City of Canning v Christou Nominees Pty Ltd
[2020] WASC 97
•25 MARCH 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CITY OF CANNING -v- CHRISTOU NOMINEES PTY LTD [2020] WASC 97
CORAM: MASTER SANDERSON
HEARD: 29 JANUARY & 5 FEBRUARY 2020
DELIVERED : 25 MARCH 2020
FILE NO/S: CIV 2326 of 2018
BETWEEN: CITY OF CANNING
Plaintiff
AND
CHRISTOU NOMINEES PTY LTD
First Defendant
AECOM AUSTRALIA PTY LTD
Second Defendant
Catchwords:
Practice and procedure - Service of writ after undertaking to accept service - Undertaking not withdrawn - Whether intention to service relevant
Legislation:
Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)
Result:
Writ duly served
Category: A
Representation:
Counsel:
| Plaintiff | : | R R Joseph |
| First Defendant | : | T J Palmer |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Thomson Geer - Perth |
| First Defendant | : | DLA Piper Australia - Perth |
| Second Defendant | : | Popperwell & Co |
Case(s) referred to in decision(s):
Daws v Duncan [2001] WASC 161
Simpson v Brereton & Alexopoulos [1964] VR 332
MASTER SANDERSON:
'We have instructions to accept service on behalf of our client'
Every solicitor involved in litigation would at some time either have sent or received a letter or email containing the above sentence. Most practitioners would assume they knew exactly what was meant when these words were used. This case requires a detailed examination of precisely what the sentence means. The issue arises in the context of a somewhat convoluted procedural process. But the question raised is of real practical importance in civil litigation.
The background to this dispute is set out in an affidavit of Adam Russell Spitz sworn 4 September 2019. The first defendant was engaged by the plaintiff on or around 22 January 2010 as the head consultant for the design of the plaintiff's Cannington Leisureplex facility and to administer the construction contract between the plaintiff and the head contractor during the construction of the Leisureplex.[1]
[1] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.1.
On or around 11 June 2010 the first defendant engaged the services of the second defendant as a sub‑consultant for the purposes of electrical, mechanical, hydraulic and fire, pool hydraulic, and environmentally sustainable design of the Leisureplex.[2]
[2] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.2.
On 19 October 2010 the plaintiff approved, among other things, the mechanical system proposed by the first defendant and the second defendant to heat and cool the Leisiureplex.[3]
[3] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.4.
The construction of the Leisiureplex commenced in or around July 2011 and commissioning occurred in June 2012. Practical completion occurred in August 2012 and the Leisiureplex officially opened on 10 September 2012.[4] The mechanical system for the Leisiureplex was constructed in accordance with the designs prepared by the first and second defendants.[5] In or around mid to late December 2012 the mechanical system substantially failed and the Leisiureplex was unable to maintain the plaintiff's required temperatures.[6] The plaintiff says as a consequence it has suffered loss and damage as a result of its reliance on representations it says were made by the first and second defendants in respect of the mechanical system. It also alleges negligence on the part of the first and second defendants in design of the mechanical system.[7]
[4] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.4.
[5] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.5.
[6] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 5.6.
[7] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 6.
In or around October 2015 the plaintiff engaged Arcon Legal Pty Ltd to act on its behalf.[8] The first defendant engaged DLA Piper to act on its behalf. At all material times Richard Edwards of DLA Piper had primary conduct of the matter. Popperwell & Co was engaged on behalf of the second defendant.[9]
[8] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 8.
[9] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 9.
The parties and their respective solicitors met for without prejudice discussions on 8 November 2016. These negotiations came to nothing. On 26 June 2017 Arcon Legal sent DLA Piper and Popperwell & Co a letter providing substantive notice of the nature of the issues with the mechanical system and the plaintiff's claims. The parties met again on 24 January 2018 but again there was no resolution to the dispute.[10]
[10] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 10.
On or about 26 July 2018 Ms Amanda Bishop, special counsel employed by DLA Piper, received a phone call from Mr Simon De Rosso, a solicitor with Arcon Legal.[11] Mr De Rosso advised Ms Bishop the plaintiff was issuing proceedings.[12] Although it is not entirely clear from the evidence it would appear that Mr De Rosso asked Ms Bishop if DLA Piper had instructions to accept service. It was then that Ms Bishop sent to Arcon Legal an email containing the sentence I have quoted above. A writ of summons with an endorsement of claim was filed on 30 July 2018.[13] But it was not served. The reasons why the writ was not served was the subject of considerable argument, but ultimately is not relevant to this decision.
[11] Affidavit of Richard Fairley Frederick Edwards sworn 17 October 2019, par 8.
[12] Affidavit of Richard Fairley Frederick Edwards sworn 17 October 2019, par 9.
[13] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 12, Annexure ARS-1.
On 10 December 2018 a notice of change of solicitor was lodged.[14] Arcon Legal were replaced by LSV Borrello Lawyers. On 29 July 2019 a further notice of change of solicitor was lodged.[15] This really was a change in name only – LSV Borrello Lawyers had changed their name to Thompson Geer. That firm presently represents the plaintiff. What is of importance is that the plaintiff's present solicitors came on the record as of 10 December 2018. On 29 July 2019 the plaintiff lodged an amended writ of summons.[16] A number of changes were made to the endorsement of claim. For present purposes the important change was to add a claim that the loss and damage allegedly sustained by the plaintiff 'began to manifest from December 2012'. This change is of some importance because it establishes a date from which any limitation period might run. The plaintiff's solicitors were aware they had to serve the writ of summons on or before 29 July 2019 or the writ would become stale.[17] In an affidavit sworn 4 September 2019 Ms Shani Claassen explains how service of the writ was attempted. Ms Claassen says that on 29 July 2019 – the last day for service of the writ – she was instructed by Mr Spitz to serve the first and the second defendants.[18] At 11.46 am Ms Claassen sent an email to Mr Edwards. That email appears as attachment SC6 to Ms Claassen's affidavit. Relevantly it reads as follows:
Dear Richard
We act for the City of Canning with respect to Supreme Court matter CIV 2326 of 2018.
Please find attached the Writ of Summons and Amended Writ of Summons.
Can you please confirm if you have instructions to accept service of the Writ and Amended Writ on behalf of the first defendant Christou Nominees Pty Ltd as trustee for the James Christou Architect Trust trading as James Christou & Partners by 1.00 pm today.
Kind regards
[14] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 17, Annexure ARS-4.
[15] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 32, Annexure ARS-11.
[16] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 32, Annexure ARS-10.
[17] Affidavit of Adam Russell Spitz sworn 4 September 2019, par 35.
[18] Affidavit of Shani Claassen sworn 4 September 2019, par 8.
Five minutes later Ms Claassen sent Mr Edwards a further email enclosing a copy of the notice of change of solicitor. At 12.17 pm Ms Claassen received an email from Mr Edwards to the following effect:
We are attempting to get instructions on your request but will likely not have them before 1.00 pm because of the very limited notice you have given us.
Please retrain from taking any further steps until we respond to your request.[19]
[19] Affidavit of Shani Claassen sworn 4 September 2019, Annexure SC-13.
In fact Mr Edwards never responded to Ms Claassen's email.
All this is very curious. It is clear neither Mr Spitz nor Ms Claassen was aware of the email sent by Ms Bishop, copied to Mr Edwards, which advised DLA Piper had authority to accept service of proceedings. Given that Thompson Greer were not the solicitors of record when that email was sent it is perhaps understandable that it may have been overlooked. That said it was a matter of some significance which it might be thought warranted close investigation by Mr Spitz when he was familiarising himself with the file. Anyway, for present purposes it is clear as at 29 July 2019 neither Mr Spitz nor Ms Claassen was aware there was in existence an email in which DLA Piper undertook to accept service of proceedings. Although the evidence on the point is not entirely clear it would appear that when he received the email from Ms Claassen on 29 July 2019, Mr Edwards was aware of Ms Bishop's email agreeing to accept service of proceedings. Mr Edwards does not anywhere suggest this email had slipped his mind. It would have been open to him to respond to Ms Claassen by saying that although DLA Piper had been authorised to accept service some time had passed and he needed to confirm his instructions. The fact he did not allude to having been instructed at one point to accept service is odd – indeed it has sinister overtones. It would have been preferable if Mr Edwards had explained precisely why it was he thought he needed to revert to his client to confirm instructions which, on the evidence, had never been withdrawn.
As at 12.37 pm on 29 July 2019 Ms Claassen found herself in an extremely difficult position. She knew from Mr Spitz service of the writ had to be effected on the 29th. Before receiving Mr Edwards' responsive email she had taken steps to ascertain the registered office of the first defendant. Unfortunately her enquiries went amiss. She obtained a search of a company which had a very similar name to the first defendant and which had its registered office in, of all places, South Australia. She arranged for service on the company she thought was the first defendant. The upshot was the first defendant was not served and the writ went stale. It is impossible not to have sympathy for Ms Claassen – she was assigned the task of serving this writ with only a few hours to spare. She approached Mr Edwards, he asked her to hold off and then did not respond to her enquiry. These circumstances are every young practitioner's nightmare.
It is an essential part of the training of any junior practitioner that they learn to perform when under pressure. No criticism can be directed at Mr Spitz for handing to Ms Claassen the challenge of serving this writ within time. But knowing what was at stake it is surprising Mr Spitz did not check with Ms Claassen on an hourly basis as to her progress in serving the writ. Had he have done so he might have thought it strange a firm of architects practising in Claremont should have its registered office in South Australia. Close supervision may have prevented the mistake made by Ms Claassen from occurring. It is difficult to understand why, in the circumstances, Mr Spitz took a hands off approach.
It is worthy of note that immediately after she had sent the email to Mr Edwards, Ms Claassen also sent an email to Mr Sean Popperwell of Popperwell & Co, representing the second defendant. Mr Popperwell responded within the half hour. Relevantly his email read:
Reserving to my client the right to file a conditional appearance and/or its right to apply to strike out the statement of claim/set aside service/strike out the indorsement/strike out the amended indorsement I have instructions to accept service.[20]
[20] Affidavit of Shani Claassen, Annexure SC-15.
Mr Popperwell is a very experienced litigation solicitor.
In due course it became apparent the first defendant maintained the writ had not been served within the 12 month period required by the rules. The plaintiff's solicitors invited the first defendant to waive any irregularity. They declined to do so. On 6 September 2019 the plaintiff's solicitors wrote to the Supreme Court seeking case management directions extending the validity of the writ. It was in support of that application that the affidavits of Ms Claassen and Mr Spitz, which I have referred to above, were filed. On 11 September 2019, without appearance by the parties, Registrar Carey extended the validity of the writ until 27 September 2019. A copy of the extended writ was filed 12 September 2019. On 3 October 2019 the first defendant entered a conditional appearance. On 17 October 2019 the first defendant issued a chamber summons seeking to set aside Registrar Carey's ex parte order.
That application was programmed to a special appointment and a number of affidavits were filed. Both the plaintiff and the first defendant filed submissions. The matter came on for hearing on 10 December 2019. During the course of the hearing it became clear the plaintiff maintained the writ had actually been served. That is to say it was the plaintiff's position that the email transmission of the writ and the amended writ on 29 July 2019 had effected service. That was because the first defendant's solicitors had agreed to accept service. If that argument was correct then the question of whether Registrar Carey's exparte order should be set aside was moot. Service had been effected before the writ became stale. It was necessary to determine whether in fact service had been effected as a necessary precursor to dealing with the first defendant's chamber summons. To regularise the procedure I directed the plaintiff to file a chamber summons seeking a declaration service had indeed been effected on 29 July 2019. That was done and at the resumed hearing both the question of whether or not service had been effected and whether the extension of the writ ought be set aside was argued. But the first question is whether or not service had indeed been effected.
Under O 9 of the Rules of the Supreme Court 1971 (WA) (Rules) there are two ways in which service of a writ can be effected. Pursuant to O 9 r 1(1) the writ can be served personally. Pursuant to O 9 r 1(2) service is effected where the defendant's solicitor endorses on the writ a statement that he accepts service on behalf of the defendant. In addition, because the first defendant in this case is a corporation service could have been effected pursuant to s 109X of the Corporations Act 2001 (Cth). The plaintiff did not rely on the Rules or the Corporations Act in advancing the argument service had been effected.
It was common ground between the parties that at common law service in accordance with an agreement, acknowledgment or undertaking constitutes sufficient service. In many cases – and this is one of them – requiring service on the client serves no real purpose. This dispute had been on foot for many years and settlement discussions involving the first defendant's personnel had taken place. There was nothing to be gained by the first defendant's solicitors forcing the plaintiff to actually serve the first defendant. Mr Popperwell realised that fact – he opted for convenience and practicality over rigid observance of the Rules.
It was the plaintiff's contention that having given an undertaking to accept service, that undertaking not having been withdrawn, the email transmission of the writ to the first defendant's solicitors constituted service. The first defendant on the other hand said that the transmission of the writ to the first defendant's solicitors was clearly never intended to effect service. The content of Ms Claassen's email to Mr Edwards makes that clear. That is further supported by the fact that service was effected on the wrong company. In other words, the first defendant's argument really hangs on the subjective intention of Ms Claassen.
The purpose of service is to bring to the attention of the parties served the fact proceedings had been issued. Service is not some sort of forensic game in which one party, by taking advantage of an oversight by another party, gains an advantage. With respect, that seems to be the approach the solicitors for the first defendant are adopting in this case. They had been advised the writ had been issued and Mr Edwards it seems knew of the undertaking to accept service. But even if he had forgotten such an undertaking had been given, he could quite easily have obtained instructions and reverted to Ms Claassen as a matter of urgency. In other words, he could, and probably should, have done what Mr Popperwell did.
On the facts I am satisfied the writ was served on the first defendant when it was transmitted by email to Mr Edwards. If there was in place a contract between the plaintiff's solicitors and the first defendant's solicitors to the effect the first defendant's solicitors would accept service of the writ, then delivering the writ to the first defendant's solicitors would have been effective service. The subjective intention of Ms Claasseen would play no part. There is no reason why that should not be the case when an undertaking to accept service had been provided. Solicitors are officers of the court. Undertakings between solicitors should be honoured – it is fundamental to the administration of justice that solicitors are able to repose trust in one another.
Accordingly, I am satisfied service has been effected and the question of whether or not the stale writ ought to have been renewed is moot.
During the course of argument two issues were raised which are of importance but which it is not necessary for me to answer. First, there is the question of whether an undertaking to accept service of a writ can be withdrawn. While there is no authority directly on the point, in Daws v Duncan [2001] WASC 161 Templeman J expressed the view that such an undertaking could be withdrawn. However, the point was not directly in issue and that case is not authority one way or the other. Here, as there was no suggestion the undertaking to accept service had been withdrawn I need not deal with the issue.
The second question is whether an undertaking to accept service in the form that was given here amounts to an undertaking to issue an unconditional appearance. There is authority to the effect that it does: See Simpson v Brereton & Alexopoulos [1964] VR 332, 334 – 335. That case must be treated with some caution – the wording of the undertaking was to the effect an unconditional appearance would be entered. But it is arguable that an undertaking to accept service of the writ is an undertaking to enter an unconditional appearance. Clearly Mr Popperwell thought so – that explains the nature of his reply.
In this case I will make a declaration the writ has been properly served. That will mean the conditional appearance entered by the first defendant will become unconditional. So the question of whether or not the undertaking was to enter an unconditional appearance is not live.
Parties to confer as to a precise form of orders and as to costs. In the circumstances an agreement cannot be reached, parties are to file competing minutes of proposed orders by 31 March 2020.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IW
Associate to Master Sanderson25 MARCH 2020