ASIC v Sweeney (No 2)
[2001] NSWSC 477
•8 June 2001
Reported Decision:
(2001) 38 ACSR 743
New South Wales
Supreme Court
CITATION: ASIC v Sweeney No.2 [2001] NSWSC 477 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 3339/99 HEARING DATE(S): 18 April 2001 JUDGMENT DATE:
8 June 2001PARTIES :
Australian Securities & Investments Commission (P)
Charles Augustine Sweeney (D)JUDGMENT OF: Austin J
COUNSEL : M Pembroke SC with J Stevenson (P)
I Barker QC, M Oakes SC & S Gorrick (D)SOLICITORS: Jan Redfern, Solicitor for Australian Securities & Investments Commission (P)
Noel F Bracks & Company (D)CATCHWORDS: PRACTICE & PROCEDURE - substituted service - plaintiff resident abroad and outside the jurisdiction when proceedings commence - whether court has jurisdiction to order substituted service - whether proceedings for declaratory relief for contravention of provisions of Corporations Law are founded on a cause of action - whether court can and should cure failure to serve form 13A Notice LEGISLATION CITED: Corporations Law ss 995, 998, 1002G, 1114, 1324
Supreme Court Act 1970 (NSW) ss 66, 75, 81
Supreme Court Rules Pt 9 r 10 & 11, Pt 10 r 1A, 2, 2A, 4, 5, 6A, Pt 11 r 8CASES CITED: ANZ Grindlay's Bank Plc v Hussein Salaheh Hussein Abdul Fattah (1991) 4 WAR 296
Arhill Pty Ltd v General Terminal Co Pty Ltd (Supreme Court of New South Wales, Rogers J, unreported, 19 December 1990)
Australian Coastal Shipping Commission v Curtis Cruising Pty Ltd (1989) 17 NSWLR 734
Australian Softwood Forests Pty Ltd v Attorney-General (1981) 148 CLR 121
BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496
Camera Care Ltd v Victor Hasselblad Aktiebolaa (1986) 1 FTLR 348
Denkman v Denkman 14 NYS (2d) 450 (1939)
Ford v Sheppard (1885) 34 WR 63
Foxe v Brown (1984) 58 ALR 542
Guaranty Trust Co of New York v Hannay & Co [1915] 2 KB 536
Hunter v Singh (1986) 1 Qd R 106
Mondial Trading Pty Ltd v Interocean Marine Transport Inc (1985) 60 ALJR 277
News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553
Papps v Mahon [1966] NZLR 288
Penn v Baltimore (1750) 1 Ves Sen 444
Porter v Freudenberg [1915] 1 KB 857
Ricegrowers Cooperative Ltd v ABC Containerline NV (1996) 138 ALR 480
Richard West & Partners v Dick [1969] 2 Ch 436
Rosenbaum v Rosenbaum [1926] VLR 280
The Vrontados [1982] 2 Lloyd's LR 241
Western Suburban and Notting Hill Permanent Benefit Building Society v Rucklidge [1905] 2 Ch 472
Williams v Lips-Heerlen BV (Supreme Court of New South Wales, unreported, 1 November 1991)
Williams v Milotin (1957) 97 CLR 465DECISION: Separate question determined by answering that Court had jurisdiction to make orders for substituted service
THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISIONAUSTIN J
FRIDAY 8 JUNE 2001
3339/99 AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION V CHARLES AUGUSTINE SWEENEY
JUDGMENT
FactsHIS HONOUR:
1 On 27 July 1999 the plaintiff filed a statement of claim alleging that in 1993 the defendant engaged in insider trading, false trading and misleading and deceptive conduct, contrary to the Corporations Law. The statement of claim sought the following relief:
‘1. A declaration that the defendant has contravened Sections 1002G (2), 998 (1) and 995 (2) of the Corporations Law.
2. An order pursuant to Section 230 of the Corporations Law [as it then stood] that the defendant be prohibited from managing a corporation for such period as the Court considers appropriate.
4. Costs.’3. Injunctions restraining the defendant from contravening Sections 1002G, 998 (1) and 995 (2) of the Corporations Law.
2 The proceedings were commenced after an extensive process of investigation by the plaintiff, which involved examinations under s 19 of what was then the ASC Law, and the gathering of a great deal of evidence. The plaintiff could have chosen to assert contraventions of the specified provisions of the Corporations Law in criminal proceedings, but it chose instead to seek the civil relief specified in the statement of claim.
3 It has been suggested that the plaintiff was concerned about a limitation period (though it is not clear to me at this stage whether there is a relevant limitation period for the relief which the plaintiff seeks), and was therefore anxious to commence proceedings in 1999. By July 1999 the defendant, who had previously resided in Australia and had practised as senior counsel from chambers in Phillip Street Sydney, had become resident outside Australia, probably in New Zealand. He was in Australia briefly in July 1999. The plaintiff became aware that he had returned to Australia and so it endeavoured to issue the statement of claim quickly, and to serve the defendant while he was here. In fact the defendant left Australia on 26 July 1999, the day before the filing of the statement of claim, and the plaintiff did not succeed in serving him in Australia.
5 On 24 November 1999 orders were made for substituted service of the statement of claim, in the following terms:4 Thereafter the plaintiff made various efforts to make contact with the defendant with a view to effecting service, but it did not succeed. It eventually made an application to this Court for orders for substituted service under Part 9 rule 10 of the Supreme Court Rules, relying on a substantial affidavit sworn on 19 November 1999 by Mr Peter Riordan, a solicitor employed by the plaintiff, and the voluminous exhibits to that affidavit.
1. Pursuant to Part 9 Rule 10, instead of service of the Statement of Claim in this matter in the manner required by the rules, the following steps be taken for the purposes of bringing the statement of claim to the notice of the defendant;‘The court orders that:
(a) The Plaintiff serve a copy of the Statement of Claim, the affidavit of Peter Riordan sworn 19 November 1999 and a copy of any orders made in consequence of the said affidavit upon:
(i) Michele Kearns, Level 6, 169 Philip Street, Sydney in the State of New South Wales. In the first instance such service may be effected by facsimile to number 9221 8686 by 5.00pm on 25 November 1999.
(ii) Noel Bracks at the offices of Noel F Bracks & Company at 129 King Street, Sydney. In the first instance such service may be effected by facsimile to number 9221 7816 by 5.00pm on 25 November 1999.
(b) By posting a statement of claim, the affidavit of Peter Riordan sworn 19 November 1999 and a copy of any orders made in consequence of the said affidavit to:
by certified mail;
(i) PO Box 4021 Shortland Street, Auckland, New Zealand;
(ii) PO Box 7, Port Vila, Vanuatu,
(c) By e-mailing a copy of the Statement of Claim, the affidavit of Peter Riordan sworn 19 November 1999 and a copy of any orders made in consequence of the said affidavit to <[email protected]>.
(d) The Commission arrange for telephone number 0011 64 21 668 187 to be dialled and
(i) if the phone is answered inform any person who answers that this Court has ordered substituted service of the Statement of Claim against the Defendant and that the Statement of Claim will be served on Michelle Kearns, clerk to 6th Floor St James Hall Chambers, Noel Bracks solicitor, by post to PO Box 4021 Shortland Street, Auckland, New Zealand, and to Post Office Box 7, Port Vila, Vanuatu, and by e-mail to <[email protected]>; or
(ii) if the phone is unanswered but diverts to a message service leave a message to the effect that this court has ordered substituted service of the Statement of Claim against the Defendant and that the Statement of Claim will be served on Michelle Kearns, clerk to 6th Floor St James Hall Chambers, Noel Bracks solicitor, by post to PO Box 4021 Shortland Street, Auckland, New Zealand, and to Post Office Box 7, Port Vila, Vanuatu, and by e-mail to <[email protected]>.
2. Pursuant to Part 9 Rule 10 (2), the Statement of Claim be taken to have been served upon the happening of the following event, namely the complete of the steps directed in Order 1.
3. The costs of this application be costs in the cause.’6 On 23 December 1999 the defendant filed a notice of motion seeking declarations that the statement of claim had not been duly served on him and that the Court had no jurisdiction in respect of the subject matter of the proceedings. The application sought an order that either the statement of claim, or the orders with respect to substituted service, be set aside. By an amended notice of motion filed on 16 February 2001, the plaintiff sought, inter alia, an order that the defendant's application of 23 December 1999 be stayed or dismissed generally.
8 On 1 March 2001 I heard that part of the plaintiff's application of 16 February 2001 which sought an order that the defendant's application dated 23 December 1999 be stayed or dismissed generally. In written reasons for judgment handed down on 6 March 2001, I decided to make orders having the effect of dismissing or staying the defendant's application, save in respect of one single ground. I gave effect to my reasons for judgment by orders made on 8 March 2001. My orders were as follows:7 On 11 December 2000, Young J dealt with an application by the plaintiff to set aside a subpoena issued for the defendant. During the course of argument it appeared to his Honour that it would be necessary for him to determine whether Part 9 rule 10 of the Supreme Court Rules, which deals with orders for substituted service, permits substituted service where the defendant is not personally present in Australia at the time when the proceedings are commenced or thereafter. With the consent of the parties, he set that question down for determination as a preliminary point, delivering his reasons for judgment on 13 December 2000. His Honour answered the question ‘sometimes’. I shall have occasion to refer again to his Honour's judgment, which I shall call ‘the 'sometimes' judgment’. On 14 December 2000 Young J dealt with the application to set aside the subpoena, upholding the subpoena in part. I shall refer to the latter judgment as ‘the subpoena judgment’.
‘1. Pursuant to Part 31 rule 2 the question referred to in the Schedule be heard separately from and before any other question in the proceedings as an issue arising on the Defendant's Notice of Motion of 23 December 1999, and I set that matter down for hearing at 10am on 18 April 2001 before me.
2. The Defendant's Notice of Motion of 23 December 1999 otherwise be stayed pending further order.
4. Costs of the Plaintiff's Notice of Motion of 16 February 2001 and the Defendant's Notice of Motion of 23 December 1999 to date be reserved.3. The Plaintiff's Notice of Motion of 16 February 2001 stand over generally pending the determination of the separate question referred to in Order 1.
SCHEDULE
Whether the Court had jurisdiction to make the order of 24 November 1999 in these proceedings.’10 The finding to which the defendant drew attention was my finding in relation to what I called the defendant's ‘second ground’, which I described as ‘the plaintiff's failure to show that personal service in New Zealand was impracticable or to even attempt such service’. My observations on this ground were as follows:9 The defendant subsequently filed a holding summons for leave to appeal to the Court of Appeal from my decision of 6 March 2001, and made an application in the Court of Appeal for a stay of the proceedings before me. Giles JA heard the latter application on 9 April 2001. The defendant submitted that all the matters on which he relied for the orders sought in his notice of motion of 23 December 1999, and all the arguments in support of those orders, should be heard together. He contended that he would be prejudiced if I were to deal with the question about jurisdiction as a separate question because, he said, I had made a finding relevant to that question in my reasons of 6 March 2001.
‘In fact, the plaintiff presented evidence to the Deputy Registrar, before the orders for substituted service were made, which showed that extensive attempts had been made to serve the defendant, and that there were no additional practical steps which could reasonably be required.
‘The application for orders for substituted service relied on the affidavit of Peter Riordan made on 19 November 1999. Mr Riordan deposed that the Commission had not been able to effect service on the defendant, whose residential and business addresses were not known, but were believed to be in Auckland. He said that the Commission had made extensive efforts to locate the defendant and effect service on him. His affidavit annexed file notes and correspondence reporting these attempts. They are extensive.
‘In light of Mr Riordan's affidavit, it is just not arguable that the plaintiff failed to show that personal service on the defendant in New Zealand was impracticable, or that it had failed to attempt such service.’‘The Commission retained a private investigator to assist in attempts to locate the defendant. The private investigator provided some information which the Commission pursued. Mr Riordan made contact with the defendant's son, who agreed to ask his mother to make contact, but she did not. He rang a mobile telephone number with a New Zealand prefix code, supplied by the private investigator. The defendant answered when Mr Riordan rang, but claimed he was in Copenhagen rather than New Zealand. Mr Riordan explained that he wished to make arrangements to serve the statement of claim in these proceedings. The defendant asked him how he obtained the telephone number. Mr Riordan said he could not say. The defendant said: ‘well I'm not going to assist you’, and terminated the conversation.
11 The defendant contended that my determination of the separate question that I had formulated would require me to consider whether the plaintiff had taken all reasonable steps to serve him personally. He said that he would be prejudiced if I were allowed to proceed because, in the above passage, I had pre-determined that issue. Giles JA rejected this contention. He held that my findings in the above passage did not bind the defendant under the principles of res judicata , whether as to fact or as to an issue. He pointed out that what I said was in an interlocutory application on a ground different from the one that I had reserved for determination as a separate question. It would be open to the defendant, when I came to hear the separate question, to put before me all the evidence relevant to that question and invite me to make a fresh determination on the basis of that evidence.
12 I proceeded to a hearing on the separate question, as planned, on 18 April 2001. The defendant made it plain that he reserved his right to pursue his appeal against my judgment of 6 March 2001, and to seek a stay of further proceedings until the appeal had been dealt with. He then contended that:
· Laurie v Carroll establishes that in law the defendant could not be personally served outside Australia (‘the Laurie v Carroll point’);
· for process to be served outside Australia, the entirety of the claims must fall within Part 10 rule 1A of the Supreme Court Rules, and the Court has no jurisdiction to hear claims for declarations against non-residents who are not present within the jurisdiction (‘the Part 10 rule 1A point’);
· the process that was the subject of the order for substituted service did not include a Form 13A (as prescribed by the Supreme Court Rules), which is mandatory for process to be served outside Australia (‘the Form 13A point’);
· Part 10 rule 4 should not be construed as permitting substituted service contrary to Laurie v Carroll (‘The Part 10 rule 4 point’);
13 I shall consider each of these arguments in turn. There are some suggestions in Young J's ‘sometimes’ judgment that there may be some special jurisdictional rules which apply when a plaintiff seeks specific relief in equity rather than a money judgment or common law damages. As I understood them, neither the plaintiff nor the defendant sought to rely on this point in their submissions before me. However, I shall refer to it briefly. But first, before considering any of the arguments, I shall set out the relevant provisions of the Supreme Court Rules and make some observations about the structure of the rules and the general approach of courts to assertions of extra-territorial jurisdiction.· the exception to Laurie v Carroll represented by Rosenbaum v Rosenbaum [1926] VLR 280, if it exists at all, does not apply in the present case as the process was incapable of being served outside Australia, and in any event Rosenbaum's case was wrongly decided (‘the grounds for substituted service point’).
14 The relevant provisions of the Rules are as follows:
The Supreme Court Rules
[9.10] Substituted service
10 (1) Where the service of any document is required or permitted in any proceedings and it is impracticable for any reason to serve the document or to serve the document in the manner required by or under any Act or by the rules, the Court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person to be served.
(2) Where the Court makes an order under subrule (1), the Court may order that the document be taken to have been served on the happening of any specified event, or on the expiry of any specified time.
[9.11] Informal service: confirmation
11 Where the service of any document on any person is required or permitted in any proceedings and it is impracticable for any reason to serve the document or to serve the document in the manner required by or under any Act or by the rules, but steps have been taken for the purpose of bringing, or having a tendency to bring, the document to the notice of that person, the Court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.
[10.1A] Cases for service of originating process
1A (1) Subject to rule 2 and rule 2A, originating process may be served outside Australia in the following cases -
(a) where the proceedings are founded on a cause of action arising in the State;
…
(o) where the proceedings are for an injunction as to anything to be done in the State or against the doing of any act in the State, whether damages are also sought or not;
…
(x) where the proceedings, so far as concerns the person to be served, fall partly within one or more of the foregoing paragraphs and fall, as to the residue, within one or more of the others of the foregoing paragraphs.[10.2] Leave to proceed where no appearance
2 (1) Where an originating process is served on the defendant outside Australia and the defendant does not enter an appearance within the time limited for appearance, the plaintiff shall not proceed against that defendant except with the leave of the Court.
(2) A motion for leave under subrule (1) may be made without serving notice of the motion on the defendant.
[10.2A] Notice to the defendant served outside Australia
The prescribed form is as follows:2A Where an originating process is served outside Australia, a notice in the prescribed form shall be served with the originating process.
‘ Form 13ANOTICE TO DEFENDANT SERVED OUTSIDE AUSTRALIA
(Notice to defendant served outside Australia)1. The Court may, on application made by you in accordance with the rules of Court, set aside the service on you of this statement of claim ( or summons or as the case may be ) where
To the Defendant:
(a) service is not authorised by the rules of the Court; or
(b) this Court is an inappropriate forum for the trial of the proceedings.
3. If you do not make an application under paragraph 1 or file a notice under paragraph 2, the Court may give leave to the plaintiff to proceed against you.’
2. Alternatively you may submit to the jurisdiction of the Court by filing the prescribed form of unconditional notice of appearance.
The structure of the Rules
[10.4] Rules as to service generally
4 Subject to this Part and subject to any convention, the rules apply to service outside the State under this Part as they apply to service inside the State.
[10.5] Mode of service
5 A document which is to be served outside Australia need not be served personally on the person required to be served so long as it is served on him in accordance with the law of the country in which service is effected.
[10.6A] Setting aside service outside Australia
6A (1) The Court may make an order of a kind referred to in Part 11 rule 8 (which relates to setting aside etc originating process) on application by a person on whom an originating process is served outside Australia.
(2) Without limiting subrule (1), the Court may make an order under this rule on the ground -
(a) that the service of the originating process is not authorised by these rules; or
(b) that this Court is an inappropriate forum for the trial of the proceedings.
8 (1) The Court may, on application made by a defendant to any originating process on notice of motion filed within the time fixed by subrule (2), by order -[11.8] Setting aside originating process, etc
(a) set aside the originating process;
(b) set aside the service of the originating process on the defendant;
(c) declare that the originating process has not been duly served on the defendant;
(d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State;
(f) protect or release -(e) discharge any order extending the validity for service of the originating process;
(ii) property subject to an order restraining its disposition or disposal or in relation to which such an order is sought;(i) property seized, or threatened with the seizure, in the proceedings; or
(g) declare that the Court has no jurisdiction over the defendant in respect of the subject matter of the proceedings;
(j) grant such other relief as it thinks appropriate.(h) decline in its discretion to exercise its jurisdiction in the proceedings;
(2) Notice of a motion under subrule (1) -
(3) The making of an application under subrule (1) shall not be treated as a voluntary submission to the jurisdiction of the Court.
(a) may be filed without entering an appearance;
(c) shall be filed within the time limited for entering an appearance.(b) shall bear a note ‘The defendant's address for service is’ and state the address;
16 Under the present Rules, a plaintiff who wishes to serve originating process outside Australia must overcome the following obstacles, which do not apply to a plaintiff who wishes to effect service within the jurisdiction:15 Part 10 was substantially amended to its present form after the enactment of the Service and Execution of Process Act, 1992 (Cth). Under the old rules service in another State or Territory of Australia was generally treated in the same way as service outside Australia. The present Part 10 is confined, for the most part, to service outside Australia, leaving the legislation to operate where service is to be effected in another State or Territory. Importantly for present purposes, Part 10 was amended with respect to service outside Australia, by removing the previous requirement that leave be obtained before service was effected. Now the originating process may be served outside Australia without leave, provided that the proceedings fall within Part 10 rule 1A, but if a defendant is served outside Australia and does not enter an appearance, the plaintiff must obtain the leave of the Court under Part 10 rule 2 before proceeding against that defendant.
(a) the proceedings must fit wholly within one or more of the categories described in Part 10 rule 1A;(b) the plaintiff is required by Part 10 rule 2A to serve a notice in accordance with Form 13A with the originating process;
(d) if the defendant does not enter an appearance, the plaintiff cannot proceed except with the leave of the Court (Part 10 rule 2).(c) if the documents are not served personally on the defendant, they may be served in accordance with the law of the country in which service is effected (Part 10 rule 5);
17 The plaintiff contends that it has validly effected substituted service under Part 9 rule 10, pursuant to the order of the Court made on 24 November 1999. Part 9 rule 10 appears, on its face, to authorise an order of the kind made in this case. It does not expressly contain any limitation that would prevent substituted service upon a defendant who is outside the jurisdiction at all relevant times. However, the structure of Parts 9 and 10 suggests that Part 9 rule 10 might be subject to an implied limitation where service is to be effected outside the State. Part 9 is a general provision with respect to the service of process, headed ‘Service - General’. Part 10 deals specifically with ‘Service outside the State’, and makes no provision for substituted service outside the State.
19 It is not necessary, under the present rules of the Supreme Court, that the originating process be in a special form or specially endorsed if it is intended to be served abroad, although Part 10 rule 2A requires that the originating process be accompanied by a Form 13A notice. Presumably, however, the principle of those two cases continues to apply. The question is whether there are any other implied restrictions on the availability of an order for substituted service against a defendant resident abroad. In Laurie v Carroll the High Court (Dixon CJ, Williams and Webb JJ) held, dealing with rules of the Supreme Court of Victoria, that there is an implied limitation with respect to substituted service where the defendant is outside the jurisdiction. Before examining that case, I wish to make some remarks about the general approach of courts to claims to permit service of process abroad.18 At a time when the general rules of procedure required that a writ be issued for the commencement of proceedings, typical rules of court required that the writ be in a special form, or specially endorsed, if it was intended for service outside the jurisdiction, pursuant to the rules which permitted such service in limited circumstances. The rule permitting substituted service applied to a writ issued for service abroad, but questions arose as to whether it was permissible or necessary for the steps taken by way of substituted service to be taken abroad. In Ford v Sheppard (1885) 34 WR 63 it was held that the court had the power to order substituted service in England of a writ that had been issued for service abroad. In Western Suburban and Notting Hill Permanent Benefit Building Society v Rucklidge [1905] 2 Ch 472, an order was made for substituted service of a writ issued for service outside the jurisdiction, by requiring that the writ be posted to several addresses, some in England and some in France and Belgium. Swinfen Eady J upheld the order, finding that it was permissible to require steps to be taken abroad, and rejecting an argument that it was impermissible to require steps to be taken in England.
20 It is important to bear in mind the international context in which questions of service abroad arise. As Lord Denning MR said in The Vrontados [1982] 2 Lloyd's LR 241, at 245:
The general approach to interpretation
‘service of a writ out of the jurisdiction is an exercise of sovereignty within the country in which service is effected. It can only be done with the consent of that country. That is why our rules provide for service through judicial authorities of that country: or through a British Consular authority in that country... .’
22 In Williams v Lips-Heerlen BV (Supreme Court of New South Wales, unreported, 1 November 1991) Giles J considered the scope of s 81 of the Supreme Court Act 1970 (NSW), according to which failure to comply with the rules is to be treated as an irregularity that does not nullify the proceedings. After observing that s 81 should be construed in a wide and generous way, he noted that special considerations apply to an irregularity in service out of the jurisdiction, such that the irregularity should be disregarded only in exceptional cases. He referred to Camera Care Ltd v Victor Hasselblad Aktiebolaa (1986) 1 FTLR 348, where Ormrod LJ said (at 354):21 Young J took up this idea in his ‘subpoena’ judgment (paragraph 5). He pointed out that the rules restricting substituted service on a person resident abroad are justified by two considerations: namely, that the courts should not without due cause trespass into a field that is properly filled by a foreign tribunal; and they should not harass a person who resides outside Australia.
‘service of process out of the jurisdiction is an unusual assertion by this Court of an extra-territorial jurisdiction which could have international repercussions, and so is carefully controlled by the Rules of Court. It is consequently very important to ensure compliance with the rules. So, irregularities should be cured only in exceptional cases.’
23 Giles J also noted the observations by Master Lee QC in Hunter v Singh (1986) 1 Qd R 106, founded on a number of English decisions of last century, which included the proposition that service on foreigners is a delicate jurisdiction to be exercised with great caution and that strict compliance with the rules is required. He referred to the respect for the sovereignty of another State which dictates that a foreigner resident abroad will not lightly be subject to local jurisdiction (citing Arhill Pty Ltd v General Terminal Co Pty Ltd (Supreme Court of New South Wales, Rogers J, unreported, 19 December 1990)).
25 On the other hand, the Court should not allow these general considerations to deflect it from the task of giving a fair and rational construction to particular provisions of the Rules. If, on their proper construction, and in light of the authorities, the Rules permit the order for substituted service that has been made in this case, general considerations should not influence the Court to reach any different conclusion.24 None of these observations is directly applicable to the problem for consideration in the present case. However, they create an environment which has some significance. Given the general approach of the courts to the interpretation of rules concerning service abroad, it is unlikely that the drafters of the Supreme Court Rules would have intended, by a general rule concerning substituted service appearing in a Part headed ‘Service - General’, to have provided a means for a plaintiff to sidestep the limitations and protections which would apply if he sought to effect personal service abroad.
The Laurie v Carroll point
26 It is necessary to examine the High Court's decision carefully, because the parties sought to draw different conclusions from it. The plaintiff contends that Laurie v Carroll stands for the proposition that the Court has jurisdiction to order substituted service of originating process whenever personal service of the originating process is otherwise permitted or required. The defendant contends that in light of Laurie v Carroll , Part 9 rule 10 does not apply outside Australia; alternatively, it can only apply outside Australia if the plaintiff has complied with Part 10 rule 5 and Part 10 rule 2A.
27 In that case the plaintiffs took proceedings in the Supreme Court of Victoria against the defendant for damages for breach of an alleged contract for division of the profits of Dame Margot Fonteyn's theatrical tour of Australia, an injunction to restrain the defendant from receiving money payable to him in respect of the theatrical performances, and the appointment of a receiver for such money. The defendant was resident in London. He was in Australia for the theatrical tour, but left Victoria on the day before the proceedings were commenced. The Supreme Court of Victoria made an order for substituted service upon the defendant's Melbourne solicitor. The High Court held that there was no jurisdiction to make that order.
28 The Rules of the Supreme Court of Victoria made provision for service of a writ outside Victoria in certain listed circumstances (broadly comparable with Part 10 rule 1A, although not including rule 1A(1)(a)), but only with the leave of the court. No application was made for leave to serve the writ outside the State, and the High Court speculated (at 322) that the cause of action relied upon by the plaintiffs may have been outside the permitted circumstances. The High Court therefore treated the case as one in which substituted service was sought where the defendant was outside the jurisdiction and direct service upon him was not authorised by the rules of court.
29 The High Court's starting point was the common law doctrine that a writ does not run beyond the limits of the State (at 322). Where the action is in personam (as it was in that case and is in the present case), the common law doctrine defines the limits of the jurisdiction of the Court over the defendant (at 323). The Court explained, referring to cases decided in the nineteenth and early twentieth centuries, that the foundation of the common law doctrine lay in the power of the Sovereign, administered by the judges, to compel a person served with a writ to submit to the command made by the writ. The assumption of the older cases is that the Sovereign had no power to enforce the command made by the writ outside the physical boundaries of the State.
30 Another justification for the common law doctrine, acknowledged by their Honours at 325 and 332, is that if substituted service could be ordered with respect to a defendant who was not present within the jurisdiction at any relevant time, the strict conditions regulating and limiting service out of the jurisdiction upon a defendant resident abroad (that is, conditions such as those in Part 10 rule 1A) would be ineffective. I regard this consideration as a particularly important part of the Court's reasoning.
31 Their Honours treated the rules permitting service outside the State (that is, in Victoria at the time, the rules permitting service outside the State in certain circumstances with leave) as an extension of the common law doctrine, rather than an abrogation of it (at 322). In the Court's view, the common law doctrine continued to apply except where the extension could be invoked (also at 322).
32 The Court rejected the theory that the issue of a writ is merely an inchoate exercise of jurisdiction completed by service, preferring the theory that the critical time - the time at which, under the common law doctrine, the defendant must be personally within the jurisdiction - is the time of issue of the writ rather than the time of service (at 324-8). They pointed out (at 328) that if the former theory were correct, a defendant who became aware of the issue of a writ and went abroad in order to evade personal service would be successful in doing so, contrary to the authorities.
33 In Porter v Freudenberg [1915] 1 KB 857, Lord Reading CJ, speaking on behalf of himself and six other members of the Court of Appeal, carefully set out the authorities which support the general doctrine that there cannot be substituted service of a person on whom personal service could not be validly effected. According to Lord Reading, that general rule is not applied if the Court is satisfied that the defendant went outside the jurisdiction before the issue of the writ in order to evade service. If the defendant went outside the jurisdiction after the issue of the writ, although not for the purpose of evading service, substituted service can be allowed, in his Lordship's view, if the Court is satisfied that the issue of the writ came to his knowledge before his departure, and the case falls within the circumstances in which direct service abroad is permitted.
35 That conclusion was sufficient to dispose of the case, since the defendant had left Victoria before the writ had been issued. But the High Court thought it appropriate (at 332-4) to consider whether the Supreme Court of Victoria's order for substituted service would have been supportable if Lord Reading's view of the law had been accepted. They gave a negative answer, because of the absence of any significant connection between the defendant and Victoria. The only connection between the defendant and Victoria was the fact that he had secured a contract with Dame Margot Fonteyn for a tour which included a brief season in Melbourne. Neither by reason of past history nor present domicile, residence or course of business, did the defendant stand in any general relation to the State of Victoria which would make him naturally or prima facie subject to the jurisdiction of the courts in that State. The plaintiffs might have taken proceedings in England or New South Wales, but had chosen Victoria, which was the most suitable jurisdiction for them but the least suitable for the defendant. They had purported to invoke the power of the Supreme Court of Victoria to order substituted service only for the purpose of giving that court jurisdiction where otherwise it did not exist. Their Honours concluded (at 333-4):34 The Court criticised Lord Reading's view that substituted service can be ordered if the defendant went outside the jurisdiction before the issue of the writ in order to evade service. They said that the cases upon which Lord Reading relied do not support his propositions, and pointed out that his Lordship's observations could not have been intended as a complete statement of the law, because nothing had been said about the connection which the defendant must have with the jurisdiction (at 330-1). If his Lordship's observations were taken literally, a transient visitor who quickened his departure because of fears that a writ would be issued and served personally within the jurisdiction, would render himself liable to the exercise by substituted service of the very jurisdiction which otherwise would depend on his actual physical presence. In their Honours' view, if the defendant has left the jurisdiction before the issue of the writ, the Court cannot overcome its lack of jurisdiction by an order for substituted service, regardless of the defendant's motive in leaving (at 332).
‘In all these circumstances the substance of the matter was that, unless the case could be brought within O.XI of the Service and Execution of Process Act, a contingency that must have appeared very dubious, the Supreme Court by ordering substituted service was really asserting a jurisdiction over the defendant Laurie which otherwise it could not possess, save in so far as it arose from the accidental circumstances of his brief visit to Melbourne.’
36 In this passage their Honours acknowledged the proposition that substituted service cannot be ordered if direct personal service is not available in the circumstances - and the corollary, that if under the rules direct personal service could have been effected, although the defendant was outside the jurisdiction, then substituted service is also permissible. Their Honours were considering whether the Supreme Court's order for substituted service would have been supportable if Lord Reading's view of the law were correct, and were not purporting to state their own view of the law, but the propositions emerging from this passage receive support throughout the High Court's judgment: see p 322, 325, 329.
37 Later cases confirm that this interpretation of Laurie v Carroll is correct. Thus, in Mondial Trading Pty Ltd v Interocean Marine Transport Inc (1985) 60 ALJR 277, the cause of action was for breach of contract or breach of duty by a shipowner with respect to the loading, handling, custody, care and discharge of the plaintiff's cargo from a number of ports in the United States to ports in Australia, pursuant to bills of lading. Dawson J considered some ex parte applications for renewal of a writ issued for service within the jurisdiction, and for an order for substituted service on a firm of Australian solicitors. These questions arose under the rules of the High Court, which required that leave be granted for service outside the jurisdiction. The defendant was a company incorporated outside Australia and had not been present within the jurisdiction at any time.
38 Dawson J held, applying Laurie v Carroll and the authorities cited in that case, that it would not be proper for him to make an order for substituted service, no order having been made for service of the writ out of the jurisdiction. His Honour acknowledged that, having regard to a clause in the bill of lading, the parties to the contract had agreed that the courts of Australia would have jurisdiction. But there was no agreement concerning the mode of service of the originating process. In those circumstances the plaintiff should have obtained leave for service outside the jurisdiction, and could obtain an order for substituted service within the jurisdiction only if it was unable to affect service outside the jurisdiction after having made reasonable efforts to do so. This reasoning acknowledges the availability of substituted service where the defendant is abroad, but adheres to the principle that substituted service must not be used to sidestep the requirements for service abroad.
39 A similar approach can be seen in Ricegrowers Cooperative Ltd v ABC Containerline NV (1996) 138 ALR 480. In that case one of the defendants was a Luxembourg company which had no business or assets in Australia. The plaintiff did not seek leave to serve the originating process on the defendant, applying instead for an order for substituted service on the defendant's Australian solicitors. Tamberlin J cited the Mondial Trading case with approval, and set out an extract from the High Court's judgment in Laurie v Carroll , emphasising a passage in which their Honours pointed out that were the law as to substituted service otherwise, the strict requirements for service outside the jurisdiction would become ineffective.
40 In my opinion, therefore, Laurie v Carroll is authority for the proposition that substituted service of an originating process for an in personam claim can be ordered where the defendant is outside the jurisdiction, if direct personal service could have been effected under the rules of court. It follows that I do not accept the defendant's submission that according to Laurie v Carroll , Part 9 rule 10 does not ever apply to permit substituted service outside Australia. In the end, I accept the plaintiff's submission that substituted service is permissible as long as the case can be brought within one of the categories set out in Part 10 rule 1A. However, I reach this conclusion by a process of reasoning that I must explain.
41 The principle of Laurie v Carroll requires an examination to be undertaken as to whether, in the circumstances, personal service could have been effected abroad. It is a principle driven by the proposition that the plaintiff should not be permitted to use substituted service as a means of sidestepping the obstacles to personal service abroad. As I indicated earlier, there are four obstacles to personal service abroad. I shall consider the first two (namely, compliance with Part 10 rules 1A and 2A) later in this judgment. However, I should say at this stage that in my view the proceedings fall within Part 10 rule 1A and so that obstacle has been overcome, and it is not necessary in this case to comply with Part 10 rule 2A. The third and fourth obstacles relate to Part 10 rules 5 and 2, and I shall turn to them now.
42 In my opinion, Part 10 rule 5 is irrelevant to the question that Laurie v Carroll requires us to consider. The question is whether personal service could have been effected abroad. Part 10 rule 5 deals with non-personal service, such as service by post.
43 The defendant seeks to rely on BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496. The case related to attempts by BP (a United Kingdom company) to enforce a judgment that it had obtained against Mr Hunt (a resident of Texas) in England, against Mr Hunt's Australian assets. BP registered its English judgment in New South Wales. The Master, when making an order for registration of the judgment, dispensed with personal service and ordered that service be deemed to have been effected ten days after a sealed copy of the notice of registration had been forwarded by registered air mail addressed to Mr Hunt at an address in Texas. There was no evidence before the Master, when he made the order, as to whether service by registered post was in accordance with the law of Texas, nor any evidence that it was ‘impractical’ within the terms of Part 9 rule 10 (1) to effect service on Mr Hunt in accordance with the rules.
44 Mr Hunt applied to this Court by notice of motion for an order to set aside the registration of the judgment, making a conditional appearance solely for that purpose. Hunt J took the view that Parts 9 and 10 of the Supreme Court Rules were irrelevant to the question before him, which concerned registration of a judgment under the Foreign Judgments (Reciprocal Enforcement) Act 1973 (NSW). Nevertheless, he considered whether, if they had been relevant, the rules had been complied with. He held that they had not, for two reasons. First, BP could not claim that posting the notice by registered post was effective service on Mr Hunt in Texas because Part 10 rule 5 ‘requires non-personal service outside the State [outside Australia, under the present rule] to be in accordance with the law of the country in which service was to be effected’ (at 503), and there was no evidence of the law of Texas nor any presumption available to overcome the lack of evidence. Secondly, the Master's order could not be treated as an order for substituted service because there was no evidence before the Master as to why it was impracticable for any reason to serve the notice in accordance with the rules.
45 The defendant says, relying on this judgment, that any order for substituted service abroad must prescribe a method of service which complies with the law of the relevant overseas jurisdiction. In my opinion Hunt J did not reach this conclusion. He was considering whether steps had properly been taken for the registration of a judgment. He reasoned, by analogy, that the procedure adopted by the Master might be supportable if either it complied with the requirements for non-personal actual service abroad, or with the requirements for substituted service. It did not comply with the requirements for non-personal actual service because Part 10 rule 5 requires compliance with the law of Texas and there was no evidence as to what the law of Texas required; and it did not comply with the requirements for substituted service because there was no evidence that it was impracticable to effect actual service. He did not treat Part 10 rule 5 as applicable in a case of substituted service.
47 In my opinion, therefore, the Laurie v Carroll principle does not require the Court to consider whether it would grant leave under Part 10 rule 2 for the plaintiff to proceed in the absence of an appearance by the defendant. However, it does require consideration of whether the proceedings fall within one of the categories in Part 10 rule 1A, and I now turn to that issue.46 I turn to Part 10 rule 2. In Laurie v Carroll the High Court was concerned with a case where the rules of court required leave to issue originating process for service abroad. Leave had not been sought or obtained. As I read the judgment, the absence of an order granting leave would not have been fatal, if the plaintiffs could have shown that leave would have been obtained had they sought it. The crucial question was whether they were using the substituted service procedure to avoid the obstacles of personal service abroad. Since substituted service itself involves an application to the Court for orders, it can hardly be said that the substituted service procedure is a mechanism for approving the requirement to approach the Court for leave. The High Court believed the plaintiffs were seeking to avoid the rules for service abroad, but this was because their Honours doubted that the plaintiffs could have brought themselves with any of the categories of the Victorian rule broadly equivalent to Part 10 rule 1A.
48 At the hearing on 18 April 2001, the case was argued on the basis that only subparagraphs (a) and (o), together with subparagraph (x), of Part 10 rule 1A are relevant. Under those subparagraphs, the question is whether the proceedings fall wholly within one or both of the following categories:
The Part 10 rule 1A point
(o) proceedings for an injunction as to anything to be done in the State or against the doing of any act in the State, whether damages are sought or not.
(a) proceedings founded on the cause of action arising in the State;
49 The proceedings seek relief of three kinds: namely a declaration that contraventions of certain provisions of the Corporations Law have occurred, an order prohibiting the defendant from managing a corporation for a stated period, and injunctions restraining the defendant from contravening those provisions of the Corporations Law. The injunctions fall squarely within subparagraph (o). In my opinion, an order under s 230 of the Corporations Law prohibiting the defendant from managing a corporation for a stated period is an injunction for the purposes of subparagraph (o). It has the essential elements of an injunction (see Meagher, Gummow and Lehane, Equity Doctrines and Remedies (3rd ed, 1992), para [2101]. It is a mandatory order, contravention of which is punishable by way of contempt proceedings. It enjoins the defendant from engaging in specified conduct. The fact that the source of the Court's power to make the order is a statute rather than its inherent jurisdiction is immaterial. Many statutes give the Court the power to make an order which is undeniably an injunction: for example, s 66 of the Supreme Court Act 1970 (NSW), and in the context of corporate law, ss 1114 (1) (c) and (d), and 1324 (1). The fact that in some cases the word ‘injunction’ is used in the statute, and in other cases the statutory language is ‘order restraining’ or similar words, is also immaterial for the purposes of subparagraph (o).
50 The defendant submits that the Court should exercise its discretion against permitting the action to proceed, in so far as it falls within subparagraph (o), because there is no allegation that the defendant intends to manage a corporation or act in contravention of the Corporations Law in future, and therefore the injunctions would be without purpose. However, I dealt with this point in my judgment of 6 March 2001 (see paragraph 30). The fact that in Australian Softwood Forests Pty Ltd v Attorney-General (1981) 148 CLR 121 the High Court decided that it was appropriate to make a declaration but not to grant an injunction, does not mean that an injunction can never be granted in respect of a past contravention. The Court will be called upon to exercise its discretion with respect to the most appropriate remedies if the case proceeds to final hearing and the plaintiff is successful. It would be premature to exercise the Court's discretion against the granting of a certain kind of remedy at this very early interlocutory stage.
51 That leaves the declarations of contravention of the Corporations Law. The only relevant subparagraph of Part 10 rule 1A is subparagraph (a). The question is whether, to the extent that the statement of claim pleads grounds for declarations of contravention, it is founded on a ‘cause of action’. It is clear that if there is a cause of action, it arose in New South Wales.
52 The defendant emphasises the difference between a declaratory order and an injunction, drawing attention to the history of the declaratory jurisdiction and pointing out that under s 75 of the Supreme Court Act, the Court may make a declaratory order without any ancillary relief. The defendant says it is significant that declarations are not specifically included in the otherwise exhaustive list of categories for service of originating process abroad. Further, he says that it would strain the language to categorise a declaration, which may declare a state of affairs and not afford any relief or affect a party's position, as a cause of action. It seems to me that this submission misses the point. The issue is not whether declarations are included in the categories set out in Part 10 rule 1A. It is whether the proceedings fall within the relevant subparagraph; subparagraph (a). The nature of the proceedings, and the causes of action upon which the proceedings are founded, are to be ascertained by considering the whole of the statement of claim, not merely the prayers for relief. The real question is whether, when the plaintiff as the public regulator brings civil proceedings complaining of contraventions of the Corporations Law, it is asserting a cause of action.
54 Some remarks by Giles J in News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553, 569, are more helpful. The question in that case was whether a summons seeking relief on the basis of equitable estoppel was a proceeding founded on a cause of action for the purposes of Part 10 rule 1A (1) (a). His Honour said:53 The defendant relies on Guaranty Trust Co of New York v Hannay & Co [1915] 2 KB 536. In that case the plaintiff purchased a bill of exchange with a bill of lading and insurance certificate attached, and sent the documents to the defendants, who accepted the bill of exchange and paid it at maturity. The bill of lading, which related to a shipment of cotton, was a forgery. The defendants sued the plaintiffs in the United States to recover the amount of the bill paid by them. The plaintiffs took action in England claiming declarations to the effect that they were not bound to repay the amount of the bill, together with an injunction to restrain the defendants from proceeding with their action in the United States. An application by the defendants to strike out the claims for declarations on the ground that they disclosed no cause of action was unsuccessful in the English Court of Appeal. Buckley LJ, dissenting, took the view (at 555) that the power to grant declaratory relief depended upon there being a cause of action, but his judgment does not shed much light on the nature of a cause of action. Pickford LJ held (at 561) that a declaration could be made where there was no cause of action, but the cases to which he refers seem to be concerned with the question of standing. Bankes LJ held (at 571-2) that a declaration could be made with respect to the rights of parties without there being a cause of action, but again he does not identify the characteristics of a cause of action. The case was dealing with a different problem and on the whole, I find it unhelpful.
‘Where Part 10 rule 1A (1) refers to a cause of action it should not be given narrow scope, confined to something like the old forms of action, but should extend to possibly new sources of legal rights. In Williams v Milotin (1957) 97 CLR 465 at 474 a cause of action was described as ‘the essential ingredients in the title to the right which it is proposed to enforce’; other descriptions have been given, including in Papps v Mahon [1966] NZLR 288 at 292 ‘all the facts and circumstances necessary to give rise to a right to relief in law or equity’. The emphasis is on the material facts from which relief flows, not the label given to the legal institution ...’. He concluded that it was strongly arguable for the purposes of subparagraph (a) that a claim in the nature of estoppel is a cause of action.
56 When these statutory ingredients are put together, they point to the conclusion that the plaintiff as public regulator has a cause of action with respect to contraventions of the three provisions in question, entitling it to seek relief including declaratory relief as well as or instead of injunctive relief. The statement of claim purports to set out the facts and circumstances necessary to give rise to the plaintiff's right to relief of these kinds, and to set out the essential ingredients in the plaintiff's entitlement to the right which it proposes to enforce. It seems to me immaterial that the right arises out of a statute rather than principles of common law, that is a public right vested in the public interest in a regulatory body, and that the relief sought to vindicate the right is declaratory relief. If the Court at the final hearing believes that such relief is appropriate and makes orders accordingly, then it will have granted relief reflecting the plaintiff's cause of action, in the sense in which Giles JA uses that expression.55 Taking the approach set out by Giles J, my view is that the proceedings in this case are founded on a cause of action. The Corporations Law contains provisions which prohibit insider trading and market manipulation, and give civil remedies for misleading and deceptive conduct (ss 1002G, 998 and 995 respectively). The plaintiff is the public regulator with respect to such conduct, having functions and powers conferred upon it by s 11 of what was at the time the Australian Securities Commission Act 1989 (Cth). It has the power under s 13 of that Act to investigate contraventions of, inter alia, the Corporations Law. Its functions and powers include those conferred upon it by the Corporations Law, including the power under s 1114 to make an application to the Court for a wide variety of orders with respect to contravention of Chapter 7, which includes the three provisions which I have mentioned. The Court may make such order as it thinks fit under that section, and although a declaratory order concerning contravention is not expressly mentioned, is undeniable that s 1114 is a statutory source of power for the Court to make such an order. Section 1324 empowers the plaintiff to apply to the Court for an injunction where a contravention of the Corporations Law has occurred, and s 1324 (6) (a) makes it clear that the Court's power to grant an injunction exists whether or not it appears that the person intends to engage again in conduct of the relevant kind.
The Form 13A point
57 Part 10 rule 2A requires a notice in terms of Form 13A to be served with the originating process, when it is served outside Australia. It is common ground that no Form 13A was sent to any of the addresses to which the originating process was sent, pursuant to the orders for substituted service. The defendant submits that service of the notice was an essential step and since it did not occur, the statement of claim could not have been validly served.
58 A Form 13A notice was not literally required in this case. This is because Part 10 rule 2A applies only where an originating process is served outside Australia. Substituted service is not service at all. It is a procedure by which the Court makes an order for certain things to be done instead of service , as Part 9 rule 10 itself makes plain. However, that is not the end of the matter. If one applies the principle in Laurie v Carroll , the question to be asked is whether direct service could have been effected under the rules. Direct service could have been effected under the rules (assuming the other relevant requirements were satisfied) if a Form 13A notice was served with the originating process. It is therefore arguable that although the requirement for a Form 13A notice does not directly apply, it is imported by the Laurie v Carroll principle.
59 The plaintiff submits that if a Form 13A notice was required, the omission to serve it was an irregularity within the meaning of s 81 of the Supreme Court Act. Therefore, says the plaintiff, the omission does not nullify the proceeding or any step taken in the proceeding (citing Australian Coastal Shipping Commission v Curtis Cruising Pty Ltd (1989) 17 NSWLR 734). Section 81 (1) applies where, ‘in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there is, by reason of anything done or left undone, a failure to comply with the requirements of this Act or the rules whether in respect of time, place, manner, forms or content or in any other respect’. Where the circumstances fit that description, the failure to comply is to be treated as any irregularity that does not nullify the proceedings, and the Court is empowered to set aside the proceedings or any step taken.
60 The interpretation of s 81 was considered by Giles J in Williams v Lips-Heerlen BV . His Honour observed that the provision should be construed in a wide and generous way. He noted that in the Australian Coastal Shipping Commission case it was held that failure to file an originating process, or amended originating process, was a failure to comply with the Rules which could be treated as an irregularity, so that the proceedings or amended proceedings were validly commenced, although irregularly. Applying the section to the circumstances of the case before him, he held that where the plaintiff had served a summons and Form 13A after the date appointed for hearing, thereby failing to comply with the requirements of the Rules, the failure was an irregularity and the proceedings were well commenced notwithstanding non-compliance with the Rules.
62 The plaintiff submitted that apart from s 81, the Court could and should relieve the plaintiff from any requirement (if there was one) to comply with Part 10 rule 2A. In the plaintiff's submission, the Court should exercise its discretion under Part 1 rule 12 to dispense with that requirement of the rules ‘either before or after the occasion for compliance arises’. I would hesitate before making an order dispensing with a requirement of the Rules concerning service abroad, having regard to the general approach to such matters set out in the cases cited above. It is unnecessary for me to do so. My view is that, for the reasons given, the principle in Laurie v Carroll does not entail that the substituted service in this case has been ineffective because of the absence of a Form 13A notice.61 In my opinion, s 81 (1) would apply in the present case if Part 10 rule 2A were directly applicable to require the service of a Form 13A notice. That being so, in considering the Laurie v Carroll principle I can take into account that their omission to serve a Form 13A notice would not be fatal unless the Court made an order under s 81 (1) (b). Having regard to s 81, and the fact that leave is not required before the issue of an originating process to be served abroad, my view is that the consequences of failure to characterise the originating process as intended for service abroad, by serving a Form 13A notice with it, are quite different from the consequences of failure to obtain leave for service abroad at the time of Laurie v Carroll and earlier cases. That being so, it seems to me that in applying the Laurie v Carroll principle to modern circumstances, the fact that service of a Form 13A notice has been omitted is not material, unless the Court takes the view that an injustice has resulted from the absence of the notice. In the present case the defendant is a senior legal practitioner who has practised his profession for a substantial time in Australia. Nothing in the contents of a Form 13A notice would have given him information of which he was not already aware. Service of such a notice was a mere formality. I can see no basis for any contention that the absence of the notice would produce any injustice to him.
The Part 10 rule 4 point64 Young J summarised the competing arguments on this point in his ‘sometimes’ judgment, but he did not express a concluded view. My opinion is that the defendant's submissions are correct on this point. Having regard to the general approach taken by the courts to the construction of rules with respect to service abroad, a general provision such as Part 10 rule 4 should not be construed so as to change the established law as explained in Laurie v Carroll . To do that one would need a more specific and clear provision.
63 The plaintiff seeks to rely on Part 10 rule 4 to support the proposition that Part 9 rule 10, concerning substituted service, applies, literally and according to its terms, to a case where the defendant is outside the jurisdiction. This is because, according to Part 10 rule 4, ‘the rules [including the rule as to substituted service] apply to service outside the State under this Part as they apply to service inside the State’. The defendant contends that Part 10 rule 4 does no more than provide for a method of personal service outside Australia, and cannot be regarded as extending the Court's jurisdiction to include residents of foreign countries as ‘targets’ of substituted service orders. That, says the defendant, would be inconsistent with Part 10 rule 5, which makes specific provision for documents to be served outside Australia. It would also be inconsistent with the principle in Laurie v Carroll , in the defendant's submission.
The grounds for substituted service point
65 The Court's jurisdiction to make an order for substituted service depends, according to Part 9 rule 10 (1), on whether it is ‘impracticable for any reason’ to serve the document in the manner required by the Rules. The wording of this provision is very similar to court rules in many other jurisdictions, and so there is a substantial body of relevant case law.
66 In some of the cases the standard of impracticability to be established by the applicant is set at a high level. Thus, in The Vrontados , Ackner LJ pointed out (at 247-8) that substituted service may be ordered only when it is impracticable for the plaintiff to effect personal service, and said ‘this inability is the essential consideration’. ‘Inability’ might be thought to be a harsh reading of the word ‘impracticability’. His Lordship said that the affidavit in support of the application should show the efforts which have been made to affect personal service. In the case before him, no efforts had been made at all, prior to the application for the order. And yet the directors were residing in England and could have been served without the slightest difficulty (at 248). O'Connor LJ took the same view, although Lord Denning MR vigorously dissented.
67 In Foxe v Brown (1984) 58 ALR 542 Mason J was principally concerned to deal with a submission that the standard of impracticability was much lower where substituted service is sought to be made on a personal injury insurer who will have the real carriage of the litigation, than in other cases. However, his Honour said in passing (at 546) that for an order for substituted service to be made, it must be shown that ‘the plaintiff, using reasonable effort, is unable to affect personal service’. ‘Impracticability’ is expressed as inability, although only reasonable efforts need to be used.
68 In Rosenbaum v Rosenbaum [1926] VLR 280 the plaintiff took proceedings against her estranged husband for specific performance of his promise to transfer to her a share of rural land in Shepparton. She obtained an order giving her leave to issue a writ and serve it on her husband in Palestine. However, she made no attempt at service there. Instead, she sought an order for substituted service on her husband's two brothers, who resided in Shepparton. They were his attorneys to manage the land, and they were in constant communication with him. There was evidence that the brothers had told the plaintiff's solicitor that they alone knew the defendant's whereabouts, and they would use every effort to prevent service of the writ on him. Schutt J made an order for substituted service, without any reported reasons.
69 The case seems to be at odds with the observations made in The Vrontados and Foxe v Brown , because an order for substituted service was made although there was no attempt at personal service. The defendant attacks Rosenbaum's case, submitting that it was wrongly decided.
71 In my opinion it would be undesirable to interpret the word ‘impracticable’ so rigidly that an extreme case such as that could not be accommodated. I therefore respectfully agree with the formulation adopted by Tamberlin J in the Ricegrowers Co-operative case (at 482). His Honour said:70 In my opinion, this case is consistent with Laurie v Carroll , because it was a case where personal service outside the jurisdiction was permitted by the rules (indeed, an order for service outside the jurisdiction had been made). In those circumstances, Laurie v Carroll supports the proposition that an order for substituted service can be made, provided that (in accordance with the terms of the substituted service rule) it is impracticable to effect personal service. It is unusual for a court to conclude that it is impracticable to effect personal service in a case where the applicant has made no attempt to do so. However, the facts of the Rosenbaum case were very unusual, the Court evidently concluding that impracticability was established having regard to the fact that only the brothers were aware of the defendant's address and they indicated, in very belligerent terms, that they would do what they could to prevent him from being served.
‘In order to establish impracticality some attempt, at least, should be made to effect service in accordance with the rules, or evidence should be led that it is so obviously futile as not to warrant an attempt at service’.
72 He found that there was insufficient evidence of impracticality when the plaintiffs' solicitors had only established through inquiries that service of the defendant in Luxembourg could take three months.
74 The defendant submitted that it would be wrong, on the evidence, to find that personal service in New Zealand was impractical. He drew attention to the following aspects of Mr Riordan's evidence:73 In the present case, in contrast with Rosenbaum's case, there was an attempt to effect personal service, and so it is unnecessary for me to make any final decision to follow or disagree with that case. The question in the present case is whether impracticability was established by the affidavit of Mr Riordan (together with the exhibits to it), which was the only evidence relied upon. I made some findings relevant to this subject in my judgment of 6 March 2001, the relevant passage of which is set out above. But it is necessary, in view of the observations by Giles JA to which I have referred, for me to re-consider the matter in light of the submissions made at the hearing on 18 April 2001, and also in light of the principles to which I have referred above. I have done so, and I have concluded that the evidence relied upon by the plaintiff when the orders were made on 24 November 1999 establishes for the purposes of Part 9 rule 10 that it was impracticable, for ample reasons, to serve the statement of claim on the defendant personally or in accordance with the law of the country in which service would be effected.
(a) Mr Riordan believed on 19 November 1999 that the defendant was a resident of Auckland;
(b) he was told by a private investigator on 11 November 1999 that the defendant had been lecturing in law at the University of Auckland, had a postal address in Auckland and had a mobile telephone number;
(c) by August 1999 he knew that the defendant came to Australia from New Zealand on 22 July 1999 on a temporary visit and left for New Zealand on 26 July 1999;
(d) he also knew that the defendant had come to Australia from New Zealand and left for New Zealand on several other dates in 1999.
75 The defendant submitted, as a matter of fact, that there was no obstacle to the plaintiff seeking to locate the defendant in Auckland in order to effect service on him there, but that the plaintiff had made no attempts to do so. I do not accept any such inference. Other evidence shows that Mr Riordan had not obtained a residential address for the defendant in Auckland or anywhere else, notwithstanding the efforts of the private investigator and his own telephone contact with the defendant's son. File notes annexed to his affidavit show that substantial attempts were made by him personally to make contact with the defendant. However, the evidence that I regard as most significant is the telephone conversation between Mr Riordan in Sydney and the defendant in Copenhagen. When Mr Riordan said that he would not disclose how he obtained the defendant's mobile telephone number, the defendant refused to assist Mr Riordan and terminated the conversation. In my opinion that is evidence, confirming other less specific evidence in the affidavit and exhibits, that the defendant would make it difficult for the plaintiff to serve him. When the evidence is considered as a whole, it provides, in my view, a strong case for the proposition that personal service on the defendant would be impracticable.77 My conclusion, therefore, is that the prerequisite of ‘impracticability’ required by Part 9 rule 10 was established to the requisite degree by the evidence placed before the Deputy Registrar before the orders for substituted service were made on 24 November 1999.76 The defendant also relies on the proposition of law that proof of realistic attempts to effect service at the place where the defendant resided was a necessary pre-requisite to an order for substituted service (if it could have been made at all). It is unnecessary for me to decide whether this asserted proposition of law is correct, because I have taken the view, on the facts, that realistic attempts to effect service were proven in this case. However, in my opinion, the cases do not, for the reasons I have given, support such an absolute proposition. Proof of realistic attempts to effect service is an obvious way of establishing impracticability, and will normally be expected. But the Rosenbaum case, and Tamberlin J's observations in the Ricegrowers Cooperative case, indicate that in exceptional circumstances a case of impracticability can be made out even if there have been no attempts at service in the jurisdiction of residence.
Equitable jurisdiction
78 As Young J pointed out in the ‘sometimes’ judgment, before the introduction of the judicature system courts of equity developed their own jurisdictional rules. Not only did they exercise jurisdiction to grant in personam relief over a defendant personally present within the territorial jurisdiction, but they were prepared to rely on the defendant's personal presence to make decrees concerning property, including foreign property. For example, relying on the defendant's personal presence and the maxim that equity acts in personam , courts of equity asserted jurisdiction to make orders in the nature of a decree of specific performance with respect to foreign land: Penn v Baltimore (1750) 1 Ves Sen 444 [27 ER 1132]; Richard West & Partners v Dick [1969] 2 Ch 436. The corollary is that the Court has no power to exercise jurisdiction by the grant of specific relief against anyone beyond the territorial limits of its jurisdiction, until jurisdiction over that person has been properly obtained or assumed: ANZ Grindlay's Bank Plc v Hussein Salaheh Hussein Abdul Fattah (1991) 4 WAR 296, 300.
79 Generally speaking, the judicature reforms in England consolidated the separate courts into a single high court of justice which possessed all the jurisdiction of each of the former courts. Thus the special equitable jurisdiction was available to the consolidated court generally, although the occasion for exercising that jurisdiction was an application for specific relief and such applications were, for convenience, assigned to the Chancery Division. The judicature reforms in other jurisdictions, including New South Wales, have the same general effect. In Laurie v Carroll the High Court held (at 327) that the principles governing substituted service in Chancery had been superseded after the introduction of the judicature system. However, the High Court appears to have acknowledged the continued existence of a special equitable jurisdiction. Their Honours noted (at 333) that the plaintiffs might have asserted equitable rights, by contending that there was a partnership between them and Mr Laurie, with the consequence that the contract he made with Dame Margot Fonteyn was a partnership contract the fruits of which were partnership property. They contemplated that this action could be brought in the Supreme Court of New South Wales, in which at that time there was a separate, unfused equitable jurisdiction, but as I read their Honours' judgment, their observations were about the assertion of equitable rights rather than the existence of a separate equitable jurisdiction.
80 This leads to the questions, is the plaintiff in this case seeking relief governed by the Court's special equitable jurisdiction, and if so, is the special equitable jurisdiction ample enough to support the Deputy Registrar's order for substituted service even if the general jurisdictional rules would not do so? The plaintiff seeks a declaratory order, and an order to prevent the defendant from managing corporations, and an injunction. As Young J pointed out in the ‘sometimes’ judgment (at paragraph 19), the proceedings involve a statutory cause of action rather than the assertion of equitable rights. It may be, however, that the special jurisdictional rules applying to the assertion of equitable rights should be extended by analogy to the statutory rights asserted by the plaintiff in this case.
82 At the hearing to determine the separate question, neither party sought to take up and develop Young J's interesting observations on the equitable jurisdiction. I have recorded them because of their potential importance to future cases. It is unnecessary for me to express any conclusion about these issues. However, having heard the general argument at the hearing on 18 April 2001, my tentative view is to be sceptical that the application of equitable rules as to jurisdiction would produce any different result, in this case, from the result produced by the general analysis that I have set out. This is not a case where specific relief is sought with respect to land, and it is not immediately obvious why the statutory rights asserted by the plaintiff should be subject to any special jurisdictional rules.81 Young J speculated in the ‘sometimes’ judgment (at paragraph 20) that the Court may have the jurisdiction to make a declaratory order in proceedings against an overseas defendant as long as there is a sufficient nexus with New South Wales (referring to Denkman v Denkman 14 NYS (2d) 450 (1939)), although perhaps the Court might generally decline to exercise its discretion to make a declaration where the defendant resides abroad. He raised the question whether the Court could, without service upon the defendant, make an order preventing him from managing a corporation, on the basis that the defendant, upon returning to Australia, could apply to set the order aside.
83 In my opinion, the correct answer to the separate question is that the Court had jurisdiction to make the order of 24 November 1999 in these proceedings. Counsel for the defendant has asked me not to make any orders immediately. I am content to stand the matter over for a short time and to make orders and to hear argument as to costs on the next occasion.
Conclusions
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10
3