Sonsan Pty Ltd v Vlavianos

[2015] WASC 336

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   SONSAN PTY LTD -v- VLAVIANOS [2015] WASC 336

CORAM:   ALLANSON J

HEARD:   24 AUGUST 2015

DELIVERED          :   9 SEPTEMBER 2015

FILE NO/S:   CIV 2908 of 2011

BETWEEN:   SONSAN PTY LTD

Plaintiff

AND

ELIAS (BEN) VLAVIANOS
First Defendant

MELISSA ANNE REILLY
Second Defendant

PERTH CITY TRADERS PTY LTD
Third Defendant

REGISTRAR OF TITLES
Fourth Defendant

COMMISSIONER OF TITLES
Fifth Defendant

Catchwords:

Practice and procedure - Extension of validity of writ for service - Whether injustice will occur unless relief is granted - Turns on own facts

Legislation:

Limitation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA), O 1 r 4B(1), O 2 r 1, O 3 r 5, O 7, O 7 r 1, O 7 r 1(2), O 60A r 2

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr A J N Aristei

First Defendant              :     No appearance

Second Defendant         :     No appearance

Third Defendant            :     No appearance

Fourth Defendant           :     No appearance

Fifth Defendant              :     No appearance

Solicitors:

Plaintiff:     Irwin Legal

First Defendant              :     No appearance

Second Defendant         :     No appearance

Third Defendant            :     No appearance

Fourth Defendant           :     No appearance

Fifth Defendant              :     No appearance

Case(s) referred to in judgment(s):

Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79

Brown v Coccaro (1993) 10 WAR 391

Popovic v Panagoulias [2014] WASCA 86

Re APCH Ltd (in liquidation) [2014] VSC 190

Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337

1. ALLANSON J:  The plaintiff, Sonsan Pty Ltd, brings this action against three defendants:  Elias (Ben) Vlavianos, Melissa Anne Reilly, and Perth City Traders Pty Ltd.  The plaintiff has applied to extend the validity of the writ for the purpose of service on Mr Vlavianos, and, if the validity is extended, an order for substituted service.  

The writ

1. The writ of summons was filed on 7 October 2011.  Mr Vlavianos is named as the first defendant.  His address is given on the writ as 'c/- Unit 12, 16‑22 Dover Road, Scarborough WA 6019'.  The writ was not immediately served on any of the defendants.

2. The writ bears an indorsement of claim.  On the face of the writ, the cause of action against the defendants arose on or about 18 May 2008.  The writ was, accordingly, filed within the period limited by the Limitation Act 2005 (WA), and that period did not expire before May 2014.

3. For the purpose of service, a writ is valid in the first instance for 12 months.  The court has power to extend the period within which the writ may be served:  Rules of the Supreme Court 1971 (WA) O 7 r 1. The court's jurisdiction under O 7 may be exercised by a case management registrar: O 60A r 2. Orders extending the writ were made by registrars on three occasions: on 14 November 2012 (on an application filed on 5 October), the period for service of the writ was extended for six months; further six month extensions were ordered in May 2013 and November 2013.

4. On the last occasion, on 6 November 2013, a registrar ordered that the date for service of the writ be extended to 6 May 2014.  An amended writ of summons was filed on 7 November 2013, and a statement of claim filed on 13 November.  The writ has been served on the second and third defendants.  It has not, to date, been served on Mr Vlavianos.

Extending the writ - principles

1. The power under O 7 r 1 of the Rules of the Supreme Court to extend the validity of a writ for service is discretionary. The rule prescribes no criteria for the exercise of the discretion. The discretion is a broad one to be exercised by reference to the general justice of the case, and taking into account all the relevant circumstances. In applying O 7, the court must also act so as best to ensure the attainment of the objects referred to in O 1 r 4B(1).

2. In Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79, Ipp J said:

   These [circumstances] would include not only the provisions of any limitation statute applicable but also the relative hardships which a grant or refusal of renewal would impose upon the parties. Relevant factors include the length of the delay, whether the delay was caused by mistake and whether such mistake is excusable, the nature of attempts made at service, and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it [52].

   See also Popovic v Panagoulias [2014] WASCA 86 [41]; Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337. In Van Leer, Stephen J identified a two part inquiry: whether reasonable efforts have been made to serve the defendant; if not, whether other good reasons exist for the renewal.

3. More specific principles guiding the exercise of the discretion have been expressed in various cases:  see, for example, Re APCH Ltd (in liquidation) [2014] VSC 190 [100]. The matters found relevant or determinative in other cases are useful in assisting the court to exercise discretions consistently, but do not detract from the broad discretion and the need to exercise it according to the justice of the case.

4. There is, however, a further consideration in this matter. The time for service of the writ expired in May 2014. Order 7 confers power to extend for a period 'not exceeding 12 months at any one time, beginning with the day next following that on which it would otherwise expire'. In Brown v Coccaro (1993) 10 WAR 391 the Full Court held that O 3 r 5 may be used to ameliorate the effect of that part of O 7 r 1(2) which empowers the Court to extend the validity of a writ only for a period not exceeding 12 months at a time. In Brealey, Ipp J referred to Brown v Coccaro, and emphasised that, in such a case, the power is to be exercised where, without such remedial relief, injustice will occur, and should only be exercised when the justice of the case requires a departure from the policy underlying O 7 r 1 (Brealey [49] ‑ [50]).

The attempts to serve Mr Vlavianos

1. In an affidavit of Frank Pileggi, sworn 17 August 2015, the plaintiff sets out the attempts to locate Mr Vlavianos for the purpose of these proceedings, and also in another matter that was current in 2013. 

2. The writ was filed on 7 October 2011, but was not immediately served.  In part this was to enable further collation of evidence, having regard to the seriousness of the allegations made. 

3. The writ was apparently served on Perth City Traders on 5 October 2012, although an appearance was only entered by that defendant in December 2013.  The plaintiff intended to serve Mr Vlavianos and Ms Reilly, but was unable to locate or serve either of them.  An attempt to serve them at premises at 36 Southbourne Street, Scarborough (where the plaintiff believed both were living) was unsuccessful, and the plaintiff's process server was unable to obtain reliable information about their whereabouts.

4. In about July 2013, in Magistrates Court proceedings, the plaintiff unsuccessfully sought to serve a witness summons on Mr Vlavianos by:

   1.attempting to serve him at Cataby Roadhouse, his last known place of business;

   2.attempting to contact him through a mobile phone number provided by a family member; and

   3.leaving the summons at the last known address of Ms Reilly who was believed to be his de facto partner.

5. On 6 September 2013, the Magistrates Court made an order for substituted service of the witness summons by registered post to Mr Vlavianos' last known residential address.  On 1 October 2013 service was effected in accordance with that order, but Mr Vlavianos did not contact the plaintiff's solicitors to arrange his attendance as a witness, and the hearing was vacated.

6. Mr Pileggi deposes that the plaintiff has attempted to locate Mr Vlavianos at:

   1.a property in Dover Road, Scarborough, where the plaintiff believed that Mr Vlavianos and Ms Reilly had previously resided,

   2.the Wiluna Hotel, where Mr Vlavianos was registered as manager,

   3.the Cataby Roadhouse;

   4.36 Southbourne Street, Scarborough, and

   5.a property in Wembley Downs, where Mr Vlavianos was registered as joint owner.

7. His affidavit does not state clearly whether these attempts were for the purpose of service in these proceedings, for the service of the witness summons or when they were made.  The documents attached to his affidavit, and on which the plaintiff relies, are confined to the period around July 2013.

8. More recently, between May and July 2015, the plaintiff has requested solicitors who have acted for Mr Vlavianos' in separate court proceedings if they would disclose Mr Vlavianos' whereabouts, or agree to accept service of court documents in this action.  I assume they had no instructions to do either.

9. The solicitors for the third defendant have also declined a request from the solicitors for the plaintiff to provide the contact details for Mr Vlavianos. 

10. On the evidence, the attempts to locate Mr Vlavianos appear to have been primarily in October 2012, and again around July 2013.  This year the plaintiff has renewed its attempts to locate him.  I am satisfied that, on those occasions, it has been difficult to locate Mr Vlavianos, in part because of his residence in more remote towns like Wiluna.  But there is nothing to suggest that he was out of the jurisdiction.  In fact, in an affidavit sworn 22 May 2014, in an application to set aside default judgment against Perth City Traders, Ms Reilly says that she was engaged in proceedings against Mr Vlavianos in the Family Court during that year. 

11. No previous application has been made to permit substituted service.

Is Mr Vlavianos aware of these proceedings?

1. The writ was served on the third defendant in 2012.  On 2 May 2013, a copy of the writ of summons and the statement of claim were served on Ms Reilly.  

2. Mr Vlavianos and Ms Reilly were the directors of the third defendant when it applied for the transfer of the hotel licence for the Club Hotel, Wiluna, in 2008.

3. The plaintiff also believes that Mr Vlavianos and Ms Reilly were in a personal relationship.  The evidence of Ms Reilly is that they had been in a relationship at an earlier time, but that it had ended.  They were, at the very least, in a business relationship as directors of the third defendant.  In August 2013, they were also the registered owners, as tenants in common, of a property at 98A Hale Road, Wembley Downs.  

4. The plaintiff has lodged caveats against the Wiluna Hotel and the property in Wembley Downs on 9 October 2012, and 15 January 2014 respectively.  In each case the application details that the claim in this court is set out in the documents lodged in support of the caveat.

5. In my opinion, it is reasonably likely that Mr Vlavianos has been aware of these proceedings through his association with Ms Reilly.

Other factors

1. An important factor, in my opinion, is the nature of the claim made by the plaintiff against the three defendants. 

2. In summary, the plaintiff claims relief for losses suffered as a result of Mr Vlavianos' breach of his fiduciary duties as manager of the Last Chance Tavern in South Hedland.  The plaintiff was the owner of the Tavern, and alleges that Mr Vlavianos was the approved manager and general manager, and Ms Reilly was employed there as a bookkeeper. 

3. The plaintiff alleges that Mr Vlavianos and Ms Reilly removed money from the Tavern's safe and used it for their own personal use.  The claim against Perth City Traders is based on the purchase in its name of the Club Hotel, Wiluna, substantially by using the plaintiff's money.  The plaintiff claims that the land and business assets of Perth City Traders are held subject to either a constructive trust or a resulting trust in the plaintiff's favour because they were purchased using money obtained by breach of fiduciary duty or misappropriation.

4. The time limited for bringing the plaintiff's claim against Mr Vlavianos has now most likely expired.  This may not prejudice the plaintiff.  The action can proceed against the defendants who have been served, and the plaintiff will not necessarily lose the opportunity to recover for its losses, should it establish its claim, as a result of the absence of Mr Vlavianos as a party.  To renew the writ, however, may deprive Mr Vlavianos of the benefit of a limitation defence.  While the plaintiff did not simply sit on its hands, the evidence suggests the attempts to locate and serve Mr Vlavianos were limited.  

5. I also take into account that if the action proceeds against the second and third defendants, the court will have to determine grave allegations against Mr Vlavianos.  It would be in the interests of justice that Mr Vlavianos has the opportunity to be heard before any finding of the kind sought by the plaintiff is made.  But it is not necessary to renew the writ for that to occur.

6. Although the facts on which the plaintiff relies are not complex, the evidence filed to date (in the application by Perth City Traders to set aside default judgment) suggests that circumstances may be considerably more complicated.  The events on which the plaintiff relies occurred in 2008.  I have no information about the state of health of Mr Vlavianos, but he is now 77 years old.

7. Finally, in Brealey, speaking of the remedial effect of O 2 r 1 of the Rules of the Supreme Court, Ipp J said of the policy behind O 7 r 1:

   It is undesirable to allow a plaintiff to issue a writ before the expiry of a limitation period and then to delay service for an indefinite period.  Lengthy delays cause difficulties in the ascertainment of the truth.  It is unfair to require potential defendants to contemplate potential litigation indefinitely.  The unfairness stems from the uncertainty and concomitant financial and other burdens that would be the consequence.  As Young CJ (with whom Kaye and Southwell JJ agreed) said in Ramsay v Madgwicks [1989] VR 1 at 5, 'it is not right that people should be left in ignorance of proceedings that have been taken against them if they are here to be served.' Finally, the proper administration of the court would be hampered if writs could be issued and then left to lie dormant for indefinite periods [45].

8. I am not satisfied that the plaintiff has shown that injustice will occur, or is likely to occur, unless relief is granted.  The explanation for the delay in serving Mr Vlavianos, over nearly four years since the writ was issued, is not convincing.  The evidence of efforts to serve him is quite limited.  No attempt was made earlier to obtain orders for substituted service.  Perhaps, understandably, the plaintiff was more concerned about tracing the money to enable it to be recovered.  And, importantly, the absence of Mr Vlavianos is not fatal to the relief sought by the plaintiff on the claim it has pleaded.

9. I dismiss the application to extend the validity of the writ.  The question of substituted service does not now arise.