Commerce Commission v Viagogo AG

• Jurisdiction: New Zealand
• Judge: Goddard J
• Judgment Date: 02 October 2019
• Neutral Citation: [2019] NZCA 472
• Court: Court of Appeal
• Docket Number: CA159/2019
• Date: 02 October 2019

Between

Commerce Commission

Appellant

and

Viagogo AG

Respondent

[2019] NZCA 472

Court:

Clifford, Gilbert and Goddard JJ

CA159/2019

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Civil Procedure — granting of interim relief before service of proceedings on an overseas defendant and before any protest to jurisdiction had been determined — High Court Rules

Appeal by the Commerce Commission (“the Commission) against a High Court (“HC”) decision which held that it had no jurisdiction to grant interim relief against Viagogo AG (“Viagogo”) before Viagogo had been served with the proceedings in Switzerland. The Commission had filed proceedings against Viagogo claiming it had made false, misleading or deceptive representations to New Zealand consumers through its ticket reselling website, in breach of the Fair Trading Act 1986 (“FTA”). Viagogo was incorporated and headquartered in Switzerland with no physical place of business in NZ. It had declined to accept service through its NZ lawyers and required the Commission to serve the proceedings at its headquarters in Switzerland, advising the Commission that if the proceedings were served on it in Switzerland, it would object to the jurisdiction of the NZ courts. The Commission proceeded to arrange service of the proceedings on Viagogo in Switzerland through diplomatic channels. Before the proceedings had been served, the Commission applied without notice for an interim injunction under r7.53 High Court Rules (“HCR”) (application for injunction) restraining Viagogo from making certain types of representation to NZ consumers through its website. The proceedings had now been served on Viagogo in Switzerland and Viagogo had filed a protest to jurisdiction. It had changes to the Viagogo website that were the subject of the Commission's application.

The issue was whether the HC had jurisdiction to grant interim relief before service of proceedings on an overseas defendant and before any protest to jurisdiction had been determined.

The Court held that interim relief could be granted against an overseas defendant before service of the proceedings, and before any protest had been determined, in order to improve the prospect of the court being able to do justice between the parties after a determination of the merits at a trial. The fact that the defendant was to be served overseas, and the prospect of a protest to jurisdiction, were factors that the court needed to consider when deciding whether it was in the overall interests of justice to grant interim relief.

The power to grant an interim injunction in the circumstances was available under r7.53 HCR. It was also available as a matter of inherent jurisdiction: the power to make such orders was necessary to administer the laws of NZ. It was not an unreasonable assertion of jurisdiction to require a defendant to comply with interim orders designed to enable substantial justice to be done between the parties, whether by the NZ court or another court, while the NZ court determined whether or not it would hear and determine the substantive proceeding. That approach was consistent with the approach adopted by the courts in Australia and England. There were no features of the NZ legal landscape that required a different approach.

If it was clear that the court would not exercise jurisdiction to entertain the substantive claim against the defendant, it would be inappropriate to grant interim relief to preserve the position pending a determination that would never come.

Where a defendant was to be served abroad under r 6.27 HCR (when allowed without leave) and the court was asked to grant interim relief against that defendant before service or before determination of any protest to jurisdiction, the court should consider, on a preliminary basis, the matters set out in r 6.29 HCR (Court's discretion whether to assume jurisdiction): was there a good arguable case that the claim fell wholly within one or more of the paragraphs of r6.27 HCR. Was there a serious issue to be tried on the merits? Was NZ the appropriate forum for the trial of the proceeding? Were there any other circumstances relevant to whether the NZ court should exercise jurisdiction?

Substituted service on a defendant outside NZ under r 6.8 HCR (substituted service) did not preclude the defendant from objecting to the jurisdiction of the NZ court, it would be wrong in principle for an order about the mode of service to defeat a defendant's rights under r5.49 HCR (appearance and objection to jurisdiction) and r6.29 HCR.

The appeal was allowed. The application for interim relief is remitted to the HC.

Counsel:

J D Every-Palmer QC, J L W Wass and A D Luck for Appellant

A J Lloyd, H O Meikle-Downing and S L Michelsen for Respondent

• A The appeal is allowed.

• B The application for interim relief is remitted to the High Court.

• C There is no order as to costs.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Goddard J)

Table of contents

	Para No.
Introduction	[1]
Summary	[7]
The proceedings	[10]
The Commission's claims against Viagogo	[10]
The Commission's without notice application for an interim injunction	[15]
High Court decision	[18]
The Commission's appeal	[21]
Interim relief against overseas defendants: relevant provisions	[23]
The High Court's power to grant interim injunctions	[23]
General principles governing grant of interim injunctions	[30]
Proceedings against overseas defendants	[32]
Interim injunctions against overseas defendants	[36]
Submissions for the Commission	[38]
Submissions for Viagogo	[44]
Analysis	[49]
The different senses of the term “jurisdiction”	[49]
The recent New Zealand authorities	[55]
Service is not a prerequisite to the grant of interim relief	[69]
Interim relief pending determination of a protest to jurisdiction	[77]
The relevance of an actual or potential protest to jurisdiction	[85]
Substituted service	[95]
Conclusion	[101]
Result	[104]

Introduction

1 In November 2018 the Commerce Commission (the Commission) filed proceedings against Viagogo AG (Viagogo) claiming that Viagogo is making false, misleading or deceptive representations to New Zealand consumers through its ticket reselling website, in breach of the Fair Trading Act 1986 ( FTA). Viagogo is incorporated and headquartered in Switzerland. It has no physical place of business in New Zealand.

2 Viagogo declined to accept service of the proceedings through its New Zealand lawyers. It required the Commission to serve the proceedings at its headquarters in Switzerland. And it advised the Commission that if the proceedings were served on it in Switzerland, it would object to the jurisdiction of the New Zealand courts to determine the claims against it. The Commission proceeded to arrange service of the proceedings on Viagogo in Switzerland through diplomatic channels. This process can take many months.

3 Before the proceedings had been served on Viagogo in Switzerland, the Commission applied without notice for an interim injunction restraining Viagogo from making certain types of representation to New Zealand consumers through its website. The Commission advised Viagogo's New Zealand lawyers that it was applying for a without notice injunction.

4 The Commission's application was heard on 5 February 2019. Counsel for Viagogo appeared at the High Court hearing on a Pickwick basis, 1 and without prejudice to Viagogo's position that it needed to be formally served in Switzerland and would be protesting jurisdiction. (It is common ground that an appearance on this basis did not amount to submission to the jurisdiction of the New Zealand courts.)

5 In a judgment delivered on 18 February 2019 (High Court decision) the High Court held that it had no jurisdiction to grant interim relief against Viagogo before Viagogo had been served with the proceedings. 2 That approach was consistent with other New Zealand High Court decisions holding that the court has no jurisdiction to grant interim relief against an overseas defendant unless and until the proceedings have been served, and any protest to jurisdiction has been determined. 3

6 The Commission appealed, arguing that the High Court can grant interim relief before service of proceedings on an overseas defendant and before any protest to jurisdiction has been determined, and should have done so in this case.

Summary

7 The jurisdiction of the High Court to determine a claim against a defendant depends on service of the defendant in accordance with the High Court Rules 2016. The court cannot proceed to finally determine a claim against a defendant while any protest to jurisdiction is outstanding. But as we explain below, the jurisdiction of the court to grant interim relief is not limited in the same way. Interim relief may be granted against an overseas defendant before service of the proceedings, and before any protest has been determined, in order to improve the prospect of the court being able to do justice between the parties after a determination of the merits at a trial. Put another way, the court is not deprived of the ability to make orders that are required to enable it to do effective justice between the parties in the future, in the event that the substantive claim is heard by a New Zealand court, simply because a defendant is to be served overseas or has objected to the jurisdiction of the New Zealand court.

8 The fact that the defendant is to be served overseas, and the prospect of a protest to jurisdiction, are factors that the court will need to consider when deciding whether it is in the overall interests of justice to grant interim relief. Those factors are relevant to the likelihood of an eventual determination of the merits at a trial before a...