Bass Metals Ltd v LIONGOLD Corp Ltd - [2013] WASC 168

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BASS METALS LTD -v- LIONGOLD CORP LTD [2013] WASC 168

CORAM: MASTER SANDERSON

HEARD: 26 MARCH 2013

DELIVERED : 7 MAY 2013

FILE NO/S: CIV 2718 of 2012

BETWEEN: BASS METALS LTD (ACN 109 933 995)
Plaintiff
AND
LIONGOLD CORP LTD (Bermuda Company No 35500)
Defendant

Catchwords:

Service of process - Application to set aside service where contract sets out mode of service - Foreign corporation - Effect of deeming provision of O 9 r 3

Legislation:

Nil

Result:

Service effective

Category: A

Representation:

Counsel:

Plaintiff: Mr C J Steel
Defendant: Mr M J Feutrill

Solicitors:

Plaintiff: Ashurst Australia
Defendant: Jackson McDonald

Case(s) referred to in judgment(s):

Howard v National Bank of New Zealand (2002) 121 FCR 366
Muller v Dalgety & Co Ltd (1909) 9 CLR 693

MASTER SANDERSON: By an application lodged on 21 November 2012 the defendant applied for orders setting aside the service of the writ of summons in these proceedings outside Western Australia. The application was made pursuant to O 12 r 6(2) of the Rules of the Supreme Court 1971 (WA) (the Rules). The application represents perhaps the most pointless interlocutory dispute imaginable.
The defendant alleges the service of the writ was not effective for the following reasons:
(a)As the plaintiff purported to serve the writ on the defendant outside Western Australia, but within the Commonwealth of Australia, the provisions of the Service and Execution of Process Act 1992 (Cth) (SEPA) exclusively governs such purported service;
(b)Service on a body corporate that is neither a company nor registered body under the Corporations Act 2001 (Cth) must be performed in accordance with s 10 and s 15(4) of SEPA and must have attached the notice required by s 16 of SEPA;
(c)Section 10 and s 15(4) of SEPA provide for service on such a body corporate at its head office, registered office or principle place of business;
(d)The defendant has no head office, registered office or place of business in New South Wales, Victoria or Australia;
(e)In the case of the purported service in New South Wales, the writ of summons was not served with the notice required by s 16 and was not, in any event, served in accordance with s 10 and s 15(4) of SEPA; and
(f)In the case of purported service in Victoria the writ of summons was not served in accordance with s 10 and s 15(4) of SEPA.
Some background facts, none of which were in dispute, put the application in context. The defendant is a company incorporated in accordance with the laws of Bermuda. It is a public company listed on the Singapore Stock Exchange. It is not a company incorporated or taken to be incorporated under the Corporations Act. The defendant is not a registered body within the meaning of that expression in s 601CX of the Corporations Act. It has no office in Australia, it has no business in Australia and it has no address in Australia. The defendant holds shares in certain companies that are incorporated in and carry on business in Australia. It is an investment company that invests in various mining companies with operations in various parts of the world. It carries out its investing from an office in Singapore.
Mr Matthew Gill is the managing director of Castlemaine Goldfields Ltd (Castlemaine). Castlemaine employs Mr Gill and pays his salary. Castlemaine has an office from which it conducts is business in Ballarat in Victoria. Mr Gill has a business card for his position as managing director of Castlemaine that refers to his place of business, and that of Castlemaine, as Ballarat in Victoria. He has an email address directed to a server in Victoria that relates to correspondence to him in his capacity as managing director of Castlemaine. There is no signage or livery at those premises relating to the defendant.
Mr Gill was appointed chief operations officer for the defendant in September 2012. The defendant pays Castlemaine for the services Mr Gill renders to the defendant. Mr Gill has a permanent office in Singapore that he attends once a month for about a week to perform services for the defendant. Mr Gill's role as chief operations officer is to provide advice to the defendant relating to the operations of companies in which the defendant has invested and assess potential investment opportunities identified by employees and officers of the defendant working in the Singapore office. The defendant says Mr Gill has no authority to enter into investment transactions for and on behalf of the defendant, nor is he involved in soliciting or negotiating such transactions. Mr Gill's business card relating to his position as chief operations officer of the defendant refers to his place of business, and that of the defendant, as Singapore. Mr Gill has a business telephone number that is connected to his office in Singapore. Mr Gill has an email address directed to a server in Singapore that relates to correspondence to him in his capacity as chief operations officer of the defendant.
The writ of summons issued by the plaintiff was endorsed with a statement of claim. What follows is a summary of the allegations made in the statement of claim. The plaintiff and the defendant entered into a written contract for the sale and purchase of all shares in Hellyer Mill Operations Pty Ltd on 5 July 2012. As might be expected the agreement contained certain terms and conditions which might be characterised as conditions precedent. The plaintiff alleges all of these conditions were met. It then alleges the defendant repudiated the agreement in a number of different ways. The plaintiff says it accepted repudiation of the agreement and terminated the contract on 11 September 2012.
On or about 17 October 2012 a copy of the writ of summons (with a notice in accordance with s 16 of the SEPA and Form 1 of the Service and Execution of Process Act 1992 (Cth) was delivered to the registered office of Castlemaine at 10 Woolshed Gully Drive, Mount Clear, Ballarat, Victoria. On 18 October 2012 a copy of the writ of summons (without an attached Form 1 notice) was delivered to the office of Holding Redlich at Level 65, MLC Centre, 19 Martin Place, Sydney, New South Wales. On 25 October 2012 a copy of the writ of summons (with an attached Form 1 notice) was delivered to Mr Gill in Victoria. The defendant entered a conditional appearance on 7 November 2012. This application was then made within time pursuant to the Rules.
A copy of the share sale agreement the subject of the dispute between the parties appears as attachment 'B' to the affidavit of Bede Gerard Haines sworn in support of this application on 16 November 2012. Clause 20.1 of that agreement is presently relevant and it is in the following terms:
20.GENERAL
20.1Governing law
(a)This document is governed by the laws of Western Australia.
(b)Each party submits to the non‑exclusive jurisdiction of the courts of the State of Western Australia, and any court that may hear appeals from any of those courts, for any proceedings in connection with this document.
(c)The Buyer irrevocably waives any objection to the venue of any proceedings on the ground that they have been brought in an inconvenient forum.
(d)The Buyer appoints Holding Redlich of Level 65, 19 Martin Place, Sydney as its agent to receive service of process for any proceedings in connection with this document. The Buyer undertakes to use reasonable endeavours to maintain this appointment until 24 months after Completion (unless this document is terminated under clause 4.4), and agrees that any such process served on that person is taken to be served on it.
It is worth pausing at this point to consider precisely what the defendant is attempting to do. Based upon cl 20.1 of the agreement there can be no doubt this court has jurisdiction in relation to the dispute between the parties. Even assuming the defendant is not resident in the jurisdiction - that is either in Western Australia or elsewhere in Australia - the so‑called long‑arm jurisdiction of the court can be invoked. Under O 10 r 1(1)(e) of the Rules leave could be obtained to serve this writ out of the jurisdiction. There is no suggestion the defendant is not aware of the writ nor can there be any suggestion this is in someway a concocted dispute. But instead of resolving the issues between the parties the defendant has chosen to take a point which at best could only delay the plaintiff's action. Be that as it may the application has been made and must be resolved.
It is open to parties to litigation to agree on a mode of service different from those provided for in the Rules unless the Rules themselves prohibit consensual service: see Howard v National Bank of New Zealand (2002) 121 FCR 366, 369. Order 9 r 3(1) of the Rules reads as follows:
3.Serving writ in accordance with contract, effect of
(1)Where -
(a)a contract contains a term to the effect that the Supreme Court shall have jurisdiction to hear and determine any action in respect of a contract or, apart from any such term, the Supreme Court has jurisdiction to hear and determine any such action; and
(b)the contract provides that, in the event of any action in respect of the contract being begun, the process by which it is begun may be served on the defendant, or on such other person on his behalf as may be specified in the contract, in such manner or at such place (whether within or out of the jurisdiction), as may be so specified,
then if an action in respect of the contract is begun in the Supreme Court and the writ by which it is begun is served in accordance with the contract the writ shall, subject to subrule (2), be deemed to have been duly served on the defendant.
The plaintiff points out the action is in connection with the share sale agreement. The share sale agreement complies with the necessary conditions for O 9 r 3 of the Rules to operate. Pursuant to that rule a writ of summons is 'deemed' to be served. Notwithstanding that it may not have been served pursuant to the requirements of SEPA for the purposes of the Rules it is deemed to have been served.
In support of its position the plaintiff relies in part on the judgment of Griffiths CJ in Muller v Dalgety & Co Ltd (1909) 9 CLR 693. The Chief Justice said:
The word 'deemed' may be used in either sense, but it is more commonly used for the purpose of creating what James LJ, and Lord Cairns LC, called a 'statutory fiction' ...; that is, for the purpose of extending the meaning of some term to a subject‑matter which it does not properly designate. When used in that sense it becomes very important to consider the purpose for which the statutory fiction is introduced. An instance of the use of the word in the other sense is to be found in the case of R v Norfolk City Council 60 LJ QB 379, where it was held that in a clause beginning - 'The following … shall be deemed to be', the word imported an exclusive definition and not an extension of meaning (696).
It is the defendant's position O 9 r 3 of the Rules and cl 20.1 of the share sale agreement have no application. Section 8 of SEPA provides that, subject to the Act, SEPA applies to the exclusion of the law of a State with respect to service in another State of process. Section 10, s 15(4) and s 16 of SEPA provide for a manner in which service of process must be effected on a body corporate that is not a company or registered body. The defendant further submits there is no provision in SEPA that allows for service to be effected pursuant to an agreement between the parties. The efficacy of such agreements is not tested where parties enter unconditional appearances and submit to the jurisdiction of the court.
The defendant submits the extent to which O 9 r 3(1) of the Rules permit service to be effected pursuant to an agreement in a State other than Western Australia is inconsistent with s 10 and s 15(4) of SEPA. Accordingly it was submitted the rule must be invalid pursuant to s 109 of the Commonwealth Constitution.
In my view the plaintiff's submission should be accepted. It may well be service on solicitors in New South Wales was ineffective. But that is not what O 9 r 3 of the Rules is saying. What it is saying is if the parties agree to a regime and regime is followed then service is 'deemed' effective. It does not mean that service in the sense of complying with any statute actually occurred. This has a parallel in an order for substituted service. A financier seeking to recover money under a mortgage may not be able to serve the registered proprietor of a property. They obtain an order for substituted service. Service may be by a notice in the general notices section of a newspaper or by posting the writ to the last known address of the registered proprietor or, increasingly, by serving a copy of the notice by email or notifying the registered proprietor of the existence of the writ through Twitter. Often the writ comes to the attention of the registered proprietor. But often it does not. There is no actual service. But there is deemed service. A judgment entered after an order for substituted service is made cannot be set aside as irregular if the defendant shows the writ never actually came to his or her attention. So here there is deemed service.
There was one further argument raised on behalf of the defendant. It was said by the time the writ was issued the firm of Holding Redlich did not have instructions to accept service. A copy of a letter to that effect from Holding Redlich addressed to the plaintiff's solicitors appears as attachment 'G' to Mr Haines' affidavit. With respect that submission ignores what is actually said in cl 20.1 of the share sale agreement and O 9 r 3 of the Rules. The first sentence of cl 20.1(d) clearly appoints Holding Redlich as the defendant's agents to accept service. What the first part of the second sentence of that clause means - that is, the reference to the defendant's use of 'reasonable endeavours' to maintain the appointment - is not entirely clear. But taken as a whole the clause does make it clear service on Holding Redlich is deemed service on the defendant. Furthermore service has been effected 'in accordance with the contract' as is required by O 9 r 3 of the Rules. Taken together these two provisions are sufficient to allow for effective service.
The defendant's application is dismissed. The appearance will become unconditional and the defendant has 14 days within which to file a defence. I will hear the parties as to any further orders and as to costs.