Jabiru Satellite Ltd v Societe Generale
[2021] VSC 544
•2 September 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2020 02631
| JABIRU SATELLITE LIMITED (in liq) (RECEIVERS AND MANAGERS APPOINTED) & ANOR (according to the Schedule) | Plaintiffs |
| v | |
| SOCIETE GENERALE & ORS (according to the Schedule) | Defendants |
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JUDGE: | DELANY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 August 2021 |
DATE OF RULING: | 2 September 2021 |
CASE MAY BE CITED AS: | Jabiru Satellite Ltd v Societe Generale |
MEDIUM NEUTRAL CITATION: | [2021] VSC 544 |
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PRACTICE AND PROCEDURE – Extending validity of writ – Exercise of discretion – Relevant considerations – Where address for service is out of Australia – Delay due in part to unsuccessful attempts by liquidator to obtain litigation funding – Steps not taken to effect service until 11 of 12 months had elapsed – Defendants on notice of the proceeding before time expired – Whether reasonable steps taken to serve writ – Presumptive prejudice of delay – Good reason shown to extend period of validity – Horne v Retirement Guide Management Pty Ltd [2017] VSCA 47; (2017) 54 VR 325, Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639, Howard v Power [2013] VSC 198 applied – Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104, Weston in Capacity as Special Purpose Liquidator of One.Tel Ltd (inliq) v Publishing and Broadcasting Ltd [2012] NSWCA 79; (2012) 88 ACSR 80 cited – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 5.12, 7.02, ord 80 – Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters – Civil Procedure Act 2010 (Vic) ss 19, 24, 25.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr G Rich SC and Mr E Gisonda | Banton Group |
| For the Defendants | No appearance |
HIS HONOUR:
Introduction
By summons filed 17 June 2021, the plaintiffs, Jabiru Satellite Limited (In Liquidation) (Receivers and Managers Appointed) (‘Jabiru’) and NewSat Limited (In Liquidation) (Receivers and Managers Appointed) (‘NewSat’), seek an order under r 5.12(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) that the period of validity of the writ, filed 18 June 2020, be extended to 18 June 2022.
Rule 5.12 of the Rules relevantly 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, …
Rule 5.12 was introduced as part of the General Rules of Procedure in Civil Proceedings 1986 (Vic). The previous rule, ord 8 r 1, provided that a writ may be renewed ‘if satisfied that reasonable efforts have been made to serve the defendant, or for other good reason’.[1] Although that language is not reproduced in r 5.12 and the discretion to amend is not so qualified, cases applying r 5.12 have continued to approach the exercise of the discretion by reference to the criteria specified in the previous rule.[2]
[1]Supreme Court (General Rules of Procedure in Civil Proceedings) Rules 1985 (Vic), ord 8, r 1.
[2]Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639, [41]; Horne v Retirement Guide Management Pty Ltd [2017] VSCA 47; (2017) VR 325, [161]; Howard v Power [2013] VSC 198, [10(e)], citing Soper v Matsukawa [1982] VR 948, 952.9 and Battersby v Anglo-American Oil Co Ltd [1945] KB 23.
In support of the relief sought, the plaintiffs rely upon affidavits of Glenn Ian Livingstone, the liquidator of the plaintiffs, sworn 17 June 2021 and of Jack Peter Mackenzie Johnstone, a solicitor, affirmed 17 August 2021. They rely on written submissions dated 18 August 2021.[3]
[3]The plaintiffs were originally represented by Gadens Lawyers. On 13 July 2021 a Notice of Change of Solicitor was filed. Banton Group are now the solicitors for the plaintiffs.
There are eight defendants to the proceeding. Six of the defendants, Societe Generale, Standard Chartered Bank (UK Company Number ZC18), Credit Suisse (Luxembourg) S.A., Deutsche Bank Trust Company Americas, Citibank N.A. and LA Compagnie Francaise D’Assurance Pour Le Commerce Exterieur (Registre du Commerce et des Societes of Nanterre 552 069 791) (‘COFACE’) initially appeared conditionally in the proceedings. The appearances by each of those defendants have since become unconditional under r 8.08 of the Rules.[4] The reason for this application is that two of the defendants, the sixth defendant, Citicorp International Ltd (‘Citicorp’) and the seventh defendant, Export–Import Bank of the United States (‘Ex-Im’), have not yet been served with a copy of the writ in accordance with the Rules.
[4]Babcock & Brown DIF III Global Co-Investment Fund, LP v The Royal Bank of Scotland PLC [2016] VSC 769, [51].
On 30 July 2021 the Court ordered any defendant who wished to be heard on this application should give notice of their intention to do so by 6 August 2021. No defendant appeared on the application. Mr Rich SC and Mr Gisonda appeared on behalf of the plaintiffs.
The proceeding
On 18 June 2020 the plaintiffs issued a generally indorsed writ against eight defendants.
The indorsement of claim alleges that from about 2010 to March 2015 Jabiru and NewSat undertook a project to finance, construct, launch and own a telecommunications satellite (‘the Jabiru Project’). The plaintiffs entered into agreements with Lockheed Martin Corporation Inc dated 8 December 2011, subsequently amended and restated, and further amended, for the construction of a satellite (‘the Lockheed Agreement’). They entered into an agreement with Arianespace S.A. dated 2 March 2012 for the launch of the satellite (‘the Arianespace Agreement’). They entered into various finance agreements with the defendants relating to funding the construction and launch of the satellite.
The finance agreements included a Common Terms Agreement dated 4 July 2013 with each of the first to seventh defendants (‘Financiers’), and an export financing credit facility agreement dated 4 July 2013 with Citibank N.A. (as the Ex–Im facility agent) and Ex-Im, and a separate COFACE Facility Agreement dated 4 July 2013, with Societe Generale, Standard Chartered Bank and Credit Suisse (Luxembourg) S.A.
The indorsement of claim alleges that financial close under the finance agreements was achieved in about February 2014 and drawdowns on the finance agreements occurred. It alleges that on 21 August 2014 the plaintiffs signed a request for a waiver of certain conditions precedent and other provisions of the Common Terms Agreement (‘Waiver 3’). The plaintiffs allege that from August 2014 until about March 2015 the defendants engaged in conduct which included requiring the plaintiffs to execute Waiver 3, and in March 2015, without explanation, withdrawing financial support for the Jabiru Project that had the result the plaintiffs were unable to comply with their obligations under the Lockheed Agreement, the Arianespace Agreement, and the finance agreements.
The plaintiffs allege the conduct of the Financiers was in breach of an implied obligation of good faith and reasonableness in the Common Terms Agreement. Separate claims are made against COFACE including allegations that it knew, or intended decisions taken by it, or its conduct, would cause the Financiers to breach their obligations. They allege the conduct of all defendants constituted unconscionable conduct engaged in by them in contravention of s 21 of the Competition and Consumer Act 2010 (Cth) sch 2 (Australian Consumer Law) (‘ACL’). The relief claimed includes damages, compensation under s 236 of the ACL and declaratory relief under s 237 of the ACL.
As can be seen from this brief summary, the facts giving rise to the causes of action alleged occurred from about August 2014 to March 2015. If the application to extend time is refused, the limitation period for the plaintiffs to bring the claims the subject of this proceeding against Citicorp and Ex-Im will have expired.
The administration of the plaintiffs in insolvency
On or about 17 April 2015, Marcus Ayres and Stephen Parbery of PPB Advisory were appointed joint and several administrators of the plaintiffs by Citicorp (as the security trustee). On 16 April 2015, Jason Preston and Matthew Caddy of McGrathNicol were appointed by Citicorp (as the security trustee) as receivers and managers to the plaintiffs. On 7 August 2015, Mr Ayres and Mr Parbery were appointed as liquidators of the plaintiffs.
Mr Ayres resigned as liquidator of the plaintiffs on 6 March 2017, leaving Mr Parbery as the sole liquidator. From about July 2018 Mr Parbery was assisted in the liquidation of the plaintiff companies by Mr Livingstone, a registered liquidator. In about May 2020 Mr Parbery gave notice of his intention to resign as liquidator of the plaintiffs. On 10 September 2020, Mr Livingstone was appointed as replacement liquidator of the plaintiffs by Order of the Federal Court.[5]
[5]Parbery, in the matter of NewSat Limited (in liq) [2020] FCA 1317.
In January 2017, NewSat, by its receivers and managers, commenced a proceeding against two directors of the plaintiffs alleging breaches of their directors’ duties (‘the Directors Proceeding’). The Federal Court approved a settlement of that proceeding in March 2019. Mr Livingstone has given evidence that until the Directors Proceeding was settled, the former receivers and managers of NewSat remained in control of the primary assets of the plaintiffs, including their books and records.
In around July 2019, Mr Livingstone was informed by Gadens, the solicitors acting for one of the directors in the Directors Proceeding that, during the Directors Proceeding, potential claims by the plaintiffs against the current defendants were identified, and that there were members of NewSat who were interested in pursuing those claims (‘Members’).
Between July and November 2019 the liquidator received select books and records of the plaintiffs, including documents discovered in the Directors Proceeding.
In about November 2019 the then liquidator, Mr Parbery, made an agreement with the Members interested in pursuing the claims, allowing them access to documents of the plaintiff companies.
In May 2020 the liquidator gave instructions for the generally indorsed writ to be filed. The liquidator was without funds to pursue the claims made in the proceeding. He gave instructions for the writ to be filed on condition that it not be served until funding satisfactory to the liquidator had been obtained and the Members agreed to indemnify him and the plaintiff companies against any adverse costs orders or other claims.
Funding of the proceeding
Mr Livingstone has given evidence that between September 2019 and January 2021, with the assistance of Gadens, litigation funding was sought to conduct the proceeding. Separately, Gadens sought funding from five further third-party litigation funders after the writ was filed. The attempts to secure litigation funding were unsuccessful. Because of a lack of funding, the liquidator was not able to take any further step in the proceeding.[6]
[6]Plaintiffs, Affidavit of Glenn Ian Livingstone, dated 17 June 2021, [25] – [27].
On 24 May 2021, Mr Livingstone was informed that one of the Members, Rockgold Holdings Pty Ltd (‘Rockgold’), was willing to seek leave to conduct the proceeding as a derivative action. Upon being so informed, Mr Livingstone immediately took action with a view to promptly effecting service of the proceeding on each of the eight defendants.
Mr Livingstone also took steps to facilitate Rockgold’s application for derivative leave. On 17 June 2021, Rockgold filed its application for derivative leave. That application is listed on 26 November 2021.
Attempts to serve the writ and to notify Citicorp and Ex-Im of its existence
On 26 May 2021, two days after Mr Livingstone was informed that Rockgold was willing to bring a derivative leave application, correspondence was sent by Gadens to Allen & Overy, the solicitors who had acted on behalf of all of the defendants during the Jabiru Project. Allen & Overy was also known to have acted for all of the defendants as recently as December 2017. The letter asked Allen & Overy to confirm whether it had instructions from any and, if so, which of the defendants, to accept service of the proceedings on their behalf.
On 4 June 2021, there having been no response, a follow-up email was sent by Gadens to Allen & Overy. Allen & Overy responded saying the firm did not ‘presently’ have instructions to act on behalf of any of the ‘lenders’, and said that ‘Any further details you are able to share may help us obtain some instructions’. Gadens responded, seeking clarification as to whether Allen & Overy had sought instructions from those for whom, in the past, it had acted. If so, whether their request for instructions to act had been rejected by any, and if so, which of those defendants.
On 15 June 2021 a copy of the writ was sent by email to Allen & Overy with a request they bring the writ to the attention of the defendants. The letter advised that instructions were being sought to request the Prothonotary attend to international service of the writ.
On 17 June 2021 Allen & Overy responded, referring to their earlier email on 4 June 2021 which advised they did not have instructions to act for any of the defendants identified, and confirming that position remain unchanged. Later that day Gadens sent a further email in which they enquired whether Allen & Overy had passed on a copy of the writ to any of the defendants. There has been no response to that enquiry. On 8 July 2021, Allen & Overy entered a conditional appearance on behalf of Societe Generale and Standard Chartered Bank. On 29 July 2021, Allen & Overy entered a conditional appearance on behalf of Credit Suisse (Luxembourg) S.A.
On and from 16 June 2021, the plaintiffs took steps with the assistance of overseas process servers to seek to bring copies of the writ to the attention of defendants including relevantly Citicorp and Ex-Im.
The plaintiffs engaged a process server in Hong Kong for the purpose of bringing a copy of the writ to the attention of Citicorp. Following inquiries by Mr Johnstone as to the appropriate address for service of Citicorp in Hong Kong, a process server, Mr Fu, attended ‘Champion Tower’, the address of Citicorp in Hong Kong at 4.15 pm on 16 June 2021. The Citicorp office address is level 50 in that building. Mr Fu was not permitted to attend level 50 but was instructed by the reception staff to hand the writ to staff in Citicorp’s mail room on level 40, which he did.
On 8 July 2021, Norton Rose Fulbright (‘Norton Rose’), solicitors, informed Gadens that the firm acted for Citicorp and for Citibank. The correspondence from Norton Rose said that service of the writ on Citibank in New South Wales had been ineffective, and denied the writ had been served on Citicorp.
By letter dated 21 July 2021, Norton Rose conceded the writ had been validly served on Citibank before it expired. Norton Rose expressly stated that it did not have instructions to accept service on behalf of Citicorp. On 21 July 2021, Norton Rose entered a conditional appearance on behalf of Citibank.
Having regard to Mr Fu’s affidavit of service I am satisfied that whilst not formally served on Citicorp, in accordance with the procedure provided for in ord 80 of the Rules, a copy of the writ was provided to Citicorp in Hong Kong before the time for service of the writ expired. It also appears highly likely from the fact that Norton Rose act on behalf Citibank, as well as on behalf of Citicorp, that independent of events in Hong Kong, that via Norton Rose a copy of the writ came to the attention of that firm’s client, Citicorp, before the time of the service of the writ expired.
From 16 to 18 June 2021, the plaintiffs engaged a process server in the United States for the purpose of bringing the writ to the attention of Ex-Im at its offices at 811 Vermont Avenue N.W. Washington DC 20571. That address is the address for service of notices upon Ex-Im specified in the 14 January 2014 First Amended and Restated Credit Agreement (‘Credit Agreement’) relating to the Jabiru Project, directed to the attention of VP - Project & Corporate Portfolio Management Division. The email address specified for service in the Credit Agreement is [email protected].
The process server, Mr Hagood, attended the Washington address of Ex-Im on 16 June 2021. When he attended the building, the guards at the front of the building said he needed a point of contact to come outside to accept service, that he was not allowed inside, that they had no contact information for anyone inside, and that the building was almost completely empty as the majority of people were (I infer due to COVID-19) working from home. The following day, 17 June 2021, Mr Hagood again attended the building, the security guards in attendance were different, but the response was essentially the same.
Between his two visits to the building, Mr Hagood called the general number for Ex-Im as per its website and was transferred to the voicemail of Henry Pitney, the Deputy General Counsel. On 16 and 17 June 2021 he left a voicemail messages for Mr Pitney, including in the course of the first message, stating the purpose of his call. Mr Pitney did not return his calls.
On 18 June 2021, Mr Hagood telephoned the Vice President - Project & Corporate Portfolio Management Division for Ex-Im. There was no answer and once again Mr Hagood left a message.
On 18 June 2021, Gadens emailed a copy of the writ to Ex-Im using the [email protected] email address, and two other Ex-Im email addresses active during the Jabiru Project. The covering email was addressed to the Vice President - Project & Corporate Portfolio Management Division (Export-Import Bank of the United States). It described the proceeding. It said a copy of the writ had been sent to Allen & Overy. It explained attempts had been made to provide a hard copy of the writ to Ex–Im’s offices. It attached informal details of Mr Hagood’s attempts to bring the writ to Ex-Im’s attention. It requested details of a point of contact at Ex-Im so that Mr Hagood could bring the writ to their attention at Ex-Im’s registered address.
There is no evidence of any response to the email from Gadens sent to [email protected] (and the other ‘@exim.gov’ addresses). A ‘read receipt’ was received from one of the other two Ex-Im email addresses, [email protected], at 10.10 am 18 June 2021 Eastern USA time. That time corresponds to 12.10 am Australian Eastern Standard time, approximately two hours after the time for service of the writ had expired.
On 29 June 2021, a hard copy of the writ was sent by registered post to Ex-Im at its Washington address. On 1 July 2021, the hard copy writ was successfully delivered to Ex-Im.
The Rules for international service and the Hague Convention
Rule 7.02 of the Rules is a general provision that provides that an originating process may be served out of Australia without leave, if any one of the circumstances specified in any one of sub-rules (a) – (s) have application. Those circumstances include:
(b)when the claim relates to damages or other relief in respect of a breach of a contract which was made in Australia, wholly or part performed in Australia, governed by Australian law or enforceable in an Australian court;
(c)when the claim is in respect of a breach in Australia of any contract wherever made; and
(j)when the claim arises under an Australian ‘enactment’, and any act or omission to which the claim relates was done or occurred in Australia or any loss or damage was sustained in Australia.
Rule 7.09 provides that a document to be served out of Australia need not be personally served as long as service is effected in accordance with the law of the country in which service is to be effected. Rule 7.05 provides that if a person is to be served out of Australia with an originating process, the person shall be served with a notice in accordance with Form 7AAA. The required form of notice informs the recipient 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.
The plaintiffs have not specifically sought to rely on r 7.02. While that is the case, in written submissions they have sought to rely on Article 10 of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965,[7] (‘Hague Convention’) and separately on the operation of ord 80 of the Rules in respect of service of the writ out of Australia.
[7]Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, opened for signature 15 November 1965, [2010] ATS 23 (entered into force 1 November 2010).
Rules 80.02 - 80.04 of the Rules provide:
80.02 Provisions of this Order to prevail
The provisions of this Order prevail to the extent of any inconsistency between those provisions and any other provisions of these Rules.
80.03 Application of Part
(1)Subject to paragraph (2), this Part applies to service in a Convention country of a local judicial document.
(2)This Part does not apply if service of the document is effected, without application of any compulsion, by an Australian diplomatic or consular agent mentioned in Article 8 of the Hague Convention.
80.04 Application for request for service abroad
(1)A person may apply to the Prothonotary, in the Prothonotary’s capacity as a forwarding authority, for a request for service in a Convention country of a local judicial document.
(2)The application must be accompanied by 3 copies of each of the following documents—
…
Articles 5 and 10 of the Hague Convention are in the following terms:
Article 5
The Central Authority of the State addressed shall itself serve the document or shall arrange to have it served by an appropriate agency, either –
a)by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory, or
b)by a particular method requested by the applicant, unless such a method is incompatible with the law of the State addressed.
Subject to sub-paragraph (b) of the first paragraph of this Article, the document may always be served by delivery to an addressee who accepts it voluntarily.
If the document is to be served under the first paragraph above, the Central Authority may require the document to be written in, or translated into, the official language or one of the official languages of the State addressed.
That part of the request, in the form attached to the present Convention, which contains a summary of the document to be served, shall be served with the document.
…
Article 10
Provided the State of destination does not object, the present Convention shall not interfere with –
a)the freedom to send judicial documents, by postal channels, directly to persons abroad,
b)the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination,
c)the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination
This is not the occasion to consider the interaction between r 7.02, ord 80 and the Hague Convention. The question of whether delivery of the writ to the address of Ex-Im would have been effective service under the Rules was discussed during the hearing. Senior counsel for the plaintiffs said that it would not have been effective because it would not have complied with or been effected via the Hague Convention.[8]
[8]Transcript of Proceedings, Jabiru Satellite v Societe Generale (Supreme Court of Victoria, Delany J, 24 August 2021) (‘Transcript’), 19-20.
I am not certain that is a correct statement of the position. It assumes that ord 80 covers the field so far as service of a writ in a country which is a party to the Hague Convention is concerned. The intent of the Hague Convention is not to construct barriers in the path of service of legal process. It is to facilitate the effective international service of legal process. The preamble to the Convention states:
The States signatory to the present Convention,
Desiring to create appropriate means to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time,
Desiring to improve the organisation of mutual judicial assistance for that purpose by simplifying and expediting the procedure,
Have resolved to conclude a Convention to this effect and have agreed upon the following provisions:
…
Article 10 expressly reserves the right of a party to serve a document in a manner that would otherwise have been permitted by the jurisdiction in which service is to be effected. Provided the State of destination does not object, the Hague Convention shall not interfere with the freedom to send by post to persons abroad. Despite the language of r 80.02, it would be surprising if ord 80 of the Rules was intended to exclude service otherwise in accordance with Article 10 of the Convention. That is, to make more restrictive the manner in which a writ may effectively be served outside Australia than provided for in the Hague Convention itself. Rule 8.02 is concerned with inconsistency in the Rules, not inconsistency with the Hague Convention. Rule 8.04(1) is permissive.
Article 5(a) of the Hague Convention appears directed to the circumstances addressed in ord 80 of the Rules. Article 10 appears to have independent operation, at least in the Hague Convention itself. Service effective in accordance with Article 10 appears consistent with r 7.02. As is the case with r 80.02, r 7.02 is expressed in permissive language.
Although there is no evidence of what is effective service in Hong Kong or in Washington, it would be surprising if service of the writ by delivering a hard copy to the office of the corporation was not effective service in both jurisdictions. That is so although it does not appear that notice, in accordance with Form 7AAA of the Rules, accompanied the writ actually delivered in either jurisdiction.
What is significant for the purposes of the present application is that before the time fixed for service of the writ had expired, the plaintiffs had sought to personally serve the writ on the registered offices of Citicorp and Ex-Im. They succeeded in the case of Citicorp.
So far as Ex–Im is concerned, despite efforts to provide a hard copy of the writ to that defendant at its address in the United States between 16 and 18 June 2021, it cannot be concluded that a hard copy of the writ was provided to Ex-Im prior to expiry of the 12 month period from issue. While that is the case, Ex-Im was provided with an electronic copy of the writ on 18 June 2021. An email enclosing the writ was sent to three different Ex-Im email addresses. The evidence does not disclose whether and, if so, at what time the email was read at two of those addresses. It does disclose that the email sent to one of the Ex-Im email addresses was read approximately two hours after the time fixed for valid service of the writ expired.
Independent of efforts to serve the writ personally and, in the case of Ex-Im, electronically, on 18 June 2021, the plaintiffs applied to the Prothonotary for service abroad of the writ on parties including Citicorp and Ex-Im in accordance with ord 80 of the Rules. The application referred to Article 5(a) of the Hague Convention. The documents enclosed were in respect of each defendant as required by r 80.04(2). They included a Form 80A - request for service abroad of judicial documents and certificate, Form 80B - summary of the document to be served, letter to the defendant, a copy of the writ and Form 7AAA Notice to the defendants.
The principles
The principles to be applied on an application to extend a writ under r 5.12 were helpfully summarised by Derham AsJ in Howard v Power:
10.The principles applicable are well settled. ….. The principles applicable are, in summary, as follows:
(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”);[9] Ramsay v Madgwicks[10] (“Madgwicks”);
[9][1945] KB 23, 32-3 per Lord Goddard.
[10][1989] VR 1, 5.5.
(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[11] (“Savcor”);
[11](2005) VR 639, 651.
(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[12] (“Soper”); Battersby;
[12][1982] VR 948 at 952.9.
(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;[13]
(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).[14]
(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] [sic] 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”)).[15]
[13]But there are cases where to await the outcome of a test case is a good reason: see Kleinwort, 619-624.
[14]It seems that this factor may be based in part on what Lord Goddard said in Battersby, 32 that it is not right that people should be left in ignorance that proceedings have been taken against them if they are available to be served.
[15]Howard v Power [2013] VSC 198, [10]-[11]; cited in Timbercorp Finance Pty Ltd (In Liq) v Allan [2016] VSC 481; (2016) 312 FLR 259 [74]; Baz v Minarto [2017] VSC 160, [42].
In Savcor Pty Ltd v Cathodic Protection International APS,[16] Gillard AJA, with whom Ormiston and Buchanan JJA agreed,[17] said as follows:
(iii) It is not possible and indeed is unwise to attempt to define the circumstances which amount to a good reason. It is trite observation but not very helpful that whether or not it is a good reason must depend upon all the circumstances of the particular case. As a general proposition difficulties serving the writ within the 12 months’ period will usually establish a good reason. By way of example where the defendant is evading service, his whereabouts are unknown or some other difficulty is experienced in serving the defendant.
(iv) By reference to decided cases it is possible to compile a list of the circumstances which constitute a good reason. The cases also provide examples where the circumstances have not been a good reason to extend the period of validity. For example, it is not a good reason that negotiations are continuing between the parties, or legal aid has not been granted and the plaintiff is waiting for the grant. There are cases which say that the latter proposition is not a good reason. But in Waddon v Whitecroft-Scovill Ltd[18] it was said delay caused by the authorities to grant aid may be a good reason. Other examples which have not found favour are difficulty tracing witnesses or obtaining evidence. [19]
[16][2005] VSCA 213; (2005) 12 VR 639 (‘Savcor’).
[17]Ibid, [1], [5].
[18][1988] 1 WLR 309.
[19][2005] VSCA 213; (2005) 12 VR 639, [41(iii)-(iv)].
In Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq)[20] Ipp JA (with whom Tobias and McColl JJA agreed)[21] said:
In my view it would be inappropriate to allow an extension of time for the service of a writ or statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court’s duty to exercise, alone, the discretion conferred upon it. [22]
[20][2009] NSWCA 104 (‘Buzzle Operations’).
[21]Ibid, [106], [107].
[22]Ibid, [82].
The plaintiffs accept that, without more, the fact the liquidator did not have funds to conduct the proceeding and was searching for a litigation funder is not ‘good reason’ to extend time under the Rules.[23] In Re Australian Property Custodian Holdings Ltd (in liq),[24] Judd J said:
The authorities make it clear that to do nothing about service while awaiting a decision of a litigation funder is to arrogate to a non-party the right to decide the period for service[25]…[26]
[23]Plaintiffs, Plaintiffs’ Submissions, dated 18 August 2021, [50].
[24][2015] VSC 745 (‘Re APCH’).
[25]Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104, [82].
[26][2015] VSC 745, [99].
In Weston in Capacity as Special Purpose Liquidator of One.Tel Ltd (inliq) v Publishing and Broadcasting Ltd,[27] in a passage on which the plaintiffs relied, Sackville AJA (with whom Young and Campbell JJA agreed),[28] said he was ‘inclined to doubt that a desire to secure litigation funding can never justify delay in serving initiating process’.[29]
[27][2012] NSWCA 79; (2012) 88 ACSR 80 (‘Weston’).
[28]Ibid, [1], [2].
[29]Ibid, [187].
In Re APCH, Judd J made the following observations about the relevance of the Civil Procedure Act 2010 (Vic) (‘CPA’):
…If it was ever appropriate for a party to adopt a holding position, that option expired in this State with the introduction of the Civil Procedure Act 2010 and the overarching obligations. Merely because a party has an additional period within which to serve a legal process, does not entitle the party, without good reason, to deliberately choose to refrain from serving the process. In the present case, the duty to act promptly and minimise delay is more emphatic because of the mandatory requirement contained in r 2.7 of the Corporations Rules, that the Originating Process be served as soon as practicable. The liquidators’ failure to act promptly after funding became available reinforces my conclusion that they reserved to themselves the right to choose the time for service to suit their own liquidation and litigation strategy.[30]
[30][2015] VSC 745, [102].
In Horne v Retirement Guide Management Pty Ltd,[31] the Court of Appeal considered whether the discretion of Judd J in Re APCH[32] to refuse to extend the time for service had miscarried. Judd J was himself required to consider whether the Associate Judge had erred in the exercise of his discretion when he determined to extend the time for service.[33] Warren CJ, Tate and Beach JJA held that Judd J correctly identified House v The King[34] error in the exercise of discretion by the Associate Judge:
[31][2017] VSCA 47; (2017) 54 VR 325 (‘Horne’).
[32][2015] VSC 745.
[33][2017] VSCA 47; (2017) 54 VR 325, [49]-[70].
[34](1936) 55 CLR 499.
156The principal error identified by Judd J was that the associate judge did not take into account presumptive prejudice. As will be seen, prejudice was considered, but as Judd J found, the associate judge did not consider presumptive prejudice.
…
159The correct approach to presumptive prejudice was outlined in the passage of Robson J’s decision in Re APCH Ltd (in liq) [No 3] that Efthim AsJ cited:
The essential factor weighing against the grant of an extension is prejudice to the defendant. Delay in service amounts to prejudice. This is presumptive prejudice. In this hearing, the defendants have not given evidence of any actual or particular prejudice ...
In the absence of any evidence of actual or particular prejudice, I find the defendants will only suffer presumptive prejudice, in the event that the extensions are granted. This prejudice is mitigated by the fact that delay between the period for service expiring and the service of writ was three to four months, and the first defendant Mr Lewski was likely on notice of the claim from late July 2012.[35]
[35]Horne v Retirement Guide Management Pty Ltd [2015] VSC 327, [76].
…
161Efthim AsJ recognised that the onus was on the applicants to demonstrate a good reason for an extension.[36] The onus was to establish that the respondents were not prejudiced by the delay in service. The respondents were not required to establish prejudice. The evidence before the associate judge concerning the respondents’ knowledge of the proceeding may have supported a finding that presumptive prejudice was mitigated,[37] but it did not support a finding that it was eliminated. The events the subject of the proceeding occurred more than six years prior to the applicants seeking an extension, and more than seven years prior to the respondents being served. The principle of presumptive prejudice reflects the adverse effect of the effluxion of time on defendants’ ability to prepare their defences. In Ramsay v Madgwicks the Court of Appeal recognised that ‘mere lapse of time is itself generally to be regarded as prejudicial’.[38] As Robson J said in relation to the events the subject of the Voidable Transactions Proceeding:
[36]Ibid, [46].
[37]Re APCH Ltd (in liq) [No 3] [2014] VSC 456 [140]–[144]; Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337, 350–1.
[38][1989] VR 1, 7 (Young CJ, with whom Kaye and Southwell JJ agreed).
the directors and others who are named as defendants are facing a proceeding that challenges conduct that allegedly took place in about July 2007. The prejudice to the defendants of further delay cannot be ignored. Delay constitutes prejudice, especially where the circumstances surrounding complicated transactions need to be examined many years after the relevant events.[39]
[39]Re APCH Ltd (in liq) [2014] VSC 190 [183].
162Presumptive prejudice was a relevant consideration in this case, and it should have been taken into account. In our view, on this basis alone, the challenge to Judd J’s finding that the associate judge’s discretion miscarried fails. Furthermore, …
…
167The applicants conceded before this Court that they did not in fact seek the guidance of the Court before the period for service of the originating process expired. In other words, the time for service under r 2.7 had already expired when the applicants filed their interlocutory process on 19 December 2013 seeking an extension. At that stage, the applicants had not taken any steps to serve the originating process.[40] This meant that the applicants had allowed time to expire before involving the Court and before taking any steps to effect service. This was a relevant consideration, and it added weight to the argument that the applicants had arrogated to themselves the power to decide the period in which service should be effected.
…
172The applicants contended in proposed grounds 4 and 5 that if Judd J was required to re-exercise the discretion, he erred in doing so by finding that awaiting the outcome of another proceeding and seeking litigation funding can never amount to good reasons for extending time, irrespective of the circumstances of the case. That was the applicants’ main challenge to Judd J’s exercise of discretion. The argument is not supported by a close reading of the reasons. His Honour carefully considered the applicants’ two principal reasons for seeking an extension, and the broader circumstances of the case, and concluded that the applicants had failed to establish a good reason for extension. The conclusion that Judd J did not assess the two reasons in the abstract, and instead considered the circumstances of the case, is supported by the following aspects of the reasons. First, Judd J quoted from the decision of the Court of Appeal in Savcor, and in particular, the general proposition that:
It is not possible and indeed is unwise to attempt to define the circumstances which amount to a good reason. It is trite observation but not very helpful that whether or not it is a good reason must depend upon all the circumstances of the particular case.[41][42]
[40]Horne v Retirement Guide Management Pty Ltd [2015] VSC 327, [49].
[41]Re Australian Property Custodian Holdings Ltd [2015] VSC 745, [99].
The plaintiffs’ submissions
Consistent with the language of the former rule, Mr Rich SC submitted the first question is whether the plaintiff has taken reasonable steps to serve the writ within time. The second question, arising if the answer to the first is in the negative, is there ‘good reason’ that means it is appropriate for an extension of time to be granted.
In written submissions the plaintiffs identified seven reasons in support of their contention an extension of time should be granted:
(a)First, six of eight defendants appear unconditionally in the proceedings.
(b)Second, attempts were made to serve the other two defendants before the Writ expired, at least in a way contemplated by Article 10 of the Hague Convention.
(c)Third, in relation to Ex-Im:
(i)The plaintiffs reasonably sought to provide the Writ to Ex-Im via Allen & Overy, but, despite request, do not know whether or not this occurred.
(ii)Two attempts were made to physically deliver the Writ to Ex-Im. However, this was not possible in circumstances where the process server was not allowed to enter the building, the process server was told that most (or all) employees were apparently working from home in any event (presumably due to COVID-19), and phone calls to try and organise delivery were not answered or returned. While it is not clear to what extent a global pandemic prevented delivery, it is clear that it was security measures in place at Ex-Im’s premises, and not lack of intention on the plaintiffs’ part which prevented the Writ from being brought to Ex-Im’s attention by means of physical delivery before it expired.
(iii)There is an argument that the Writ was brought to the attention of Ex-Im by email on 18 June 2021 or alternatively ten minutes after midnight on the morning of 19 June 2021 (which was 10.10am on 18 June 2021 Eastern USA time), or by post on 1 July 2021.
(iv)It is possible that A&O, Ex-Im’s former legal representatives would have provided the Writ to Ex-Im, or otherwise made Ex-Im aware of the Writ and plaintiffs’ intention to serve the Writ at the time correspondence was exchanged in May and June 2021.
(v)Ex-Im’s Facility Agent in the transaction (Citibank) is a defendant to the proceedings and now has an unconditional appearance.
(d)Fourth, in relation to Citicorp:
(i)Again, the plaintiffs reasonably sought to provide the Writ to the defendants via Allen & Overy, but, despite request, do not know whether or not this occurred.
(ii)The Writ was physically delivered to Citicorp in Hong Kong on 16 June 2021.
(iii)The solicitors for Citibank, which now has an unconditional appearance, also act for Citicorp.
(e)Fifth, the proceedings are on foot as against six of the eight defendants. The causes of action against Ex-Im and Citicorp are the same as against the other defendants (save for COFACE) and arise from the same transaction and set of facts.
(f)Sixth, the derivative leave application is scheduled to be heard no earlier than November 2021. Even if Ex-Im and Citicorp had been served, no substantive step in the proceedings would occur until the derivative leave application was determined.
(g)Seventh, the process for service under r.80 of the Rules has been underway for almost two months. The extension of time sought will allow the process for service abroad to be concluded,[43] following which Ex-Im and Citicorp can be heard on the following questions, if they so wish: (a) whether an extension of time under r.5.12(2) of the Rules (assuming an extension is granted) ought to have been granted by the Court; (b) whether Ex-Im and/or Citicorp shall be taken to have been served by reason of r.6.11 of the Rules; and (c) whether Rockgold should be granted derivative leave.[44]
[43]For an example of where such an order has been made for this purpose, see Babcock & Brown DIF III Global Co-Investment Fund, LP v The Royal Bank of Scotland PLC [2016] VSC 769, [23].
[44]Plaintiffs, Plaintiffs’ Submissions, dated 18 August 2021, [51(a)-(g)].
The plaintiffs further submitted that because it is not known how long the process under ord 80 of the Rules will take to conclude, an order extending the period of validity for one year should be made.
Application of the principles
Turning to the first question,[45] whether the plaintiffs have taken reasonable steps to serve the writ, immediately Mr Livingstone became aware that Rockgold wished to bring an application for derivative leave so as to continue the proceeding, he acted promptly to seek to ensure service of the writ was effected on all defendants before the 12 month period from 18 June 2020 expired.
[45]Howard v Power [2013] VSC 198, [10(e)].
The first step, taken on 26 May 2021, was a reasonable one; it was to contact Allen & Overy. The purpose of making contact was to ascertain whether that firm had instructions to accept service on behalf of all defendants. That firm was the last known point of legal representation for all defendants, albeit that was most recently known to have been the case in December 2017. On 4 June 2021, Allen & Overy said it did not ‘presently have instructions’; on 15 June 2021, it was sent a copy of the writ; on 17 June 2021, it declined to say if it had passed on the writ to its former clients. The firm later entered appearances on behalf of three defendants to the proceeding. The subsequent entry of those appearances supports the appropriateness and reasonableness of contacting Allen & Overy and of providing a copy of the writ to that firm with a request that it be provided to their former clients.
The reasonableness of the further steps taken after 26 May 2021 to effect formal service of the writ in Hong Kong and in Washington also cannot be questioned. In the case of Citicorp it appears highly likely service was effected as contemplated under Article 10 of the Hague Convention, but without a form 7AAA Notice as required by r 7.05 of the Rules. In the case of Ex-Im, the process server was thwarted by the combination of COVID-19 restrictions and the absence of a specific name of a person known to be in the Ex-Im office building to request to come out of the building to accept service.
The general proposition to which Gillard AJA referred in Savcor that ‘difficulties serving the writ within the 12-month period will usually establish a good reason’[46] appears to be premised on attempts to serve being made for all or certainly most of the 12 month period. The problem for the plaintiffs in this case is that even though the steps they took to effect service on Citicorp and Ex-Im were reasonable, no steps at all were taken until 26 May 2021 to effect service of the writ that had been issued on 18 June 2020. I do not consider that steps only taken in the last month of the 12 month period constitute reasonable efforts to serve the writ over the 12 month period or that those steps alone constitute ‘good reason’ to renew the writ.
[46][2005] VSCA 213; (2005) 12 VR 639, [41].
The reason no steps were taken to serve the writ in the preceding 11 months is because first, Mr Parbery and then Mr Livingstone did not have funding, and were unable to secure funding from a litigation funder. The period in which they sought litigation funding commenced before the writ was issued. Litigation funding was sought from September 2019 until at least February 2021.
In Buzzle Operations, the New South Wales Court of Appeal said that it would be inappropriate to extend the time for service where delay was due to awaiting a decision from a litigation funder, describing that period of time as a period during which the litigation funder ‘arrogated’ to themselves the right to decide the period for service.[47] Judd J expressed the same view in Re APCH.[48]
[47][2009] NSWCA 104, [82].
[48][2015] VSC 745, [99], referring to Buzzle Operations [2009] NSWCA 104, [82].
I do not consider the attempts of the liquidator to secure funding and instructing solicitors to file but not serve the writ while those attempts were ongoing can fairly be described in this case as amounting to an arrogation to himself by the liquidator or to a litigation funder of the power to decide the period in which service should be effected. This is not a case where a litigation funder delayed a decision on funding and then applied to extend the time for service. In this case, no litigation funding has been secured.
Without funding, the liquidator could not have responsibly served the writ, knowing that the recipients would incur costs in entering appearances if he did, yet he had no intention, because he had no funding, of taking any steps in the action. Had he instructed solicitors to serve the writ at any time before 26 May 2021, he could legitimately have been criticised for breach of the overarching obligations in ss 19 and 24 of the CPA. Section 19 provides a person must not take a step in the proceeding unless the person reasonably believes the step is necessary to facilitate the resolution or determination of the proceeding. Section 24 imposes an obligation to use reasonable endeavours to ensure legal and other costs incurred in connection with civil proceedings are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute.
The obligations in ss 19 and 24 of the CPA must be taken into account when evaluating the actions of the liquidator and when considering the delay prior to 26 May 2021; as must the competing obligation to minimise delay in s 25 of the CPA[49] to which Judd J referred in Re APCH.[50]
[49]Section 25 of the Civil Procedure Act 2010 (Vic) says that for the purpose of ensuring the prompt conduct of a civil proceeding, a person…must use reasonable endeavours in connection with the civil proceeding to (a) act promptly; and (b) minimise delay.
[50][2015] VSC 745, [52(10)].
Although the underlying cause of the decision not to serve the writ from June 2020 until 26 May 2021 was a lack of litigation funding, I consider the liquidator was acting responsibly in maintaining instructions that the writ not be served. Notwithstanding the obligations in s 25 of the CPA, I do not think the liquidator acted to ‘arrogate’ to himself the right to decide the period for service. Further, even if his conduct during this period could appropriately be so described, from 26 May 2021 any such conduct ceased. This is not a case like Horne, where the applicants had not taken steps to effect service before the time for service expired;[51] a consideration the Court of Appeal regarded as relevant to the argument that the applicants had arrogated to themselves the power to decide the period in which service should be effected.[52]
[51][2017] VSCA 47; (2017) 54 VR 325, [167], citing Horne v Retirement Guide Management Pty Ltd [2015] VSC 327, [49].
[52]Ibid.
The plaintiffs were not able to refer the Court to any cases where the reason for the delay in service was the search for litigation funding and, upon application being made, the court agreed to extend the time for service. While that is so, the discretion in r 5.12(2) is not fettered. In Savcor, Gillard AJA said it was ‘not possible and indeed is unwise to attempt to define the circumstances that amount to good reason.’[53] There is no hard and fast rule that where any time delay in service is occasioned by a search for litigation funding that ‘good reason’ cannot be established. So much was recognised by Sackville AJA in Weston.[54]
[53][2005] VSCA 213; (2005) 12 VR 639, [41(iii)].
[54][2012] NSWCA 79; (2012) 88 ACSR 80, [187].
While the defendants had been left in ignorance that proceedings had been commenced, between 18 June 2020 and 26 May 2021,[55] both Citicorp and Ex-Im knew about the existence of the proceeding before the time for service expired. Citicorp was given a copy of the writ in Hong Kong before 18 June 2021. Voice messages were left by the process server with relevant employees of Ex-Im, including the Deputy General Counsel, alerting him both to the existence of the writ and the desire to serve it on Ex-Im before 18 June 2021.
[55]Howard v Power [2013] VSC 198, [10(j)], citing Battersby v Anglo-American Oil Co Ltd [1945] KB 23, 32.
As discussed in Horne,[56] it is important to consider the presumptive prejudice to Citicorp and Ex-Im by reason of delay and the effluxion of time. The presumptive prejudice that the ‘mere lapse of time’ is prejudicial to Citicorp and to Ex-Im,[57] must be considered from August 2014 when the cause of action crystallised. Mr Livingstone and his predecessor were not in control of the books and records of the plaintiff until July 2019. It was only in July 2019 they became aware of the potential claim. From that point on, they acted promptly. However, it is not to the point that these delays are delays for which the successive liquidators cannot be criticised. Irrespective of the cause, the presumptive prejudice to Citicorp or Ex-Im from the passage of time is an important consideration.
[56][2017] VSCA 47; (2017) 54 VR 325, [161].
[57]Ibid, [161], citing Ramsay v Madgwicks [1989] VR 1, 7.
In this case the presumptive prejudice is mitigated by the fact that both defendants not only knew of the existence of the proceeding before time expired, but also both already had copies of the writ. In the case of Citicorp, it received a copy before the time for service expired; in the case of Ex-Im, it received a copy electronically about two hours after time expired and a hard copy by post within two weeks of the period for service expiring. One might reasonably conclude in these circumstances that the presumptive prejudice suffered is not materially greater than if the writ had validly been served on both defendants on the last day for valid service, 18 June 2021.
Turning to some of the factors identified by Derham AsJ in Howard v Power,[58] in this case, the application to extend time was made before the period of service had expired. It was filed while attempts to physically serve documents on Citicorp and on Ex-Im overseas were continuing and one day before the application for service under ord 80 of the Rules was initiated. This is not a case like Horne where the applicant allowed time to expire before involving the court and before taking any steps to effect service.[59]
[58][2013] VSC 198.
[59][2017] VSCA 47; (2017) 54 VR 325, [167], citing Horne v Retirement Guide Management Pty Ltd [2017] VSCA 47; (2017) 54 VR 325, [159]-[162].
The plaintiffs submitted the fact six of the eight defendants have unconditionally appeared in the proceedings is a relevant consideration. I do not consider the fact they have appeared is itself relevant to the extension application. Critical to this application is the position of the two defendants who have not appeared. However, one matter relevant to the discretion and to the question of any actual prejudice to Citicorp and Ex-Im is that those defendants may be liable for the same damage as the six defendants who have appeared in the proceeding, or some of them. If so, it would be open to any such defendant to join the remaining two unserved defendants, or either of them, as third parties to the proceeding within 12 months of the date of service on that defendant.[60] That is, to claim contribution from those defendants pursuant to s 23B of the Wrongs Act 1958 (Vic). It would be an odd outcome if that were to occur, yet the plaintiffs, who brought the existence of the proceeding to the attention of Citicorp and Ex-Im before the 12 month period for service of the writ expired, were not allowed the corresponding period to serve the writ, as available to the six defendants who have been served, to bring third party claims.
[60]Wrongs Act 1958 (Vic), s 24(4).
It is also relevant to the discretion to extend that if service is effected pursuant to the process set out in ord 80, a process that is currently underway, Citicorp and Ex-Im will have a right to be heard as to:
(a)whether an extension of time under r 5.12(2) of the Rules ought to have been granted; and
(b)whether Ex-Im and/or Citicorp shall be taken to have been served by reason of r 6.11 of the Rules.
Taking all of these factors together, I consider that ‘good reason’ has been shown to extend the period of validity of the writ. The plaintiffs took reasonable steps to provide electronic and hard copies of the writ to both Citicorp and Ex-Im before the 12 month period expired. When those steps were not proving successful, they applied to the Prothonotary so as to permit international service in accordance with the Hague Convention, immediately before the period for service of the writ expired. They also initiated this application before the 12 month period had expired.
Disposition
In all the circumstances this is an appropriate case to extend the time for service of the writ on Citicorp and Ex-Im and to do so for a period of no more than one year. One year is an appropriate period because it is not known how long the already initiated process under Article 5(a) of the Hague Convention and ord 80 of the Rules will take to complete.
As there may later emerge further evidence concerning the issue of whether there was actual notice of the writ on the part of Citicorp and Ex-Im prior to expiration of the time for service, it is appropriate to reserve the plaintiffs’ costs of and incidental to this application.
The solicitors for the plaintiffs should prepare a draft form of order and provide it to my chambers for authentication.
SCHEDULE OF PARTIES
JABIRU SATELLITE LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (ACN 121 667 365)
First Plaintiff
NEWSAT LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (ACN 003 237 303)
Second Plaintiff
SOCIETE GENERALE
First Defendant
STANDARD CHARTERED BANK (UK Company Number ZC18)
Second Defendant
CREDIT SUISSE (LUXEMBOURG) S.A.
Third Defendant
DEUTSCHE BANK TRUST COMPANY AMERICAS
Fourth Defendant
CITIBANK, N.A.
Fifth Defendant
CITICORP INTERNATIONAL LIMITED
Sixth Defendant
EXPORT-IMPORT BANK OF THE UNITED STATES
Seventh Defendant
LA COMPAGNIE FRANCAISE D’ASSURANCE POUR LE COMMERCE EXTERIEUR (Registre du Commerce et des Societes of Nanterre 552 069 791)
Eighth Defendant
[42]Horne v Retirement Guide Management Pty Ltd [2017] VSCA 47; (2017) 54 VR 325, [156], [159], [161]-[162], [167], [172].
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