C a Sweeney v Australian Securities and Investments Commission

[2001] NSWCA 106

NEW SOUTH WALES COURT OF APPEAL

CITATION:     C A Sweeney v Australian Securities and Investments Commission [2001]  NSWCA 106

FILE NUMBER(S):
40164/01

HEARING DATE(S): 9 April 2001

JUDGMENT DATE:    09/04/2001

PARTIES:
Charles Augustine Sweeney - Claimant
Australian Securities and Investments Commission - Opponent

JUDGMENT OF:        Giles JA      

LOWER COURT JURISDICTION:    Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):             ED 3339/99

LOWER COURT JUDICIAL OFFICER:        Austin J

COUNSEL:
I Barker QC & M Gorrick - Claimant
M Pembroke SC - Opponent

SOLICITORS:
Noel F Bracks & Co - Claimant
Jan Redfern - Opponent

CATCHWORDS:
STAY OF PROCEEDINGS - whether what was said as to one ground operated as a res judicata for another ground - on facts, did not do so.  ND

LEGISLATION CITED:

DECISION:
Notice of Motion filed 5 April 2001 is dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA  40164/01

GILES JA

Monday 9 April 2001

CHARLES AUGUSTINE SWEENEY
v
AUSTRALIAN SECURITIES & INVESTMENT COMMISSION

JUDGMENT

1. GILES JA:  This application is more limited than at times the claimant’s submissions suggested.  The explanation for it is as follows.

2. On 27 July 1999 the opponent commenced proceedings against the claimant by filing a statement of claim.  On 24 November 1999 it obtained an order for substituted service of the statement of claim.  On 23 December 1999 the claimant filed a notice of motion claiming various orders appropriate to his contention that the Court had no jurisdiction in the proceedings commenced by the statement of claim.  He sought an order that the statement of claim be set aside;  additionally or alternatively, an order that the order for substituted service be set aside; and additionally or alternatively, orders in the nature of declarations that the statement of claim had not been duly served on him and that the Court had no jurisdiction over him in respect of the subject matter of the proceedings.

3. The claimant's notice of motion was fixed for hearing on 27 February 2001.  On 16 February 2001 the opponent filed a notice of motion returnable on 27 February 2001, seeking in part orders in relation to the claimant's notice of motion.  Relevantly, the opponent sought an order that the claimant's notice of motion be stayed or dismissed generally, and in the alternative an order, stated to be in the event that the order for substituted service was set aside, extending the period of the validity of the originating process for a time to enable personal service.

4. Austin J, before whom the proceedings had been listed for 27 February 2001, made an order vacating that date as the date for hearing the claimant's notice of motion and another order setting down the opponent's notice of motion for hearing on that day.  In circumstances not revealed, the opponent's notice of motion came to be argued before his Honour on 1 March 2001.  His Honour delivered judgment on 6 March 2001. 

5. Austin J’s reasons took each of the ten grounds stated in the claimant's written submissions for the purposes of the hearing as the grounds on which the claimant contended that he was entitled to resist the opponent's notice of motion.  The grounds obviously enough went into why the claimant would contend that he was entitled to the relief he sought in his own notice of motion.  Austin J considered that all but one of the grounds did not avail the claimant.  The one ground which his Honour considered was arguable, as indeed was conceded before his Honour by the opponent, was the claimant’s fifth ground expressed in the terms, "Whether in the circumstances of the case the Court has jurisdiction, the defendant not having been served personally."

6. This was occasionally referred to before me as the Laurie v Carroll [(1958) 98 CLR 310] question, raising the circumstances in which the Court could have jurisdiction in relation to a defendant not served personally. It appears that in an earlier hearing in the proceedings before Young J his Honour had indicated that the answer to the question was of the nature "sometimes yes and sometimes no".

7. Austin J ended his reasons as follows:

   "For these reasons, my view is that nine of the grounds advanced by the defendant are either wholly inappropriate, or manifestly hopeless and doomed to fail, because they are based on demonstrably incorrect statements of fact or misapprehensions about relevant legal principles.  Consequently, nine of the defendant's grounds disclose no reasonable 'cause of action' for setting aside the orders for substituted service.  However, in light of counsel's concession about the tenth ground, I cannot make an unqualified order staying or dismissing the defendant's notice of motion.

   Counsel invited the Court to make an order dismissing or staying the defendant's application save in respect of that single ground.  There is no direct authority in Part 13 Rule 5 for the Court to make an order that does not dismiss or stay a claim to relief, but merely limits the grounds upon which the claim can be made.  However, the Court has the power to give directions to control its own processes, as part of its inherent jurisdiction as a superior court of record:  Richie's Supreme Court Practice (looseleaf), para [s 23.3] and cases there cited.  In my opinion that is a sufficient source of power for me to make the kind of order proposed by counsel for the plaintiff.

   Counsel for the defendant made it crystal clear that the grounds for setting aside the orders for substituted service, as set out in his written submission, have not been fully developed and are not necessarily exhaustive.  Counsel submits that, because of the huge bulk of the documentary evidence that has been under review, he has not yet had the time to consider all possibilities, and that in those circumstances I should not pre-empt him from putting forward new grounds.  In my view, however, an enterprise which depends on the consideration of massive evidence is misconceived from the outset, because of the limited scope of the review authorised by Part 11 Rule 8 and cases such as Agar v Hyde.

   The plaintiff, bearing the onus in the present application, submits that there is no conceivable way of putting the defendant's case on the application of 23 December 1999, which provides a reasonable basis for success on the application.  I find that submission plausible.  The defendant has had the opportunity to respond by pointing to some grounds which he would develop at the hearing of his application, and has done so.  Apart from the fifth ground, none of them is a reasonable basis for the relief that the defendant's application seeks.  In those circumstances, I accept the plaintiff's submission that there are no other grounds which would provide a reasonable basis for the defendant to succeed, and consequently I should make orders and directions confining the defendant's application to the fifth ground alone."

8. The matter was adjourned to 8 March 2001 for short minutes of orders.  On that day the claimant's counsel indicated that instructions had been given to seek leave to appeal from the decision of 6 March 2001.  There was some debate over the form which the short minutes of orders should take, including the submission by the claimant that the ground remaining alive should not be dealt with by Austin J in a hearing of the claimant's notice of motion until after the application for leave to appeal had been heard and, if leave were granted, the appeal itself had been heard.  The considerations which were explored were really ones of case management and the best use of the time of the Court and of the parties. 

9. The course determined by Austin J was to make an order pursuant to Pt 31 r 2 of the Rules by which a question should be heard separately from and before any other question in the proceedings, that question being intended to take up the Laurie v Carroll question and being expressed in the terms, "Whether the Court had jurisdiction to make the order of 24 November 1999 in these proceedings."  His Honour ordered that the claimant's notice of motion "otherwise be stayed pending further order", and that the opponent's notice of motion "stand over generally pending the determining of the separate question referred to in Order 1."  His Honour set the separate question down for hearing before himself on 18 April 2001.

10. The orders about the stay and standing over generally are not in issue on the present application.  What is in issue is his Honour's determination to proceed with the Laurie v Carroll question on 18 April 2001.  The date itself holds no magic.  What the claimant seeks by the application presently before me is an order that there be a stay of proceedings whereby the Laurie v Carroll question is not heard before the determination of his application for leave to appeal from the decision of 6 March 2001.

11. The claimant’s holding summons for leave to appeal was filed on 21 March 2001, and the ordinary summons for leave to appeal was filed on 6 April 2001.  The application presently before me was brought by a notice of motion filed in the proceedings so commenced.  No point was taken about the appropriateness of that procedure, and the parties concentrated on the substance of the application.

12. The claimant's position came down to this.  Speaking generally, it was said that he wished to have 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 before the Court and heard together, because, it was said, the relevant considerations would be better appreciated when heard as a whole rather than in a fragmented manner.  In particular, however, and this I think was the real basis of the application before me, the Laurie v Carroll question could include whether the opponent had taken all reasonable steps to serve the claimant personally, that being perceived as a possibly relevant matter to the "sometimes yes and sometimes no" answer.  The claimant submitted that he would be prejudiced in dealing with the Laurie v Carroll question discretely, because there was a finding by Austin J in his reasons of 6 March 2001. 

13. What the claimant pointed to as the finding is found in his Honour's reasons in relation to the claimant’s second ground, described as "The plaintiff's failure to show that personal service in New Zealand was impracticable or to even attempt such service".

14. Austin J said as to this ground:

    "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 were extensive.

    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 the 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.

    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.”

15. It does not seem to me that this amounts to a finding which would prejudice the claimant through his being held bound under principles of res judicata, whether as to fact or as to an issue, in dealing with the Laurie v Carroll question.  Although I do not rest my conclusion on this, I note that the opponent disclaimed reliance on it in that way for the future of the claimant's notice of motion.

16. What his Honour said was said in an interlocutory application.  The summary of the evidence from the affidavit of Mr Riordan was, subject to the limitations of any summary, accurate, and it shows just what his Honour was referring to.  What his Honour said was in relation to a ground distinct from the claimant’s ground raising the Laurie v Carroll question.  On  the separate ground of the Laurie v Carroll question, and it must be regarded as a separate ground because it was dealt with in that way in his Honour's reasons, any relevant factual inquiry to my mind remains open.  The claimant will not be prejudiced in putting before his Honour on 18 April 2001, or whatever other date might come about, all the evidence relevant to that question which he might seek to rely on and all relevant submissions based on that evidence. 

17. Once that is appreciated it seems to me there is no ground for intervening in Austin J's management of the proceedings, specifically his determination that the Laurie v Carroll question should be dealt with promptly and before the hearing of the application for leave to appeal and any subsequent appeal (if, as is likely, that is the way the timing of things turns out).  It is plain from the incomplete transcript of 8 March 2001 that his Honour had in mind that whatever decision he gave on the Laurie v Carroll question was likely to be the subject of an application for leave to appeal, and that that further application for leave to appeal could be joined up with the existing application for leave to appeal so that everything was subject to appellate review at the one time.  That to my mind is a very sensible approach;  other approaches might have been available, but there is nothing wrong with that approach.

18. The conclusion to which I have come, therefore, is that no ground for ordering the stay sought by the claimant has been made out.  I order that his notice of motion filed on 5 April 2001 be dismissed with costs.

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LAST UPDATED:       17/04/2001