Marubeni Equipment Finance (Oceania) Pty Ltd v Harris
[2018] VCC 267
•16 March 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-17-02097
| MARUBENI EQUPMENT FINANCE (OCEANIA) PTY LTD (ACN 151 545 434) | Plaintiff |
| V | |
| CHAD ANTHONY HARRIS | Defendant |
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JUDGE: | HER HONOUR JUDGE A RYAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 February 2018 | |
DATE OF RULING: | 16 March 2018 | |
CASE MAY BE CITED AS: | Marubeni Equipment Finance (Oceania) Pty Ltd v Harris | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 267 | |
REASONS FOR RULING
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Subject: CONTEMPT OF COURT
Catchwords: Civil contempt – breach of judgment order to deliver up equipment – whether personal service of judgment order effected under Rule 6.03 of the County Court Civil Procedure Rules 2008 – contempt of court proven.
Legislation Cited: County Court Civil Procedure Rules 2008 (Vic)
Federal Court Rules 1979 (Cth)
Supreme Court (General Civil Procedure Rules) 1996 (Vic)
Cases Cited:Australian Competition & Consumer Commission v INFO4PC.com Pty Ltd [2002] FCA 949
Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
Grocon Constructions (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] VSC 275
Legal Services Board v Forster (No.2) [2012] VSC 633
Lucas, Re MSI Holdings Pty Ltd [2012] FCA 1486
Morgan v State of Victoria [2008] VSCA 267
Primelife Corp Ltd v Newpark Pty Ltd [2003] VSC 106
Re Ditfort; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347
Re Elkateb; Lawindi v Elkateb (2001) 187 ALR 479
Thomson v Pheney (1832) 1 Dowling's Practice Cases 441
Witham v Holloway (1995) 183 CLR 525
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms C M Jones | DSS Law |
| For the Defendant | No appearance |
HER HONOUR:
1 The plaintiff (“Marubeni”) in this proceeding is engaged in the business of providing finance for Hitachi, John Deere and Bell branded machinery. The defendant (“Mr Harris”) was the sole director of Crown Earthmoving Pty Ltd (“Crown”). Crown provided earthmoving and excavation services until it was deregistered on 20 July 2015.
2 On 24 April 2013, Marubeni (as mortgagee), together with Crown (as mortgagor) and Mr Harris (as guarantor of Crown’s obligations) executed a Deed of Mortgage granting a mortgage over a Hitachi hydraulic excavator, together with six attachments (“the Excavator”). The amount financed was $167,257.40. Crown took delivery of the Excavator on 26 April 2013.
3 Pursuant to the terms of the mortgage, Crown was required to repay the principal by way of monthly instalments. Crown has been in default of its obligations since 28 July 2015. Following the service of a notice of default on 17 February 2017, which was not rectified, Marubeni issued a writ on 12 May 2017. Marubeni sued Mr Harris, in his capacity as guarantor for damages and sought an order for delivery up of the Excavator.
4 On 12 May 2017, Marubeni filed a summons seeking an order pursuant to r31.07 of the County Court Civil Procedure Rules 2008 (Vic) (“the County Court Rules”) that Mr Harris deliver up the Excavator. His Honour Judge Cosgrave gave judgment in default of appearance on 6 July 2017. Mr Harris was ordered to deliver up the Excavator to Marubeni by 4.00pm on 13 July 2017 (‘the judgment order”). The judgment order contained a penal notice warning Mr Harris of the consequences of disobedience of its terms.
5 By summons filed 6 November 2017, Marubeni sought to have Mr Harris dealt with contempt of court for failing to comply with the judgment order. Under r75.06(2) of the County Court Rules, where the contempt is committed by a party in relation to a proceeding, the application is made by way of summons in that proceeding.
6 Following difficulties with service of the judgment order, His Honour Judge Woodward made orders on 23 January 2018 in the following terms:
1. The defendant, CHAD ANTHONY HARRIS, attend at Court at 10.00am on 28 February 2018 for the purpose of answering the judgment of this Court dated 6 July 2017 (judgment)(attached);
2. This order and the judgment be taken to be served on the Defendant by:
(a) personal service; or
(b) leaving this order and the judgment with a person apparently over 16 years of age present at the Defendant’s last known residential address being 1/180 Copernicus Way, Keilor Downs in the State of Victoria, and stating to that person words to the effect:
“This order requires the attendance of Mr Chad Harris at the County Court of Victoria at 10:00am on 21 December 2017, failing which he may be arrested.”
3. Upon compliance with order 1(a) or (b), the Defendant shall be deemed to have been duly served with this order and the judgment.
4. The defendant pay the Plaintiff’s costs of this application on an indemnity basis.
The order also contained a penal notice to the effect that if Mr Harris did not attend court on 28 February 2018 for the purpose of answering the judgment of the court dated 6 July 2017, he would be liable to imprisonment, sequestration of property or other punishment.
7 The plaintiff relies upon two affidavits, namely:
(a) affidavit of Zohal Hussaini, solicitor, sworn 27 February 2018; and
(b) affidavit of service of Riszard Nogas, private investigator, sworn 7 February 2018.
8 Mr Harris did not appear in court on 28 February 2018 nor did he appear when he was called outside court. Mr Harris has not filed any evidence or submissions in response to this application or in the substantive proceeding.
9 Having regard to the serious nature of the application, I reserved my decision to consider whether Marubeni has established the necessary requirements to prove a contempt of court.
10 The orders sought here are by way of civil contempt, namely, the procedure adopted to facilitate enforcement of a court order. It is well settled that a failure by a party to comply with a court order constitutes civil contempt.[1] The purpose of imposing a punishment for wilful disobedience to the court is to discipline the offender and vindicate the authority of the court.[2]
[1]Legal Services Board v Forster (No.2) [2012] VSC 633 at [43]
[2]Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
11 The plaintiff contends the contempt in this case falls within the second category identified by the Court of Appeal in Morgan v State of Victoria,[3] being disobedience to an order requiring a party to do any act. It would also seem that the third category is invoked, being a failure to comply with a judgment for the delivery of goods or payment of its assessed value. The alleged contempt constitutes a direct disobedience to the authority of the court and is therefore defiant and contumacious.
[3][2008] VSCA 267 at [110]
12 The relevant standard of proof is the criminal standard, so that the facts establishing the contempt must be proved beyond a reasonable doubt.[4] It is not necessary to prove a subjective intent to deliberately disobey an order of the court, provided the person is aware of the order and intentionally undertakes an act constituting a breach. Deliberate defiance or contumacious disregard is relevant to the determination of the appropriate sanction.[5]
[4]Witham v Holloway (1995) 183 CLR 525 at [29]
[5]Australian Competition & Consumer Commission v INFO4PC.com Pty Ltd [2002] FCA 949 at [10]
13 Counsel for Marubeni submits the following five elements need to be satisfied to establish a contempt, namely:
(a) an order was made by the court;
(b) the terms of the order are clear, unambiguous and capable of compliance;
(c) the order was served on Mr Harris (or failure to serve was excused or service was dispensed pursuant to the Rules of the Court);
(d) Mr Harris has knowledge of the terms of the order; and
(e) Mr Harris has breached the terms of the order.[6]
[6]Grocon Constructions (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] VSC 275 at [8]
14 It is self-evident an order was made by the court, being the judgment order, which was clear in its terms and capable of compliance. Grounds (a) and (b) are made out.
15 The next element is whether there is sufficient proof that Mr Harris has been served with the judgment order. Mr Riszard Nogas, a private investigator, deposes that he personally served Mr Harris on 29 January 2018, with sealed copies of the order dated 23 January 2018 and the judgment order.
16 Mr Nogas describes his interaction with Mr Harris after he intercepted him at Hampshire Road in a shopping centre car park in Sunshine in the following paragraphs of his affidavit sworn 7 February 2018:
‘3. I spoke with the Defendant who said to me “who are you? And why are you following me”? In response, I said the following words to the Defendant:
“This order requires the attendance of Mr. Chad Harris at the County Court of Victoria at 10.00am on 28 February 2018, failing which he may be arrested.”
4. The Defendant threw the Orders and said that “I haven’t been served”…
5. The Defendant stopped at Harvester and Ballarat Road at the intersection next to the lane where I was driving and said to me “how would you like it if I followed you home and harassed you” and I replied “Chad, you have been served”.’
17 The surveillance report, exhibited to Mr Nogas’ affidavit as Exhibit “RN-3”, provides some further information about the means of service. Mr Harris and Mr Nogas were both in their cars at the time. After saying the words set out in paragraph 3 of his affidavit, Mr Nogas threw the orders onto Mr Harris’ lap. Mr Harris then threw the orders out of the vehicle window and yelled at Mr Nogas: “I have not been served” and drove from the area. Mr Nogas picked up the orders off the ground and drove away.
18 The issue then is whether in these circumstances effective service took place within the meaning of r6.03 of the County Court Rules. Rule 6.03 provides as follows:
“6.03 How personal service effected
(1) Personal service of a document is effected by—
(a) leaving a copy of the document with the person to be served; or
(b) if the person does not accept the copy, by putting the copy down in the person's presence and telling the person the nature of the document.
19 In Re Elkateb; Lawindi v ElkatebI,[7] Stone J considered the requirements of effective personal service pursuant to Order 7 r2(2) of the Federal Court Rules 1979 (Cth), which is virtually identical to r6.03(1)(b). In that case, the process server and the respondent gave contradictory accounts of the manner of service of a creditor’s petition. The process server claimed that he told the respondent “this is a creditor’s petition I’m serving on you” and then placed the document in the respondent’s lap who then threw it on the floor, while the respondent said the server threw the document at the respondent without identifying it as a creditor’s petition.
[7](2001) 187 ALR 479
20 Stone J outlined the relevant authorities concerning circumstances where the defendant refuses to accept service at [12]:
‘I do not need to decide whether the document was placed on the respondent's lap or thrown at him. In either event, the document could be said to have been "put down in his presence". As noted by Patterson J in the Court of King's Bench in Thomson v Pheney (1832) 1 Dowling's Practice Cases 441 at 443, "[i]f the deponent had informed the defendant of the nature of the process, and thrown it down, that would do."
This comment was approved by Gummow J in Re Ditfort; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347 at 360; 83 ALR 265 at 277, where he states:
"If the debtor were refusing to take such actual corporal possession of the process, but the process server informed the debtor of the nature of the process and left it before or near the debtor so that the debtor had unimpeded and immediate access to the documents, that, in my view, should, in general, be sufficient to comply with [a provision in the Bankruptcy Rules requiring personal service]."
21 The requirement to inform of the “nature” of the document was considered by Nettle J in Primelife Corp Ltd v Newpark Pty Ltd.[8] Referring to r6.03(1) of the Supreme Court (General Civil Procedure Rules) 1996 (Vic), which essentially mirrors r6.03(1) of the County Court Rules, His Honour stated at [23]:
‘Authority establishes that not a great deal is required in order to "tell the person the nature of the document". It is certainly not necessary to explain in any detail or even to identify in any detail what is said in the document. Indeed it is enough that the process server hand to the defendant a document which is clear on its face and not contained in an envelope.’ (footnote omitted)
[8][2003] VSC 106
22 His Honour continued at [26]:
‘In my opinion Birch's uncontradicted evidence of Andrejic walking away and refusing to take the documents when asked to do so proves that there was a non-acceptance of the documents in the sense described by Batt J, and I regard the other requirements of the second method of service as plainly satisfied by Birch's actions in saying that he had documents for service, holding the documents out uncovered, launching them into the path of Andrejic so that he walked over them and finally proclaiming "you are served".’
23 In Lucas (recs and mgrs), Re; MSI Holdings Pty Ltd (recs and mgrs. apptd) (in liq),[9] Logan J, applying Re Elkateb, found that personal service was effected where the process server placed the documents on the respondent’s chest and said “You are served”, and the respondent let the documents fall to the ground and left them there. The documents were not housed in an envelope and their nature was apparent on their face. His Honour concluded “that he chose to leave them on the ground and walk on was entirely a matter for him” and did not negate service.[10]
[9][2012] FCA 1486
[10] Ibid at [21]
24 In these circumstances, the plaintiff contends that Mr Harris has knowledge of the terms of the judgment order by reason of the fact that he was personally served. I am satisfied that the process server, Mr Nogas effected personal service in accordance with r6.03(1)(b) by informing Mr Harris of the nature of the document prior to placing the orders on Mr Harris’ lap. The fact that Mr Harris then threw the orders out of the car window does not negate service.
25 It follows that grounds (c) and (d) are also made out, namely, service was effected and Mr Harris has knowledge of the terms of the judgment order.
26 As at 27 February 2018, Mr Harris has failed to deliver up the Excavator to Marubeni.[11] Therefore, Mr Harris is in breach of the judgment order, being the fifth element set out in ground (e).
[11] Para 11 of the affidavit of Zohal Hussaini sworn 27 February 2018
27 In the course of submissions on 28 February 2018, counsel agreed with the procedure by which the matter should be pursued. First, there should be a determination as to whether the contempt has been established. Secondly, assuming the contempt is found, the matter should then be relisted for hearing for submissions as to the appropriate form of penalty.
28 I find Marubeni has proved beyond reasonable doubt that Mr Harris has committed a prima facie contempt of court given:
(a) Mr Harris had knowledge of the judgment order and notice of the application returnable before the court on 28 February 2018 once personal service was effected upon him on 29 January 2018;
(b) Mr Harris has not delivered up the Excavator to Marubeni in breach of the judgment order.
29 I will list the matter again for directions so that orders can be made in respect of:
(i) an order that Mr Harris appear before the court on a particular date, at which time the court will hear submissions as to the appropriate form of orders to be made, including whether a conviction should be recorded, penalty and costs;
(ii) the method of service of this ruling upon Mr Harris, together with a copy of the orders to be made directing his future attendance at court.
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Certificate
I certify that these 8 pages are a true copy of the Reasons for Judgment of Her Honour Judge A Ryan delivered on 28 February 2018.
Dated: 16 March 2018
Elisabeth Buchan
Associate to Her Honour Judge A Ryan
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