2003] FCAFC 305 was heard and decided after the Full Court decision in Bray 130 FCR 317. In Costa Vraca [2003] FCAFC 305, the applicants made claims against foreign suppliers of seeds purchased in Australia from other respondents who were the foreign suppliers’ Australian distributors. The applicants alleged that the seeds were the source of bacterial canker affecting their tomato crops and sought to serve the foreign suppliers overseas. Ryan, Kiefel and Gyles JJ said that provisions like the analogue to item 20 had a long history, citing (Costa Vraca [2003] FCAFC 305 at [14]-[16]) among a large body of authority Massey v Heynes & Co (1888) 21 QBD 330 at 338 per each of Lord Esher MR, Lindley LJ and at 339, per Lopes LJ. As Lord Esher MR said:

The question, whether a person out of the jurisdiction is a ‘proper party’ to an action against a person who has been served within the jurisdiction, must depend on this, – supposing both parties had been within the jurisdiction would they both have been proper parties to the action? If they would, and only one of them is in this country, then the rule says that the other may be served, just as if he had been within the jurisdiction. (emphasis added)

34    In a case like the present, the Court must be satisfied that a prima facie case exists against, at least, a party within the jurisdiction and that the foreigner is a necessary or proper party to the proceedings so as to justify the exercise of the Court’s long arm jurisdiction. Thus, in Tyne Improvement Commissioners v Armement Anversois S/A (The Brabo) [1949] AC 326 at 338-339 Lord Porter referred to the care that the Court should exercise before allowing service out of the jurisdiction under an analogue to item 20. He said (at 339):

No doubt it is in some circumstances desirable that persons not usually subject to the jurisdiction should be brought before our courts in order that a case may be fairly and fully disposed of, but the right to add the foreigner should be sparingly used, more particularly in a case where the party within the jurisdiction may not be subject to any liability and therefore the action would fail as against the only person or persons who could be sued here were it not for the rule. ...

But there are cases where there is a genuine and substantial doubt whether the parties within the jurisdiction are liable or not, in which leave has been given. Massey v. Heynes & Co [(1888) 21 QBD 330], in which those within the jurisdiction were sued for breach of warranty of authority and those without on the alternative plea that they had in fact authorized the contract said to be unwarranted, is perhaps as good an example as can be chosen, since in that case, the claims being alternative, it was impossible that the action should succeed against the one unless it failed against the other. (emphasis added)

35    The position discussed in Costa Vraca [2003] FCAFC 305 at [21]-[24] is similar to that in these proceedings, where Mr Vautin’s claims arise out of a common substratum of fact. As Ryan, Kiefel and Gyles JJ said there (at [21]):

Where damage is said to have been suffered as a result of the use of defective goods, the joinder of the manufacturer of the goods to a claim made by a purchaser against the local distributor is a routine application of the principle that all parties involved in a controversy should be before the Court in order that the controversy may be determined having regard to all relevant rights and interests (see s 22 Federal Court of Australia Act 1976 (Cth)). A local party in the position of the [foreign] respondents would plainly be properly joined or properly added pursuant to the rules of Court to which we have referred. The fact that the manufacturer (or in this case the supplier to the local distributor) is overseas does not change the nature of the rights and interests which are involved in determining that controversy. (emphasis added)

36    Their Honours then held (at [22]) that the claims asserted against the foreign suppliers involved the same damage as claimed against the local respondents and that these were all part of the same controversy or matter. They also said that even if that analysis were not correct, the claims against the foreign suppliers were associated matters under s 32 of the Federal Court of Australia Act. They concluded (at [23]-[24] and see also BDT Holdings Pty Ltd v Piscopo (No 2) [2009] FCA 1126 at [32] where I applied these principles):

23    This analysis makes clear that the application of O 8 r 2(2)(c) is not to be approached by considering only the Federal claim against the overseas party by reference only to conduct of the overseas party in Australia. The question is whether there is a prima facie case that the foreign party is involved in the ‘matter’ which is the controversy to be determined. The finding that there was a prima facie case that the bacterial canker had been caused by the Daniela seed is sufficient to involve the suppliers of that seed in the same ‘matter’ or ‘matters’ in the sense just discussed as the parties which have been served within the jurisdiction.

24    In those circumstances there would be no reason for the exercise of any residual discretion which may exist to not confirm service. The policy of having all parties concerned in a controversy before the Court and all aspects of a controversy before the Court at the one time is sound. It ensures that those with the knowledge and interest to do so bring forward all relevant material and so enable the adversarial system to work best. In the present case the conduct of the actual supplier of the seed is an integral part of the factual matrix to be considered and determination of the issues would be very much hampered without the involvement of that party. (emphasis added)

37    In my opinion, the principles identified by Ryan, Kiefel and Gyles JJ apply to item 20 in the table to r 10.42 and to the obligation of the Court under s 22 of the Federal Court of Australia Act to deal with all matters in controversy where possible. Bertram did not take issue that this particular way of attracting the Court’s jurisdiction had not been argued at the time I granted leave to serve outside the jurisdiction. All parties accept for the purposes of the jurisdictional argument that a prima facie case exists that justifies the joinder of Eagle Yachts as a person who has been served in Australia.

38    Accordingly, there is a sufficient nexus to serve Bertram out of the jurisdiction, as the manufacturer of the yacht, in the capacity of being a person properly joined as a party. That is particularly so, given that the alleged defects are not ones for which it is likely that Eagle Yachts, as the vendor to Mr Vautin, would be responsible as opposed to Bertram, being its manufacturer. Mr Vautin’s claim against Bertram, as manufacturer, is part of the one matter that includes his claim against Eagle Yachts: Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 585-586 [139]-[142] per Gummow and Hayne JJ, Gleeson CJ at 546 [25] and Gaudron J at 546 [26] agreeing.

39    For these reasons, I am satisfied, because the requirements of r 10.43(4) have been met, that I should not set aside service of the originating application on Bertram.

Bertram’s submissions – carrying on business in Australia

40    Bertram argued that it was not carrying on business in Australia and that the evidence of activities on which both Mr Vautin and, despite its pleading to the contrary, Eagle Yachts relied were insufficient to support such a conclusion. In particular, Bertram pointed to the fact that it had no business or establishment in Australia or any other links here, other than through the dealer agreement and the sales that it made ex-works in Florida to Eagle Yachts as its distributor. It argued that the ordinary incidents of a dealership agreement between a foreign manufacturer or supplier and a local dealer or distributor told against a finding that such an arrangement would entail that the foreign supplier or manufacturer, in the ordinary course, itself would carry on the business for which it had appointed the dealer in the local territory to exploit and develop, using its own local knowledge and resources, without the enterprise of the supplier or manufacturer being deployed within the jurisdiction.

41    Bertram also pointed to the fact that the limited warranty, which Mr Vautin and other purchasers signed, would only become effective when received by Bertram in Florida. It accepted that no one test or set of criteria was decisive and that it was a question of fact and degree as to whether or not a person could be found to be carrying on business in Australia. It contended that Mr Vautin’s pleading that Bertram carried on business through Eagle Yachts, as opposed to some activity independent of Eagle Yachts, supported its contention that the activities in which it engaged could not be sufficient to establish that it carried on business here. Bertram argued that the Parliament could have chosen simply to subject, to the provisions of either the Competition and Consumer Act or the Australian Consumer Law, a person who was an overseas manufacturer or supplier of goods per se, but had not done so, because s 5(1)(g) required the additional factor that such a person had to carry on business in Australia.

Consideration – carrying on business in Australia

42    There is a limited number of connecting factors between Bertram and Australia that may signify that it had business activities here. In particular, the dealer agreement required that, first, the dealer (Eagle Yachts) furnish Bertram’s limited warranty in effect at the time of the delivery of the product to the dealer’s customer – that is, the first use purchaser (i.e. retail consumers) for each product (i.e. yacht) (cl 6.4), secondly, the dealer provide service facilities, under Bertram’s limited warranty to any owner of a Bertram yacht, wherever in the world it might have been purchased, who presented to Eagle Yachts in Australia with a claim for a warranty service (cll 4.2 and 4.9), and thirdly, Eagle Yachts promote Bertram’s products in accordance with Bertram’s approved materials (cl 4.1) (although this last factor taken alone would not, in my view, in the circumstances of this case, be decisive).

43    Bertram appears to have had sales of its products, principally yachts at least some of which were ocean going, in a large number of countries throughout the world. In my opinion, a reasonable business person in the position of the parties to the dealer agreement at the time it was made (and extended) would have understood that Eagle Yachts, as the dealer, was required under cl 4.9 to service yachts that might arrive in Australia having been purchased overseas, as part of the overall way in which Bertram promoted itself and sales of its products, including where such sales occurred through dealers. There is no evidence as to how Bertram conducted its sales activities in other countries, including in the United States, but it is safe to infer that it frequently appointed exclusive dealers in other countries. In addition, Bertram required its dealers to provide Bertram’s limited warranty to their retail customers and that warranty included the choice of Florida law and exclusive jurisdiction provision to which I have referred.

44    In Australian Competition and Consumer Commission v Valve Corporation (No. 3) [2016] FCA 196 at [196]-[197], Edelman J said:

196    For instance, in Bray [v Hoffmann La Roche (2002) 118 FCR 1]at 17-18 [59]-[60], Merkel J referred to the parties’ acceptance that expression “carrying on business in Australia” should be broadly interpreted in light of its purposes of consumer protection to enable the Trade Practices Act to apply to conduct that is intended to have, and has, an adverse effect on competition in Australia. His Honour continued, saying that:

The expression “carrying on business” is not defined although s 4(1) defines “business” as including a business not carried on for profit. As was pointed out by Gibbs J in Luckins v Highway Motel (Carnarvon) Pty Ltd [1975] HCA 50; (1975) 133 CLR 164 (“Luckins”) at 178 the expression “may have different meanings in different contexts”. The present context is s 5(1), which gives effect to the legislature’s view that comity, for the purposes of the TPA, requires that a particular nexus with Australia exist (ie citizenship or residence by a person or incorporation or the carrying on of business in the case of a body corporate) if certain Parts of the TPA are to apply to conduct engaged in outside of Australia by those persons or bodies corporate. As is clear from the judgments in Meyer Heine it was open to the legislature, as a matter of power and comity, to impose a lesser nexus requirement (eg intended and actual anti-competitive consequences in Australia) but it chose not to do so. In that context the expression should be given its ordinary or usual meaning.

197    As his Honour concluded, the ordinary meaning of “carrying on business” usually involves (by the words “carrying on”) a series or repetition of acts. Those acts will commonly involve “activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”: see Thiel v Federal Commissioner of Taxation [1990] HCA 37; (1990) 171 CLR 338, 350 (Dawson J); Pioneer Concrete Services Ltd v Galli [1985] Vic Rp 68; [1985] VR 675, 705 (the Court); Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, 8-9 (Mason J; Gibbs, Stephen and Aickin JJ agreeing). (emphasis added)

45    There is a well-recognised distinction that a third party, acting under contractual or fiduciary obligations for the benefit of another, may do so in its own behalf as opposed to as agent of the other. Thus, a receiver appointed under a debenture trust deed does not act as the agent of the persons entitled to the benefit of the debenture trust deed in performing the duties of the receivership or carry on the business as agent for the beneficiaries. The mere fact that the receiver carries on the business within the jurisdiction does not mean that he or she does so as agent of the beneficiaries who are outside the jurisdiction: City Finance Co Limited v Matthew Harvey & Co Limited (1915) 21 CLR 55 at 61-62 per Griffith CJ and Gavan Duffy J and at 66 per Isaacs J.

46    In Hope v Bathurst City Council (1980) 144 CLR 1 at 8, Mason J, with whom Gibbs, Stephen, Murphy and Aickin JJ agreed, said of the word “business”:

In truth it is the popular meaning of the word as used in the expression “carrying on a business”, rather than the popular meaning of the word itself, that is enshrined in the statutory definition. It is the words “carrying on” which imply the repetition of acts (Smith v Anderson (1880) 15 Ch D 247 at 277-278) and activities which possess something of a permanent character.

47    Indeed, in Smith 15 Ch D at 277-278, Brett LJ explained that the series of acts relied on had to constitute a business that was being carried on. Besanko J set out a number of criteria that he drew from authorities in his discussion of this question in Australian Competition and Consumer Commission v Yazaki Corporation (No. 2) (2015) 332 ALR 396 at 465-469 [344]-[363].

48    In Luckins v Highway Motel (Carnarvon) Pty Limited (1975) 133 CLR 164 at 178, Gibbs J, with whom the other members of the Court agreed, said that the expression “carrying on business” would usually connote at least “the doing of a succession of acts designed to advance some enterprise of the company pursued with a view to pecuniary gain”. In my opinion, that is the correct way to characterise the activities of Bertram in requiring Eagle Yachts to provide service facilities to all owners of Bertram yachts, on any limited warranty claims wherever the yachts were purchased, and in requiring Eagle Yachts to provide the document recording the limited warranty to first use purchasers from Eagle Yachts of yachts that it had bought from Bertram for on sale.

49    The way in which Bertram sought to preserve and enhance its goodwill through the other requirements of the dealer agreement to which I have referred fortifies, but is not essential to, the conclusion which I have reached.

50    Bertram engaged in a succession of acts designed to advance Bertram’s overall worldwide goodwill, including its goodwill in Australia, and to promote sales of its products by being able to offer persons who purchased those products from whichever dealer, or other source as the original purchaser of a newly manufactured yacht, the ability to obtain service for those yachts throughout the world, including from Eagle Yachts in Australia: Hope 144 CLR at 8; Luckins 133 CLR at 178. Accordingly, I am satisfied that Bertram did carry on business within Australia for the purposes of s 5(1)(g) of the Competition and Consumer Act.

Bertram’s submissions – stay

51    Bertram also argued that, in the event I came to the conclusion that it had been properly served under r 10.43, I should stay the proceedings because, on the evidence it had adduced, the law of Florida provided at least an equivalent remedy namely, a right to damages, to that Mr Vautin sought against it in these proceedings. It argued that Mr Vautin had contracted with it by returning the limited warranty document. Bertram argued that he obtained the benefit of the promise of the limited warranty and gave consideration in the form of his agreeing to accept both the terms of the limited warranty and subject himself to choice of law and exclusive jurisdiction clause in it. Bertram submitted that by reason of the choice of law and exclusive jurisdiction clause and its undertaking not to take any point about privity, in the sense that I have mentioned, there would be no oppression or vexation if a stay were ordered that required Mr Vautin to do what he had promised to do, when he returned the limited warranty to Bertram, by submitting to the exclusive jurisdiction of courts in Miami-Dade County, Florida.

Consideration – stay

52    I reject that argument. In my opinion, granting a stay of the proceedings as against Bertram would lead to a bifurcation of these proceedings and amount to oppression and vexation of Mr Vautin. These proceedings clearly involve common issues of fact as to the adequacy or otherwise of Revive, when manufactured and delivered to Mr Vautin. There would be a risk of inconsistent findings between this Court and any court in Florida to which Mr Vautin might have submitted in the exclusive jurisdiction clause.

53    As Allsop J noted in Incitec Limited v Alkimos Shipping Corporation (2004) 138 FCR 496 at 508-509 [61]-[66], the existence of the possibility, if not probability, of duplicated litigation across two continents because of an exclusive jurisdiction clause creating that bifurcation of litigation, provides a good and powerful reason not to foist on parties the cost and inconvenience of such litigation.

54    Moreover, the yacht is here, Mr Vautin is here, as are many of the witnesses who are likely to be called as to the adequacy and condition of the yacht and any relevant circumstances. Of course, Bertram’s employees or former employees are located in the United States. There will inevitably be dislocation for one side or another where multinational litigation occurs, requiring witnesses to give evidence in a different country. I note in passing, that Bertram is also a defendant in proceedings in the Supreme Court of Queensland, together with Eagle Yachts, in respect of the sale of another of its products and that that litigation appears to be proceeding in the Supreme Court.

55    The purposes of ss 54, 271 and 272 of the Australian Consumer Law are to provide remedies that prima facie are given to consumers in Australia for breaches of the statutory warranty in s 54(1). Moreover, ss 67 and 276 precludes contracting out of the application of the Australian Consumer Law, although it may be possible that the exclusive jurisdiction clause could otherwise be enforced.

56    In my opinion, it is preferable that this litigation, properly commenced in this Court, be conducted here. Australia is not a clearly inappropriate forum: Voth 171 CLR at 558-559, 564 per Mason CJ, Deane, Dawson and Gaudron JJ.

57    For these reasons, I refuse to grant a stay.

Conclusion

58    Bertram’s interlocutory application must be dismissed with costs. Eagle Yachts’ costs of that interlocutory application should be its costs in the cause.

Associate:

Dated:    17 October 2016