Andressen v Bendigo and Adelaide Bank Ltd (No 2)

[2017] SASC 25

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

ANDRESSEN v BENDIGO AND ADELAIDE BANK LTD (No 2)

[2017] SASC 25

Judgment of The Honourable Justice Parker

1 March 2017

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - SECURITY FOR COSTS

Application for permission to appeal against the judgment in Andressen v Adelaide Bank [2016] SASC 111. Applicant contends that s 50A of the District Court Act 1991 does not operate so as to extend the power of the Court beyond the territorial limits of the State. Respondent submits permission to appeal ought to be refused. The question as to the effect of s 50A is a significant and complex question of law and the matters pressed by the applicant are reasonably arguable. Permission to appeal is granted.

District Court Act 1991 s 50A, s 51; Australian Constitution s 51(xxiv), s 51(xxix); Supreme Court Civil Rules 2006 r 288(1)(a)(iii), referred to.
Laurie v Carroll (1958) 98 CLR 310, considered.

ANDRESSEN v BENDIGO AND ADELAIDE BANK LTD (No 2)
[2017] SASC 25

Magistrates Appeal: Civil

1. PARKER J:  This is an application for permission to appeal against the judgment in Andressen v Bendigo and Adelaide Bank Ltd.[1] That judgment decided an appeal from a judge of the District Court. The latter judgment decided an appeal from an interlocutory order made by a Master of the District Court. Because the judgment was given on appeal from an interlocutory judgment permission is required to appeal under r 288(1)(a)(iii) of the Supreme Court Civil Rules 2006. After considering the written submissions of the parties, for the reasons that follow, I have decided to grant permission to appeal.

   [1] [2016] SASC 111.

   Background

2. The respondent Bank filed a statement of claim in the District Court seeking to recover from the applicant the sum of $155,823.45 under the terms of a loan agreement. The applicant had borrowed monies from the Bank and provided security by way of a mortgage over land in South Australia. The applicant defaulted on the loan agreement. Following the making of orders by this Court the Bank took possession of the land and ultimately sold it. The sum sought to be recovered by the Bank in the District Court was outstanding after settlement on the sale of the land.

3. The applicant is employed by Flinders University in an academic position but spends much of his time teaching in a joint program with a Chinese university and also apparently teaches in Spain. Thus, he is often outside Australia. Apparently for that reason the Bank was unable to serve the summons and statement of claim on the applicant.

4. On 23 August 2012 a Master of the District Court made an order for presumptive service. On 26 October 2012 the Bank was granted default judgment against the applicant. On 14 April 2013 the applicant’s solicitors 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 the applicant’s solicitors. On 21 November 2014 a Master made orders to that effect. The order relied upon r 69 of the District Court Rules.

5. Subsequently, the applicant sought an order restraining the Bank from entering judgment against him. On 12 February 2015 a Master dismissed that application and also held that the presumptive service order made on 21 November 2014 was valid. The applicant appealed to a judge of the District Court. That appeal was dismissed on 28 May 2015.

6. The applicant then appealed to this Court. I granted permission to appeal because the applicant had an arguable case and there was a serious question about the meaning and operation of the District Court Rules.

   The appeal to a single judge

7. The primary contention by the applicant was that the District Court lacked 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 applicant contended that presumptive or substituted service can only be effected when a defendant is present in the jurisdiction. There was nothing in s 50A, s 51 or elsewhere in the District Court Act 1991 that extended the power of the Court beyond the territorial limits of the State. The jurisdictional position remained as it was at common law. Rule 69 did not expressly provide that it was to apply to persons outside the jurisdiction and nor did it authorise the making of an order for presumptive service on a person outside the jurisdiction.

8. The Bank contended that the District Court Civil Rules 2006 provided for service outside South Australia. Moreover, at the time of service the applicant was constructively within Australia. The Bank also contended that Dr Schmitthoff had correctly stated in The English Conflict of Laws[2] that it was only necessary for a defendant to be within the jurisdiction at the time the writ was issued rather than when it was served. If a defendant left the jurisdiction, an order for substituted service could be made. While the High Court had not decided in Laurie v Carroll whether or not Dr Schmitthoff was correct, the High Court had approved or not doubted the authorities that he had relied upon.[3]

   [2]    (3^rd ed, 1954) at 428.

   [3] (1958) 98 CLR 310.

9. I found that the High Court had not decided in Laurie v Carroll whether presence within the jurisdiction at the time of the issue of process, but not at the time of substituted service, was sufficient to confer jurisdiction. I also found that the judge had erred in relying upon the opinion of Dr Schmitthoff. Contrary to the submission by the applicant, I found that the words in s 50A(1) of the District Court Act 1991 that “if it is not practicable to serve any process … in the manner otherwise prescribed or contemplated by law” empowered the Court to make orders for substituted or presumptive service in circumstances where that would not have been permitted at common law. That interpretation was supported by the use of the words “despite any other law” in s 50A(2). On that basis I considered that the rule making power conferred by s 51(1)(g) extended to the making of rules to regulate the exercise of the power to make orders for service that went beyond the limits that existed at common law. Thus, the order allowed presumptive service regardless of whether or not the applicant was overseas at the time of service.

   The application for permission to appeal

10. The applicant now contends that my decision was wrong or at least attended with sufficient doubt to warrant reconsideration by the Full Court. The interlocutory order made by the Master was not merely procedural nor based upon a discretionary judgment. It concerned a matter of profound importance, being the jurisdiction of the District Court and necessarily also that of this Court and the Magistrates Court. The applicant further contends that s 50A of the District Court Act 1991 does not operate so as to extend the power of the Court beyond the territorial limits of the State and even if it did so it must be of doubtful validity because of the operation of s 51(xxiv) and s 51(xxix) of the Constitution.

11. The applicant contends that if the decision to uphold the order of the Master is not correct then he will suffer a substantial injustice. The basis for that contention is that he will be put to the expense of substantive proceedings in the District Court in circumstances where he says that Court lacks jurisdiction. Because of that suggested lack of jurisdiction he can be expected to appeal if judgment was to be entered against him in the substantive proceedings. The applicant also contends that a further cause of injustice if the decision is allowed to stand arises from the fact that my finding that s 50A empowered the Court to make orders that extended its jurisdiction beyond the limits at common law had not been dealt with in submissions and nor had the relevant Second Reading speech been addressed by the parties.

12. The respondent Bank submits that permission to appeal ought to be refused.  The applicant should not be permitted to pursue a third appeal on an interlocutory point. The matter has been decided against him on three occasions. The decision is not wrong nor is it attended with sufficient doubt so as to warrant reconsideration by the Full Court. There is no injustice to the applicant. He is holding up proper progress of the matter by the device of declining to instruct his solicitor to accept service even though he has provided instructions in all other respects, including the conduct of the several appeals.

    Discussion

13. In most circumstances where an applicant has already unsuccessfully pursued two appeals on an interlocutory matter I would be very reluctant to grant permission for a further appeal. However, I consider that the question as to the effect of s 50A of the District Court Act 1991 and the scope of the District Court Civil Rules 2006 goes well beyond the type of issues usually dealt with in interlocutory appeals. Significant and complex questions of law arise that have potentially wide implications. The matters pressed by the applicant are reasonably arguable. I therefore consider that the grant of permission to appeal is appropriate.

14. Because of the history of this matter I informed the parties that I wished to hear them on the question of security for costs. The delivery of these reasons was significantly delayed pending the availability of counsel to appear on that issue. Ultimately, that proved unnecessary as the parties consented to the making of an order for security for costs in the sum of $5,000.

    Conclusion

15. I will make orders granting the applicant permission to appeal against the orders that I made on 28 July 2016 dismissing the appeal from the District Court and ordering security for costs in the terms consented to by the parties