Olson v Keefe

Case [2017] FCA 101

FEDERAL COURT OF AUSTRALIA

Olson v Keefe [2017] FCA 101

File number: NSD 1498 of 2016
Judge: BROMWICH J
Date of judgment: 23 February 2017
Catchwords: PRACTICE AND PROCEDURE – application for confirmation of service of amended originating application on three foreign respondents pursuant to r 10.43(6) of the Federal Court Rules 2011 (Cth) – requirements of r 10.43(4) – where proceedings involve an Australian respondent and foreign respondents – held: application allowed, service of amended originating application confirmed pursuant to r 10.43(6) – held: service of further documents also confirmed pursuant to r 10.44(4)
Legislation:

Australian Consumer Law, ss 18, 31

Competition and Consumer Act 2010 (Cth), ss 5(1)(g)

Corporations Act 2001 (Cth), ss 601CD, 1317AC(2), 1317AC(3)

Federal Court of Australia Act 1976 (Cth), s 22

Judiciary Act 1903 (Cth), s 39B(1A)(c)

Federal Court Rules2011 (Cth), rr 10.42, 10.43(1), 10.43(2), 10.43(4), 10.43(6), 10.44(3), 10.44(4)

Cases cited:

Bell v Steele [2011] FCA 1390; (2011) 198 FCR 291

BY Winddown, Inc v Vautin [2016] FCAFC 168

Costa Vraca Pty Ltd v Bell Regal Pty Ltd [2003] FCAFC 305

Fencott v Muller (1983) 152 CLR 570

Ho v Akai Pty Limited (in liquidation) [2006] FCAFC 159; (2006) 24 ACLC 1526

Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511

Tyne Improvement Commissioners v Armement Anversois S/A (The Brabo) [1949] AC 326

Vautin v BY Winddown, Inc [2016] FCA 632

Vautin v BY Winddown, Inc (No 2) [2016] FCA 1235

Date of hearing: 8 February 2017
Registry: New South Wales
Division: General Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 56
Counsel for the Applicant: Mr G Hatcher SC with Mr D Mackay
Solicitor for the Applicant: Mills Oakley Lawyers
Counsel for the First, Second and Third Respondents: The First, Second and Third Respondents did not appear
Counsel for the Fourth Respondent: Mr Y Shariff
Solicitor for the Fourth Respondent: King & Wood Mallesons

ORDERS

NSD 1498 of 2016
BETWEEN:

KEVIN OLSON

Applicant
AND:

MICHAEL THOMAS KEEFE

First Respondent

CORY LIPOFF

Second Respondent

HILCO MERCHANT RESOURCES LLC

Third Respondent

HILCO MERCHANT AUSTRALIA PTY LTD
ACN 150 215 875
Fourth Respondent

JUDGE:

BROMWICH J

DATE OF ORDER:

23 FEBRUARY 2017

THE COURT ORDERS THAT:

1.Pursuant to r 10.44(3) of the Federal Court Rules 2011 (Cth), service of the amended statement of claim filed 22 November 2016, the interlocutory application dated 25 November 2016, the affidavit of Malcolm John Davis sworn 25 November 2016 and orders previously made on 21 November 2016 be confirmed as against:

(a)the first respondent;

(b)the second respondent; and

(c)the third respondent.

2.Order 1 above be made nunc pro tunc to 14 February 2017.

THE COURT NOTES THAT:

1.Service of an amended originating application filed 22 November 2016 was confirmed as against the first, second and third respondents pursuant to r 10.43(6) of the Federal Court Rules 2011 (Cth) by orders made 14 February 2017.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal…

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AGLC
Olson v Keefe [2017] FCA 101
Case
[2017] FCA 101
Decision Date

CaseChat Overview and Summary

The case of Olson v Keefe involves an application for confirmation of service of an amended originating application on three foreign respondents in accordance with Rule 10.43(6) of the Federal Court Rules 2011 (Cth). The primary issue before the court was whether the application for confirmation of service should be allowed, considering that the service was made without prior leave and whether it complied with Rule 10.43(4) of the Federal Court Rules. The court also had to determine whether the service of further documents should be confirmed under Rule 10.44(4).

The court found that the applicant's decision to effect service ahead of obtaining leave was reasonable given the circumstances. The applicant provided an affidavit explaining that the service was made to facilitate the resolution of the issues as quickly, inexpensively, and efficiently as possible and to comply with both the Hague Convention and local Illinois law. The court accepted the explanation for the failure to seek leave first, given that the service took place under the Court’s supervision and involved an Australian respondent alongside foreign ones. Consequently, the court concluded that the service of the amended originating application, the amended statement of claim, the interlocutory application, an affidavit, and the orders were confirmed against the first, second, and third respondents. The court also noted that the costs of this application should be reserved rather than being costs in the cause or there being no order as to costs, considering the foreign respondents were probably aware of the application and could have elected to waive service.

Orders

Orders of the court

1. Pursuant to r 10.44(3) of the Federal Court Rules 2011 (Cth), service of the amended statement of claim filed 22 November 2016, the interlocutory application dated 25 November 2016, the affidavit of Malcolm John Davis sworn 25 November 2016 and orders previously made on 21 November 2016 be confirmed as against:

(a) the first respondent;

(b) the second respondent; and

(c) the third respondent.

2. Order 1 above be made nunc pro tunc to 14 February 2017.

THE COURT NOTES THAT:

1. Service of an amended originating application filed 22 November 2016 was confirmed as against the first, second and third respondents pursuant to r 10.43(6) of the Federal Court Rules 2011 (Cth) by orders made 14 February 2017.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

As the first, second and third respondents had not been served in accordance with the Federal Court Rules they had no obligation to appear at this stage and did not do so. The fourth respondent provided very short written submissions identifying the matters required to be addressed by the Court, but expressly submitted that it could not consent to nor oppose the application. Counsel appearing for the fourth respondent maintained that position at the hearing of the application, to the point of not even making any submissions on a point of law once objection was taken to that course by senior counsel for the applicant. Accordingly, unlike the first application that was abandoned, in relation to which the fourth respondent took an active albeit quasi amicus curiae role, in this application the fourth respondent took an entirely passive role.The applicant’s case as pleaded and supported by evidence on the application The case is now brought by the applicant by way of an amended originating application, the material facts and circumstances of which are pleaded by way of an amended statement of claim. The following narrative is drawn mostly from the applicant’s pleadings, supplemented to a limited extent by the evidence relied upon by the applicant for the purposes of this application. The narrative necessarily does not have the benefit of any competing pleadings or evidence and may or may not reflect the facts ultimately found following a trial. Counsel for the fourth respondent has referred to particulars being sought and has foreshadowed the possibility of at least a partial strikeout application in relation to the case brought against it. The third respondent is a company within a group of companies operating worldwide and described in the evidence somewhat elliptically as “specialising in asset valuation, asset monetisation and advisory solutions”. Part of this work is referred to in the amended statement of claim as “store closing projects”. It seems these projects involve giving effect to the closing of failed retail businesses, including inventory and other asset sales. The evidence relied upon by the applicant in addition to the case as pleaded refers to this work being done in relation to a number of different businesses worldwide. The fourth respondent is involved in such projects in Australia. Between 2003 and 2006, the applicant was employed by a company related to both the third and fourth respondents, apparently in the USA although that is not expressly pleaded. From 2006 to 2009, the applicant worked as a contractor to the third respondent and in about 2009 became a permanent contractor and received weekly remuneration. For the period from 2006 to 2010, the applicant was responsible for business development, identifying and pursuing opportunities for the third respondent’s services and doing due diligence reviews of identified opportunities. Again, although not expressly pleaded, it seems that this work was done in the USA.

Decision

Reasons for decision

The reasons given by affidavit evidence for effecting service ahead of obtaining leave were to facilitate the resolution of the issues as quickly, inexpensively and efficiently as possible and to effect service in accordance with both the Hague Convention and local Illinois law. To that should be added that I made orders permitting delivery to take place ahead of leave being obtained. In all the circumstances where there was a live case against a respondent in Australia, rather than only foreign respondents, in my view that was a reasonable and appropriate course to adopt, given that it took place under the Court’s effective supervision. Such a course may not be so readily accepted for solely foreign respondents, or in different circumstances. A sufficient explanation for the failure to seek leave first has been established in the circumstances of this case.Conclusion By reason of the forgoing, the service of the amended originating application, amended statement of claim, this interlocutory application, an affidavit and orders upon the first respondent, second respondent and third respondent must be confirmed. The costs of this application should be reserved rather than being costs in the cause or there being no order as to costs. That is because the three foreign respondents were probably aware of this application and could have elected to waive service. That does not necessarily mean that they should pay the costs of this application, but, depending on the outcome of the litigation and any other considerations that may be advanced, it may be that the costs of the application should be the applicant’s costs in the cause.

Ratio Decidendi

Legal Principle Established

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