Baz v Minarto

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PERSONAL INJURIES LIST

S CI 2015 03148

ROXANNE STEPHANIE BAZ	Plaintiff
v
HARRY MINARTO	First Defendant
SIOE KIEM LO	Second Defendant
WHITE RAY (OAKLEIGH) PTY LTD (ACN 074 712 440) TRADING AS RAY WHITE OAKLEIGH	Third Defendant

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 February 2017
DATE OF RULING:	31 March 2017
CASE MAY BE CITED AS:	Baz v Minarto and ors
MEDIUM NEUTRAL CITATION:	[2017] VSC 160

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PRACTICE AND PROCEDURE – Application to set aside order for substituted service – Where conditional appearance filed – Substituted Service of writ and amended statement of claim – Where defendant residing in Indonesia – Where order for substituted service set aside – Informal Service – Where informal service not confirmed – Application to set aside extension of writ – Where good reason for extending writ – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 46.08, 6.10, 6.11, 7.02, 7.05, 7.09, 8.08, 2.01 – Civil Procedure Act 2010 (Vic) ss4, 7, 8, 9, 10, 16.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A C Dimsey	Shine Lawyers
For the First Defendant
For the Second Defendant	Mr A Trichardt	Charles Fice Solicitors
For the Third Defendant

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Summary.............................................................................................................................................. 1

Background......................................................................................................................................... 1

Evidence............................................................................................................................................... 5

Applicable principles........................................................................................................................ 6

Submissions on service................................................................................................................... 16

Second Defendant’s Submissions.................................................................................... 16
Plaintiff’s Submissions...................................................................................................... 18

Consideration – substituted service order................................................................................... 19

Consideration - service.................................................................................................................... 20

Submissions on extension of writ................................................................................................. 24

Second Defendant’s submissions.................................................................................... 24
Plaintiff’s submissions...................................................................................................... 25

Consideration – extension of writ................................................................................................. 26

Conclusion......................................................................................................................................... 27

HER HONOUR:

Introduction

This ruling concerns whether or not orders made for extension of a writ and substituted service should be set aside. The orders were made by a Judicial Registrar on 19 August 2016 and 16 September 2016 respectively.

The application to set aside the orders is made by summons filed by the second defendant on 15 December 2016. The plaintiff opposes the application.

The second defendant makes her application pursuant to r 46.08 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) on the basis that the orders were made ex parte and without notice to her. It was common ground between the parties that the Court had jurisdiction to hear the application under r 46.08.

Summary

The Court will allow the application to set aside the orders for substituted service of the second defendant.

The Court will dismiss the application to set aside the orders made for extension of writ.

Background

The plaintiff filed a writ on 18 June 2015. On 11 March 2016, an amended writ and statement of claim was filed which simply corrected a typographical error in the spelling of the name of the first defendant. The first defendant’s defence to the amended statement of claim was filed on 19 July 2016.

The amended statement of claim alleges that the first and second defendants were each a registered proprietor of premises in Clayton (‘the premises’) and a landlord of the premises. It alleges the third defendant was appointed by the first and second defendants to manage the premises and any and all residential tenancies that existed from time to time in relation to the premises. The first defendant admits that he was a registered proprietor and landlord of the premises and says that he, the second defendant and third defendant, entered into an agreement entitled ‘Exclusive Leasing and Managing Authority’. The first defendant says that, pursuant to that agreement, the first and second defendants appointed the third defendant to act as their agent to manage the premises and all residential tenancies that existed from time to time in relation to the premises.

The plaintiff alleges that the first and second defendants, via the third defendant, entered into a Residential Tenancy Agreement with Christopher Andrew Wheelahan. The first defendant says that Chandra Minarto, as landlord, and Mr Wheelahan as tenant, entered into a Residential Tenancy Agreement. Mr Chandra Minarto is not a party to these proceedings and it appears common ground between the parties that he is the son of the first and second defendants.

The plaintiff alleges that she and Mr Wheelahan were friends. The first defendant does not admit this allegation. The plaintiff alleges that at all material times from the commencement of the lease there was no smoke detector, smoke alarm or other fire warning device of any nature installed anywhere within the room rented by Mr Wheelahan. The first defendant does not admit this allegation and says that he was not aware and not made aware by the third defendant that there was no smoke detector, smoke alarm or other fire warning device of any nature, nor any defect that might injure a person.

The plaintiff alleges that on 16 September 2012, she suffered catastrophic burns to her right forearm and hand. The first defendant admits the plaintiff suffered catastrophic burns and says they did not occur in the room rented by Mr Wheelahan, but another room in the same premises.

The plaintiff alleges that the injuries included resultant amputation of her right hand and forearm and severe psychiatric injury. This is not admitted.

The plaintiff alleges that at all material times the first and second defendants each owed the plaintiff a duty pursuant to s 14B of the Wrongs Act 1958 to ensure the plaintiff was not injured by reason of the state of the premises or of things done or omitted to be done in relation to the state of the premises. This allegation is denied by the first defendant. The plaintiff alleges that the first and second defendant each owed the plaintiff a duty to take reasonable care to ensure the premises were safe and that persons, including the plaintiff, would not be injured by reason of the state of the premises. On the other hand, the first defendant says that if a duty was owed to the plaintiff, it was discharged by delegating it to the third defendant pursuant to the management agreement, and otherwise denies the allegation. The first defendant also denies the plaintiff’s allegations that the injuries were caused by the negligence of the first and second defendants. Similarly, the allegation of breach of statutory duty is denied.

The plaintiff makes allegations against the third defendant. They are not relevant for the purpose of this ruling.

The plaintiff claims damages for pain and suffering, loss of earning and earning capacity, and medical and treatment costs.

On 11 March 2016, orders were made by consent between the plaintiff and the third defendant. The orders recorded in ‘Other Matters’ that the plaintiff was to make an application for substituted service to the first and second defendants by 18 March 2016.

On 18 March 2016, the plaintiff filed a summons seeking orders for substituted service on the first and second defendants.

On 26 April 2016, the Court made orders for substituted service on the first defendant. It declined to make orders for substituted service on the second defendant.

On 23 May 2016, the first defendant filed a Notice of Appearance.

On 16 August 2016, the plaintiff filed a summons seeking orders for substituted service on the second defendant by delivery to the solicitors of the first defendant. The hearing was listed for 19 August 2016.

On 19 August 2016, the Court made orders pursuant to r 5.12(2) of the Rules extending the period of validity for service of the writ until 18 June 2017. This is one of the orders that the second defendant seeks to have set aside. The orders were made on return of the plaintiff’s summons filed 16 August 2016, although the plaintiff’s summons had not sought those orders in the summons. Counsel for the first defendant was in Court and he is also the same counsel appearing now for the second defendant.

The application for substituted service of the second defendant, that had been made by summons on 16 August 2016, was heard on 16 September 2016. On that date, the Court made orders for substituted service of the second defendant by posting the amended writ and statement of claim, with an Indonesian translation of those documents, to the second defendant’s address in Indonesia. The reasons for the Court’s orders were set out in the ‘Other Matters’ sections of the orders. This included the following:

It has been submitted to the Court that service upon the second defendant in Indonesia in accordance with the requirements of order 7 could take in excess of six months. Having regard to the affidavit of Mr Christopher Charles, sworn on 15 September 2016, there would be a real likelihood that the first defendant would obstruct or prevent service upon the second defendant. Guided by the objects of the Act, and the requirement upon the Court to further the overarching purpose, I consider that it is impracticable for the plaintiff to serve the amended writ and statement of claim upon the second defendant in the manner required by order 7.
I will make an order under rule 6.10 that service of the plaintiff’s amended writ and statement of claim upon the second defendant be effected by posting this, with an Indonesian translation of these documents, to the second defendant’s known address in Semarang, Indonesia.
...
The affidavit of Mr Charles both refers to and provides a copy of an email from Mr Andi Lie. That email is expressed to be written on behalf of the first defendant and advises that the first defendant has intercepted mail relating to these proceedings from the second defendant which included the amended writ and statement of claim, and that he has withheld information about these proceedings from the second defendant, his domestic partner.
I expect that the solicitors for the first defendant will emphasise to the first defendant, if they have not already done so, his obligations under the Act, and advise him of the sanctions that may be applied to a contravention of the overarching obligations, including costs orders and compensation orders. Counsel for both the plaintiff and the first defendant appeared at this hearing on 16 September 2016. (underline added)

On 1 December 2016, a conditional appearance was filed on behalf of the second defendant. The conditional appearance noted an address for the defendant in Semarang, Indonesia. The conditional appearance indicates that the document was prepared by solicitors who also represent the first defendant.

On 15 December 2016, the second defendant filed the summons that is the subject of this ruling.

At the hearing of this matter on 24 February 2017, the second defendant was represented by counsel who had previously appeared on behalf of the first defendant.

Evidence

The plaintiff’s solicitor, Caitlyn Renee Lake, has filed four affidavits in this proceeding sworn on the following dates:

(a) 18 March 2016 (‘the first Lake affidavit’);

(b) 6 April 2016 (‘the second Lake affidavit’)

(c) 4 August 2016 (‘the third Lake affidavit’); and

(d) 31 January 2017 (‘the fourth Lake affidavit’).

The solicitor for the first and second defendants filed four affidavits in this proceeding sworn on the following dates:

(a) 18 August 2016 (‘the first Charles affidavit’);

(b) 15 September 2016 (‘the second Charles affidavit’);

(c) 12 January 2017 (‘the third Charles affidavit’); and

(d) 2 February 2017 (‘the fourth Charles affidavit’).

In addition, a law clerk of the firm acting for the second defendant, Annabel Tresise, has filed two affidavits sworn on the following dates:

(a) 14 December 2016 (‘the first Tresise affidavit’); and

(b) 9 February 2017 (‘the second Tresise affidavit’).

Both parties referred to various exhibits to the affidavits. Those references are not all reiterated below although they have all been considered.

Applicable principles

The Civil Procedure Act 2010 (‘CPA’) provides:

4 Application of this Act
(1) Subject to this section, this Act applies to all civil proceedings.
…
7 Overarching purpose
(1)The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute.

…
8 Court to give effect to overarching purpose
(1)A court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether those powers—
(a)in the case of the Supreme Court, are part of the Court's inherent jurisdiction, implied jurisdiction or statutory jurisdiction; or

…
9 Court's powers to further the overarching purpose
(1)In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects—
(a) the just determination of the civil proceeding;
(b)the public interest in the early settlement of disputes by agreement between parties;

(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial and administrative resources;
(e)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i)the fair and just determination of the real issues in dispute; and
(ii)the preparation of the case for trial;

(f)the timely determination of the civil proceeding;
(g)dealing with a civil proceeding in a manner proportionate to—
(i)the complexity or importance of the issues in dispute; and
(ii)the amount in dispute.

…
(2)For the purposes of subsection (1), the court may have regard to the following matters—
(a)the extent to which the parties have complied with any mandatory or voluntary pre‑litigation processes;
…
(c)the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;
(d)the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;
(e)the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;
(f)any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;
…

…
10 Application of overarching obligations—
participants
(1) The overarching obligations apply to—
(a) any person who is a party;
(b)any legal practitioner or other representative acting for or on behalf of a party;

…
16 Paramount duty
Each person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to any civil proceeding in which that person is involved, including, but not limited to—
(a)any interlocutory application or interlocutory proceeding;
(b)any appeal from an order or a judgment in a civil proceeding;
(c)any appropriate dispute resolution undertaken in relation to a civil proceeding.

…

Submissions proceeded on the basis of a previous version of the rules, as in force at the time of the orders made by the Judicial Registrar on 19 August 2016 and 16 September 2016. On 1 October 2016, however, some of the Rules were updated. Of particular relevance to this application were changes made to Part 1 of Order 7. The application must be considered under the current Rules. Rule 1.05 relevantly provides:

1.05 Application
(1) Subject to this Rule and to any transitional or other provision in these Rules to the contrary, these Rules apply to every civil proceeding commenced in the Court whether before, on or after the commencement date.

The Rules applicable to this ruling are as follows.

Rule 46.08 provides:

46.08 Setting aside
The Court may set aside or vary an order which affects a person where the application for the order—
(a)was made on notice to that person, but the person did not attend the hearing of the application; or

(b) was not made on notice to that person.

Service – applicable principles

In respect of substituted service, the Rules relevantly provide:

6.10     Substituted service
(1)Where for any reason it is impracticable to serve a document in the manner required by these Rules, the Court may order that, instead of service, such steps be taken as the Court specifies for the purpose of bringing the document to the notice of the person to be served.
(2)Where the Court makes an order under paragraph (1), the Court may order that the document be taken to have been served—
(a)       on the happening of any specified event; or
(b)       on the expiry of any specified time.
(3)The Court may make an order under paragraph (1) notwithstanding that the person to be served—
(a)       is out of Victoria; or
(b)       was out of Victoria when the proceeding commenced.

6.11 Confirmation of informal service
Where for any reason a document has not been served in the manner required by these Rules, but the document has come to the notice of the person to be served, the document shall be taken to have been served on the day it came to the person’s notice.

…
7.02 When allowed without leave
An originating process may be served out of Australia without leave in the following cases—
(a) when the claim is founded on a tortious act or omission—
(i)which was done or which occurred wholly or partly in Australia; or
(ii)in respect of which the damage was sustained wholly or partly in Australia;

…
(j) when the claim arises under an Australian enactment and—
(i)any act or omission to which the claim relates was done or occurred in Australia; or
(ii)any loss or damage to which the claim relates was sustained in Australia; or

(iii)the enactment applies expressly or by implication to an act or omission that was done or occurred outside Australia in the circumstances alleged; or
(iv)the enactment expressly or by implication confers jurisdiction on the Court over persons outside Australia (in which case any requirements of the enactment relating to service must be complied with);

…
(n)when the claim is founded on a cause of action arising in Australia;
…

…
7.05 Notice to person served out of Australia
If a person is to be served out of Australia with an originating process, the person shall also be served with a notice in Form 7AAA informing the person of —

(a)the scope of the jurisdiction of the Court in respect of claims against persons who are served out of Australia; and
(b)the grounds alleged by the plaintiff to found jurisdiction; and
(c)the person's right to apply for an order setting aside the originating process or its service on the person or dismissing or staying the proceeding.

…
7.09 Mode of service
A document to be served out of Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected.

…
8.08     Conditional appearance
(1)       A defendant may file a conditional appearance.
(2)       A notice of conditional appearance shall be—
(a)in Form 8B; or
(b)if the proceeding has been commenced by filing an originating process in RedCrest under Order 28A, in Form 8AC.

(3)A conditional appearance shall have effect for all purposes as an unconditional appearance, unless, on application by the defendant, the Court otherwise orders.
(4)Application under paragraph (3) shall be made by summons within 14 days after the day the conditional appearance is filed.

Order 80 of the Rules provides a mechanism for service of documents pursuant to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965 (‘the Hague Service Convention’). Indonesia is not a party to the Hague Service Convention.

Part 2 of Order 7 is a mechanism for service of documents overseas in nations not party to the Hague Service Convention. It requires the lodgement of documents with the Prothonotary, who then liaises with the Attorney-General in respect of service overseas of the documents.

In respect of overseas service, Bell J outlined the following principles in Carter Holt Harvey v David:

Rule 6.10 operates according to its terms. It is not qualified by reference to facts and circumstances bringing the case within O 7. It contains no express territorial limitation confining its use to cases where the person to be served in the substituted manner is within Australia or Victoria. There is no basis for implying such a limitation.
The opening words of r 6.10 state this operative condition: ‘Where for any reason it is impracticable to serve a document in the manner required by these Rules…’ The expression ‘for any reason’ is broad and ‘should be given a wide meaning’. What is required is that, for any reason, it is impracticable to serve the document in the manner required by the Rules. Where the court finds this condition to be satisfied and it is proper to do so in the exercise of the court’s discretion, an order for substituted service may be made with respect to a person who is outside of Australia, as Kyrou J did in this court in Talacko v Talacko. Likewise, in Immerman v London Pie Co Pty Ltd Carr J held that the equivalent substituted service rule in the Federal Court of Australia was ‘not to be confined to impracticability within the Commonwealth.’ By parity of reasoning, r 6.10 applies where, as here, the whereabouts of the person to be served are unknown and he or she might be inside or outside of Australia.
I note that, in the related proceeding, Randall AsJ made a substituted service order in favour of the liquidators of Mr David’s company, Amerind Pty Ltd (in liquidation), in similar circumstances. It is unclear why the liquidators were able to obtain a substituted service order against Mr David in that proceeding yet Carter Holt Harvey was not able to do so in this proceeding.
The mere fact that a person is outside of Australia is not by itself sufficient to make service ‘impracticable’ for the purposes of r 6.10. Otherwise parties could apply for substituted service in circumstances covered by, and in order to avoid, the specific rules governing service of documents outside of Australia. As explained by Austin J in Australian Securities and Investments Commission v Sweeney (No 2), there is a discretionary principle that parties are not ‘permitted to use substituted service as a means of sidestepping the obstacles to personal service abroad’. Mondial Trading Pty Ltd v Inter Ocean Marine Transport Inc was a case where, in the exercise of the court’s discretion, Dawson J refused to permit substituted service on a party outside of Australia because the applicant had not first attempted to obtain and enforce an order for service outside of Australia.
…
As the associate justice stated, r 7.03 [now r 7.09] provides that a defendant located overseas need not be served personally if the law applicable to service in the relevant country does not require personal service. A procedure for effecting foreign service is laid down in r 7.10 and following. In the application before her Honour, there was no evidence of the legal requirements in Ghana for the service of court documents. However, even if the law of Ghana were shown to permit non-personal service, it would still be impracticable under r 6.10 to serve Mr David when his current location (whether somewhere in Ghana or elsewhere) was unknown. [1]

[1][2015] VSC 393 (31 July 2015) [9]-[12], [14] (citations omitted).

In Babcock & Brown DIF III Global Co-Investment Fund, LP v the Royal Bank of Scotland PLC (‘Babcock & Brown’), Hargrave J has observed that, faced with ineffective service, a defendant has three options.

(1)it could file an unconditional appearance, thereby submitting to the jurisdiction of this Court, and then proceed to defend itself against the allegations against it;
(2)it could file a ‘conditional appearance’ as permitted by r 8.08 of the Supreme Court (General Civil Procedure) Rules 2005 which were in force at the time (the ‘Rules’), thereby conditionally submitting to the jurisdiction of this Court, and then apply to set the purported service aside within the time prescribed; or
(3)before filing any appearance (either unconditional or conditional), apply to the Court under r 8.09 for orders setting aside the purported service. [2]

[2][2016] VSC 769 (16 December 2016) [4].

Hargrave J concluded that a defendant who files a conditional appearance and does not make an application under r 8.08(3) in time places itself in the same position as a defendant who files an unconditional appearance. That is, waiving any right to object to the ineffectiveness of the purported service of the writ and submitting therefore to the Court’s jurisdiction.[3]
[3]Ibid [51].

In Timbercorp Finance Pty Ltd (in liq) v Allan (‘Timbercorp’), Derham AsJ stated:[4]

The filing of the notice of conditional appearance in accordance with r 8.08(2)(b) of the Rules enables the defendant to apply, within 14 days after the day the conditional appearance was filed, to set aside the writ or its service or to stay the proceeding…
The defendant’s summons …. was filed within the time prescribed and seeks, amongst other orders, the setting aside of the service of the originating process… This procedure allows the defendant to challenge jurisdiction of the Court or the validity of service or other procedure, in effect, under protest and until determination of the defendant’s objection in accordance with the rule, it prevents the plaintiff entering judgment in default of appearance. The defendant can attend before the court to press the challenge and, by so attending, does not submit to the jurisdiction or waive any procedural objection or forfeit the right to argue the matter. But unless under the rule the court ‘otherwise orders’ the appearance has effect as a conditional appearance.

[4][2016] VSC 481 at [42] and [43].

The second defendant relied upon Myerson v Martin[5] as authority. However, as conceded, this authority predates the current rules on substituted service. It is not applicable.

Extension of writ – applicable principles

[5][1979] 3 All ER 667, 671.

In respect of extension of a writ, r 5.12 provides:

5.12 Duration and renewal of originating process
(1)A writ or an originating motion shall be valid for service for one year after the day it is filed.
(2)Where a writ or originating motion has not been served on a defendant, the Court may, from time to time, by order extend the period of validity for such period from the day of the order as the Court directs, being not more than one year from that day.

(3) An order may be made under paragraph (2) before or after expiry.
(4)The plaintiff may apply under paragraph (2) without notice to the defendant, but if the Court considers that the defendant ought to be heard, the Court shall—
(a) adjourn the further hearing; and
(b)direct the plaintiff to give notice to the defendant by summons or otherwise.

(5)Where an order is made under paragraph (2), the Prothonotary shall stamp any sealed copy originating process for service with the date of the order and the extended date of validity.

In relation to the principles concerning extension of a writ, it was common ground that principles enunciated by Associate Justice Derham in Timbercorp were applicable:

(a)Although the power conferred by Rule 5.12 is wholly discretionary, a judge has to approach the exercise of the discretion in accordance with established principles: Dagnell v Freedman & Co [1993] 2 All ER 161 at 165 (‘Dagnell’);
(b)The jurisdiction given by the rule ought to be exercised with caution: Battersby v Anglo-American Oil Co Ltd (‘Battersby’); Ramsay v Madgwicks (‘Madgwicks’);

(c) It is the duty of a plaintiff to serve a writ promptly: Battersby at 32;
(d)An application to extend time for service is not granted as a matter of course: Battersby at 32; Madgwicks; Savcor Pty Ltd v Cathodic Protection International APS (‘Savcor’);
(e)The first question to consider is whether the plaintiff has taken reasonable steps to serve the writ. If not, it then becomes necessary to consider whether there was “some other good reason” for making the order to extend time for service of the writ: Soper v Matsukawa (‘Soper’); Battersby;
(f)The plaintiff carries the onus of showing that there is a good reason for extending the time to serve the writ (Soper at 952; Madgwicks at 6; Savcor at [41]); the applicant’s burden is no greater if the limitation period has expired between the date of issue of the writ and the date on which the application is made: Findlay at 187.
(g)Whether there is good reason depends on all the circumstances of the case: Dagnell at 165; Kleinwort Benson Ltd v Barbrak Ltd & Ors [1987] AC 597 at 622-3 (‘Kleinwort’); and it is not possible to define or circumscribe the scope of the expression ‘good reason’: Kleinwort;
(h)Where the application is made after the period for service has expired, the reason must be one of substance (Savcor at [41]);
(i)The selection of relevant factors to establish that there is a good reason for making the order, and the significance to be given to each of the factors, are matters of discretion (Soper at 954);
(j)The fact that the plaintiff decides not to serve the writ whilst some other case is tried, or to await some future development, is generally not a good reason to justify extending time for service. Madgwicks at 4 and 5; Savcor at [42]); Dagnell at 165-168. It is for the Court and not for one of the litigants to decide whether there should be a stay, and it is not right that people should be left in ignorance that proceedings have been commenced against them if they are there to be served: Battersby at 32;
(k)It is a relevant factor against the exercise of the discretion that the renewal of the writ might deprive the defendant of a limitation defence where the plaintiff has been aware that the passage of time might be dangerous: Battersby at 31–2; Madgwicks at 7; Soper at 953; see also Finlay v Littler [1992] 2 VR 181 at 187 (‘Finlay’).
(l)It is a relevant factor against the exercise of the discretion that the defendant was unaware of and had no reason to expect that a writ had been issued against them: Madgwicks at 7; Kleinwort at 623–4).
(m)The lapse of time is itself generally to be regarded as prejudicial to the defendant (Madgwicks at 7; Finlay at 188). In this contest, the relevant delay is to be measured from the time at which the plaintiff’s cause of action arose (Tyson v Morgan [200] 1 Qd R 100 at 104.50);
(n)Any delay in making the application to extend the time for service of the writ is a relevant factor against the exercise of the discretion (Finlay at 187); delay preceding (as well as following) the issue of the writ is material (Soper at 953);
(o)The expiration of the limitation period will not in itself constitute a good reason for extending the validity of the writ (Finlay at 187), although it is relevant (Soper at 952); and
(p)It may be appropriate to have regard to the balance of hardship: Kleinwort at 622; Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337 at 343 and 346 (‘Van Leer’) (adopting the approach of Bray CJ in Victa Ltd v Johnson (1975) 10 SASR 496 at 502 (‘Victa’). [6]

[6][2016] VSC 481 (26 August 2016) [74] quoting Howard v Power [2013] VSC [10] – [11] (citations omitted).

In respect of prejudice, Derham AsJ stated in Timbercorp:

The requirement to show reasonable efforts had been made to serve the defendant or ‘other good reason’ for an extension will not be satisfied by demonstrating that no prejudice will be occasioned to the defendant if an extension is granted. But where the scales are evenly balanced, the relative prejudice may be taken into account. I consider the attempts at service are to be taken as being reasonable, but unsuccessful, efforts to serve the defendant. The significance of this is that the Court might order that a writ be renewed if satisfied that reasonable efforts had been made to serve the defendant, or for ’other good reason’. In my opinion it is also the case that an error in serving the writ by omitting the SEPA notice, and that without that error the service would have been effective (as in my opinion it would have been), constitutes an ‘other good reason’ to extend the validity of the writ.
A factor in favour of extending the validity of the writ is that if renewal were refused, a new writ would be outside the limitation period. Similarly, a factor against an extension is the fact that the limitation period has expired and to grant an extension will deprive the defendant of a defence to the proceeding. In this regard, the scales are fairly evenly balanced. The prejudice to the defendant is, as I have said, presumptive prejudice. There is no evidence of prejudice arising from any specific loss of evidence. In fact, the correspondence between solicitors in 2009 shows that the defendant was even then well prepared to go into battle with the plaintiff. In my opinion, the absence of prejudice other than presumptive prejudice is, where the scales are evenly balanced, to be taken into account in favour of extending the validity of the writ.
…
The critical reason exposed in the material that, in my opinion, constitutes reasonable efforts having been made to serve the defendant, or another good reason to extend the validity of the writ, is the technical deficiency brought about by the oversight of the plaintiff’s solicitor in omitting the SEPA notice, leading to the setting aside of service. In my view, that is a proper basis to extend the validity of the writ especially where there is no evidence or prejudice to the defendant other than presumptive prejudice.[7]
[7]Timbercorp, [109], [110] and [112].

Submissions on service

Both oral and written submissions were made by the plaintiff and the second defendant. They need not all be reiterated here. The key submissions are as follows.

Second Defendant’s Submissions

The second defendant submits that the CPA is not applicable to the second defendant as she is not a ‘party’. Alternatively, if the CPA is applicable, the second defendant has not acted inconsistently with it.

The second defendant is the domestic partner of the first defendant. It is irrelevant what the first defendant has or has not done.

The second defendant cannot read, write or speak English. She is seriously ill and undergoing intensive treatment for cancer and is therefore only occasionally at the address in Indonesia.

The second defendant has not received the amended writ and statement of claim. There is no evidence before the Court to the effect that personal service of the second defendant was ever attempted. Unauthorised attempted service by mail is not personal service. The document relied upon by the plaintiff’s solicitor for evidence of registered post was a Customs form and, had it been scanned in Australia, would not have been trackable. There is no evidence that posting documents would bring them to the attention of the second defendant.

No adverse inference should be drawn from a lack of affidavit evidence from the second defendant regarding receipt of service. Hearsay evidence can be relied upon in this type of application.

The writ was not indorsed as required by r 7.02(1) for overseas service. There has been no application under r 7.02(2) concerning the failure to comply with r 7.02(1). Rule 2.04 (dispensing with compliance) cannot assist the plaintiff because it does not apply where there is a statute of limitations issue.

It is not impracticable to serve within the meaning of r 6.10.

In relation to the Court’s questions concerning the applicability of Carter Holt Harvey v David, the second defendant concedes that r 6.10 applies if the whereabouts of the person to be served are unknown and he or she might be inside or outside Australia. However, conditions need to be met. As enunciated in Carter Holt Harvey v David at [12], the mere fact a person is outside Australia is not by itself sufficient to make service impracticable for the purposes of r 6.10.

In relation to the Court’s questions about the application of Babcock & Brown, the second defendant submitted that the circumstances in this case did not fall within any of the three factors identified by Hargrave J because service has not happened. Further, the application pursuant to r 46.08 was made within 14 days as required by r 8.03. The appearance filed was conditional. No application was made prior to filing the conditional appearance.

The second defendant sought leave to amend its summons pursuant to r 8.08 so that the appearance filed on behalf of the second defendant continued to be conditional. There was no objection by the plaintiff to that application. The amendment sought by the second defendant was for leave to amend the summons pursuant to r 8.08 to include an application that the conditional appearance continue to be a conditional appearance until either the Court has determined this summons or the second defendant has been served with the writ and amended statement of claim and that the plaintiff has provided proof of service and such service be in accordance with the law of Indonesia.

Plaintiff’s Submissions

The plaintiff says that submissions in this application on behalf of the second defendant are made on instruction from a person who says they know nothing about the proceeding.

Whilst there is a natural inclination to accept the evidence as to the second defendant’s medical condition, such an attitude would be inconsistent with the second defendant’s purported failure to receive several attempts at service.

The second defendant had duties under the Wrongs Act as a proprietor and landlord. The injuries were suffered in Victoria by the plaintiff. She is young and has lost her arm with catastrophic impact.

There is some evidence from the second defendant regarding the difficulties of service if she is not at home because of the medical condition. There were difficulties in locating the second defendant.

Rule 6.10 provides for substituted service outside of Victoria. In response to the second defendant’s submission, r 6.10 did not require evidence of the law in Indonesia and so was not provided.

Rule 7.03 provides an alternative method of service.

The failure to indorse the writ for overseas service is an irregularity and can be corrected (the plaintiff concedes that the writ should have been so indorsed for overseas service). Order 2 of the Rules gives the Court power to correct an irregularity – r 2.04 allows the Court to dispense with compliance.

Postal service has now been effected (there is no affidavit of service but reliance on an affidavit by the second defendant’s solicitor).

Applying Babcock & Brown, if a conditional appearance has been filed, then the jurisdiction of the Court is invoked and irregularities are incidental. There has been no application made by the defendant (until the day that the matter was heard) that a conditional appearance shall have effect for all purposes as an unconditional appearance and therefore Babcock & Brown is applicable.

One needs to consider the purpose of service – there can be no question the second defendant is aware of proceedings and has taken active steps to ensure that her interests are protected. The first and second defendants have obtained legal representation by the same firm of lawyers and are in a domestic relationship.

The CPA informs the Court’s approach to the Rules. The CPA applies in circumstances where a conditional appearance has been filed.

The plaintiff was unaware of the location of the second defendant or her residence at the time the writ commenced. The residence is clearly in Indonesia. This was unknown until the solicitor for the first defendant shared that information on 22 July 2016.

Consideration – substituted service order

The Court will set aside the orders for substituted service made by the Judicial Registrar on 16 September 2016. The Judicial Registrar’s decision was made in reliance upon the evidence in the second Charles affidavit as to the first defendant obstructing service upon the second defendant. This evidence is from Mr Lie and is, as discussed below, unreliable. The decision was also made on the basis of a submission that it would take in excess of six months to effect service in accordance with Order 7. The fourth Lake affidavit, which deposes as to a conversation with someone in the Court’s registry ‘that if we were to serve the proceeding in Indonesia, in a major city, it would take approximately 6 months’ is insufficient evidence to conclude that service would take in excess of six months.

There was insufficient evidence before the Judicial Registrar to conclude that it was not practicable to serve the second defendant. There were certainly unsuccessful attempts to locate her. The first and second Lake affidavits outline the efforts made by the plaintiff to locate the second defendant. The third Lake affidavit was made in support of the application for substituted service of the second defendant. There is no evidence as to any attempt at personal service. (The fourth Lake affidavit deposes that the plaintiff attempted to serve the first defendant at the premises in July 2015, but the area was now a vacant block of land.)

The fourth Lake affidavit deposes that Indonesia is not a signatory to the Hague Convention (and indeed, it is not). There was no evidence before the Judicial Registrar as to how service should be effected in Indonesia. Pursuant to r 7.03 (now r 7.09), there should have been.

It was unnecessary to indorse the writ pursuant to r 7.02(1) as at the time that it was served r 7.02(1) had been replaced by r 7.05.[8] That requires a form 7AAA be served with the writ.
[8]The fourth Lake affidavit states that the translated proceeding was posted on 5 October 2016. The rule change became effective on 1 October 2016.

Given the insufficiency of evidence, the order made by Judicial Registrar for substituted service of the second defendant will be set aside.

Consideration - service

As conceded by the second defendant’s counsel, the CPA is applicable to all civil proceedings: s 4(1). The overarching purpose of the CPA is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9(1) requires the Court to have regard to the overarching purpose. This extends to pre-litigation steps. For instance, section 9(2)(a) specifically gives the Court power to have regard to the extent to which the parties have complied with any mandatory or voluntary pre-litigation processes. The CPA is applicable in this application.

The second defendant did not make an application for the appearance to continue to be conditional pursuant to r 8.08(3) in the time stipulated by r 8.08(4), namely 14 days. It sought to do so during the course of oral submissions. The second defendant did however make her application to set aside service within 14 days. The plaintiff did not oppose the application to amend the summons to include the application for the appearance to continue to be conditional. Given this, and, importantly, that the summons was filed within the 14 days required by r 8.08(4), the second defendant will be given leave to amend her summons.

In Babcock & Brown, no application at all had been made within the required time frame. It is therefore distinguishable from this application.

Turning now to the plaintiff’s submission that an inference could be drawn that the writ had come to the notice of the second defendant. In this context, consideration has been given to whether r 6.11 (confirmation of informal service) is therefore applicable.

It was common ground between the parties that the second defendant is the domestic partner of the first defendant. She has the same solicitor and counsel as the first defendant. Her legal representatives have been able to make submissions in relation to this application and indeed generally issue the summons on her behalf. The plaintiff sent the writ and statement of claim to an address in Indonesia provided by the second defendant’s solicitor.[9]
[9]Third Lake affidavit, Exhibit ‘CRL-3’ and ‘CRL-4’; Fourth Lake affidavit [33]; Second Tresise affidavit [7].

On 3 August 2016, that solicitor for the first and second defendants informed the plaintiff’s solicitor:

It is possible that I will be acting on behalf of the second defendant, for there are economies to be had in doing so. However, I expect that I will only act if:
- you effect personal service of the writ on the second defendant in Indonesia, together with a formal translation of the Writ in the Indonesian language;
- the second defendant than [sic] asks me to act for her.
My hesitation arises from the fact that the second defendant speaks no English and I am unlikely to have an opportunity to meet with her anytime soon. Also, I do know that she has previously engaged the services of another Melbourne lawyer who does speak her language.[10]

[10]Fourth Charles affidavit, Exhibit ‘CAC-11’; Third Lake affidavit, Exhibit ‘CRL-6’.

The fourth Lake affidavit and the fourth Charles affidavit evidence a telephone conversation between solicitors for the plaintiff and second defendant on 17 August 2016. There is some dispute as to what was said in that telephone conversation. However, it is not in dispute that on 31 August 2016, the plaintiff’s solicitors provided a copy of the translated pleading to the second defendant’s solicitor and requested he provide it to the second defendant.[11] On 2 September 2016, the second defendant’s solicitor posted the documents, together with a covering letter, to the second defendant.[12]
[11]See Fourth Lake affidavit, Exhibit ‘CRL-10’.
[12]Second Charles affidavit [4] and Exhibit ‘CAC-3’; Fourth Lake affidavit, Exhibit ‘CRL-11’.

Six days after posting the documents to the address where the second defendant resides, there was an indirect email reply from another person. The second defendant’s solicitor has deposed to an email from a Mr Andi Lie received by him on 8 September 2016. Mr Lie is allegedly a friend of the first defendant. The email stated that the second defendant was seriously ill and undergoing intensive treatment for cancer. Further, that the letter to the second defendant had been intercepted by the first defendant as he did not wish to cause her unnecessary distress.[13] The email concluded with: “If the plaintiff wishes to serve the writ on [the second defendant], she should do so by personal service on [the second defendant] at her home in Indonesia.” This suggestion of personal service appears completely inconsistent with a purported desire to minimise unnecessary distress on the second defendant. It is also inconsistent with the second defendant’s submission that due to her treatment for cancer, the second defendant is only occasionally at the address in Indonesia.
[13]Fourth Lake affidavit, Exhibit ‘CRL-12’.

Following the communication above, the plaintiff made an application for substituted service of the second defendant. The substituted service orders were for service at the same address at which the indirect email reply from Mr Lie requested personal service to occur.

The plaintiff says that there was compliance with the substituted orders by way of documents sent by registered post on 5 October 2016.[14] There is no affidavit of service in respect of such service on the second defendant. There is no evidence as to what date the documents arrived at the second defendant’s address in Indonesia (or indeed whether they arrived). Rule 6.11 refers to ‘the day that it came to the person’s notice’ suggesting some specificity regarding when notice was achieved.
[14]Second Tresise affidavit, Exhibit ‘AT-4’.

Moreover, the Court accepts the evidence in the second Tresise affidavit that the documents were not sent by registered post. Mr Charles deposes that he has ‘not received confirmation from the first defendant that either he or the second defendant received the envelope, the covering letter, the writ and the translation of the writ into Indonesian’.[15] He says that Mr Lie informed him by telephone that Mr Charles’ letter and attachments had not yet been received by the second defendant and perhaps the housekeeper did not accept the letter because they know the second defendant by another name.[16]
[15]Third Charles affidavit, [16].
[16]Ibid [15].

In the second Tresise affidavit, the deponent says that she had a telephone conversation with ‘Andi Li’ who confirmed that neither the second nor the first defendants had received the service documents.[17]
[17]It is assumed this is a typographical error and the reference should be to the “Mr Andi Lie” referred to in the Charles affidavits.

The Court does not accept the hearsay evidence in relation to the plaintiff that the second defendant failed to receive service of the writ. It is not satisfied that the evidence concerning the conversations between Mr Lie and the first defendant is reliable. The Court draws an adverse inference from the failure of the first defendant and Mr Lie to depose as to these matters.

The Court observes that in the ‘Other Matters’ section of the orders made by the Judicial Registrar on 16 September 2016, the first defendant was cautioned as to his obligations under the CPA concerning the obstruction of service of the second defendant deposed to by his solicitor, as outlined above.

There is no evidence that the writ came to the second defendant’s notice, either directly or indirectly.

Notice should not be inferred by the filing of the conditional appearance and instruction of solicitors for this application. If that were so, it would completely circumvent any possible application ever being made to have service set aside.

For completeness, the Court does not accept the second defendant’s submission that the writ should have been indorsed pursuant to r 7.02 as the rule, as it then was, had been replaced by r 7.05. It does not require indorsement of the writ.

Given the above, the second defendant has not been served. The second defendant’s appearance may continue to be conditional at this point.

Submissions on extension of writ
Second Defendant’s submissions

The second defendant was not a landlord of the premises where the alleged injuries occurred, but rather a proprietor. Exhibit ‘CAC’9’ to the fourth Charles affidavit is a residential tenancy agreement with Mr Wheelahan at the premises, and it indicates that Mr Chandra Minarto (son of the defendants) is the landlord. The statement of claim alleges that the second defendant was a landlord and relies upon her being so. The plaintiff cannot bring herself within the ambit of a r 7.01 writ.

The second defendant submits that the plaintiff should have approached the Court for the extension prior to expiry of the writ. The second defendant concedes that the validity of the writ can be extended after expiry. There was, however, no good reason to extend the writ. The relevant factor is that it deprives the second defendant of the limitations defence. The writ was served days before the limitations period expired. The lapse in time is relevant. The alleged cause of action arose at least four years prior to that. The plaintiff was told months before the expiry of the writ that the second defendant was in Indonesia. The second defendant cannot read or write English. She was unaware of the writ. She is being roped into Supreme Court proceedings and has a medical condition. On the other hand, the plaintiff will not suffer any hardship because the action will continue against the other defendant. To allow the extension of time (and substituted service) would affect the fundamental rights of the second defendant. It will be a significant prejudice to be roped into the proceedings. The CPA does not detract from the principles of natural justice and procedural fairness and does not override the Rules.

The Judicial Registrar was not informed that the writ had already expired, even though it was an ex parte application. Nor was the Judicial Registrar informed that the personal injuries claim was statute barred as against the second defendant.

Plaintiff’s submissions

The plaintiff says that the CPA informs the Court’s approach to the Rules. On the question of merit, the Court needs to have the CPA firmly in mind. She relies on the same factual matrix relevant to the submissions on service.

The plaintiff considers there is an obligation to serve promptly. She accepts that extensions of service should not be granted as a matter of course and there needs to be good reason. The good reason here was the difficulty in locating the second defendant.

Prejudice is evenly balanced. The plaintiff will be prejudiced if the order is overturned because she will be left in a situation where a further proceeding would need to be commenced. If the claim is statute barred, she is likely to succeed in her application for an extension of time.

The second defendant’s health is not relevant to the question of prejudice.

Consideration – extension of writ

For the following reasons, the Court declines to overturn the orders extending the writ.

The second defendant’s submission that the writ falls outside r 7.01 is rejected. Rule 7.02 is now the applicable rule. This proceeding falls within the ambit of r 7.02(a),(j) and/or (n). It is not disputed that, as pleaded, the defendants are the registered proprietors of the premises where the alleged cause of action arose and the injuries were allegedly caused. The scope of their duties as proprietors is a matter for the trial judge to determine. Whether or not their son, Chandra, is the landlord because it says so on the residential tenancies agreement, despite him not being the owner, is a matter for the trial judge to determine.

Applying the Timbercorp principles, the prejudice to the second defendant is presumptive prejudice. It is a factor to be taken into account. However, against that is the fact that the limitation period has expired and the proceeding will be statute barred if the validity of the writ is not extended. While the expiration of the limitation period will not in itself constitute a good reason for extending the validity of the writ, it is a relevant reason. There is no evidence of prejudice to the defendant other than presumptive prejudice.

There is no reliable evidence as to the second defendant’s health. However, even if there was, this factor is not one which would weigh against the extension of the writ being given.

There was a good reason for extending the writ: the second defendant could not initially be located to be served, as the first and second Lake affidavits evidence. At the time the writ was extended, on 19 August 2016, the second defendant had not been served. Indeed, as discussed above, her address was only confirmed on 27 July 2016 (by the solicitor now acting for her).[18]
[18]Third Lake affidavit [4].

The plaintiff’s delay in seeking extension of the writ after its expiry is not a factor that outweighs the factors in favour of extending the writ. The delay was not undue. There is a reasonable explanation for it – the plaintiff had been attempting to locate the second defendant. It made the application several weeks after it identified her location.

Having regard to the balance of hardship, on the evidence available before the Court, it favours the granting of the extension of the writ.

For completeness, it matters not that the plaintiff’s counsel did not inform the Court that the writ had expired as r 5.12(3) permits extension after expiry.

Conclusion

Orders will be made overturning the Judicial Registrar’s order as to substituted service, amending the second defendant’s summons, allowing her appearance to continue as conditional at this point, and dismissing her application concerning extension of time.

The parties are requested to confer as to the appropriate form of orders.

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Citations

Baz v Minarto [2017] VSC 160

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[2017] VSC 160

31 March 2017