Kilbane v QBE Insurance (Australia) Limited
[2020] VCC 1145
•11 August 2020
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
General List
Case No. CI-17-06011
| Martin Kilbane | Plaintiff | ||
| v | |||
| QBE Insurance (Australia) Limited & Anor (ACN 003 191 035) | First Defendant | ||
| Pattersons Insurerbuild Pty. Ltd. (ACN 076 016 996) | Second Defendant | ||
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JUDGE: | Judicial Registrar Tran | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 August 2020 | |
DATE OF RULING: | 11 August 2020 | |
CASE MAY BE CITED AS: | Kilbane v QBE Insurance (Australia) Limited & Anor | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1145 | |
REASONS FOR RULING
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Subject: Civil procedure; extending validity of writ
Catchwords: Extending validity of writ; setting aside orders; sub-rule 5.12(2); rule 46.08; postal service; ordinary course of post
Legislation Cited: County Court Civil Procedure Rule 2018 (Vic) sub-rule 5.12(2); r46.08
Cases Cited:Battersby v Anglo American Oil Co Ltd [1945] KB 23; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Howard v Power [2013] VSC 198; Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; Soper v Matsukawa [1982] VR 948; Timbercorp Finance Pty Ltd (In Liq) v Allan [2016] VSC 481; Tyson v Morgan [2000] 1 Qd R 100
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Bingham | Maurice Blackburn |
| For the Second Defendant | Mr T Messer | Hall & Wilcox |
JUDICIAL REGISTRAR:
1 On 13 May 2020, Judicial Registrar Burchell made an order extending the validity of the writ for service by two days, from 12 February 2020, to 14 February 2020.
2 The first defendant (“QBE Insurance”), who was not served with the application to extend the validity of the writ for service, applies to set aside this order under r46.08(b) of the County Court Civil Procedure Rules2018 (Vic) (“Rules”)
3 As the application was not made on notice to QBE Insurance, it is treated as a re-hearing of the plaintiff’s original application.[1] QBE Insurance has not sought to contend that I ought to set aside the order on the basis that material non-disclosure was made on an ex parte application. In that context, questions of whether the original application for the orders of Judicial Registrar Burchell ought to have been made on notice to QBE Insurance, or whether appropriate disclosure was made to Judicial Registrar Burchell, are not relevant to the determination which I have to make.
[1] Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213 at [20]-[21].
Background
4 This proceeding was commenced by the plaintiff (“Mr Kilbane”) by a generally indorsed filed on 20 December 2017. The indorsement of claim alleges that Mr Kilbane entered into a home and contents policy for the period from 17 September 2011 to 17 September 2012 renewed for successive periods until 17 September 2017. His home is alleged to have been damaged as the result of a storm on 25 December 2011 (“first storm”); a storm on 5 June 2012 (“second storm”); and a storm on 6 September 2017 (“third storm”). He alleges that QBE Insurance chose to repair the home and arranged for the second defendant (“Pattersons”) to do so. He alleges that the repairs were performed negligently by Pattersons. He alleges that QBE Insurance purported to make a cash settlement of the claim of $162,273 on 17 June 2013.
5 It will be apparent from the above dates that significant limitations issues may arise for Mr Kilbane if the defendant is successful in this application.
6 The validity of the writ for service was extended as follows:
a) on 18 December 2018, for a further 6 months from the date of the order;
b) on 12 June 2019, for a further 6 months from the date of the order; and
c) on 26 November 2019, until 12 February 2020.
7 I made the order extending the writ on 26 November 2019. On that occasion I directed the following be recorded in the “Other Matters” section of the note of the orders:
“No further extensions will be granted without notice of the application for an extension being given to the Defendants.”
8 On 4 February 2020, Mr Kilbane’s solicitors filed an amended writ which incorporated a statement of claim.
9 On 6 February 2020 at 4.43pm, the amended writ and statement of claim was picked up by Australia Post for delivery to QBE Insurance. Mr Kilbane’s solicitors sent the amended writ and statement of claim by ordinary post to QBE Insurance’s registered address. On 14 February 2020, the amended writ and statement of claim was delivered to QBE Insurance’s registered address.
10 On 13 May 2020, Mr Kilbane applied to extend the validity of the writ for service.
Issues to be determined
11 Sub-rule 5.12(2) of the Rules empowers the Court to extend the period of validity of a writ for service by up to one year from the date of the order.
12 The power to extend is discretionary, however should be exercised with caution and in accordance with established principles.[2] In Howard v Power, Associate Justice Derham describes a two-stage approach. First, one considers whether the plaintiff has taken reasonable steps to serve the writ.[3] If not, one considers whether there was another good reason for making the order to extend time. This two-stage approach is drawn from r8.01 of the former rules of the Supreme Court, which provided that the Court could extend the validity of a writ for service “if satisfied that reasonable efforts have been made to serve such defendants, or for other good reason…”. Whilst it is not expressly referred to in sub-r5.12(2), I agree with Derham AsJ that it continues to be an appropriate approach to the exercise of the discretion under sub-r5.12(1).
[2] Howard v Power [2013] VSC 198 at [10(a)] and [10(b)].
[3]Ibid at [10(e)].
13 I will consider first whether the plaintiff took reasonable steps to serve the writ before turning to the question of whether he has shown other good reason for making the order to extend time.
Did the plaintiff take reasonable steps to serve the writ?
14 Counsel for Mr Kilbane submitted that reasonable steps had been taken to serve the writ because it had been sent, by ordinary post, on 6 February 2020 and in the “ordinary course of the post” could have been expected to arrive by Tuesday, 11 February 2020 or Wednesday, 12 February 2020.
15 Section 49(1) of the Interpretation of Legislation Act 1984 (Vic) provides that where a document is served by post, unless the contrary is proved, service shall be deemed to be effected at the time at which the letter would be delivered “in the ordinary course of post”. Section 160 of Evidence Act2008 (Vic), as it was in force at the time Mr Kilbane’s solicitor posted the amended writ,[4] set up a rebuttable presumption that an item is delivered on the fourth working day after it was sent by pre-paid post. This was Tuesday, 11 February 2020. However, both provisions create rebuttable presumptions only. In other words, they contemplate that it is possible that an item may not arrive within these timeframes and allow for a defendant to provide that it has not.
[4]It has subsequently been amended to create a rebuttable presumption that an item was delivered on the seventh working day after it was sent. I have not had regard to this amendment given it was not in force at the time the amended writ was served.
16 There was no evidence before me as to the actual times currently taken by Australia Post to deliver items.
17 I do not accept the submissions made on behalf of Mr Kilbane that posting a document by ordinary post by 6 February 2020 was taking “reasonable steps” to serve the writ when the validity of the writ for service expired on 12 February 2020. This is even more so in the context of this proceeding, where the validity of the writ for service had previously been extended three times and Mr Kilbane’s solicitor was warned that any further application for an extension would be required to be made on notice to the defendants. Mr Kilbane’s solicitor must have known of the significance of the limitations issues to her client of the writ not being served within time. This was not the time for proceeding at a “leisurely pace”.[5] She could have engaged a courier to deliver the writ; or sent it by express post; or arranged for a town agent in Sydney to deliver it. She did not do so.
[5]See Soper v Matsukawa [1982] VR 948 at 950.
18 Furthermore, I am not satisfied that the focus of the enquiry for the purposes of determining whether the requirement to take “reasonable steps” to serve the writ has been met can be narrowed to the period between 6 February 2020 and 12 February 2020. In Battersby v Anglo American Oil Co Ltd the Court of Appeal expressed it simply thus: “It is the duty of a plaintiff who issues a writ to serve it promptly”.[6]
[6][1945] KB 23.
19 QBE Insurance is a company. It has a registered business office at which service may be effected. This is not a case where the defendant was evading service or for some other reason personal service was impracticable. It is to considerations of this kind to which this stage of the exercise of the discretion is directed. Service of the writ could easily have been effected by Mr Kilbane’s solicitor within time had it been posted promptly after my order of 26 November 2019. It was not. Questions of whether it was reasonable to delay service in the circumstances because of the desire to file and serve a statement of claim are more appropriately dealt with in the second stage of the process.
20 I am not satisfied that Mr Kilbane took reasonable steps to serve the writ.
Is there another good reason for making the order to extend time?
21 QBE Insurance has not sought to set aside the three previous orders extending the validity of the writ for service. The only order it challenges is the order by Judicial Registrar Burchell extending the validity of the writ for service for two days, from 12 February 2020 to 14 February 2020.
22 QBE Insurance contends that the prejudice to be considered is not the prejudice caused by reason of the delay in two days in serving the writ but the prejudice caused by reason of the delay between the arising of the cause of action and the application for the extension of time. It relies on the decision of Ambrose J in Tyson v Morgan.[7] In that case, Ambrose J held that similar principles should be applied to an application to extend the validity of a writ for service as are applied to an application to extend a limitation period.
[7][2000] 1 Qd R 100 at 105; referred to with approval by Derham AsJ in Howard v Power [2013] VSC 198, see also Soper v Matsukawa [1982] VR 948 at 952.
23 Mr Kilbane, on the other hand, contends that the relevant period under consideration was the period from 12 February 2020 to 14 February 2020. No prejudice had been suffered by reason of the delay from 12 February 2020 to 14 February 2020. The present case could be distinguished from Soper v Matsukawa, in which all previous orders extending the validity of the writ for service were sought to be set aside, and Tyson v Morgan where the first and only application for an extension was sought to be set aside.
24 I accept that the prejudice suffered by QBE Insurance is most appropriately assessed by considering the prejudice suffered by reason of the delay between the date the cause of action arose and the date of service. This is particularly so in relation to the policy considerations which underly the limitations periods.[8] Although there is no specific evidence of prejudice, there is a presumptive prejudice to QBE Insurance in having to deal with a claim which it is strongly arguable[9] arose in either 2012 or 2013, and of which it did not appear to have notice[10] until 14 February 2020.
[8]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551.
[9]Much of the affidavit evidence filed appeared to be addressed to the question of when the limitation period expired. I do not propose to finally determine this issue on this interlocutory application.
[10]QBE was on notice of the original claims for coverage made by Mr Kilbane, however there was no evidence that QBE was on notice of the existence of this litigation.
25 On the other hand, the relevance of the prejudice caused by reason of the delay between the date the cause of action arose and the date of service does not render the length of the extension sought irrelevant. Thus, for example, Lush J in Soper v Matsukawa said “If service had been effected one month after the order was made, that is, nine days after the expiry of the original 12 months for service, I do not imagine that this Court would have set the order aside.”[11]
[11][1982] VR 948 at 953.
26 Mr Kilbane submitted that there was good reason to extend because the delay in service of the amended writ and statement of claim could be explained by the need to properly particularise the statement of claim. He pointed to the decision of Derham AsJ in Timbercorp Finance Pty Ltd (In Liq) v Allan as support for this proposition.[12] In that case, it was submitted by the plaintiff that a need to obtain appropriate evidence was a good reason for delaying to serve the writ and statement of claim. However, Derham AsJ in fact extended the validity of the writ for service on a different basis, that the writ was not served in time due to a “technical deficiency brought about by the oversight of the plaintiff’s solicitor in omitting the SEPA notice”.[13] The case does not provide direct support for the Mr Kilbane’s submissions.
[12][2016] VSC 481; 312 FLR 259.
[13][2016] VSC 481 at [101].
27 The further difficulty with this submission is that other than a broadbrush assertion that “In relation to the period of time between 20 November 2019 and 6 February 2020, that period of time was needed and used by the Plaintiff in order to obtain relevant information and instructions and to gather evidence in order to properly particularise the Statement of Claim”,[14] there was no specific evidence explaining the reason for the delay between 29 November 2019 and 6 February 2020. A comparison of the generally indorsed writ with the amended writ and statement of claim shows the differences are largely in the provision of particulars, by way of reference to expert reports. All these expert reports pre-date November 2019. Again, in the context of this proceeding, it was not the time for a “leisurely pace”.
[14]Affidavit of Hayriye Uluca sworn 23 June 2020 at [5].
28 More specific and detailed evidence justifying the delays would be required if this were to be relied upon as a good reason to extend the validity for service of the writ. Whilst I accept that in some circumstances it may be permissible to delay service in order to obtain the evidence necessary to properly plead and particularise a statement of claim and to prepare a proper basis certificate, this should not be used an excuse to circumvent the underlying policy of the limitations periods. As said in Madgwicks:[15]
“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. 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”.
[15]Howard v Power [2013] VSC 198 at [10(j)] and [20], applying Madgwicks at [5].
29 The prejudice to Mr Kilbane in being unable to litigate all claims against QBE Insurance is also a relevant factor which may be weighed in the balance, although it is generally considered not to be a sufficient reason in and of itself.[16] Refusing to extend the validity of the writ for service may have the effect that he is shut out from litigating significant causes of action against QBE Insurance in relation to the repair of his home.
[16]Ibid at [10(o)].
30 The relevance of this consideration is heightened in a context where the reason he may be shut out is a delay of two days in serving the writ because it was not delivered within the time expected by his solicitor. In that respect, the case is analogous to Derham AsJ’s decision to extend validity for service in Timbercorp Finance Pty Ltd (In Liq) v Allan [2016] VSC 481; 312 FLR 259, on the grounds that a technical deficiency in service had been brought about by the oversight of the plaintiff’s solicitor. In the present case, the fact that the writ was served two days late resulted from a combination of Mr Kilbane’s solicitor’s decision to send the amended writ by ordinary post and the fact that it was not delivered within the expected time.
31 This was a difficult decision. However, having regard to all of the above factors, I have concluded that it is appropriate to extend the validity of the writ for service for a period of two days from 12 February 2020 to 14 February 2020. In the end, the “balance of hardship”[17] favours the grant of the order given:
[17]Ibid at [10(p)].
a) the lack of specific evidence of prejudice to QBE Insurance arising from the delay between the time the cause of action arose and the time amended writ was served;
b) the fact that the delay in service was only two days and occurred because the writ was not delivered in the time expected by his solicitor; and
c) the prejudice that Mr Kilbane will suffer in having what may otherwise be valid causes of action statute barred.
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Certificate
I certify that these 9 pages are a true copy of the reasons for ruling of Judicial Registrar Tran, delivered on 11 August 2020.
Dated: 11 August 2020
Susan Thomas
Associate to Judicial Registrar Tran
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