Bauer v Aussie Wanderer Tours Pty Ltd
[2020] WADC 91
•19 JUNE 2020
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: BAUER -v- AUSSIE WANDERER TOURS PTY LTD [2020] WADC 91
CORAM: PRINCIPAL REGISTRAR MELVILLE
HEARD: 27 FEBRUARY & 26 MAY 2020
DELIVERED : 19 JUNE 2020
FILE NO/S: CIV 3262 of 2017
BETWEEN: TANJA BAUER
Plaintiff
AND
AUSSIE WANDERER TOURS PTY LTD
First Defendant
REAL AUSSIE ADVENTURES PTY LTD
Second Defendant
THE TRAVEL & MARKETING COMPANY GMBH (HRB 19981 HANDELREGISTER TRAUNSTEIN GERMANY)
Third Defendant
Catchwords:
Validity of service contrary to Corporations Act s 500(2) - Joinder of insurer of de-registered company - Limitation defence of insured available to insurer - 'Accrued right of limitation'
Legislation:
Corporation Act 2001 (WA), s 601AG, s 500(2)
Rules of the Supreme Court 1971 (WA), O 7 r 1
Result:
QBE Insurance (Australia) Ltd be joined as a defendant to this action
Representation:
Counsel:
| Plaintiff | : | Mr J G M P Fiocco & Dr G Janssen |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Non-party | : | Mr J P Wilson |
Solicitors:
| Plaintiff | : | Janssen & Maluga Legal |
| First Defendant | : | Not applicable |
| Second Defendant | : | Not applicable |
| Third Defendant | : | Not applicable |
| Non-party | : | Gilchrist Connell |
Case(s) referred to in decision(s):
Alinta 2000 Ltd v Petkov [2012] WASCA 258
Allianz Australia Insurance Ltd v Mercer [2014] TASFC 3
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127
Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158
Commonwealth of Australia v Verwayen [1990] HCA 39
Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11
PRINCIPAL REGISTRAR MELVILLE:
Background
By a generally endorsed writ dated 5 September 2017 the plaintiff commenced proceedings against the defendants for damages as a result of serious spinal injuries she suffered as a result of the defendants' alleged breach of contract and alleged negligence.
In her statement of claim the plaintiff alleges that pursuant to a contract she entered into with the third defendant The Travel & Marketing Company GMBH (HRB 19981 Handelregister Traunstein Germany) (TMC), a company incorporated in accordance with the laws of the Federal Republic of Germany, TMC sold and booked a guided tour for her, was to perform the contract itself and through its agents being the first and second Defendants and arranged for the tour to be 'delivered by either the First Defendant or the Second Defendant…'.
At par 4 of the statement of claim the plaintiff alleges the second defendant (Aussie Adventures) was the Australian booking agent for TMC and that Aussie Adventures engaged the first defendant (Aussie Wanderer) to conduct the guided tour.
The plaintiff suffered her injuries on the guided tour on 6 September 2014, when she slipped and fell several metres while navigating through a slippery narrow pathway in the Karijini National Park.
The writ, whilst issued on 5 September 2017 and valid for service for 12 months thereafter, was not served on Aussie Wanderer in that period. On 5 June 2018 Aussie Wanderer was put into liquidation.[1] The ASIC record shows the liquidator as David Ashley Norman Hurt of 'WA Insolvency Solutions level 49, 108 St George's Terrace Perth WA 6000'.
[1] Affidavit of Professor Dr Gerhard Janssen sworn 24 February 2020, par 23, annexure GJ13.
On 2 September 2019 armed with the knowledge that Aussie Wanderer was in liquidation the plaintiff filed an ex parte application to this court for an order extending the validity of the writ. The application was granted and the validity of the writ extended to 30 October 2019.[2]
[2] Affidavit of Professor Dr Gerhard Janssen sworn 24 February 2020, par 23.
The writ was then served on the liquidator by sending it by registered mail at the address given in the ASIC records, the writ being posted on 27 September 2019.[3]
[3] Affidavit of Professor Dr Gerhard Janssen sworn 24 February 2020, par 24, annexure GJ14.
On 5 November 2019 Aussie Wanderer was deregistered. On 14 November 2019 the plaintiff applied for an order amending the writ by substituting QBE Insurance (Australia) Ltd ACN 003191035 for Aussie Wanderer as first defendant and an order requiring the plaintiff to serve the amended writ on QBE within 14 days of the date of the order. The application was brought having regard to the provisions of s 601AG of the Corporations Act 2001 (Cth) on the basis that QBE had been at all material times the insurer of Aussie Wanderer.
QBE which has a right to be heard on the application[4] opposes the making of the order. The application was first argued on 27 February 2020 and my decision reserved. The plaintiff then successfully applied for leave to file further evidence and this application was further heard on 26 May 2020.
[4] Alinta 2000 Ltd v Petkov [2012] WASCA 258 [58].
The application sought leave to amend the writ of summons by substituting QBE for Aussie Wanderer without first seeking an order for substitution or joinder of QBE pursuant to RSC O 18 r 6 or r 7(2). Nevertheless, the parties have proceeded and argued on the basis that the application is for joinder of QBE as the first defendant in lieu of Aussie Wanderer. Amendment of the writ would be consequential on an order for joinder.
QBE's submissions
QBE opposes the application on the basis that the application to join it serves no purpose. QBE submits that at the time the plaintiff brought the application for an order extending the validity of the writ and at the time the order was made extending the validity of the writ Aussie Wanderer was in liquidation and by virtue of the Corporations Act s 500(2) the action could not be proceeded with.
The Corporations Act s 500(2) provides that:
After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
QBE submits that accordingly the order made extending the validity of the writ was itself invalid with the consequence that the purported service of the writ in accordance with the order was not valid.
Further, at the time of the application for the order the limitation period had expired. This is said to give rise to an 'accrued right of limitation' for Aussie Wanderer, a right to which QBE as the insurer of its now deregistered insured may avail itself.
Discussion
It was not clear to me whether QBE was submitting it should not be joined because Aussie Wanderer had a limitation defence, or whether the opposition is based, at least in part, on the idea that if an order is made 'substituting' QBE for the deregistered Aussie Wanderer, QBE will for all purposes be treated as though it had been a party to the proceedings from the date of issue of the writ and invalid service of the writ on Aussie Wanderer should therefore be seen as giving QBE the opportunity to apply to set aside service. QBE submits that such an application would be successful.
The plaintiff's action against Aussie Wanderer for damages was commenced within the limitation period. Accordingly, Aussie Wanderer never had a limitation defence. Assuming for the moment that the order extending the validity of the writ for service was invalid, the writ nevertheless remains valid and is not a nullity.[5]
[5] Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158 [19].
A failure to serve the writ within the limitation period or any period of validity or extended validity of the writ does not create a limitation defence.[6]
[6] Brealey v Board of Management Royal Perth Hospital [11].
Further, and subject to any argument about validity of service once the Corporations Act s 500(2) is enlivened, service of a writ which is not valid for service is not a nullity but an irregularity.[7] In those circumstances it is open to a defendant to file a conditional appearance and apply to have the service set aside as irregular pursuant to the provisions of the Rules of the Supreme Court 1971 (WA) (RSC) O 2. Whether such an application would be successful is another question.
[7] Brealey v Board of Management Royal Perth Hospital [19] (Malcolm J) and [73] (Anderson J).
QBE's reference to an 'accrued right of limitation' is a reference to the comments of Ipp J in Brealey v Board of Management Royal Perth Hospital at [53]. That was a case involving an application by plaintiff under RSC O 7 r 1 for an order retrospectively extending the validity of the writ served at a time when the limitation period had expired and at a time when the validity of the writ for service had expired. In discussing the care and caution that needed to be exercised when using RSC O 2 r 1 to remedy an irregularity in connection with the extension, renewal or service of a writ in conjunction with O 7 r 1 Ipp J drew attention to the undesirability of allowing a plaintiff to issue a writ before the expiry of the limitation period and then delay service for an indefinite period and the unfairness this can visit upon the potential defendant.[8]
[8] Brealey [45].
At [53] Ipp J observed that bringing the application to extend the validity of the writ at a time at which the writ was stale and the limitation period had expired was a 'category (3) case' and that it could properly be said that to bring the application at such a time was to bring the application at a time when the defendant on whom the writ had not been served had an accrued right of limitation. To view the application in that light meant the plaintiff is required to give a satisfactory explanation for the plaintiff's failure to apply for an extension before the validity of the writ expired.
Ipp J's comments are not to be taken as support for the proposition that a defendant does in fact have a limitation defence. His comments are confined to the question of what weight to give, in the exercise of a discretion to retrospectively extend the validity of a writ, to the fact of delay in the bringing the application until after the writ was not valid for service and after the time at which a defendant would otherwise have had a limitation defence.
In my view the weight that in the past would be given to this consideration has been affected by the subsequent introduction of the Limitation Act 2005 (WA) and the ability of a plaintiff to apply to extend a limitation period, including the bringing of an application in proceedings that are already pending.[9] Further, it is not always easy to determine when a cause of action accrues or whether there is in fact a limitation defence. For example a defendant may be estopped from pleading a limitation defence.[10] Generally the question of whether a defendant has a limitation defence is best left the trial.[11]
[9] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127.
[10] Commonwealth of Australia v Verwayen [1990] HCA 39 (Voyager case).
[11] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [47].
There is in fact no evidence before the court that QBE would plead any limitation defence even if one was available.
The validity of orders extending the validity of the writ
In my view it is not necessary for me to determine whether the effect of the Corporations Act s 500 results in the conclusion that the order extending the validity of the writ and any subsequent service thereof is invalid and a nullity.
The reason for this is that Aussie Wanderer is now deregistered. It is the human equivalent of deceased. The question of whether it was validly served has now been rendered otiose or irrelevant. No judgement can be entered against Aussie Wanderer either by way of default judgement or otherwise.
Whether Aussie Wanderer was or was not validly served is immaterial because by the Corporations Act 2001 s 601AG the plaintiff now has a new cause of action against QBE that arose upon deregistration of Aussie Wanderer on 5 November 2019.[12] Any order joining QBE as a party will only take effect from the date of service on QBE of the amended writ.[13]
[12] Allianz Australia Insurance Ltd v Mercer [2014] TASFC 3 [183].
[13] RSC O 18 r 8(4).
QBE in seeking to defend itself will have all the defences available to it that it would otherwise have had in defending a claim brought against it by its insured Aussie Wanderer, together with any defences Aussie Wanderer might have against the plaintiff.
If QBE's submission that Aussie Wanderer had a limitation defence is correct then QBE has the option of pleading that as part of its defence. Insofar as QBE refers to the 'accrued right of limitation' that Aussie Wanderer might be described as having, that was a term used in the context of considering how discretion should be exercised on an application to extend the validity of a writ. The plaintiff's application before me is not to extend the validity of the writ but to substitute QBE or join QBE as a party to the current proceedings pursuant to RSC O 18.
Conclusion
The writ remains on foot and valid for everything except service. It would be open to the plaintiff to apply under RSC O 7 r 2 to extend the validity of the writ for service. Such an application would require consideration of all relevant criteria such as the explanation for the delay, QBE's 'accrued right of limitation' argument and the respective prejudices to the parties involved. It would require evidence addressing all of those issues. The application may or may not be successful, but the question of its success or failure is not a question to be decided in this application.
However, it is my view that procedurally the correct approach is not to order QBE be made a party to the action and the proceedings be carried on as if QBE was substituted for Aussie Wanderer pursuant to RSC O 18 r 7(2) but, to order Aussie Wanderer cease to be a party to the proceedings and that QBE be joined as a party. This is because O 18 r 7(2), which deals with substitution, only applies in circumstances where 'the interest or liability of any party is assigned or transmitted to or devolves upon some other person', whereas s 601AC of the Corporations Act creates a new statutory cause of action for the plaintiff against QBE arising on the date of deregistration of Aussie Wanderer.
It is my view that QBE should be joined to the action following deregistration of Aussie Wanderer. The plaintiff has a new cause of action against QBE which arose on 5 November 2019, which cause of action involves the question of Aussie Wanderer's tort liability to the plaintiff.
I would not be inclined to make the second order sought in the summons which is that the writ be served on QBE within 14 days of this order. My preliminary view is that the writ is currently invalid for service and it is not apparent on the face of the chamber summons that an order is sought to extend the validity of the writ. Although to some extent it might be said the application for the order QBE be served within 14 days implicitly seeks such an order, and that there is a certain lack of logic in ordering joinder of a party who cannot be validly served, nevertheless joinder is one thing and extending the validity of the writ for service, if it is required, is another. Neither party has really addressed me on the issue. I will hear further from the parties on this question.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AC
Court Officer19 JUNE 2020
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