Commerce Commission v Viagogo AG [2019] NZCA 472

 

This is a 2 October 2019 appeal decision of the Court of Appeal.   The Commerce Commission (“ComCom”) appealed against the High Court’s refusal to issue an interim injunction against Viagogo AG (“Viagogo”).

 

Viagogo has made the news in NZ several times in the last couple of years for allegedly ripping off NZ consumers attempting to buy tickets to NZ events. Viagogo is incorporated and headquartered in Switzerland, with no physical place of business in NZ.

 

In 2018 the Commerce Commission (ComCom) filed proceedings against Viagogo, claiming that Viagogo is making false, misleading or deceptive representations to NZ consumers through its ticket reselling website, in breach of the Fair Trading Act 1986.

 

Viagogo would not accept service of the proceedings through its NZ lawyers, and required the ComCom to serve the proceedings on it in Switzerland – also advising that if served, it would object to the jurisdiction of NZ courts to determine the claims.

 

The ComCom arranged service of the proceedings in Switzerland.  But prior to the proceedings being served, the ComCom applied without notice for an interim injunction restraining Viagogo from making certain representations to NZ consumers on its website.  The ComCom did advise Viagogo’s NZ lawyers that it was making this without notice application.

 

The application was heard in the High Court on 5 February 2019.  Counsel appeared for Viagogo on a Pickwick basis, and without prejudice to Viagogo’s position that (a) it needed to be formally served in Switzerland and (b) it would be protesing jurisdiction.

 

Courtney J held[1] that the court had no jurisdiction to grant interim relief against Viagogo before Viagogo had been served with the proceedings – this being consistent with a line of NZHC decisions holding that the court does not have jurisdiction to grant relief against an overseas defendant unless and until the proceedings have been served, and protests to jurisdiction determined.

 

The ComCom appealed.

 

The Court of Appeal noted that it is clear that interim relief can be granted against domestic defendants who have not been served.  It is also clear that proceedings against an overseas defendant cannot be finally determined until the proceedings have been served on that defendant and any protest to jurisdiction determined.  The issue for the Court of Appeal to resolve was whether interim relief could be granted against overseas defendants who have not been served, and when potential protests to jurisdiction remain undetermined.

 

The Court of Appeal decided that interim relief may be granted against an overseas defendant before service of the proceedings, and before any protest to jurisdiction has been determined.  This is to ensure that the court is not prevented from being able 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 NZ court).

 

However, the fact that a defendant is yet to be served overseas, and the prospect of a protest to jurisidction, are factors the court will need to consider.  The overriding consideration is whether it is in the overall interests of justice to grant interim relief.  If it is more likely that the case will eventually be determined at a trial before a NZ court, that will be relevant to an assessment of the overall interests of justice.

 

The Court of Appeal therefore allowed the appeal.  But matters had moved on since the February 2019 High Court hearing.  Viagogo had been served in Switzerland; Viagogo had served a protest to jurisdiction; and changes had been made to some parts of the Viagogo’s website that were the subject of the ComCom’s application.  Given that, the parties agreed that this appeal would be determined without consideration of the merits of the ComCom’s application for interim relief.  The ComCom needed to review the website changes and decide whether it still sought the interim relief.  If it did, the Court of Appeal directed it would need to be dealt with in the High Court on notice to Viagogo, and they remitted the matter to the High Court for that to occur.

 

The decision is somewhat lengthy (34 pages) but is an interesting one, and is well worth reading for any counsel who deals with civil proceedings which may involve defendants based outside of NZ.  Interesting aspects of the decision include:

·      A discussion of the meaning of “jurisdiction”, a word that is used in a number of senses (for example: subject matter jurisdiction, personal jurisdiction, jurisdiction to grant a particular form of relief), and the importance of keeping these distinct.  At the heart of this appeal was the question of whether jurisdiction to grant a particular form of relief was dependent on the plaintiff first having established personal jurisdiction[2]

·      A discussion around whether the granting of interim relief involves accepting that the court has jurisdiction to hear and determine a proceedings on the merits, noting that granting interim relief is not equivalent to determining a summary judgment application in which the court is asked to enter judgment against the defendant on the merits of the case[3]

·      A review of the cases which made up the line of authorities that Courtney J had relied upon in determining she could not grant interim relief when the proceedings had not been served and where a protest to jurisdiction needed to be resolved[4]

·      A discussion about why courts should be able to exercise jurisdiction to grant interim relief against a defendant even where a defendant has filed a protest to jurisdiction or is likely to do so – particularly focusing on how in doing so, courts will retain the option of enabling substantial justice to be done between the parties[5]

·      If it is clear the court would not exercise jurisdiction to resolve the substantive claim against the defendant, it would be inappropriate to grant interim relief.  Conversely, where it is clear a NZ court can exercise jurisdiction, then a lack of service overseas would be of little relevance when deciding whether to grant interim relief.  Where the position is less clear, the court would need to consider the likelihood of a hearing on the merits before a NZ court as part of its assessment of the overall interests of justice[6]

·      While not resolving this matter, the Court indicated that when assessing an application for interim relief to restrain statements made to consumers in NZ, the focus should be on the practical reality of whether communications are directed to NZ consumers, rather than on matters like where a website is hosted, or whether the communications are made by “push” or “pull” technology[7]

·      Courts should not assume that simply because a defendant is outside NZ, interim injunctions will not be complied with[8]

·      Where a defendant is to be served abroad with the leave of the court, and where the court is asked to grant interim relief against that defendant before service or before determining any protests to jurisdiction, courts should consider:

o   Is there a good arguable case that the claim falls within a paragraph of High Court Rule 6.27?

o   Is there a serious issue to be tried on the merits?

o   Is NZ the appropriate forum for the trial?

o   Are there any other circumstances relevant to whether a NZ court should exercise jurisdiction?[9]

·      The fact that a defendant is outside NZ should not encourage the making of without notice interim orders[10]

·      Substituted service is not an appropriate alternative to granting interim relief in urgent cases[11]

Copyright Steve Keall, all rights reserved, 2020.

Written by Steve Keall & Katy Barker

[1] Commerce Commission v Viagogo AG [2019] NZHC 187

[2] [49] to [54]

[3] [55] to [61]

[4] [55] to [68]

[5] [77] to [84]

[6] [85] to [86]

[7] [89]

[8] [91]

[9] [92]

[10] [94]

[11] [95] to