Federal Court of Australia

Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Ltd (No 2) [2021] FCA 1246

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the first respondent on 14 September 2021 is dismissed.

2.    The first respondent pay the costs of the applicant of and incidental to the application.

3.    Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers.

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

REASONS FOR JUDGMENT

GREENWOOD J:

1    These proceedings are concerned with an application by the first respondent, Redbubble Ltd (“Redbubble”) for an order that leave be granted “to the extent that leave is required”, to file a further amended defence in the principal proceeding in the form served on the applicant, Hells Angels Motorcycle Corporation (Australia) Pty Limited (“HAMC”) and the second respondent, Hells Angels Motorcycle Corporation (“HAMC US”), on 14 September 2021. The interlocutory application was heard on 30 September 2021.

2    The question of the extent to which leave to file a further amended defence is necessary is in part a function of further procedural orders which were made in the principal proceeding on 8 September 2021. Those procedural orders have arisen in circumstances which are a little unusual. The context in which the orders were made is described in reasons for judgment given on 8 September 2021: Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Ltd [2021] FCA 1090 (“the re-opening judgment’). These reasons ought to be read in conjunction with the re-opening judgment. That judgment is concerned with the circumstances that led to a decision to re-open the principal proceeding (which had been heard and was reserved for further consideration and judgment), in order to enable the applicant to address causes of action in relation to contended trade mark infringements it asserts concerning what are described as Examples 8, 9, 10 and 11.

3    The re-opened principal proceeding is set down for a further hearing in relation to Examples 8, 9, 10 and 11 on 2 November 2021 for one day with a day held in reserve on 3 November 2021.

4    In order to enable the relevant matters in relation to Examples 8, 9, 10 and 11 to be properly formulated, Order 3 provided that by 8 September 2021, the applicant file and serve points of claim in relation to the four further examples in suit; Order 4 provided that, by that date, the applicant file and serve a further amended originating application; Order 5 provided that by 14 September 2021, Redbubble file and serve a response to the applicant’s points of claim; and Order 6 provided that by 16 September 2021, HAMC file and serve a reply to the first respondent’s points of claim.

5    A series of other procedural orders were made on 8 September 2021.

6    As the re-opening judgment explains, the conception lying behind the re-opening of the principal proceeding was, and is, that the most efficient way of addressing the applicant’s contentions in relation to Examples 8, 9, 10 and 11 is to re-open the principal proceeding to enable the applicant to identify the facts relevant to the four further examples and to enable Redbubble to respond to those facts with each party addressing the legal consequences said to arise on the relevant findings of fact.

7    On 8 September 2021, HAMC filed a further amended originating application by which it identifies the four further examples at para 2(h) to (k) and para 3(h) to (k) of the application. The applicant also filed an amended statement of claim in which it identifies the four further examples at paras 44 to 59 of the document.

8    On 14 September 2021, Redbubble filed a further amended defence in which it addresses the applicant’s pleading of the four further examples at paras 44 to 59 with consequential amendments and amended paras 61 to 65 of the pleading.

9    However, Redbubble seeks to introduce into the proceeding a proposed para 66 of its further amended defence, which is in these terms:

66.    In answer to the whole of the ASOC [Amended Statement of Claim], insofar as it alleges any action, claim, damages, liability or cause of action at law or in equity of any kind, nature and description that the Applicant or the Second Respondent [HAMC US] or either of them had against the First Respondent [Redbubble] as at the date set out in the Confidential Schedule to this FAD [further amended defence], the First Respondent makes the allegations in the Confidential Schedule.

10    The Confidential Schedule referred to in proposed para 66 of the further amended defence is concerned with [redacted] which is said to have the effect of releasing Redbubble from all claims advanced in these proceedings in relation to Examples 1 to 7 which are the subject of the proceedings to date and which were reserved for consideration and judgment. The [redacted] are said to be confidential with the result that on 30 September 2021 orders were made for the preservation of the confidentiality of the matters recited in the Confidential Schedule and particular aspects of affidavits filed in support of the application for leave.

11    Because the proposed para 66 seeks to provide a further answer to all of the matters litigated in the proceeding in relation to Examples 1 to 7, it is necessary for leave to be given to rely upon the matter raised by para 66. As to all of the matters in controversy in relation to Examples 1 to 7, the case is closed. The proceeding has only been re-opened to enable the facts going to the four further contended infringements together with any answer on the facts to those matters to be litigated together with the legal consequences said to arise out of facts as might be found. The new proposed para 66 raises an entirely fresh and separate matter.

12    The application for leave to amend to introduce para 66 is supported by an affidavit of Mr Joel Barrett affirmed on 14 September 2021, a further affidavit of Mr Barrett affirmed on 29 September 2021 and an affidavit of Ms Corina Davis affirmed on 28 September 2021.

13    It is necessary to now note some matters arising out of those affidavits and accordingly these reasons, for the moment, will be published only to the parties.

14    Turning first to the affidavit of Ms Davis, these things should be noted.

15    Ms Davis is the Chief Legal Officer of the Redbubble group of companies which is said to include the first respondent to these proceedings (the “Australian proceedings”), Redbubble Inc and TP Apparel, LLC (“TPA”). Ms Davis is employed by Redbubble Inc and works in that company’s office in San Francisco. Redbubble Ltd is said to be the “corporate parent” of TPA. Ms Davis says that Redbubble has been the parent of TPA since October 2018. TPA conducts a business undertaking called the “Teepublic” business which provides a platform said to be similar to the Redbubble website. Ms Davis says that as the Chief Legal Officer of the Redbubble group, she oversees the “legal functions of both the Redbubble and Teepublic businesses”.

16    [redacted]

17    [redacted]

18    [redacted]

19    [redacted]

20    The recitals [redacted] give context and coherence to the document and thus become an operative element of the document for construction purposes, [redacted].

21    [redacted]

22    [redacted]

23    [redacted]

24    [redacted]

25    [redacted]

26    In any event, if the term “Disputes” is to be construed so as to include a dispute in a proceeding in Australia in which HAMC US makes no claim of fact, law or relief against Redbubble, but is one in which an entirely different entity with its own statutory standing (albeit as an authorised user (and “licensee”) of trade marks owned by HAMC US), makes a claim of 11 examples of trade mark infringement in Australia, it would follow, on that construction, that the applicant’s “causes of action” in the Australian proceeding and thus its “claims” in that proceeding are said to be forever discharged and released as causes and claims “related to” the “Disputes”.

27    But how could a proceeding in Australia in which HAMC US makes no claim against Redbubble [redacted].

28    Nevertheless, these questions become matters of construction of the document according to the applicable Australian principles of construction to be applied in resolving that matter.

29    [redacted]

30    [redacted]

31    [redacted]

32    [redacted]

33    [redacted] That raises the question of the principles to be applied in construing the document and in determining whether extrinsic evidence is admissible. Those questions raise two anterior questions of what is the proper law [redacted]; and what is the body of law to be applied in determining matters of construction and the admissibility of extrinsic evidence in construing the document?

34    [redacted] It seems common ground between the parties to these proceedings that the proper law [redacted] is not the law of the forum. It may be the law of the State of California or the law of New York State. The document would need to be construed to determine which body of law is the proper law [redacted]. The answer to that question is likely to be the place where the [redacted] was “made” and it seems that it was not made until TPA signed the document on 24 May 2021. [redacted]

35    [redacted], Redbubble suggests that the proper way to approach the matter is to simply apply the law of the forum on questions of construction and admissibility of evidence in construing the document on the presumption that the proper law [redacted] is no different to the law of Australia on questions of construction and admissibility of evidence. The applicant contends that if Redbubble seeks to rely upon [redacted] as an answer to the claims made in the Australian proceeding, it falls to Redbubble to prove [redacted] and establish what body of law is the proper law to be applied.

36    The Courts of Australia “are not presumed to have any knowledge of foreign law”: Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 (“Neilson”) at [115], Gummow and Hayne JJ. The content of the foreign law is a question of fact to be proved by expert evidence: Neilson at [115]. There is, however, a “well-known rule that, absent proof of, or agreement about, foreign law, the law of the forum is to be applied”: Neilson, Gummow and Hayne JJ at [116]. Recourse to the “general presumption” may prove problematic. In Neilson, Gleeson CJ at [16] observed: “I find no assistance in the general presumption that, in the absence of evidence to the contrary, foreign law is the same as Australian law”. The Chief Justice observed that the general presumption might be “a rational and practical aid to decision-making in many cases”, but “whatever its precise extent” the principle was said by the Chief Justice to be “devoid of content in this case”. That particular case involved the approach to construction of aspects of the General Principles of Civil Law of the People’s Republic of China and, in particular, Article 136. In Damberg v Damberg (2001) 52 NSWLR 492 (“Damberg”), Heydon JA said this at [144]:

The cases in which foreign law has been assumed to be the same as the lex fori are instructive. Many involve merely the repetition in dicta of the general principle. Some involve the application of common law principles unlikely to differ from foreign principles (for example, the principles of contractual construction).

37    That was thought to be particularly so in circumstances where had there been an investigation of the relevant commercial code of the foreign country, it would probably show that such a code differed from English commercial law in detail or in the inferences to be drawn from particular facts rather than in substance or principle: Damberg at [144]; The Parchim [1918] AC 157.

38    In this case, the Court is invited to proceed on the basis of a hypothesis that the foreign law is the same as the lex fori. The following observations of Heydon JA in Damberg at [160] and [162] ought to be noted:

160    In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed. A similar caution appears to apply in relation to an assumption or agreement that foreign law is the same as the lex fori.

…

162    To state exhaustively when a court will not assume that the unproved provisions of foreign law are identical with those of the lex fori would be a difficult task. It is not necessary to perform it in this case. The issue in this case is whether it should be assumed that German law in relation to the avoidance or evasion of capital gains tax is the same as Australian law. In my opinion it should not. …

39    Redbubble contends that while there are factors in particular cases which need to be taken into account to determine whether the general presumption should apply, this case is not one of those cases. Redbubble says that this case involves a question of construction of a contract and the general presumption should apply.

40    It seems to me to be generally unacceptable to decide a question of construction [redacted] on the basis of a hypothesis. It is desirable to understand what body of law governs [redacted]. Even if that difficulty is put to one side and the general presumption is applied, the present case would involve a question of construction which, in the face of ambiguity, would require consideration to be given to the extent to which extrinsic evidence ought to be admitted. That may well involve evidence being given by Mr Boren, Ms Oliver, Mr Wilson and possibly others. Having regard to the circumstances which gave rise to the re-opening of the case in order to address Examples 8, 9, 10 and 11, the scope of the issues were to be quite confined. The present question of the extent to which [redacted] arose late in the day. Although I take the view that Redbubble’s contention that [redacted] might apply is not absolutely unarguable, I am not satisfied that it is sufficiently arguable, taken in conjunction with the other considerations I have mentioned concerning matters of fact in the affidavit of Ms Davis and the evident issues arising on construction, so as to grant leave to further amend the defence to put the question in controversy in the proceeding as re-opened. I do not accept that the interests of justice are served by enabling the question to be ventilated and nor do I accept that enabling the question to be ventilated serves the overarching purpose. The question has already been the subject of a separate hearing, further evidence and an additional determination.

Associate:

Dated:    13 October 2021