Frigger v Professional Services of Australia Pty Ltd
[2023] WASC 418
•1 NOVEMBER 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: FRIGGER -v- PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD [2023] WASC 418
CORAM: REGISTRAR FATHARLY
HEARD: 13 OCTOBER 2023
DELIVERED : 13 OCTOBER 2023
PUBLISHED : 1 NOVEMBER 2023
FILE NO/S: CIV 1986 of 2023
BETWEEN: ANGELA CECILIA THERESA FRIGGER
First Plaintiff
HARTMUT HUBERT JOSEF FRIGGER
Second Plaintiff
AND
PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD
First Defendant
SANDRA MAY BANNING
Second Defendant
SANDRA MAY BANNING in his capacity as administrator of the estate of MARTIN PAUL BANNING
Third Defendant
DAVID ABRAHAM LENHOFF
Fourth Defendant
TIMOTHY RICHARD STEPHENSON
Fifth Defendant
CAMERON VICTOR EASTWOOD
Sixth Defendant
Catchwords:
Practice and procedure ‑ Notice of motion for default judgment and substituted service heard urgently with limited notice ‑ No appearance by defendant company served by post ‑ Potential injustice ‑ Writ and claim based upon allegations at face value at odds with facts relied upon in evidence ‑ Writ and claim fundamentally seek declarations making default judgment inappropriate ‑ Where plaintiffs sought substituted service of individuals by post on the basis that the company was served by post at the same address ‑ Where default judgment against first defendant would create difficulties in relation to issues to be tried between remaining parties ‑ Where default judgment would not be capable of enforcement without leave even if granted ‑ Where similar issues arise in another proceeding concurrently case managed by a Judge ‑ No proper basis on the evidence for substituted service order or default judgment based upon substituted service
Legislation:
Rules of the Supreme Court 1971 (WA), O 13 r 9
Result:
Applications for default judgment and substituted service dismissed
The costs of the fourth, fifth and sixth defendant be reserved
The matter referred to Justice Hill for future case management
Category: B
Representation:
Counsel:
| First Plaintiff | : | In Person |
| Second Plaintiff | : | In Person |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | S Ringrose |
| Fifth Defendant | : | J Singh |
| Sixth Defendant | : | P Fenwick |
Solicitors:
| First Plaintiff | : | In Person |
| Second Plaintiff | : | In Person |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | Jackson McDonald |
| Fifth Defendant | : | Barry Nilsson Lawyers (WA) |
| Sixth Defendant | : | Popperwell & Co |
Case(s) referred to in decision(s):
Bass v Permanent Trustee Co Ltd [1999] HCA 9
Charles v Shepherd [1892] 2 QB 622
City of Stirling v Dueschen [2011] WASC 126
Permanent Custodians Ltd v Elite Grains Pty Ltd (No 2) [2016] WASC 238
Termijtelen v Van Arkel [1974] 1 NSWLR 525
Wiedenhofer v Commonwealth [1970] CLR 172
REGISTRAR FATHARLY:
(This judgment was delivered extemporaneously on 13 October 2023 and has been edited from the transcript.)
Application
Given that this matter has been brought on urgently before me I have had the benefit of considering, in detail, the application and the documents filed, and turning my mind to some of the case authorities in relation to the Rules of the Supreme Court (WA) (RSC) O 13 r 9 so that I can deliver a decision in relation to this application quickly today.
In these proceedings, Mr and Mrs Frigger have commenced proceedings against six defendants, the first defendant being a company, and the other defendants being individuals.
The plaintiffs have applied by notice of motion heard before me, for:
(a)a default judgment against the first defendant with costs of the action; and
(b)for an order for service upon Sandra May Banning (Ms Banning) such that the service on the first defendant stand as service upon her; and
(c)if that substituted service is so ordered, then for a default judgment against Ms Banning, with costs of the action.
This application is made under O 13 r 9 RSC.
Having considered the submissions and the authorities, and having heard the submissions from the parties this morning, it is not necessary for me to adjourn this matter to another date to hear further from the defendants.
For the following reasons, the application must be dismissed.
Proceedings
The proceedings were commenced by a writ of summons filed on 23 August 2023. The writ is endorsed with a claim seeking orders to set aside outcomes of what are referred to as 'null actions' and CIV 1309 of 2021 and CACV 55 of 2022, respectively proceedings heard and determined by a single judge of this court and of the Court of Appeal. The plaintiffs further claim loss and damages, compensation and interest and costs.
The plaintiffs' claim by the endorsement is to the effect that:
(a)despite the first defendant being registered by the Australian Securities Commission on 5 June 1998 in the register of companies, the first defendant was not, in fact, formed as an incorporated company on registration or at all, and that is a fact admitted or conceded by the second and third defendants in Federal Court proceedings WAD 126 of 2022;
(b)notwithstanding that the company never came into existence, the second and third defendants commenced numerous actions in this court in the first defendant's name against the plaintiffs and their company, Computer Accounting and Tax Pty Ltd, and in those circumstances, the actions were nullities because they were commenced in the name of a party that does not exist;
(c)the third to sixth defendants claim to be agents of the first defendant, representing it in the proceedings, and they are jointly and severally liable to the plaintiffs by law of agency.
Appearances have been filed to date by the fourth to sixth defendants. I note the objection by Mrs Frigger this morning on behalf of the plaintiffs, that they have not been properly completed and filed in accordance with the rules. That is not an issue for me to determine today.
The statement of claim was filed on 5 October 2023.
The plaintiffs' application by notice of motion also filed on 5 October 2023 is supported by an affidavit of service sworn by Angela Frigger, the first plaintiff, on 5 October 2023 (Affidavit), and a certificate of urgency filed 11 October 2023 (Certificate). There is also a further affidavit filed on 13 October 2023, being an affidavit of the first plaintiff sworn 12 October 2023.
The Certificate states that:
1.The plaintiffs request the default judgment application be listed urgently for hearing by a judge on the following grounds:
(a)the first defendant, although included in ASIC's register of companies, never came into existence, and since at least 8 September 2008, has not had any shareholders or directors;
(b)the first defendant cancelled its ABN in December 2009 but purports to operate its business through the fifth and sixth defendants in CIV 1613 of 2023 and Federal Court proceedings WAD 126 of 2022.
(c)the second defendant purports to be a member and director of the first defendant but has never had a share allotted or transferred to her, and there has never been a valid resolution recording her as a director, and she has never given written consent to the director.
2.The first defendant through the second defendant and her late husband Martin Paul Banning has waged a war of litigation against the plaintiffs since August 2008 through the fourth, fifth and sixth defendants who acted without authority.
3.The second defendant has avoided personal service of the writ.
4.There are numerous actions in this court which will be resolved if default judgment is entered against the first defendant.
Those are substantially submissions as opposed to grounds of urgency in relation to this matter.
It is apparent that the plaintiffs proceed on the assumption that if default judgment is entered against the first defendant, the outcomes of the proceedings in CIV 1309 of 2021 and CACV 55 of 2022 must necessarily be set aside as the first defendant company was not formed as an incorporated company on registration or at all[1] and not had any shareholders or directors such that the first defendant company, through the second defendant and Mr Banning and his executor, had acted without authority.
Default judgment under O 13 r 9 RSC
[1] Indorsement of the writ and Certificate as to the effect of its status.
Generally a plaintiff may enter default judgment if the defendant fails to enter an appearance within the time limited for appearing to proceedings commenced by writ.[2]
[2] O 13 r 1 RSC.
Proof of service and an endorsement of service on the writ by affidavit are essential requirements for any default judgment application.
The plaintiffs' writ seeks relief which is not merely for liquidated or unliquidated damages or other specific relief that is referred to in O 13 r 2 to O 13 r 6 RSC. The requirements of O 13 r 9 apply in considering whether default judgment should be given, and the application is properly made under that rule.
Order 13 r 9 has the additional requirements that, in addition to service and indorsement, I have to be satisfied:
(a)the defendant has failed to enter an appearance within the time limited for appearing;
(b)that the statement of claim, which was not indorsed on the writ, has been served on the defendant; and
(c)the plaintiffs have produced a certificate issued by the proper officer on the day of the hearing stating that no appearance has been entered by the defendant against whom judgment is sought in default of appearance.
Further, if a default judgment is entered against one of several defendants, judgment cannot be enforced against any defendant without leave of the Court.[3]
Service of a writ
Requirements
[3] O 13 r 9(4).
Subject to provisions of any Act and the RSC, a writ must be served personally on each defendant by the plaintiff or the plaintiffs' agent,[4] and the details of the service of the writ must be endorsed on the writ.
[4] O 9 r 1(1) and r 1(4) RSC.
The requirements for personal service of a writ on an individual require leaving a copy of the writ with the individual personally and, if requested, showing them the original writ.[5]
[5] O 72 R 2 RSC.
Section 109X of the Corporations Act 2001 (Cth) provides for service of a document on a company, which includes by posting it to the company's registered office.[6] That form of service is permitted for service of a writ on a corporation.[7]
Has the first defendant been served?
[6] Section 109X (1)(a).
[7] O 72 r 3 RSC.
As to service on the first defendant, the Affidavit:
(a)attaches the copy of the ASIC current company extract for the first defendant, dated 5 October 2023;
(b)swears to the fact that on 17 September 2023, she served the writ on Professional Services of Australia Pty Ltd by post in a prepaid envelope to the registered office of the company, which I am satisfied is the same address as stated in the company extract;
(c)attaches a copy of the sealed writ with her signature on the indorsement as to service, with the date for indorsement of 17 September 2023; and
(d)swears to the fact that on 5 October 2023, she served the statement of claim on Professional Services of Australia Pty Ltd by post in a prepaid envelope to the same address as the writ.
I am satisfied by the Affidavit that the first defendant has been served with the writ by post.
Has the writ been indorsed with service within three days as required by the Rules?
I am satisfied that the indorsement of the service of the writ has been made and bears a date, being the same date of the service. It is therefore compliant.
Has there been non‑appearance within the time limited for appearance?
The address for service is on the outskirts of metropolitan Perth. The time for appearance is 10 days after service.
Section 29 of the Acts Interpretation Act 1901 (Cth) provides, essentially, that unless the contrary is proved, service on the first defendant by post would be taken to have been effected at the time at which the letter would be delivered in the ordinary course of post.
If the writ was posted to the first defendant on 17 September, being a Sunday, the earliest it would have been collected and sent out for delivery would have been Monday 18 September, and it may not have been delivered in the ordinary course until at least Thursday 21 September 2023.
On the basis of 10 days to appear, while there is no evidence of what the ordinary course of post would require, more than 10 days would have elapsed before the application for default judgment.
While I am not aware of an appearance having been filed by the first defendant prior to 5 October or at the time of hearing the application, it is a matter for the plaintiffs to produce the certificate for the purposes of O 13 r 9 that no appearance has been entered.
I have been handed up that certificate this morning, complying with O 13 r 9(2)(b).
Service of the statement of claim
There are proper reasons why the statement of claim has not been indorsed on the writ given the pleadings in that document in this case. There are matters that clearly should not be indorsed on the writ.
Service of the statement of claim by post to the first defendant on 5 October 2023 has provided very limited time for the first defendant to consider the statement of claim, given the claimed urgency of this hearing.
The first defendant would likely not have received the statement of claim in the ordinary course of post until at least 10 October 2023. In any event, not more than two, possibly three days prior to this hearing would the first defendant have received the statement of claim.
Given that a failure by a defendant to appear is taken to be an admission of allegations of fact contained in the statement of claim,[8] the obligation for the service of the statement of claim and opportunity for the defendant to consider the content of it cannot be underestimated.
[8] City of Stirling v Dueschen [2011] WASC 126 [48].
It is a matter of fundamental procedural fairness. At the very least, further time would be provided to the first defendant to have an opportunity to consider the content without default judgment being entered.
Is there an entitlement to default judgment?
Even if the plaintiff has met all the requirements of O 13 r 9 RSC, there is no entitlement as of right to default judgment.
Even if the statement of claim is perfectly clear, the court has a discretion to refuse to give judgment if there is reason to think that injustice will result.[9]
[9] Charles v Shepherd (1892) 2 QB 622 (624) – (625); Wiedenhofer v Commonwealth [1970] CLR 172.
On a motion for judgment on deemed admissions on the pleadings, the court will not give a judgment which is contrary to the true facts or where it will create difficulty in relation to issues yet to be tried, such as where the facts in relation to the party in default are substantially interwoven with the case of parties who have appeared.[10]
[10] Termijtelen v Van Arkel [1974] 1 NSWLR 525.
There is additional limitation on a default judgment that it is interlocutory in nature. It is not a final judgment.[11]
[11] Permanent Custodians Ltd v Elite Grains Pty Ltd (No 2) [2016] WASC 238 [11].
Generally, a declaration will not be made when judgment is given without proper argument before a judge, including the case of default.[12]
[12] Bass v Permanent Trustee Co Ltd [1999] HCA 9.
Further, even if a default judgment were given against one of several defendants, it cannot be enforced unless judgment is obtained against all other defendants without leave of the Court. That is clearly stated by O 13 r 9(4) RSC.
Should there be default judgement against the first defendant?
Applying those authorities to this matter, the plaintiffs' application in this case for default judgment against the first defendant must be dismissed for the following reasons:
1.The statement of claim, while served by post, will only have been received within the last two to three days, providing limited time to consider the content. To enter the default judgment now or at all upon this urgently requested hearing may be convenient to the plaintiffs providing an opportunity to be heard, but it has great potential to cause injustice to the first defendant. It is accepted, however, that, at present, they have not filed an appearance and, on the face of it, are well beyond the time limited for entering an appearance.
2.The writ and the nature of the claim are based on an allegation that the first defendant was not formed as an incorporated company on registration or at all, and that the remaining defendants did not have proper authority in relation to it, including as to the commencing of and carrying on legal proceedings in the name of a company that does not exist, making such proceedings nullities. While it is not my role as a case manager to finally determine these proceedings and beyond my authority, those allegations are at face value entirely at odds and contrary to the Affidavit attaching the ASIC current company extract of the first defendant of the same date, which confirms:
(a)the name and registered status of the first defendant;
(b)the ACN and the ABN;
(c)the registered office and principal place of business address since 2016;
(d)the current director and secretary appointed 10 May 2016, being Ms Banning;
(e)the share structure and beneficial ownership of the shares by Ms Banning.
3.Accordingly, while the claim is based upon an assertion that the first defendant never came into existence and does not exist, that is contrary to the ASIC records in evidence and it is not appropriate for me to give a judgment by default against the first defendant, which, on the face of it:
(a)is contrary to the facts relied upon for this application;
(b)will create a difficulty in relation to issues yet to be tried between the parties.
Those are matters for determination on another date by a judge.
4.Furthermore, if the first defendant never came into existence, the plaintiff has commenced proceedings against that non-entity and seeks a judgment by default against that non-entity. If that is the correct position, then such a judgment would be a nonsense.
5.Even if a default judgment were entered against the first defendant, it is not capable of enforcement at present.
6.Although not clearly pleaded in this case, what the plaintiff seeks fundamentally are declarations to be made. It is entirely inappropriate for that to occur by default judgment against one of several defendants and without proper argument before a judge.
7.It also happens to be the case that in the matter of CIV 1613 of 2023, similar issues are currently before Hill J and it would be appropriate for the matter to be concurrently managed by Hill J in relation to the same issues that need to be determined.
Substituted service of Ms Banning
The plaintiffs also seek orders that the service of the writ and the statement of claim on the first defendant should stand as service on Ms Banning in her capacity as the second and third defendant.
All but the first defendant are individuals who must be personally served.
While it is possible for the court to order that there be substituted service upon a person, I must first be satisfied that personal service is impracticable. The application that is before me is not for an order for substituted service so that that order may be then complied with and service in accordance with that order, including service of the order made, but rather that the service on the first defendant by post stand as service on the second and third defendant, and then if such order is made immediately grant default judgment against her in each of those capacities.
The only evidence before me in the Affidavit of service is that on 14 and 16 September 2003 (sic)[13] Mrs Frigger and her husband attended the property at which the first defendant is located, being the same address as Ms Banning, and attempted to serve her personally with the writ. The Affidavit states that Ms Banning was in the house, but she refused to open the door.
[13] Which I understand to be intended to be 2023.
I have been told today from the bar table that the position was different to that, because it was not apparent who was in the property other than that somebody was in the property and she lived alone and that they did not know whether that was Ms Banning or not.
So the evidence of service or attempted service upon Ms Banning is somewhat contradictory and is limited in terms of the attempts at service.
So the application in relation to Ms Banning should also be dismissed for the following reasons.
(a)she has not been personally served in accordance with the RSC;
(b)in my view there have been insufficient attempts to serve her and to satisfy me that it is impracticable to serve her personally;
(c)there has not previously been an application for substituted service, including as to the service of the order that I make for substituted service;
(d)there are three different legal capacities in which Ms Banning is involved in the proceedings, firstly as a director of the company who is the first defendant; secondly, in a personal capacity; and thirdly, as an administrator of the estate of her late husband. She should be served as second and third defendant in each of those capacities personally;
(e)an order is not made by this court that service has been effected and then immediately acted upon as a default judgment. To do so, in my view, would cause an injustice.
So having disposed of the application against the first defendant, the same issues as to why default judgment should not be given in relation to the second and third defendant apply in relation to Ms Banning. So, even if she had been personally served, there are very good reasons, as I have stated in relation to the first defendant, why default judgment should not be given.
Disposition
Accordingly, I dismiss the entirety of the application that is before me today.
The costs of the fourth defendant, fifth defendant and sixth defendant will be reserved.
It is appropriate for the matter to be referred to Justice Hill for future case management.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JC
Associate
1 NOVEMBER 2023
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