Federal Court of Australia

LK Law Pty Ltd v Karas (No 2) [2022] FCA 970

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to rules 10.42, 10.43 and 10.44 of the Federal Court Rules 2011 (Cth), the applicants have leave to serve on the fourth respondent:

(a)    the applicants’ originating application, statement of claim and genuine steps statement filed on 21 December 2021;

(b)    the applicants’ amended originating application and amended statement of claim filed on 26 July 2022;

(c)    the affidavits of Nathan Peter Day sworn 26 July 2022, 8 August 2022 and 9 August 2022 and filed in support of the interlocutory application;

(d)    the affidavit of Scipio John Lipman sworn and filed in these proceedings on 1 April 2022;

(e)    the applicants' written submissions filed on 26 July 2022 in support of the interlocutory application;

(f)    a copy of these orders; and

(g)    a copy of the orders made on 27 April 2022,

(together the Documents), by sending the Documents by international registered post with return receipt to its registered office, being Africa House, 70 Kingsway, London, England, WC2B 6AH.

2.    Order 2 of the orders made on 27 April 2022 be varied to permit service of the affidavits of Nathan Peter Day referred to in order 1(c), the affidavit of Scipio John Lipman referred to in order 1(d) and the written submissions referred to in order 1(e) on the fourth respondent.

3.    The costs of and incidental to this interlocutory application are to be the applicants’ costs in the cause.

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

REASONS FOR JUDGMENT

O’SULLIVAN J:

introduction

1    By their interlocutory application filed on 26 July 2022 (Application) the applicants seek the following orders pursuant to rules 10.42 and 10.43 of the Federal Court Rules 2011 (Cth) (FCR):

1.    The applicants be granted leave to serve:

(a)    the applicants’ originating application, statement of claim and genuine steps statement filed on 21 December 2021;

(b)    the applicants’ amended originating application and amended statement of claim filed on 26 July 2022;

(c)    the affidavit of Nathan Peter Day filed in support of the applicants’ interlocutory application;

(d)    the affidavit of Scipio John Lipman sworn on 1 April 2022;

(e)    the applicants’ submissions filed on 26 July 2022 in support of this interlocutory application; and

(f)    a copy of the orders made by this Honourable Court in connection with this interlocutory application,

(collectively referred to as the Documents), on the fourth respondent by sending the Documents by international registered post with return receipt to its registered office, being Africa House, 70 Kingsway, London, England, WC2B 6AH.

2.    Order 2 of the orders made on 27 April 2022 be varied to permit service of the affidavits of Nathan Peter Day and Scipio John Lipman and the submissions on the fourth respondent.

3.    The costs of and incidental to this interlocutory application are to be the applicants’ costs in the cause.

4.    Such further or other orders as this Honourable Court deems fit.

2    Prior to the delivery of this decision, the applicants sought and were granted leave to amend the Application by adding a reference to rule 10.44 and by adding paragraph 1(g) which reads “(g) a copy of the orders made by this Honourable Court on 27 April 2022”.

Documents READ AND relied upon

3    The applicants read:

(1)    The affidavit of Nathan Peter Day sworn and filed 26 July 2022 (first Day affidavit);

(2)    The affidavit of Nathan Peter Day sworn and filed on 8 August 2022 (second Day affidavit);

(3)    The affidavit of Nathan Peter Day sworn and filed on 9 August 2022 (third Day affidavit); and

(4)    The affidavit of Scipio John Lipman sworn and filed on 1 April 2022 (Lipman affidavit).

4    The applicant also tenders for the purposes of the interlocutory application the affidavit of Jason Demetrios Karas sworn on 11 March 2022 and filed on 15 March 2022 (first Karas affidavit). The first Karas affidavit was received into evidence for the purposes of the Application and marked as exhibit A-1.

The hearing

5    The Application was heard on 10 August 2022. None of the respondents attended.

6    On 22 July 2022, the applicants’ solicitors advised the fourth respondent, Mishcon de Reya LLP (OC 399969) (Mishcon), of the Application and invited it to advise them of any evidence and/or arguments that it wanted the applicants to bring to the Court’s attention on the hearing of the Application by 4:30 PM (ACST) on 9 August 2022: first Day affidavit [29.4], Annexure NPD-11.

7    On 1 August 2022 the applicants’ solicitors were copied into an email dated the same date from the first to third respondents to my Chambers in which they advised that they did not wish to be heard on the Application: second Day affidavit [5].

8    On 5 August 2022, the applicants’ solicitors received a letter from the solicitors for the first to third respondents in which they drew to the applicants’ solicitors’ attention various matters: second Day affidavit [6], Annexure NPD 16. I deal with the matters raised in that letter later in these reasons.

9    When the Application was called on for hearing on 10 August 2022, the Court was informed by Mr Roberts QC, who appeared for the applicants on the Application, that no response had been received from Mishcon.

Background

10    I set out the factual background to the dispute between the applicants and the respondents at a general level, including the then pleaded causes of action in both the claim and cross-claim in LK Law Pty Ltd & Ors v Karas & Ors [2022] FCA 762, [4], [5], [9]-[56].

11    I do not repeat the factual background I set out in that decision in full, however for the purposes of this application, I repeat what I said at [11]-[18]:

11    Both Mr Lipman and Mr Karas are qualified legal practitioners. In 2004, both were equity partners in the legal firm Fisher Jeffries. In or about August 2004, Mr Lipman and Mr Karas established the legal firm (Lipman Karas Pty Ltd) LKPL. Apart from Mr Lipman and Mr Karas, a further nine employees, who had previously been with both Mr Lipman and Mr Karas at Fisher Jeffries, worked at LKPL. (Brackets not in original)

12    Between 2005 - 2009, Mr Karas spent a considerable amount of his time in Hong Kong working on a substantial litigation matter.

13    In 2008, Mr Lipman and Mr Karas decided to establish a “Lipman Karas” practice in Hong Kong. As part of investigating how they might establish such a practice, Mr Lipman and Mr Karas sought advice from a Hong Kong firm of solicitors, Tanner De Witt. That advice, in summary, was that LKPL could not immediately establish a legal firm in Hong Kong advising on Hong Kong law using the name Lipman Karas. That was because Mr Lipman was not admitted as a solicitor in Hong Kong. LKPL could, however, register as a foreign law firm in Hong Kong, using the name “Lipman Karas” and advising on foreign law.

14    The advice from Tanner De Witt continued that after LKPL had practised as a foreign law firm in Hong Kong for three years, a firm practising Hong Kong law under the name “Lipman Karas”, could practice in Hong Kong notwithstanding Mr Lipman was not qualified as a solicitor to practice in Hong Kong.

15    In October 2008, Mr Karas was admitted to practice in Hong Kong as a solicitor.

16    The strategy adopted by Mr Lipman and Mr Karas was that over the three-year period, Mr Karas would establish a registered Hong Kong law firm under the name “Karas Lawyers” with Mr Karas being the sole proprietor of that firm. Whilst Mr Karas was practising under the name “Karas Lawyers”, Lipman Karas would establish itself as a foreign law firm practising foreign law in Hong Kong with Mr Tim Kentish (Mr Kentish) as the proprietor of that firm. Mr Kentish was to act as LKPL’s agent in Hong Kong.

17    On 17 February 2010, the foreign law firm Lipman Karas, as agent for LKPL, and Karas Lawyers entered into an agreement known as an “association agreement”. The association agreement is annexed to the first Karas affidavit at pp 18-23 of annexure JK-1: First Karas affidavit at [19]; Lipman affidavit at [41]. The association agreement recorded, amongst other things, that:

Recital C - On 6 November 2009 the Law Society of Hong Kong registered an Association between Lipman Karas and Karas Lawyers in accordance with section 39C of the Legal Practitioners Ordinance.

Clause 2.1 - Premises

(a)    Lipman Karas will permit Karas Lawyers to share and use with Lipman Karas the premises located at 1702, Tower 1, Admiralty Centre, 18 Harcourt Road, Hong Kong (Premises).

(b)    Lipman Karas will be responsible for all costs associated with the Premises and will maintain contents and public liability insurance in respect of the Premises.

Clause 2.3 - IT

(a)    Lipman Karas will permit Karas Lawyers to share and use with Lipman Karas the information technology infrastructure, including personal computers, servers, printers, photocopiers, fax machines, videoconferencing equipment, mobile telephones and landline telephones (the IT infrastructure).

(b)    Lipman Karas will be responsible for all costs associated with the IT infrastructure (including consumables) and will maintain the IT infrastructure to a reasonable standard.

Clause 2.4 - Staff

(a)    Lipman Karas and Karas Lawyers will share the resources of staff employed by the respective firms.

(b)    Each firm will be responsible for the salaries and related on-costs of its respective staff.

Clause 3.1 - Premises Fee

(a)    In consideration of the use of the Premises, Karas Lawyers will pay Lipman Karas an annual fee (Premises Fee) calculated in accordance with the following formula: …

18    Having spent three years practising as a foreign law firm in Hong Kong, in late 2012 Lipman Karas ceased to practise as a foreign law firm. Mr Karas changed the name of Karas Lawyers to Lipman Karas and began trading as “Lipman Karas” in Hong Kong (LKHK).

The claims against Mishcon

12    On 26 July 2022, the applicant filed and served an amended statement of claim (ASoC).

13    The claims against Mishcon in the ASoC are best understood by identifying first the claims against Mr Karas.

14    The applicants plead that by virtue of his position as a director of LKPL, amongst other things, Mr Karas:

(1)    owed a fiduciary duty not to misuse his position as a director of LKPL to obtain a benefit for himself or a third party and not to place himself in a position where his duty to act in the best interest of LKPL and his self-interest conflicted:  ASoC [29.1], [29.1]; and

(2)    owed statutory duties arising under ss 181, 182 and 183 of the Corporations Act 2001 (Cth):  ASoC [29.3], [29.4].

15    The applicants plead that in his dealings with Mishcon, Mr Karas:

(1)    Breached his fiduciary duties to LKPL; and

(2)    Breached his statutory duties under ss 181, 182 and 183 of the Corporations Act:  ASoC [69]-[77].

16    The applicants plead further that by his silence, Mr Karas breached s 18 of the Australian Consumer Law (ACL):  ASoC [66A]-[68].

17    At ASoC [47], [48] and [78] the applicants plead that Mishcon had actual knowledge of a number of matters. I do not set out all the allegations pleaded by the applicants as to Mishcon’s actual knowledge given the confidentiality orders made in this matter, however the applicants plead, amongst other things, that Mishcon had actual knowledge that:

(1)    Mr Karas was in dispute with LKPL;

(2)    LKHK generated work for LKPL; and

(3)    Of various matters concerning the financial integration between LKPL and LKHK.

18    It is against that background that the applicants plead against Mishcon:

(1)    Knowing assistance to Mr Karas in contravening his fiduciary duties to LKPL:  ASoC [78]-[80];

(2)    Accessorial liability in Mr Karas’ alleged contraventions of his statutory duties to LKPL under ss 181, 182 and 183 of the Corporations Act by being “involved” in those contraventions within the meaning of s 79 of the Corporations Act; such that Mishcon is taken to have contravened ss 181, 182 and 183 by operation of ss 181(2), 182(2) and 183(2) of that Act:  ASoC [81]; and

(3)    Accessorial liability under the ACL by being “involved” within the meaning of s 2 of the ACL in Mr Karas’ alleged breach of s 18.

The Application

19    The Application is brought pursuant to FCR 10.42, 10.43 and 10.44. FCR 10.42 and 10.43 provide (relevantly):

10.42 When originating application may be served outside Australia

Subject to rule10.43, an originating application, or an application under Part 7 of these Rules, may be served on a person in a foreign country in a proceeding that consists of, or includes, any one or more of the kinds of proceeding mentioned in the following table.

10.43 Application for leave to serve originating application outside Australia

(1)    Service of an originating application on a person in a foreign country is effective for the purpose of a proceeding only if:

(a)    the Court has given leave under subrule (2) before the application is served; or

(b)    the Court confirms the service under subrule (6); or

(c)    the person served waives any objection to the service by filing a notice of address for service without also making an application under rule 13.01.

(2)    A party may apply to the Court for leave to serve an originating application on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country.

(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.

(5)    …

(6)    …

(7)    …

20    I deal with FCR 10.44 later in these reasons.

Principles

21    In Hamilton v Meta Platforms Inc [2022] FCA 681 at [4], [5], Cheeseman J summarised the applicable principles governing an application for service out of the jurisdiction as follows:

4    …  In the interlocutory application for leave to serve out of Australia, [the applicant] must establish first, that the Court has jurisdiction in the proceedings (r 10.43(4)(a)); second, that the proceedings are of a kind mentioned in r 10.42 of the Rules (r 10.43(4)(b)); and third, that he has a prima facie case for all or any of the relief claimed in the proceedings: (r 10.43(4)(c)). The application for leave to serve out must be accompanied by an affidavit stating (1) the name of the foreign country where the person to be served is or is likely to be; (2) the proposed method of service; and (3) that the proposed method of service is permitted, relevantly in the present application, under the Hague Convention: r 10.43(3). If [the applicant] establishes each of the matters in rr 10.43(3) and (4) of the Rules, the Court has a residual discretion as to whether to grant leave: Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116; 154 FCR 425, 428 at [3] (Black CJ and Finkelstein J); Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd [2015] FCA 1453; 331 ALR 108, 119 at [66] (Edelman J, when his Honour was in this Court).

5    [The applicant] need not establish a prima facie case in respect of all of his pleaded claims. He need only establish a prima facie case in relation to one cause of action or remedy: r 10.43(4)(c) of the Rules; Israel Discount Bank Limited v ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd) [2019] FCAFC 90; 367 ALR 71, 84 at [48] (Yates, Beach and Moshinsky JJ).

Consideration

22    FCR 10.42 is subject to FCR 10.43. It provides that an originating application may be served on a person in a foreign country in a proceeding that consists of, or includes, any one or more of the kinds of proceeding mentioned in the table to that Rule.

23    “Foreign country” is defined in FCR 10.41 as meaning a country other than Australia. The claims advanced by the applicants in the ASoC include proceedings based on a contravention of the Corporations Act and contraventions of the ACL comprising Schedule 2 to the Competition and Consumer Act 2010 (Cth). These claims come within items 13 and 15 of the table to FCR 10.42. Accordingly, subject to FCR 10.43, the requirements in FCR 10.42 are met.

FCR 10.43

24    The first requirement in FCR 10.43 is that in FCR 10.43(2) the application for leave to serve an originating application on a person in a foreign country must be in accordance with a convention; the Hague Convention; or the law of a foreign country: FCR 10.43(2). The applicants propose to serve the originating application and the accompanying documents identified in the application in the United Kingdom (being the United Kingdom of Great Britain and Northern Ireland) (United Kingdom) using the Hague Convention:  first Day affidavit [30]-[35].

25    FCR 10.43(3)(a)-(c) requires that the application under FCR 10.43(2) must be accompanied by an affidavit stating the name of the foreign country where the person to be served is or is likely to be; the proposed method of service; and that the proposed method of service is permitted by, in this case, the Hague Convention.

26    I am satisfied that the first Day affidavit identifies the foreign country where Mishcon is to be served; the proposed method of service which is by international registered post with a return receipt to Mishcon’s registered office in the United Kingdom; and that service is to be pursuant to the Hague Convention:  first Day affidavit [30]-[35].

27    FCR 10.43(4) has three requirements.

Jurisdiction

28    FCR 10.43(4)(a) requires the applicant to satisfy the Court that the Court has jurisdiction in the proceeding. In the ASoC the applicants seek relief including:

(1)    Rescission of two agreements pursuant to s 237(1) of the ACL:  ASoC [84.1], [84.2];

(2)    Declarations that Mr Karas has contravened his duties to LKPL under ss 181, 182 and 183 of the Corporations Act and that Mishcon has contravened those same sections by reason of being involved in Mr Karas’ contraventions of such duties:  ASoC [84.4.1], [84.4.2];

(3)    An order that Mr Karas and Mishcon pay compensation pursuant to s 1317H of the Corporations Act, alternatively an account of profits under that section, in respect of gains made by Mr Karas or alternatively Mishcon:  ASoC [84.4.3], [84.4.4]; and

(4)    In the alternative to the relief sought in ASoC [84.4];

(a)    orders pursuant to s 237(1) of the ACL, that an agreement between the applicants and the first and second respondents is unenforceable in whole or in part:  ASoC [84.5.1];

(b)    in the alternative to the relief sought in ASoC [84.5.1], orders pursuant to s 237(1) of the ACL refusing to enforce certain terms contained in the agreement referred to in (a) above:  ASoC [84.5.2]; and

(c)    compensation from Mr Karas and Mishcon pursuant to s 236 of the ACL or, in the alternative, damages pursuant to s 7 of the Misrepresentation Act 1972 (SA):  ASoC [84.5.3].

29    Clearly, the Court has jurisdiction over the claims set out above and I am satisfied the requirements of FCR 10.43(4)(a) have been met by the applicants.

The proceeding is of a kind mentioned in FCR 10.42

30    The proceeding is of a kind referred to in items 13 and 15 of the table to FCR 10.42. I am satisfied the requirements of FCR 10.43(4)(b) have been met by the applicants.

Prima facie case

31    The requirement in FCR 10.43(4)(c) is for the applicants to satisfy the Court that they have a prima facie case for all or any of the relief claimed in the proceedings such that the applicants only need establish a prima facie case in relation to one cause of action or remedy:  Hamilton at [5] citing Israel Discount Bank Limited v ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd) [2019] FCAFC 90; 367 ALR 71 at [48] (Yates, Beach and Moshinsky JJ).

32    The requirement of establishing a prima facie case has been described as “not particularly onerous”:  Hamilton at [36] citing Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 at [25] where Gordon J, (as a member of this Court) said:

The requirement to demonstrate a prima facie case in this context is not particularly onerous.  The question is whether on the material before the Court, inferences were open which, if translated into final findings of fact, would support the relief claimed.  A prima facie case exists, provided there is such evidence, even on a hearsay basis, as to sufficient elements of the proceeding leading to any (and not necessarily all) of the relief sought:  Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at [39], [55], [58] and [97].

(Emphasis in original)

33    The applicants refer to Ho v Akai Pty Ltd (in liq) (2006) 247 FCR 205 at [10] where the Full Court (Finn, Weinberg and Rares JJ) said:

As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aids to the making out of a case: see eg Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390. It “should not call for a substantial inquiry”: WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. Or, to put the matter more prosaically as Lee J did in Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust Ltd [1996] FCA 376:

What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court’s processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified.

34    The observations by the Full Court in Ho were made prior to the current Rules, however they remain applicable:  Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltd [2022] FCA 623, [42]-[43] (Derrington J) citing Israel Discount Bank Ltd at [46]–[47].

35    In Mining Standards International Pty Ltd Derrington J went on to observe: at [44], that for the purposes of an application such as this, the case may be established as a matter of inference and that relevant inferences may be drawn more readily than at a trial:  citing Tiger Yacht Management v Morris (2019) 268 FCR 548, [46] (McKerracher, Derrington and Colvin JJ).

36    The applicants allege that at all material times Mr Karas was a director of LKPL between 16 August 2004 and 31 May 2021. That fact is admitted:  ASoC [4.2]; first and second respondent’s defence [4a].

37    Section 181 of the Corporations Act imposes duties on directors of companies to exercise their powers and discharge their duties in good faith and in the best interests of the Corporation and for a proper purpose; s 182 imposes a duty on a director not to use their position improperly to gain an advantage for themselves or someone else or to cause detriment to the Corporation; and s 183 imposes a duty upon a director not to misuse confidential information.

38    Sections 181, 182 and 183 are civil penalty provisions:  Corporations Act s 1317E(3), the contravention of which may lead to an order for compensation to be paid pursuant to s 1317H of the Corporations Act for the damage suffered by the corporation as a result of the contravention.

39    The allegation against Mishcon is that they were “involved” in contraventions of the Corporations Act and/or the ACL.

40    Section 79 of the Corporations Act provides:

79 Involvement in contraventions

A person is involved in contravention if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced, whether by threats or promises or otherwise, the contravention; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d)    has conspired with others to effect the contravention.

41    In Gore v Australian Securities and Investments Commission (2017) 249 FCR 167, Dowsett and Gleeson JJ considered at [6]-[16] the question of accessorial liability apart from that in the Criminal Code Act (1995). Their Honours concluded at [16]:

… The point is that the provisions which establish accessorial liability, civil or criminal, generally use expressions such as “knowingly concerned in” or “aiding and abetting”. Those provisions have traditionally been construed as requiring actual knowledge of all relevant circumstances. This requirement comes from such accessorial provisions, not from the provisions creating the relevant principal contravention. As a result, it is not uncommon for accessorial liability to depend upon knowledge, proof of which is not required in order to prove the contravention as against the principal offender.

42    In all the circumstances, I am satisfied the applicants have a prima facie case for the relief claimed in the proceeding.

Matters brought to the Court’s attention by the applicants

43    This is an ex parte application. The applicants have a duty of full and frank disclosure such that they are obliged to place before the Court all relevant matters including such matters as would have been raised by the respondent in defence to the application if that party had been present:  Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, 681 (Isaacs J); Town & Country Sport Resorts (Holdings) Pty Ltd and Ors v Partnership Pacific Ltd (1988) 20 FCR 540, 543 (Davies, Gummow and Lee JJ); Hayden and Ors v Teplitzky and Ors (1997) 74 FCR 7, 11-12 (Lindgren J).

44    In the first Day affidavit, Mr Day deposes to and draws the Court’s attention to the following matters at [29]:

(1)    claims brought against Mishcon are founded on the same documents in respect of which the first to third respondents have bought a cross-claim and in which the cross respondents allege the applicants have contravened an equitable obligation of confidence in using what has been described in these proceedings as the “Contested Documents” in drawing the statement of claim, by extension, the amended statement of claim and continuing to use those documents in these proceedings;

(2)    Mishcon also contends that the “Contested Documents” are confidential to it;

(3)    the first to third respondents have sought leave to appeal against orders one and two of the orders made on 1 July 2022 in which I dismissed an interlocutory application by the first to third respondents seeking interlocutory injunctions and strike out of various paragraphs in the Statement of Claim. That application for leave to appeal is yet to be heard;

(4)    there are three separate agreements which play a part in these proceedings. In at least one of those agreements there exists mutual releases, an entire agreement clause, a no- representation clause and warranties as to power and authority; and

(5)    the first to third respondents have filed pleadings, evidence and submissions in these proceedings denying the applicants claims. In [29.8] of the first Day affidavit Mr Day deposes in detail as to the pleadings, evidence and submissions that have been filed in this matter. I do not set out the detail in the first Day affidavit but I am aware of all of the matters to which Mr Day deposes in view of the prior application by the first to third respondents for interlocutory injunctions and strike out which occupied approximately two days of argument and involved over 2000 pages of documents.

45    In the second Day affidavit, Mr Day annexes as annexure NPD-16 a letter from the solicitors for the first to third respondents in which the solicitors allege that the material placed before the Court does not make the necessary disclosures to the Court that ought be made by a party seeking ex parte relief in general and in relation to a prima facie case. They set out five sub- paragraphs detailing what they say are the deficiencies in the material placed before the Court. The asserted deficiencies are in some cases not particularised and in cases where they are particularised, raise matters which were the subject of argument on the interlocutory injunction and strike out application brought by their clients. I have the advantage in this matter of being well acquainted with the arguments by all parties, the affidavit material filed by the parties and the pleadings to this point in time. That, of course, does not relieve the applicants from their obligation to make full and frank disclosure, however it does allow me to understand the complaints made by the solicitors for the first to third respondents, notwithstanding the lack of particularity in some cases.

46    As part of fulfilling its obligations to make full and frank disclosure, in their oral and written submissions made to the Court on this application, the applicants draw to the Court’s attention to the fact that the first to third respondents have contended that the remedy of rescission is not available due to the inability to restore the status quo ante, and that the applicants have affirmed one of the agreements between the applicants and the first to third respondents:  Applicants Written Submissions [88].

47    In response to that contention, the applicants point to their pleaded alternative claims for compensation under s 236 of the ACL resulting from Mr Karas’ alleged contraventions of s 18 of the ACL and Mishcon’s involvement in those contraventions. They submit that in the absence of an order for rescission, monetary relief is available, referring to the statement by Leeming JA in:  Nadinic v Drinkwater [2017] NSWCA 114, [141] where his Honour said:

There is no broad discretion in equity to rewrite a contract, even if it has been entered into as a result of fraudulent misrepresentation, by reference to what seems just. Instead, the question is whether, by the orders available to a court of equity, “practical justice” can be achieved so as to authorise the rescission of the contract and restore the parties to the position they previously enjoyed. Notwithstanding the breadth of orders available to achieve “restitutio in integrum”, there will be times when that cannot occur. In such cases, rescission is not available, and the plaintiff will be left to other remedies (including damages, if the misrepresentation was negligent or fraudulent).

I accept that submission.

48    I am satisfied that the applicants’ written submissions and in the course of the comprehensive oral submissions made by Counsel for the applicants, the matters raised by the solicitors for the first to third respondents have been addressed.

49    In all the circumstances, I am satisfied the requirements of FCR 10.43(c) have been met by the applicants and that they have established a prima facie case for all or any of the relief claimed in the proceeding.

FCR 10.44

50    FCR 10.44 provides relevantly:

10.44 Service of other documents

(1)    A party may apply to the Court for leave to serve a document filed in or issued by the Court, other than an originating application, on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country.

(2)    An application under subrule (1) must be accompanied by an affidavit that includes the information mentioned in paragraphs 10.43(3)(a) to (c).

(3)    …

51    The applicants apply to serve not just the originating application but other documents identified in the interlocutory application. Since I am satisfied the requirements of FCR 10.42 and 10.43 are met and FCR 10.44 requires the Court to be satisfied of the same matters as in FCR 10.43(3)(a) to (c), it follows that I am also satisfied that the requirements of FCR 10.44 are met.

The exercise of the discretion

52    Although the applicants have satisfied the requirements of FCR 10.42, 10.43 and 10.44, since FCR 10.43(2) speaks of a party who “may apply to the Court” there remains a residual discretion to refuse leave to serve out of the jurisdiction:  Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd [2015] FCA 1453; 331 ALR 108 at [66] (Edelman J).

53    The jurisdiction of the Court is engaged by these proceedings, the applicants have standing to bring the proceedings and the action is not oppressive, vexatious or otherwise an abuse of process. The Court can assume jurisdiction over Mishcon by service of these proceedings: Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2006) 154 FCR 425 at [10] (Black CJ and Finkelstein J). There is no other apparent reason which might cause the Court to consider exercising its discretion against the applicants.

Conclusion

54    It is for the reasons set out above that pursuant to FCR 10.42, 10.43 and 10.44, the applicants will be granted leave to serve:

(1)    the applicants’ originating application, statement of claim and genuine steps statement filed on 21 December 2021;

(2)    the applicants’ amended originating application and amended statement of claim filed on 26 July 2022;

(3)    the affidavits of Nathan Peter Day filed in support of the applicants’ interlocutory application;

(4)    the affidavit of Scipio John Lipman sworn on 1 April 2022;

(5)    the applicants’ written submissions filed on 26 July 2022 in support of their interlocutory application;

(6)    a copy of the orders made on 27 April 2022; and

(7)    a copy of the orders to be made on this Application granting leave to the applicants to serve the Documents set out above on the fourth respondent by sending the Documents by international registered post with return receipt to its registered office, being Africa House, 70 Kingsway, London, England, WC2B 6AH.

Associate:

Dated:    19 August 2022

SCHEDULE OF PARTIES