Andressen v Bendigo and Adelaide Bank Ltd
[2016] SASC 111
•28 July 2016
SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Civil)
ANDRESSEN v BENDIGO AND ADELAIDE BANK LTD
[2016] SASC 111
Judgment of The Honourable Justice Parker
28 July 2016
PRIVATE INTERNATIONAL LAW - SERVICE OUT OF JURISDICTION - UNDER OTHER LEGISLATION AND RULES OF COURT - VALIDITY
PRIVATE INTERNATIONAL LAW - JURISDICTION - SUBSTITUTED SERVICE OUT OF JURISDICTION
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - RULES OF COURT - POWERS OF COURT IN RELATION TO COURT
Appeal against the decision of a Judge of the District Court refusing an appeal from the decision of a Master. The respondent Bank filed a statement of claim in the District Court seeking to recover from the appellant $155,823.45 remaining outstanding under the terms of a loan agreement. Shortly after the proceedings were issued the appellant left the jurisdiction. The Bank obtained orders for presumptive service under rule 69 of the District Court Rules. The appellant made an application for an order restraining the Bank from entering judgment. A Master dismissed the application and upheld the validity of the presumptive service order. The matter was appealed to a Judge of the District Court. The Judge found for the Bank and held that the Master was entitled to make the order for presumptive service. The matter was then appealed to a single Judge of the Supreme Court. The issues are whether permission to appeal ought to be granted and whether a summons in an action in personam could be effected by presumptive service at a time when the defendant was not in Australia.
Held per Parker J dismissing the appeal:
(1) Permission to appeal is granted. The appeal raises a serious question about the operation of the District Court Rules. The Appellant has an arguable case that the matter was not correctly decided by the Judge and the Master.
(2) The Judge erred in finding that at common law it was sufficient for a defendant to be within the jurisdiction at the time the writ was issued. The service of a writ, rather than its issue, is the basis for jurisdiction and substituted service cannot be effected after the defendant has left the jurisdiction.
(3) Section 50A of the District Court Act 1991 empowers the District Court to make orders that extend its jurisdiction beyond the limits that exist at common law. Thus, the Master’s orders allowed presumptive service regardless of whether or not the appellant was overseas at the time of service.
(4) Obiter: there was no authority in support of a constructive presence principle in relation to service of a writ. Such a principle would have rendered superfluous the consideration given by the courts to the issue of substituted service on persons outside the jurisdiction.
District Court Civil Rules 2006 r 10(2), r 40, r 40(1), r 40(2), r 40(3), r 41AD, r 69, r 69(2), r 69(3) r 117(2); District Court Act 1991 s 8, s 50A, s 50A(1), s 50A(2), s 50(1), s 51, s 51(1)(g); Supreme Court Civil Rules 2006 r 288(1)(a)(iii); Domicile Act 1982 (Cth) s 7, s 8, s 10 ; Federal Court Rules 1979 O 7 r 9; Corporations Act 2001 s 5, s 569B, referred to.
Laurie v Carroll (1958) 98 CLR 310, applied.
Jay v Budd [1898] 1 QB 12; Waller v Freehills (2009) 177 FCR 507; Agar v Hyde (2000) 201 CLR 552; Porter v Freudenberg [1915] 1 KB 857; Joye v Sheahan (1996) 62 FCR 417, discussed.
Cook v Groove is in the Park Pty Ltd [2010] SASC 289; Ward v Motor Vehicle Accident Commission [2008] SASC 346; Atco Industries (Aust) Pty Ltd v Ancla Maritima SA (1984) 35 SASR 408; McLean v DID Piling Pty Ltd [2010] SASC 33; House v The King (1936) 55 CLR 499; John Russell and Co Ltd v Cayzer, Irvine and Co Ltd [1916] 2 AC 298; Re Deposit and Investment Co Ltd (Receiver Appointed) (1991) 30 FCR 463; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; Pearce v Florenca (1976) 135 CLR 507; Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1; Jumbunna Coal Mine NL v Victorian Coal Miner's Association (1908) 6 CLR 309; Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391; Rigney v Rigney (1987) 48 SASR 291; Taylor v Guttilla (1992) 59 SASR 361, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"presumptive service", "substituted service", "constructive presence"
ANDRESSEN v BENDIGO AND ADELAIDE BANK LTD
[2016] SASC 111Appeals to a Single Judge: Civil
Parker J: This is an appeal against the decision of a Judge of the District Court refusing an appeal from the decision of a Master.
The Master held that service on the appellant following a presumptive service order had been effective even though he was overseas when service was purportedly effected. The Master dismissed the appellant’s application for an order restraining the plaintiff from applying to enter judgment.
The matter was appealed to a Judge of the District Court. The Judge found for the plaintiff and held that the Master was entitled to make the order for presumptive service.
I consider that the real question was not whether the Master could validly make an order for presumptive service but rather whether service of a summons in an action in personam could be effected by presumptive service at a time when the defendant was not in Australia. I have found that the answer to that question turns upon the scope of the rule making power of the District Court and the operation of the District Court Civil Rules 2006 (“District Court Rules”).
Background
Dr Andressen was and is an employee of Flinders University. The plaintiff was Adelaide Bank Ltd. Following a restructure of its business in 2008, the plaintiff became Bendigo and Adelaide Bank Ltd (“the Bank”).
In or about February 2005 Dr Andressen entered into a loan agreement and mortgage with the Bank. In May 2006 Dr Andressen ceased making scheduled payments of interest and principal on the loan. This Court made an order for vacant possession and in September 2006 the Bank took possession of the land under the order. The Bank sold the land. Settlement took place in June 2007 with an alleged shortfall of $155,823.45 remaining outstanding under the terms of the loan agreement.
In April 2012 Dr Andressen arranged to teach in a joint international relations program involving Flinders University and Nankai University. The program is taught in China. He also teaches in Spain.
On 23 May 2012 the Bank filed a statement of claim in the District Court seeking to recover the sum of $155,823.45. The Bank instructed a process server to effect personal service on Dr Andressen between 25 and 29 May 2012. The attempt to effect service was unsuccessful. On 19 July 2012 Dr Andressen left Australia for the purpose of teaching in China. He remained overseas until 1 October 2012. At the time Dr Andressen left Australia he apparently had no knowledge that a summons and statement of claim had been filed or that attempts had been made to effect service on him.
On 2 August 2012 the Bank conducted further unsuccessful searches to locate Dr Andressen. The Bank sought an order for presumptive service on 13 August 2012. A Master of the District Court made an order for presumptive service on 23 August 2012. The conditions of the order required that a copy be sent to Dr Andressen’s email address at Flinders University.
On 24 August 2012 the Bank emailed a copy of the order with the necessary documents for presumptive service to Dr Andressen’s Flinders University email address. The Bank received neither a “delivery” nor a “read” receipt for the email. The Bank also sent the documents in a sealed envelope addressed to Dr Andressen at Flinders University.
On or about 28 August 2012 the bank instructed a process server to attempt to serve Dr Andressen personally with the documents, including the order for presumptive service, the summons and the statement of claim. That was unsuccessful.
On 1 October 2012 Dr Andressen re-entered Australia. He stayed for six days before leaving again on 7 October 2012. On 26 October 2012 the Bank applied for and was granted default judgment against Dr Andressen. On 5 November 2012 Dr Andressen returned to Australia but left again on 17 November 2012.
Dr Andressen returned to Australia on 24 December 2012 and remained in Australia until 6 April 2013. During this time a bankruptcy notice was issued and the Bank commenced action in the Federal Court against the defendant. On 10 May 2013 the Federal Court made an order for substituted service. On 15 May 2013 a bankruptcy notice was emailed to Dr Andressen.
On 14 April 2013 the solicitors for Dr Andressen filed a conditional appearance in the District Court stating that he did not submit to the jurisdiction of the Court.
On 7 October 2014 the Bank applied to set aside the default judgment in its favour and sought a second order for presumptive service to be effected by service upon Dr Andressen’s solicitors. On 21 November 2014 a Master made an order to that effect. The relevant passage in the order was as follows:
3 Service of the summons and statement of claim in this Action (“the documents”) will be presumed pursuant to Rule 69 after the expiry of 7 clear days from the last of:
3.1the sending of the documents by ordinary prepaid post to Mr Charles Gillam of Von Doussas Solicitors, 33 Hutchinson Street, MOUNT BARKER, SA 5251; and
3.2the sending of the documents by an email to Mr Charles Gillam to [email protected]
On 24 December 2014 Dr Andressen made an interlocutory application seeking an order restraining the Bank from entering judgment. On 12 February 2015 a Master dismissed Dr Andressen’s application and upheld the validity of the second presumptive service order.
Dr Andressen then appealed to a Judge of the District Court against the order of the Master dismissing the application for an order restraining the Bank from entering judgment. The appeal was dismissed on 28 May 2015. On 18 June 2015 Dr Andressen appealed to this Court.
The District Court Act and the District Court Rules
Section 50A of the District Court Act 1991 provides as follows:
50A—Service
(1)If it is not practicable to serve any process, notice or other document relating to civil or criminal proceedings in the manner otherwise prescribed or contemplated by law, the Court may, by order—
(a) provide for service by post; or
(b)make any other provision that may be necessary or desirable for service.
(2)Any process, notice or other document served in accordance with an order under subsection (1) will, despite any other law, be taken to have been duly served.
The rule-making power of the District Court is conferred by s 51. This provides:
51—Rules of Court
(1) Rules of the Court may be made—
(a)regulating the business of the Court and the duties of the various officers of the Court; and
(b)authorising the Masters to exercise any part of the jurisdiction of the Court; and
(c)regulating the practice and procedure of the Court; and
(ca)imposing mutual obligations on parties to proceedings in the Court to disclose to each other the contents of expert reports or other material of relevance to the proceedings before the proceedings are brought to trial; and
(cb)regulating the referral of an action or issues arising in an action to mediation or arbitration, the conduct of mediations or arbitrations or the referral of questions for investigation and report by an expert; and
(d)regulating the form in which evidence may be taken; and
(da)empowering the Court—
(i)to order the carrying out of a biological or other scientific test that may be relevant to the determination of a question before the Court; and
(ii)to include in such an order directions about the carrying out of the test and, in particular, directions requiring a person (including a party to the proceedings) to submit to the test or to have a child or other person who is not of full legal capacity submit to the test; and
(iii)if a party is required to submit to the test, or to have another submit to the test—to include in the order a stipulation that, if the party fails to comply with the order, the question to which the test is relevant will be resolved adversely to the party; and
(e)giving law clerks limited rights of appearance before the Court; and
(f)regulating costs; and
(g)dealing with any other matter necessary or expedient for the effective and efficient operation of the Court.
(2)Rules of the Court may be made by the Chief Judge and any two or more other Judges.
(3)The rules take effect as from the date of publication in the Gazette or a later date specified in the rules.
Rule 69 of the District Court Rules provides for presumptive service in the following terms:
(1)The Court may, on application by a party, make an order for presumptive service of a document.
(2)An order for presumptive service provides that, if the conditions of the order are complied with, service of the document is to be presumed.
Examples—
1An order for presumptive service might provide for service on a person who might reasonably be expected to bring the document to the attention of the party.
2 An order for presumptive service might provide for the publication of notice of the document in a particular newspaper or newspapers.
3In a case where the plaintiff seeks an order for possession of land and it is not clear who (if anyone) is in occupation of the land, the Court might order that notice of the action be affixed in a prominent position on the land.
(3)It is not necessary for the applicant to establish that the proposed alternative to personal or non-personal service will bring the document to the notice of the person to be served.
…
Rule 40(1) provides for the service of originating process outside Australia without the Court’s permission in specified circumstances. These circumstances include proceedings where the claim relates to real or personal property in the State, where a remedy is sought against a person domiciled or resident in the State, particular proceedings in contract and in tort, and certain other matters.
Rule 40(2) provides that originating process for an action of any kind that is not specified in r 40(1) may only be served outside Australia with the Court’s permission.
It is unnecessary to refer to the various provisions in Division 3 and Division 4 of Part 4 of Chapter 3 of the District Court Rules. Those divisions respectively relate to service through a diplomatic channel or by transmission to a foreign government and service outside Australia under the Hague Convention.[1]
[1] Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, opened for signature 15 November 1965, 658 UNTS 163 (entered into force 10 February 1969).
It is also unnecessary to refer to r 41AA to r 41AF. These provisions commenced operation on 1 October 2014. That was prior to the application by the Bank on 7 October 2014 for the second order for presumptive service. Of the new provisions, only r 41AD may potentially have been relevant. This provides that a party may apply to the Court without notice for an order that a document is taken to have been served if it is not practicable to serve the document on the person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country, and the party provides evidence that the document had been brought to the attention of the person to be served. The Bank has not sought to rely upon this provision
Permission to appeal
Rule 288(1)(a)(iii) of the Supreme Court Civil Rules 2006 provides that permission is required for an appeal to this Court from a judgment given on appeal from an interlocutory judgment.[2] The decision of the Master was interlocutory.[3]
[2] Cook v Groove Is in the Park Pty Ltd [2010] SASC 289 and Ward v Motor Vehicle Accident Commission [2008] SASC 346.
[3] Atco Industries (Aust) Pty Ltd v Ancla Maritima SA (1984) 35 SASR 408.
The parties’ written submissions failed to address the question of permission. The Court therefore drew their attention to r 288(1)(a)(iii) and the decision of the Full Court in Ward v Motor Vehicle Accident,[4] and invited submissions.
[4] [2008] SASC 346.
The Bank contended that permission was required and should be refused. The question of law had been dealt with by the Master’s decision and found to be correct by a Judge. The appeal did not raise a serious question. Permission should be refused in the interests of justice.
Counsel for Dr Andressen submitted that permission should be granted. If the question of validity of service is not resolved by a judgment of this Court the matter would continue to be an issue. In Laurie v Carroll the High Court considered a similar issue about the validity of service to be sufficiently important to warrant the grant of special leave.[5] It would be odd for this Court to take a different view and refuse permission.
[5] (1958) 98 CLR 310.
I consider it appropriate to grant permission to appeal. The appeal raises a serious question about the operation of the District Court Rules. Dr Andressen has an arguable case that the matter was not correctly decided by the Judge and the Master.
The grounds of appeal
The first ground of appeal is that the District Court lacked power to order that service on the defendant is to be presumed to have occurred if service is effected at a time when the defendant is not within Australia or its Territories.
A second ground of appeal is that the Judge erred in finding that the appellant was constructively in Australia at the time of putative service.
A third ground was that the Judge had decided the matter in accordance with the views expressed by Dr Clive Schmitthoff in The English Conflict of Laws[6] and the judgment of the Court of Appeal in Jay v Budd,[7] without those authorities having been referred to by the Bank. Counsel had no opportunity to make submissions about this question and Dr Schmitthoff’s analysis is not correct.
[6] (3rd ed, 1954) at 428.
[7] [1898] 1 QB 12.
The final ground of appeal is that the Judge addressed the wrong question when he considered whether the reasons of the High Court in Laurie v Carroll justified the order for substituted service.[8]
[8] (1958) 98 CLR 310.
The Judge’s reasons
Before referring to the reasons of the Judge for dismissing the appeal from the Master, it is necessary to refer briefly to the Master’s reasons for declining to make an order restraining the Bank from entering judgment against Dr Andressen.
The Master held that the presumptive service order was effective on the basis that Dr Andressen was constructively within the jurisdiction although he was not physically present. The Master found that Dr Andresssen’s solicitor had an extensive retainer as the filed documents revealed that he held instructions to object to the validity of service and also instructions relating to the merits of the proceedings. It was not necessary to rely on the process for service outside the jurisdiction under r 41AD. Rule 69 did not provide for substituted service but rather presumed service. That entailed the Court fashioning an order to meet the particular situation as envisaged by s 50A(1)(b) of the District Court Act. The Master also found in the alternative that the District Court Rules do not provide for the entry of a conditional appearance. Thus, Dr Andressen’s solicitors had not used the appropriate process to challenge the validity of service. The Master also noted that the terms of the action had been made known to Dr Andressen and the proceedings had come to his attention.
Before the Judge considered the merits of the appeal he noted that Layton J had held in McLean v DID Piling Pty Ltd[9] that when deciding an appeal from a Master the Court should follow the principles set out by the High Court in House v The King.[10]
[9] [2010] SASC 33 at [19]-[23].
[10] (1936) 55 CLR 499.
The decision by Layton J involved a completely orthodox application of the principles in House v The King concerning appeals from the exercise of a judicial discretion. Those principles require that an appellate court should not interfere in the exercise of a judicial discretion unless an error is identified. An error may involve matters of process or the outcome. While the reasoning of Layton J was plainly correct, it does not apply in the present circumstances where the appeal concerns a question of law.
That question is whether presumptive service was validly effected at a time when Dr Andressen was not in Australia. Neither the decision of the Master nor that of the Judge relevantly involved the exercise of a judicial discretion. In any event, despite the Judge’s apparent reliance upon McLean v DID Piling Pty Ltd and House v The King, his Honour did not decide the appeal on the basis that there was no error in the exercise of the Master’s judicial discretion that warranted appellate intervention. Instead, he approached the matter as a question of law. That was the proper approach as McLean v DID Piling Pty Ltd and House v The King were not relevant.
The Judge referred to the reasons of the High Court in Laurie v Carroll.[11] He also referred to several English cases noted by the High Court in its judgment and to passages in Dicey’s Conflict of Laws[12] and Dr Schmitthoff’s The English Conflict of Laws[13] that were cited by the High Court. I have discussed Laurie v Carroll at paragraphs 65 to 71 below.
[11] (1958) 98 CLR 310.
[12] (6th ed, 1949) at 172.
[13] (3rd ed, 1954) at 428.
The Judge referred to the view of Dr Schmitthoff that “the decisive moment when the defendant must be within the jurisdiction is that of the issue and not of the service of the writ”.[14] If the defendant thereafter leaves the jurisdiction so that personal service cannot be effected, an order for substituted service may be made.[15] The Judge also noted that Dr Schmitthoff had relied, at least in part, upon the decision of the English Court of Appeal in Jay v Budd.[16] There, Lord Halsbury LC and Collins LJ held (with Rigby LJ dissenting) that an order for substituted service could be validly made where the defendant had gone overseas after the issue of the writ, of which he knew, without doing so for the purpose of evading service.
[14] Ibid.
[15] Ibid.
[16] [1898] 1 QB 12.
The Judge concluded that Laurie v Carroll established that the foundations for an order for substituted service were present in this case. His Honour also held that the Master was entitled to make an order for presumptive service on the basis that service upon Dr Andressen’s solicitors would in all reasonable probability be effective to bring knowledge of the proceedings to him, albeit that his solicitors did not have instructions to accept service. At the time the writ was issued Dr Andressen was present in the jurisdiction. He maintained his domicile in South Australia, was employed by Flinders University in this State and maintained an office and email address here. It was not necessary to rely upon the Hague Convention process to effect service outside the jurisdiction.
The Judge noted that he also regarded the first order for presumptive service as having been validly made and the application by the Bank to set aside its own default judgment as having been unnecessary. His Honour dismissed the appeal.
The appellant’s contentions
The core argument by counsel for Dr Andressen is not that the order for substituted service made by the Master was incompetent or beyond power but rather that the Bank had not served the proceedings in a way which the order, when properly construed, and the District Court Rules permit. It is further contended that the Judge erred in finding that Dr Andressen was constructively in Australia at the time service was effected. The order for presumptive service contemplated that he was not in Australia.
Counsel also contended that the analysis by Dr Schmitthoff was not correct. Moreover, neither the view of Dr Schmitthoff nor the decision in Jay v Budd had been referred to in submissions before the Judge. Counsel referred to the contrary view expressed by Sykes and Pryles in Australian Private International Law that service of process for an action in personam cannot be effected when a person is not in the jurisdiction.[17]
[17] (3rd ed, 1991) at 22-23.
The Judge had addressed the wrong question on the appeal from the Master. It was not necessary for his Honour to consider whether the reasoning of the High Court in Laurie v Carroll justified the order for presumptive service. Dr Andressen did not attack the order for presumptive service. The point on the appeal was (and remains) that he could only be effectively served via presumptive service when he was somewhere in Australia, which he was not.
The primary contention on behalf of Dr Andressen is that the District Court does not have power to order that service be presumed to occur if it was effected at a time when he was not within Australia or its Territories. The starting point for that contention was that in the case of an action in personam the rules as to legal service of a writ define the limits of the Court’s jurisdiction. The present action is in personam. Such actions are transitory and the jurisdiction of the Court depends upon the amenability of the defendant to the summons. Support for that proposition was said to be provided by John Russell and Co Ltd v Cayzer, Irvine and Co Ltd where Viscount Haldane had observed that the judges stand in the place of the Sovereign and that whoever is served with the King’s writ is a person over whom the courts have jurisdiction.[18]
[18] [1916] 2 AC 298 at 302.
It is further contended that amenability to summons had historically depended, and still primarily depends, on nothing but presence within the jurisdiction at the time of service. While a defendant can be served by presumptive or substituted service, that still requires the defendant to be present in the jurisdiction at the time of the presumptive service.
Because Dr Andressen was not in Australia at the time of presumptive service, he had not been validly served. Thus, the Court could not entertain the Bank’s claim and judgment could not be entered against Dr Andressen.
Counsel further submitted that the District Court Act did not authorise service to be presumed to have occurred if it was effected at a time when the defendant was not within Australia or its territories. There is nothing in s 50A of the District Court Act, or elsewhere in that Act, to extend the power of the Court beyond the territorial limits of South Australia. Thus, the jurisdictional position remained as it was at common law.
The District Court Rules could not be relied upon to interpret the District Court Act. The District Court Rules could not enlarge the jurisdiction of the Court. There was nothing in the rule-making power conferred upon the District Court by s 51 which gave the Court power to enlarge its jurisdiction by the making of rules. The jurisdiction of the Court was prescribed by Division 3 of Part 2.
Counsel also submitted that each of the rules in the District Court Rules applied only within South Australia in the absence of an express contrary enactment or by an implication. Rule 69 did not expressly provide that it was to apply to persons outside the jurisdiction. Nor did it authorise the making of an order for presumptive service on a person outside the jurisdiction or for presumptive service to be effected on a person outside the jurisdiction.
The District Court Rules make express provision for service of proceedings on persons in foreign jurisdiction. Counsel also pointed to the fact that the Bank might seek to effect service under the Hague Convention or in the more recent provisions contained in rr 41AA to 41AE.
Counsel contended on behalf of Dr Andressen that:
a) The Court had acted ultra vires the District Court Act in permitting presumptive service on Dr Andressen while he was not in Australia;
b) Alternatively, the purported service was not effective as it was done at a time when Dr Andressen was not in Australia;
c) The Court does not have jurisdiction to allow service in the way contemplated by the Judge; and
d) The Bank should effect service in the way intended by the Rules, which it had never attempted, or by way of an order for presumptive service when Dr Andressen was within Australia.
Contentions by the respondent
Counsel for the Bank submitted that, because Dr Andressen had been in South Australia at the time the summons was issued, the Court had jurisdiction to make an order for presumptive service upon him not withstanding his absence overseas at the time service was effected. The District Court Rules provided for service upon Dr Andressen outside South Australia and, in any event, at the time of service he was constructively within Australia.
The basis for the contention that Dr Andressen was constructively present within Australia at the time of service was as follows. Dr Andressen was at all material times an employee of Flinders University. The reasons for his absences overseas were that he was working for Flinders University at a foreign location or was on study leave from the university. At all material times he maintained a university email address. At the time the summons and statement of claim were served upon him he had engaged a South Australian solicitor who practised in the courts of this State to deal with issues arising from the proceedings. That engagement was still on foot.
Counsel submitted that in Laurie v Carroll the High Court had not decided whether or not the view expressed by Dr Schmitthoff was correct or not. The High Court had, however, either expressed its approval for, or had not doubted the authorities relied upon, by Dr Schmitthoff in reaching his view. These cases supported Dr Schmitthoff’s view that it was only necessary for a defendant to be within the jurisdiction at the time a writ was issued rather than when it was served. If a defendant left the jurisdiction so that personal service was not possible, an order for substituted service could be granted.
It was also noted by counsel that on each of the occasions when Dr Andressen had entered or left Australia during 2012 he had stated that on re‑entry he intended to live in Australia for the following 12 months and on each occasion that he departed he had stated that he was an Australian resident leaving temporarily. It was therefore submitted that his domicile of choice was Australia, and in particular South Australia, within the meaning of s 8 of the Domicile Act 1982 (Cth), he had not chosen an alternative domicile within the meaning of s 10 of that Act and had not reverted to his domicile of origin as contemplated by s 7 of that Act.
Counsel also submitted that upon its true construction r 69 of the District Court Rules did not provide for “substituted service” (as had been the case under the District Court Civil Rules 1987) but instead provided that service would be presumed if there had been compliance with the relevant order made by the Court. That construction was said to be supported by the terms of r 69(3) which provides that it is not necessary for the applicant to establish that the proposed alternative means of service will bring the document to the notice of the person to whom it was targeted. Instead, under r 69(2) service would be presumed if the terms of the order had been complied with.
Counsel relied upon the decision of the Full Court of the Federal Court in Waller v Freehills which had considered the operation of O 7 of the Federal Court Rules 1979 as they then stood.[19] The terms of O 7 r 9 were said to be similar to r 69 of the District Court Rules. The circumstances were said to be similar to the present matter in that the parties serving the document had relied on an order for presumptive service when the target of the service was overseas. The Full Court held that O 7 r 9 permitted presumptive service notwithstanding that the target had not been present in Australia at the time service was effected.[20]
[19] (2009) 177 FCR 507.
[20] Ibid at [73]-[75].
It was also submitted that r 40 of the District Court Rules specifically allows the originating process to be served outside Australia without reliance upon the Hague Convention provisions if a remedy was being sought against a person who was domiciled or resident in South Australia. While the endorsement required by r 40(3) had not been included in the originating process, counsel for the Bank submitted that the Court could exercise its power under r 10(2) and r 117(2) to dispense with that requirement in the interests of justice. Counsel suggested that the decision of the High Court in Agar v Hyde concerning a provision of the Supreme Court Rules 1970 (NSW) in similar terms to r 40 of the District Court Rules established that process may be served outside Australia and, on proof of service, the Court’s jurisdiction was prima facie properly invoked.[21]
[21] (2000) 201 CLR 552.
The decision of the English Court of Appeal in Porter v Freudenberg was said by counsel to support the view expressed by Dr Schmitthoff.[22] In that case the Court of Appeal followed Jay v Budd, in which Collins LJ had held:[23]
If the writ had not been issued until the defendant left the country, the only way in which the defendant could have been properly served would have been by proceeding under the practice as to writs for service out of the jurisdiction.
[22] [1915] 1 KB 857 at 887.
[23] [1898] 1 QB 12 at 19.
Counsel for the Bank submitted that the corollary to the situation referred to in Porter v Freudenberg was that if the defendant in that case had been in the jurisdiction at the time of the issue of the writ then substituted service would have been possible without relying upon the rules concerning service overseas, notwithstanding that he was absent from the jurisdiction at the time of service.
In support of the submission that Dr Andressen was constructively within the jurisdiction, counsel for the Bank noted that the firm of solicitors acting for him had actively participated in the proceedings. They had applied to set aside the original default judgment, had requested documents referred to in the statement of claim, presumably for the purposes of defending the action, and had appeared and made submissions through counsel at the hearing of the application by the Bank for presumed service. It was clear that the proceeding served under the order made by the Master on 21 November 2014 had come to the attention of Dr Andressen. However, his instructions apparently fell short of what counsel described as “the proper thing to do” which was to instruct his solicitors to accept service. It was apparent that Dr Andressen had an agent in South Australia and that agent was an officer of the court. As an officer of the court the solicitor was under a duty to avoid unnecessary delay. In these circumstances it was open to the Court to use its powers to avoid the effect of the unnecessary delay that was being caused by the limited instructions given by Dr Andressen to his solicitor. Thus, it was open to the Court to treat Dr Andressen as being within South Australia.
Consideration
Service outside the jurisdiction at common law
After considering the relevant authorities I find that the Judge was in error when he relied upon the opinion of Dr Schmitthoff that at common law it was sufficient for a defendant to be within the jurisdiction at the time the writ was issued.
The defendant in Laurie v Carroll was a resident of England who had been briefly in Victoria conducting business that had allegedly given rise to a legal liability.[24] The Chief Justice authorised service of the writ upon his solicitors although he had left Victoria before the writ was issued. It is important to note that, contrary to the situation in Laurie v Carroll, Dr Andressen was in the jurisdiction when the proceedings were issued.
[24] (1958) 98 CLR 310.
The High Court noted that, at common law, the jurisdiction of the courts on actions in personam had depended upon the defendant being amenable or answerable to the command of the writ. That depended, and still primarily depends, upon presence within the jurisdiction. In support of that proposition the High Court cited with approval[25] the following passage in Dicey’s Conflict of Laws:[26]
The service of the writ, or something equivalent thereto, is absolutely essential as the foundation of the court’s jurisdiction. Where a writ cannot legally be served upon a defendant the court can exercise no jurisdiction over him. In an action in personam the converse of this statement holds good, and wherever a defendant can be legally served with a writ, there the court, on service being effected has jurisdiction to entertain an action against him. Hence, in an action in personam, the rules as to the legal service of a writ define the limits of the court’s jurisdiction. Now, a defendant who is in England can always, on the plaintiff’s taking proper steps, be legally served with a writ. The service should be personal, but if personal service cannot be effected, the court may allow substituted or other service. In other words, the court has jurisdiction to entertain an action in personam against a person who is in England at the time for the service of the writ.
[25] Ibid at 324.
[26] (6th ed, 1949) at 172.
The High Court noted that unless there was a statutory exception allowing service out of the jurisdiction, the effect of the view expressed by Dicey was to make it essential that the defendant was present within the jurisdiction at the time of service.[27] That excluded the possibility of substituted service when the defendant was no longer within the jurisdiction.
[27] (1958) 98 CLR 310 at 324.
The Court then noted that two views had been expressed as to what was to be regarded as the exercise of sovereign authority: the issue of the command, or its communication. Those views had respectively been expressed by Francis Piggott in Service out of the Jurisdiction[28] and by Dr Schmitthoff in The English Conflict of Laws.[29]
[28] (1892) at lvii.
[29] (3rd ed, 1954) at 428.
Piggott stated that the service of the writ, rather than its issue, was the basis for jurisdiction. An ordinary writ could not be served abroad and remained inoperative until the defendant came into the jurisdiction.
Dr Schmitthoff’s view was that:[30]
The decisive moment when the defendant must be within the jurisdiction is that of the issue and not of the service of the writ. If after the issue of the writ the defendant has left the jurisdiction (even though not for the purpose of evading service) so that personal service cannot be effected, an order for substituted service … may be granted.
[30] Ibid.
After a detailed analysis of the English authorities, including those relied upon by Dr Schmitthoff, the High Court concluded that the better view was that if it was not possible to effect service in the ordinary way because the defendant was not within the jurisdiction, that could not be overcome by an order for substituted service. In other words, the decisive moment when the defendant must be within the jurisdiction was at the service of the writ. The motive of the defendant for leaving the jurisdiction did not matter.[31]
[31] (1958) 98 CLR 310 at 323-332 and, in particular, at 332.
For completeness, I note that I have had regard to the explanation by the Full Federal Court in Joye v Sheahan[32] of the meaning of the High Court’s decision in Laurie v Carroll. The facts in Joye v Sheahan were very similar to the present matter. A summons was issued against the appellant at a time when he was in Australia. An order for substituted service was later made when he was not in Australia.
[32] (1996) 62 FCR 417.
The appellant in Joye v Sheahan contended, as in the present case, that an order for substituted service could not be made after he had left Australia. The Full Court observed that what had been decided in Laurie v Carroll was “that substituted service could not be ordered where a person was not in the jurisdiction at the time of issue of suit, but had accelerated his departure because of the threat of suit”.[33] The Full Court noted that the High Court had not decided whether mere presence within the jurisdiction at the time of the issue of process was sufficient to confer jurisdiction. It was not necessary for the Full Court to decide the question because of a concession made by the appellant.
[33] Ibid at 421.
I turn to the Bank’s submission that, by way of a corollary, a passage cited in the English Court of Appeal’s judgment in Porter v Freudenberg supported the view of Schmitthoff.[34] I have set out at paragraph 62 the corollary that was said by counsel to exist with the passage cited at paragraph 61 above. There is no room to suggest a corollary. That is because, shortly after the passage referred to by counsel, the Court of Appeal went on to specifically deal with the situation where a defendant had left the jurisdiction after the issue of the writ. In that situation the Court stated that an order for substituted service could be made if the Court was satisfied that the issue of the writ had come to the defendant’s notice before they went outside the jurisdiction and special circumstances existed to show that substituted service would be just.
[34] [1915] 1 KB 857 at 887, citing Jay v Budd [1898] QB 12 at 19.
That is a very specific exception to the general common law principle that substituted service cannot be effected if the defendant is not in the jurisdiction. It negates the corollary relied upon by counsel. Moreover, in Laurie v Carroll the High Court expressly rejected the view of the Court of Appeal in Porter v Freudenberg concerning substituted service upon defendants who had left the jurisdiction to escape service.[35]
[35] (1958) 98 CLR 310 at 330.
I do not consider that the decision of the High Court in Agar v Hyde assists the Bank.[36] The case was concerned with a New South Wales rule in similar terms to r 40 of the District Court Rules. The rule permitted service outside Australia in certain specified cases but the defendant was entitled to seek an order setting aside the originating process on the grounds that service was not authorised by the Supreme Court Rules 1970 (NSW) or that the Court was an inappropriate forum. The issue before the High Court was whether the claim against the defendants had such poor prospects of success that it should not go to trial. The High Court held that when deciding that question the same test was to be applied as in an application for summary judgment by a defendant who had been served locally. The High Court judgment provides no relevant assistance with the present matter.
[36] (2000) 201 CLR 552.
The relevant issue before the Full Court of the Federal Court in Waller v Freehills was whether the Corporations Act 2001 and the Federal Court (Corporations) Rules 2000 authorised the making of an order that a person who was not resident in Australia attend for compulsory examination before the Court under section 596B of that Act.[37] The Court found that the order was valid because s 5 of the Corporations Act gave the Act extra-territorial operation. The Federal Court (Corporations) Rules must be construed in accordance with the legislative intention manifest in the Act rather than the other way round.[38] The decision in Waller v Freehills has no relevance to the common law principles considered in Laurie v Carroll but it is consistent with my finding at paragraph 90 below that a statute may authorise the making of a rule or an order that goes beyond the common law principles governing service of process.
[37] (2009) 177 FCR 507.
[38] Ibid at [63].
As counsel for the Bank submitted, and as the Full Federal Court observed in Joye v Sheahan, the view expressed by the High Court in Laurie v Carroll (that substituted service could not be effected after the defendant left the jurisdiction) was obiter as the defendant had left the jurisdiction before issue of the writ. Nevertheless, the opinion stated in the joint judgment of the High Court was reached after a careful analysis of the English authorities upon which Dr Schmitthoff had relied. The contrary view held by Dr Schmitthoff was clearly rejected.[39] The Judge was required, as am I, to follow seriously considered dicta of the High Court.[40] If his Honour had given the parties the opportunity to make submissions on the correctness of the Schmitthoff view, this may have been avoided.
[39] See also Atco Industries (Aust) Pty Ltd v Ancla Maritima SA (1984) 35 SASR 408 where Walters J at 413 (with King CJ at 409 agreeing) unequivocally adopted the views of Piggott in Service out of the Jurisdiction as to the nature of jurisdiction, albeit without referring to the contrary Schmitthoff position.
[40] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89.
Presumptive service under the District Court Act and District Court Rules
Lockhart J held in Re Deposit and Investment Co Ltd (Receiver Appointed) that it was well established that the jurisdiction of a court in actions in personam depended at common law upon the presence of the defendant in the geographical jurisdiction of the court.[41] However, the jurisdiction had been extended by statute dating back as far as the Common Law Procedure Act 1852 (UK). Those statutory extensions of jurisdiction generally provided for the service of process out of the jurisdiction where there was some link between the forum and the subject matter. Lockhart J noted that the rules of the High Court, the Federal Court and each of the State and Territory Supreme Courts contained provisions for the service of process outside the jurisdiction.
[41] (1991) 30 FCR 463 at 464.
In that light, and in view of my finding that the Judge erred in relying upon the opinion of Dr Schmitthoff that at common law it was sufficient for a defendant to be within the jurisdiction at the time the writ was issued, a further question arises as to whether the common law applicable to the District Court has been changed by statute.
Section 50A of the District Court Act has a very wide operation. It authorises the Court, where it is not practicable to serve any process in the manner otherwise prescribed or contemplated by law, to make an order providing for service by post or making any other provision that may be necessary or desirable for service. Section 50A(2) provides that any process served in accordance with an order under s 50(1) will, despite any other law, be taken to have been duly served.
The power of the Court to make an order under s 50A is predicated upon a finding that it is not practicable to serve the process in the manner otherwise prescribed or contemplated by law. There was no evidence before the Court as to the practicability of serving the proceedings upon Dr Andressen under the ordinary procedures apart from the observation in submissions that his regular movements between Australia, China, Spain and perhaps elsewhere made that difficult.
While the words “despite any other law” are extremely wide, those words cannot authorise decisions that exceed the legislative capacity of the State. However, the Parliament can enact legislation with extra-territorial effect provided that there is a sufficient nexus between the State and the subject matter of the legislation.[42] That requirement is liberally applied and even a remote and general connection between the subject matter of the legislation and the State will suffice.[43]
[42] Pearce v Florenca (1976) 135 CLR 507 and Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1.
[43] Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 14.
While the State Parliament can clearly enact legislation with extra-territorial effect provided that a sufficient nexus exists, whether it has done so in any particular case depends upon the terms of the relevant enactment. When interpreting the general words of a statute there is always a presumption that the legislature does not intend to exceed its territorial jurisdiction.[44] That principle of interpretation is based upon the comity of nations, ie the legislature of one jurisdiction is presumed not to deal with matters that properly belong to some other jurisdiction.[45] The presumption against extra-territorial operation can be fairly readily rebutted if the circumstances so demand.[46]
[44] Jumbunna Coal Mine NL v Victorian Coal Miner’s Association (1908) 6 CLR 309, O’Connor J at 363.
[45] Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391, Dixon J at 423-424.
[46] Pearce and Geddes, Statutory Interpretation in Australia, (7th ed, 2011) at [5.11].
The common law principle that a court will only have jurisdiction over an action in personam if the defendant is served within the jurisdiction is a rule of law determining the scope of jurisdiction and not merely a matter of procedure.[47]
[47] Re Deposit and Investment Co Ltd (Receiver appointed) (1991) 30 FCR 463 at 466. I note that this decision was overruled on other grounds in Waller v Freehills [2009] FCAFC 89 at [93].
The parties assumed in their submissions that the District Court, unlike this Court,[48] does not have an inherent power to make rules. While other interpretations have been canvassed,[49] because no contrary submission was put to me I proceed on the basis that the only source of power for the District Court to make rules must be found in the District Court Act. That position was accepted by the Full Court in Taylor v Guttilla.[50]
[48] Rigney v Rigney (1987) 48 SASR 291.
[49] The commentary in Lunn’s Civil Procedure South Australia suggests in the notes to s 8 and s 51 of the District Court Act that there may be potential arguments that the District Court has an inherent rule making power in its own right or may have obtained the inherent rule making power of the Supreme Court by virtue of s 8(1) of the District Court Act. The latter provision confers upon the Court the same civil jurisdiction as the Supreme Court. If such an argument were to be pursued, a question may arise as to whether there is relevantly a distinction between the conferral of jurisdiction and the conferral of power. It seems to me that s 8(1) confers only the same civil jurisdiction as the Supreme Court and not the inherent power to make rules.
[50] (1992) 59 SASR 361.
Counsel for Dr Andressen submitted that s 50A(1) did not manifest the clear intention necessary to change the common law. It simply provides for substituted service in accordance with the common law. He also submitted that s 50A(2) is merely consequential upon subsection (1) and does not extend its operation. It simply renders lawful what may be done under s 50A(1).
I consider that the words “despite any other law” in s 50A(2) are extremely broad. That phrase complements the statutory empowerment given to the Court by s 50A(1) that “if it is not practicable to serve any process … in the manner otherwise prescribed or contemplated by law” the Court may make orders.
The Second Reading speech by the Attorney-General,[51] the Hon CJ Sumner MLC, indicated that the immediate reason for the introduction of s 50A was the problem with effecting personal service identified by the High Court in Plenty v Dillon in circumstances where a householder does not permit entry on to land.[52] The Attorney-General stated that s 50A would also enable the courts to make appropriate provision for some other form of service in cases where personal service was impracticable.
[51] Hansard, Legislative Council, 31 March 1993, at 1814.
[52] (1991) 171 CLR 635.
The Second Reading speech makes clear that the purpose of s 50A was to empower the Court to overcome the technical and practical difficulties that existed at common law with effecting personal service. I consider that the words used by the legislature in the passages in s 50A are sufficiently wide to authorise the District Court to make orders that go beyond the common law principles governing the exercise of jurisdiction.
I do not accept the submission by counsel that subsection (2) of s 50A is merely consequential upon subsection (1) and does not extend its operation. Subsection (2) complements and gives additional force to the words in s 50A(1), “if it is not practicable to serve any process … in the manner otherwise prescribed or contemplated by law”.
Section 51(1)(g) of the District Court Act empowers the Court to make rules dealing with any other matter necessary or expedient for the effective and efficient operation of the Court. Given that s 50A empowers the Court to make orders that extend its jurisdiction beyond the limits that exist at common law, I consider that the rule-making power conferred by s 51(1)(g) extends to the making of rules that regulate the exercise of that power. On that basis I consider that r 69 of the District Court Rules is within the rule-making power conferred by s 51. I further find that r 69 authorised the Master to make an order for presumptive service.
My finding that s 50A empowers the Court to make orders that extend its jurisdiction beyond the limits that exist at common law removes the suggested need to read the order down so that it only authorised presumptive service to be effected at a time when Dr Andressen was within the jurisdiction. Because of the wide powers conferred by s 50A which operate despite any other law, the order allowed presumptive service regardless of whether or not he was overseas at the time of service.
Whether or not a particular order was validly made must be decided on a case by case basis having regard to the constitutional requirement that there be a sufficient nexus with South Australia and also the principles of private international law, eg should the proceedings have been instituted elsewhere? Because the proceedings concern monies allegedly owed under a loan agreement secured against land in South Australia neither the nexus requirement nor the relevant principles of private international law would appear to present any barrier to the exercise of jurisdiction.
Because of the wide reading I have adopted of s 50A (and thus also r 69), it is unnecessary for me to consider whether the change from substituted service to presumptive service under r 69 has made distinguishable the many English and Australian authorities that considered the circumstances in which substituted service could be validly effected.
It is also unnecessary for me to consider the submission on behalf of the Bank that Dr Andressen should be regarded as having been constructively in South Australia when presumptive service was effected. However, I will make some brief observations.
No reference was made by counsel to any authority in support of a constructive presence principle and nor am I aware of any. The existence of such a principle would have rendered superfluous the consideration given over many years by courts in England and in Australia to the question whether substituted service was permitted upon persons who had not been in the jurisdiction when proceedings were instituted or were absent when service was effected. The decided cases have proceeded on the basis that actual rather than constructive presence was in issue. Whether the common law should develop to recognise such a principle is a question for another day.
Conclusion
I grant permission to appeal.
The order made by the Master validly authorised presumptive service to be effected upon Dr Andressen regardless of whether or not he was overseas at the time of service.
I dismiss the appeal. I will hear the parties as to costs.