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Earlier in the year, Associate Professor Jeanne Huang reported on the Australian Information Commission’s action against Facebook Inc in the Federal Court of Australia. In particular, Huang covered Australian Information Commission v Facebook Inc [2020] FCA 531, which concerned an ex parte application for service outside of the jurisdiction and an application for substituted service.

In April, Thawley J granted the Commission leave to serve the first respondent (Facebook Inc) in the United States, and the second respondent (Facebook Ireland Ltd) in the Republic of Ireland. Through orders for substituted service, the Commission was also granted leave to serve the relevant documents by email (with respect to Facebook Inc) and by mail (with respect to Facebook Ireland Ltd).

Facebook Inc applied to set aside the orders for its service in the United States, among other things. Facebook Ireland appeared at the hearing of Facebook Inc’s application seeking equivalent orders, although it did not make submissions.

On 14 September, Thawley J refused that application: Australian Information Commissioner v Facebook Inc (No 2) [2020] FCA 1307. The foreign manifestations of Facebook are subject to the Federal Court’s long-arm jurisdiction.

The decision involves an orthodox application of Australian procedure and private international law. The policy represented by the decision is best understood by brief consideration of the context for this litigation.

Background

The Australian Information Commission is Australia’s ‘independent national regulator for privacy and freedom of information’, which promotes and upholds Australians’ rights to access government-held information and to have their personal information protected.

Those legal rights are not as extensive as equivalent rights enjoyed in other places, like the European Union. Australian law offers minimal constitutional or statutory human rights protection at a federal level. Unlike other common law jurisdictions, Australian courts have been reluctant to recognise a right to privacy. Australians’ ‘privacy rights’, in a positivist sense, exist within a rough patchwork of various domestic sources of law.

One of the few clear protections is the Privacy Act 1988 (Cth), (‘Privacy Act’), which (among other things) requires large-ish companies to deal with personal information in certain careful ways, consistent with the ‘Australian Privacy Principles’.

In recent years, attitudes towards privacy and data protection seem to have changed within Australian society. To oversimplify: in some quarters at least, sympathies are becoming less American (ie, less concerned with ‘free speech’ above all else), and more European (ie, more concerned about privacy et al). If that description has any merit, then it would be due to events like the notorious Cambridge Analytica scandal, which is the focus of this litigation.

Various manifestations of Australian governments have responded to changing societal attitudes by initiating law reform inquiries. Notably, in 2019, the Australian Competition and Consumer Commission (‘ACCC’) delivered its final report on its Digital Platforms Inquiry, recommending that Australian law be reformed to better address ‘the implications and consequences of the business models of digital platforms for competition, consumers, and society’. The broad-ranging inquiry considered overlapping issues in data protection, competition and consumer protection—including reform of the Privacy Act. The Australian Government agreed with the ACCC that Australian privacy laws ought to be strengthened ‘to ensure they are fit for purpose in the digital age’. A theme of this report is that the foreign companies behind platforms like Facebook should be better regulated to serve the interests of Australian society.

Another important part of the context for this Facebook case is Australia’s media environment. Australia’s ‘traditional’ media companies—those that produce newspapers and television—are having a hard time. Their business models have been undercut by ‘digital platforms’ like Facebook and Google. Many such traditional media companies are owned by News Corp, the conglomerate driven by sometime-Australian Rupert Murdoch (who is responsible for Fox News. On behalf of Australia: sorry everyone). These companies enjoy tremendous power in the Australian political system. They have successfully lobbied the Australian government to force the foreign companies behind digital platforms like Google to pay Australian companies for news.

All of this is to say: now more than ever, there is regulatory appetite and political will in Australia to hold Facebook et al accountable.

Procedural history

Against that backdrop, in March 2020, the Commission commenced proceedings against each of the respondents in the Federal Court, alleging ‘that the personal information of Australian Facebook users was disclosed to the This is Your Digital Life app for a purpose other than the purpose for which the information was collected, in breach of the Privacy Act’.

The Commissioner alleges that:

1. Facebook disclosed the users’ personal information for a purpose other than that for which it was collected, in breach Australian Privacy Principle (‘APP’) 6;
2. Facebook failed to take reasonable steps to protect the users’ personal information from unauthorised disclosure in breach of APP 11.1(b); and
3. these breaches amounted to serious and/or repeated interferences with the privacy of the users, in contravention of s 13G of the Privacy Act.

In April, the service orders reported by Huang were made. Facebook Inc and Facebook Ireland were then served outside of the jurisdiction.

Facebook’s challenge to the orders for service outside of the jurisdiction: ‘no prima facie case’

Facebook Inc contended that service should be set aside because the Court should not be satisfied that there was a prima facie case for the relief claimed by the Commissioner as required by r 10.43(4)(c) of the Federal Court Rules 2011 (Cth).

The Court summarised the principles applicable to setting aside an order as to service as follows (at [23]):

• An application for an order discharging an earlier order granting leave to serve out of the jurisdiction, or for an order setting aside such service, is in the nature of a review by way of rehearing of the original decision to grant leave to serve out of the jurisdiction.
• It is open to the party who sought and obtained an order for service out of the jurisdiction to adduce additional evidence, and make additional submissions.
• The onus remains on the applicant in the proceedings to satisfy the Court in light of the material relied upon, including any additional material relied upon, that leave ought to have been granted.

Facebook Inc accepted that although demonstrating a prima facie case is ‘not particularly onerous’, the Commissioner had failed to establish an arguable case; she had merely posited ‘inferences’ which did not reasonably arise from the material tendered: [28]-[29].

As noted above, the underlying ‘case’ that was the subject of that argument is in relation to the Cambridge Analytica scandal and alleged breaches of the Privacy Act.

The case thus turns on application of an Australian statute to seemingly cross-border circumstances. Rather than having regard to forum choice-of-law rules, the parties seemingly accepted that the case turns on statutory interpretation. The extra-territorial application of the Privacy Act depends on an organisation having an ‘Australian Link’. Section 5B(3) relevantly provides:

(3) An organisation or small business operator also has an Australian link if all of the following apply: …

(b) the organisation or operator carries on business in Australia or an external Territory;

(c) the personal information was collected or held by the organisation or operator in Australia or an external Territory, either before or at the time of the act or practice.

Facebook Inc argued that the Commissioner failed to establish a prima facie case that, at the relevant time, Facebook Inc:

• carried on business in Australia within the meaning of s 5B(3)(b) of the Privacy Act; or
• collected or held personal information in Australia within the meaning of s 5B(3)(c) of the Privacy Act.

Facebook Inc carries on business in Australia

In Tiger Yacht Management Ltd v Morris (2019) 268 FCR 548 (noted here), the Full Court of the Federal Court of Australia ‘observed that the expression “carrying on business” may have a different meaning in different contexts and that, where used to ensure jurisdictional nexus, the meaning will be informed by the requirement for there to be sufficient connection with the country asserting jurisdiction’: [40].

The Court considered the statutory context of the Commissioner’s case, being the application of Australian privacy laws to foreign entities. The Court had regard to the objects of the Privacy Act, which include promotion of the protection of privacy of individuals and responsible and transparent handling of personal information by entities: Privacy Act s 2A(b), (d). Whether Facebook Inc ‘carries on business in Australia’ for the purposes of the Privacy Act is a factual inquiry that should be determined with reference to those broader statutory purposes.

The Commissioner advanced several arguments in support of the proposition that Facebook Inc carries on business in Australia.

One argument advanced by the Commissioner was that Facebook Inc had financial control of foreign subsidiaries carrying on business in Australia, suggesting that the parent company was carrying on business in Australia. (Cf Tiger Yacht, above.) That argument was rejected: [155].

Another argument turned on agency more explicitly. Essentially, the Commissioner sought to pierce the corporate veil by arguing Facebook is ‘a single worldwide business operated by multiple entities’: [75]. Those entities contract with one another so that different aspects of the worldwide business are attributed to different entities, but the court ought to pierce the jurisdictional veil. The Commissioner submitted that ‘the performance pursuant to the contractual arrangements by Facebook Inc of functions necessary for Facebook Ireland to provide the Facebook service…, including in Australia, indicated that Facebook Ireland was a convenient entity through which Facebook Inc carried on business in Australia during the relevant period’: [115].

Facebook Inc appealed to cases like Adams v Cape Industries [1990] 1 Ch 433, where the English Court of Appeal explained that, typically, a company would not be considered to be carrying on business within the forum unless: ‘(a) it has a fixed place of business of its own in this country from which it has carried on business through servants or agents, or (b) it has had a representative here who has had the power to bind it by contract and who has carried on business at or from a fixed place of business in this country’ (at 529). (See also Lucasfilm Ltd v Ainsworth [2008] EWHC 1878 (Ch).)

Ultimately, the Court was not satisfied that Facebook Inc carried on business within Australia on the basis that Facebook Ireland conducted Facebook Inc’s business in Australia: [117]. More accurately, the Commissioner had not established a prima facie case to that effect.

But the Commissioner had established a prima facie case that Facebook Inc directly carried on business within Australia.

Facebook Inc is responsible for various ‘processing operations’ in relation to the Facebook platform, which includes responsibility for installing, operating and removing cookies on the devices of Australian users. Facebook Inc appealed to case authority to argue that this activity did not amount to carrying on business in Australia. The Court thus considered cases like Dow Jones v Gutnick (2002) 210 CLR 575 and Valve Corporation v Australian Competition and Consumer Commission (2017) 258 FCR 190, which each addressed the territorial aspects of businesses that depend on communication on the internet.

The Court rejected Facebook Inc’s argument that ‘installing’ cookies is to be regarding as equivalent to uploading and downloading a document (cf Gutnick). At the interlocutory stage of the proceeding, there was not enough evidence to accept Facebook Inc’s claim; but there was enough to draw the inference that the installation and operation of cookies within Australia involves activity in Australia.

The Court concluded: ‘the Commissioner has discharged her onus of establishing that it is arguable, and the inference is open to be drawn, that some of the data processing activities carried on by Facebook Inc can be regarded as having occurred in Australia, notwithstanding that the evidence did not establish that any employee of Facebook Inc was physically located in Australia’: [137]. It was thus concluded that the Commissioner had established a prima facie case that Facebook Inc carried on business within Australia: [156]. (Cf the reasoning of Canadian courts that led to Google Inc v Equustek Solutions Inc [2017] 1 SCR 824, noted here.)

Facebook Inc collected or held personal information in Australia

The Court was assisted by responses provided by Facebook Inc to questions of the Commissioner  made pursuant to her statutory powers of investigation. One question concerned the location and ownership of servers used to provide the Facebook service. Although Facebook Inc’s answer was somewhat equivocal, it suggested that the platform depends on servers located in Australia (including network equipment and caching servers) to improve connection and delivery time. This was enough for the Court to make the relevant inference as to collection and holding of personal information within Australia: [170].

The Court had regard to the purposes manifested by the Explanatory Memorandum to the Privacy Act in concluding that ‘the fact that the personal information is uploaded in Australia and stored on Australian users’ devices and browser caches and on caching servers arguably owned or operated by Facebook Inc in Australia, it is arguable that Facebook Inc collected the personal information in Australia’: [185].

Combined with the findings as to carrying on business, this was enough to establish a prima facie case that the extra-territorial application of the Privacy Act was engaged. The Court’s orders as to service were not disturbed.

Concluding remarks

The interlocutory character of this decision should be emphasised. The Court’s findings on the territorial aspects of ‘carrying on business’ and data collection were each subject to the ‘prima facie case’ qualification. These are issues of fact; the Court may find differently after a thorough ventilation of evidence yet to be adduced.

This decision is not anomalous. The assertion of long-arm jurisdiction over Facebook Inc indicates Australian courts’ increasing willingness to pierce the jurisdictional veil for pragmatic ends. In my experience, most Australian lawyers do not really care about the multilateralist ideals of many private international law enthusiasts. The text of the Australian statutes that engage the case before them is paramount. Lawyers are directed to consider the text of the statute in light of its context and purpose: Australian Securities and Investments Commission v King (2020) 94 ALJR 293, [23]; Acts Interpretation Act 1901 (Cth) s 15AA. Essentially, in the case of a forum statute with putative extraterritorial operation, a form of interest analysis is mandated.

I am OK with this. If the policy of the Privacy Act is to have any chance of success, it depends on its application to internet intermediaries comprised of corporate groups with operations outside of Australia. As an island continent in a technologically interconnected world, the policy of Australian substantive law will increasingly determine the policy of Australian private international law.

Michael Douglas is Senior Lecturer at UWA Law School and Consultant at Bennett + Co, Perth.

The author of this post is Omar Vanin. He earned a Phd in Private International Law from the University of Padova and is now in private practice.

On 7 August 2020, the Italian Supreme Court (Corte di Cassazione) ruled on the non-recognition of a judgment whereby a Palestinian religious court had acknowledged the severance of the matrimonial ties between a muslim couple, on the ground that the judgment offended the public policy of Italy (the ruling is numbered as follows: No 16804/20; the text has not yet been officially published by the Court, but it’s available here through the website Cassazione.net).

The Facts

Proceedings were brought by a woman of Italian and Jordanian nationality against the recording in Italy of a judgment rendered, on an application by her husband, by the Sharia court of Western Nablus (West Bank). The husband had repudiated the woman in accordance with Islamic law, and the Sharia court, taking note of the repudiation (talaq), had certified that the couple had ceased to be bound by marriage.

The woman argued that the judgment was at odds with the public policy of Italy. She submitted, first, that Islamic law, as applied in the West Bank, failed to provide equal rights to the spouses in relation to divorce, and, secondly, that the she was not given an opportunity to present her case in the proceedings which resulted in the judicial declaration.

The man, for his part, claimed that talaq merely constituted a process of revocable separation, and that the judgment was passed after an unsuccessful attempt by the Sharia court to reconcile the couple.

Islamic Repudiation and its Judicial or Contractual Nature

Islamic law sees marriage as a contract. Talaq is one of the grounds on which marriage may be terminated.

The traditional view is that only the husband is entitled to have the marital ties severed by means of repudiation.

Developments have occurred in this area in several Islamic jurisdictions. In some of them, the wife may seek to have the marriage terminated through a declaration by the competent (religious) authority, based on a breach of the husband’s obligations towards her.

Concurrently, marriage termination is losing its ‘contractual’ features, and rather represents, in some jurisdictions, the outcome of a judicial procedure.

Against this backdrop, a case-by-case analysis may prove necessary to assess whether, in the circumstances, the authorities involved merely attested a unilateral termination prompted by the husband or rather declared such termination based on their own independent assessment.

The Judgment of the Italian Supreme Court

The Cassazione held that, in the case at issue, the basic procedural rights of the wife had been violated. Indeed, the woman did not take part in the proceedings instituted by her husband before the Sharia court, in the framework of which he irrevocably repudiated his wife.

In fact, the woman was notified of the procedure after the judgment was given, and only to enable the court to ascertain that no reconciliation had occurred in the three months following the decision.

In addition, the Cassazione ruled that the judgment was also incompatible with the substantive public policy of Italy, since talaq could only be exercised by the male spouse, thus violating the principle of equality of rights between husband and wife enshrined both in the Italian Constitution and in various international instruments in force for Italy, such as Protocol No. 7 to the European Convention on Human Rights.

The Court’s Findings Compared with Previous Italian Case Law and the Case Law of Other States  

By the described ruling, the Cassazione took a stance on a topic that lower courts in Italy have been discussing for several years. Prior to this judgment, the Court itself had relatively few opportunities to address the matter, the latest of which dates back to 1983.

The conclusion reached by the Supreme Court, namely that traditional talaq is inconsistent with public policy, accords with the Court’s own precedents and with most lower courts’ judgments. In fact, the reasoning of the Cassazione echoes, to a large extent, the reasoning of several among such lower courts.

In various respects, the views expressed by the Cassazione are in line with those expressed, often in a more nuanced way, in other European countries.

In 2014, for instance, the French Cour de Cassation denied the recognition of an Algerian judgment acknowledging the unilateral repudiation of an Algerian wife by an Algerian husband on the ground that it contravened the principe whereby the spouses enjoy equal rights as regards the termination of marriage.

The Cour de Cassation had previously granted effect to judgments rendered as a result of talaq, through the doctrine of ‘mitigated’ public policy. The latter doctrine posits that, in appropriate circumstances, foreign judgments offending as such public policy may nevertheless be granted recognition to the extent to which their authority is merely invoked as a basis for a different claim, one that is not, per se, inconsistent with public policy (e.g., a claim for spousal support based on the termination of marriage through talaq).

Eventually, the Cour de Cassation abandoned this line of thought in 2004, stressing the radical incompatibility of talaq with a paramount principle of the French legal system such as gender equality.

The question remains debated in France, among scholars, of whether a milder solution ought to be adopted where to deny recognitin would preclude the wife from enjoying some important benefits (see in general, among recent contributions available on the web, this paper by Yann Heyraud).

Note, incidentally, that the concept of ordre public atténué is not necessarily followed everywhere. The Italian Supreme Court, for example, has never explicitly endorsed the doctrine of attenuated effects in respect of talaq or other legal institutions.

Greek courts, for their part, have expressed the view that talaq judgments ought to be denied recognition on grounds of public policy. Recently, however, lower courts admitted the recognition of of such judgments in cases where an application to that effect was lodged by the wife herself (see further the chronicle and remarks by Apostolos Anthimos here).

Some Remarks

The position taken by the Italian Supreme could hardly be criticised in itself. The Court’s reasoning, however, is unpersuasive in at least two passages.

To begin with, the Cassazione failed to take a clear stance on the nature of talaq in a situation where a foreign judicial authority is involved in the process. Arguably, the issue has repercussions on the methods through which the severance of matrimonial ties may be given effect in Italy. If the severance of those is understood to be produced by a judicial decision (i.e., one based on an assessment by the authority in question, following the husband’s declaration), its effectiveness in Italy depends on whether the conditions for the recognition of such a foreign decision are met in the circumstances. Instead, if talaq is labelled as a contractual act (i.e., as a declaration of the husband that the competent judicial authority is merely required to attest, e.g., for publicity reasons), then its effects in Italy would depend on whether the act in question was performed in accordance with the law specified under the pertinent Italian conflict-of-laws rules. Of course, public policy may prevent a talaq from producing effects in Italy in both scenarios, but the question remains of whether the issue of its should be addressed against the background of the rules on the recognition of judgments rather than those on the conflicts of laws. In some cases, the conditions required under the applicable rules may not be fulfilled, which would make any inquire into public policy useless.

In the case at issue, the Cassazione observed that the Sharia court of Western Nablus simply took note of the repudiation, without carrying out, properly speaking, any assessment. The Court, however, failed to elaborate on the implications of such a characterisation for the identification of the relevant methods and rules of private international law, and in fact contented itself with noting that the decision ought to be denied recognition on grounds of public policy.

The second questionable passage in the Supreme Court’s ruling is a general remark whereby a foreign judgment declaring the severance of matrimonial ties ought to be denied recognition on grounds of public policy unless such a judgment is based on, or at least implies, a finding that the bond of affection between the spouses has irretrievably come to an end.

Doubts may be raised as to the pertinence of the latter requirement. As a matter of fact, even Italian courts do not inquire into the reasons why the spouses may be seeking divorce, when pronouncing the dissolution of marriage under Italian law.

The Court of Justice delivered today its judgment in case C‑540/19 (WV v Landkreis Harburg) which is about Article 3 (b) of the Maintenance Regulation. The decision should have a clear practical impact: « A public body which seeks to recover, by way of an action for recovery, sums paid in place of maintenance to a maintenance creditor, and to which the claims of that maintenance creditor against the maintenance debtor have been transferred by way of subrogation, may validly invoke the jurisdiction of the court for the place where the creditor is habitually resident, as provided in Article 3(b) of Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations”.

Source: http://curia.europa.eu/juris/document/document.jsf?docid=231185&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=EN&cid=2561617

AG  Saugmandsgaard Øe delivered last week (10 September 2020) his opinion in case C‑59/19 (Wikingerhof GmbH & Co. KG contre Booking.com BV), which is about Brussels I bis. The opinion is currently available in selected EU official languages only (such as German and Spanish). It is not available in English. Here is the French version (to check whether an English translation has finally been made available, just click on the link below and change the language version):

“L’article 7, point 2, du règlement (UE) no 1215/2012 du Parlement européen et du Conseil, du 12 décembre 2012, concernant la compétence judiciaire, la reconnaissance et l’exécution des décisions en matière civile et commerciale doit être interprété en ce sens qu’une action en responsabilité civile fondée sur la violation des règles du droit de la concurrence relève de la « matière délictuelle ou quasi délictuelle », au sens de cette disposition, y compris lorsque le demandeur et le défendeur sont parties à un contrat et que les prétendus agissements anticoncurrentiels que le premier reproche au second se matérialisent dans leur relation contractuelle ».

Source : here

La Cour de cassation a examiné un pourvoi relatif à la question de l’application des dispositions de la loi du 23 mars 2019 relative au seuil d’aménagement des peines. Est-elle applicable aux procédures en cours, ou seulement aux procédures dont les faits poursuivis ont été commis postérieurement à l’entrée en vigueur de la loi, le 24 mars 2020 ? Dans son avis, l’avocate générale a soutenu la deuxième hypothèse. La décision sera rendue le 20 octobre.

en lire plus

The new Uruguayan General Law of Private International Law has passed the Senate and will now be submitted to the House of Representatives. This means that a project that was initiated in 1994 by Didier Opertti Badán will finally come to fruition. ASADIP’s blog provides a note by Cecilia Fresnedo that lays out, in Spanish, the arduous path that the project took between 1994 and now. It is also possible to download the draft legislation.

Despite its small size, Uruguay has long been one of the leaders of private international law in Latin America, and has been highly regarded worldwide. Cecilia Fresnedo reported on the project last year at a conference on the role of academia in Latin American private international law at the Max Planck Institute; she has written on Uruguayan Private International Law – Past and Future in the Festschrift for Herbert Kronke that came out earlier this year. The 2016 draft of the law is here; an  appreciation by José Antonio Tomás Ortíz de la Torre is here.

I reported earlier on the jurisdictional issues in BNP Paribas SA v Trattamento Rifiuti Metropolitani SPA [2020] EWHC 2436 (Comm) . In current judgment the issue of interest to the blog is the possibility of res judicata /issue estoppel on  the substance of the claim as a result of arguments made in the jurisdictional challenge.

The issue is an important one given the English (potentially other States’) courts’ inclusion of a ‘serious issue to be tried’ test in which the judge has to decide to ‘much the better of the argument’ standard at the jurisdictional gateway level. While aimed at determining jurisdiction, this inevitably engages with some discussion on the merits.

Cockerill J is justifiably cautious in accepting much estoppel, given the clear separation between jurisdictional and substantial discussions. I do feel she might have pointed out the relevance of the case being heard under Brussels Ia rules as opposed to residual English rules. Under the former, a certain amount of merits engagement may be required for some jurisdictional gateways as discussed repeatedly on the blog (and in the jurisdictional rulings there was clearly a lot of engagement with the facts, to establish Article 25 consent for choice of court). But there can certainly not be a ‘serious issue to be tried’ condition for the substance of the case, in the jurisdictional gateways of BIa (summary dismissal proceedings are an entirely different matter).

Geert.

 

Discussion on res judicate /issue estoppel and abuse of process in relation to earlier judgments upholding jurisdiction of the English courts – which I discuss here https://t.co/mn3rGYTttG

— Geert Van Calster (@GAVClaw) September 11, 2020