FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Valve Corporation [2014] FCA 1018 Citation: Australian Competition and Consumer Commission v Valve Corporation [2014] FCA 1018 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v VALVE CORPORATION File number(s): NSD 886 of 2014 Judge(s): JAGOT J Date of judgment: 16 September 2014 Legislation: Federal Court Rules 2011 (Cth) rules 10.24, 10.43(2), 10.44(1) Cases cited: Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 94 FCR 384; [1999] FCA 1572 Swan Brewery Co Ltd v Atlee [1998] FCA 277 Unilever Australia Ltd v PB Foods Ltd [2000] FCA 798 Date of hearing: 16 September 2014 Place: Sydney Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 12 Counsel for the Applicant: Ms N L Sharp Solicitor for the Applicant: Thomson Geer Counsel for the Respondent: The Respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 886 of 2014 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: VALVE CORPORATION Respondent JUDGE: JAGOT J DATE OF ORDER: 16 SEPTEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to rules 10.43(2) and 10.44(1) of the Federal Court Rules 2011, the applicant is granted leave to serve: (a) the originating application dated 28 August 2014; (b) the statement of claim dated 28 August 2014; (c) the affidavit of Juliana Derevnina Liskov affirmed on 12 September 2014; (d) the affidavit of Rebecca Lynch sworn on 12 September 2014; (e) notice of the orders made by the Court on 16 September 2014; and (f) any additional affidavits filed by the applicant (collectively, "Documents") outside the Commonwealth in accordance with the 15 November 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters by using the private contractor of the US Department of Justice, Process Forwarding International of 633 Yesler Way, Seattle, Washington 98104, United States of America, to personally serve the Documents on the respondent, a company incorporated and registered in the State of Washington in the United States, at its principal places of business at 10900 NE Fourth Street, Suite 500, Bellevue in the State of Washington in the United States. 2. Pursuant to rule 10.24 of the Federal Court Rules 2011, that the Documents will be taken to have been served on the respondent by delivering copies of the Documents to K+L Gates of Level 31, O'Connell Street, Sydney NSW 2000. Service of the Documents (excluding any additional affidavits in accordance with order 1(f)) is to take place on or before 5.00pm on 17 September 2014 and the originating application is to be returnable for directions at 9.30am on 23 September 2014. 3. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 886 of 2014 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: VALVE CORPORATION Respondent JUDGE: JAGOT J DATE: 16 SEPTEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application pursuant to rules 10.43(2) and 10.44(1) of the Federal Court Rules 2011 (the Rules) by which the applicant seeks leave to serve an originating application, statement of claim and accompanying documents outside the Commonwealth on the respondent, which is a company located in Seattle, Washington, in the United States of America. 2 The application is supported by an affidavit sworn by the applicant's solicitor on 12 September 2014. The evidence before me leaves me in no doubt that the procedural and substantive requirements of rule 10.43, including the specific requirements in sub-paragraph 10.43(3), are satisfied. In particular, set out in the applicant's supporting affidavit are the proposed method of service and the facts establishing that the proposed method of service is permitted by article 10(c) of the Hague Convention (as defined in rule 10.41). 3 With respect to rule 10.43(4) of the Rules, I am satisfied that the proceeding is of a kind mentioned in rule 10.42, being a proceeding based on a cause of action arising in Australia (item 1) and also a proceeding seeking relief or a remedy under an Act (item 15), and, accordingly, that the Court has jurisdiction in the proceeding. I am also satisfied that the applicant has a prima facie case for the relief claimed in the proceeding. 4 It is unnecessary for me to say anything more about the proceeding other than that the originating application seeks declarations, injunctions and ancillary orders relating to alleged breaches of the Australian Consumer Law by the proposed respondent, Valve Corporation, relating to the making of representations to consumers in Australia via a website known as the "Steam platform", which representations are said to be false and misleading or likely to mislead or deceive because they are representations in contravention of various sections of the Australian Consumer Law. 5 In addition to the application for leave to serve outside the jurisdiction, the applicant makes an application for substituted service pursuant to rule 10.24 of the Rules. Rule 10.24 provides that "[i]f it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order… substituting another method of service". Before making such an order, the Court must be satisfied that it is not practicable to serve the document in the way required by the Rules which, in the present case, would be the way required under the Hague Convention, and that the proposed method of service will bring the relevant documents to the attention of the party in question. 6 Again, there is no doubt on the evidence before me that the proposed method of substituted service will bring all of the documents to the attention of the proposed respondent. Amongst other things, there is evidence that solicitors acting for the respondent are located in Australia and were copied in to the relevant email correspondence which foreshadowed the proposed proceedings between the applicant and the respondent. 7 There is also an element of abundant caution about the substituted service application because a solicitor within the Australian firm of solicitors acting for the respondent has endorsed a note on each of the originating application and statement of claim acknowledging that service was accepted pursuant to rule 10.22 of the Rules on 28 August 2014 and that the solicitors were authorised by the respondent to do so. 8 The exercise of power to order substituted service under rule 10.24 of the Rules is conditioned on the circumstance that it is not practicable to serve a document on a person in a way required by the Rules. Counsel for the applicant took me to a number of decisions which stress that the concept of "not practicable", which appears in the current version of the Rules (and which I accept is equivalent to the concept of "impracticable" which appeared in the previous version of the Rules), is one which has to be assessed, relevantly, in the factual context in which it arises. In particular, in Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 Gordon J noted (at [35]): The ACCC accepted that it must demonstrate that service is impractical and that the method of substituted service proposed should be one which in all reasonable probability, if not certainty, will be effective to bring knowledge of the documents to the person to be served. As is now well established, the question of impracticability must be considered in the factual context in which it arises: [Unilever Australia Ltd v PB Foods Ltd [2000] FCA 798 (Unilever)]. 9 Gordon J went on to note a number of factors which have been recognised as relevant considerations (at [36]): 1. whether the outcome of the proceeding is time sensitive, for example where the interests of the applicant are at immediate risk: [Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 94 FCR 384; [1999] FCA 1572]; 2. whether there are case management benefits for the Court in allowing substituted service: Unilever; and 3. whether personal service would result in significant delays and there are more convenient alternatives: [Swan Brewery Co Ltd v Atlee [1998] FCA 277]. 10 In the present case, there are undoubtedly case management benefits for the Court in allowing substituted service. The reason for this is that the evidence adduced in order to establish a prima facie case is to the effect that the alleged representations which are said to be misleading and deceptive or likely to mislead and deceive are continuing; they are being made to users of the Steam platform in Australia, which is said to involve some 1.4 million people. In addition, there is no doubt, given the endorsement by the solicitor for the respondents present in the jurisdiction, that the proposed respondent is aware of the proceedings and, indeed, should be inferred to have authorised acceptance of service by the proposed method of substituted service in this case. If that method of service is used, then it is apparent that the relevant documents can be served not only with little cost and expense but, more importantly, in a very timely manner – perhaps in one or two days – as compared to the time and expense which is likely to be involved in service outside the jurisdiction. 11 While the requirements of article 10(c) of the Hague Convention are not particularly onerous, it is significant that the best time frame for service of documents in the United States by the relevant organisation under the Hague Convention is service within a 30-day period. Notwithstanding the fact that the alleged misleading and deceptive conduct is said to have been taking place since the inception of the Australian Consumer Law, in circumstances where the alleged conduct is said to be continuing and involves such a large number of people, it does seem to me that there are substantial case management benefits for the Court in allowing substituted service. 12 There would be delay which, in the circumstances of this particular case, I am satisfied would amount to significant delay and, undoubtedly, there is a more convenient alternative which will, with certainty, bring the documents to the knowledge of the proposed respondent. In those circumstances, I am satisfied that it is not practicable to serve the documents having regard to the concept of practicability which has been referred to in the various decisions to which I have been taken. I am also satisfied, as a matter of discretion, that an order for substituted service should be made. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 23 September 2014