Strauss v Macdonald
[2023] VSC 226
•1 May 2023 Ex tempore; revised 1 May 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2022 03004
| JAMES STRAUSS | Plaintiff |
| v | |
| JOEL MACDONALD | Defendant |
JUDGE: | Connock J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 May 2023 |
DATE OF JUDGMENT: | 1 May 2023 Ex tempore; revised 1 May 2023 |
CASE MAY BE CITED AS: | Strauss v Macdonald |
MEDIUM NEUTRAL CITATION: | [2023] VSC 226 |
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PRACTICE AND PROCEDURE — Application for substituted service of writ and statement of claim — Where defendant’s location is not known — General principles for substituted service — Requirements for substituted service by email and email links — Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 6.10(1), 6.10(1.1) and (1.2), 7.02, 7.05, 7.09 — Substituted service refused at this time — Application adjourned to allow further steps to be taken and further evidence adduced — Consideration of the probability or otherwise of the proposed methods of service bringing the documents and the proceeding to the attention of the defendant — Plaintiff not established on the evidence that the proposed methods of service will likely bring the writ and statement of claim to the attention of the defendant.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | M Hazell (solicitor) | Macpherson Kelley |
| For the Defendant | No appearance |
HIS HONOUR:
Introduction and Summary
By summons filed 17 April 2023, the plaintiff seeks orders pursuant to r 6.10(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) for substituted service upon the defendant of the writ and statement of claim and related documents by the various proposed methods of service later referred to in paragraph 22 of these reasons (Proposed Service Methods). The plaintiff also seeks an ‘effective service’ deeming order pursuant to r 6.10(2) of the Rules.
The application was supported by an affidavit of the plaintiff’s solicitor, Michael Hazell, sworn 14 April 2023 (Hazell Affidavit) and the plaintiff’s written submission filed on 17 April 2023, which was supplemented by oral submissions made by Mr Hazell at the hearing of the application.
For the reasons that follow I have concluded that no substituted service orders should be made at this time. That being so it is not necessary to address the application for an ‘effective service’ deeming order under r 6.10(2).
Subject to hearing further from the plaintiff, I do not propose to dismiss the application at this point but propose to allow the plaintiff a further opportunity to take additional steps and adduce additional evidence in support of the application should he wish to do so. Unless the plaintiff submits otherwise, I propose to adjourn the further hearing of the plaintiff’s application to a future date.
The Proceeding
The proceeding was commenced by writ and statement of claim filed on 8 August 2022. For present purposes it is not necessary to address the detail of the claims made by the plaintiff against the defendant. Briefly, the plaintiff seeks substantial damages and other relief from the defendant in connection with the alleged sale of his shares in GetSwift Limited (GetSwift) prior to its collapse. The plaintiff alleges that by reason of the defendant’s misleading conduct and representations, the plaintiff was prevented from selling his GetSwift shares at the time or times that he would have chosen to have sold them.
The plaintiff alleges that had the alleged contravening conduct not been engaged in by the defendant he would have sold his GetSwift shares at specified times of his choosing and that, had he done so, he would have received substantially higher share sale prices than he in fact received when he did sell his shares. Although the quantum of the damages claim is not yet fully particularised, it is apparent from the terms of the statement of claim that the loss and damage claimed from the defendant is substantial and is alleged to amount to millions of dollars. During oral submissions Mr Hazell informed the court that the claim is for an amount in the order of $14–16 million.
The Hazell Affidavit
The plaintiff relied upon the Hazell Affidavit, including its exhibits, which I have read and considered. The Hazell Affidavit addressed some brief background to the proceeding and GetSwift’s collapse, its liquidation, and its later reconstruction pursuant to a scheme of arrangement. It also recorded the attempts that have been made to locate and serve the defendant since 29 July 2022 and, among other things, addressed the plaintiff’s ongoing efforts to establish GetSwift’s insurance position.
The matters referred to in paragraphs 8 to 14 of the Hazell Affidavit have caused Mr Hazell to be of the view that the defendant may have permanently moved to the United States, particularly as a result of GetSwift becoming domiciled in Canada to concentrate on its North American operations. Mr Hazell stated that he therefore assumed that the defendant is residing in the United States for the purpose of conducting GetSwift’s business. He said that to his knowledge there was no evidence to suggest that the defendant had returned to Australia since moving to the United States or since the proceeding had been filed.
Mr Hazell said that shortly before the proceeding was filed in August 2022, he spoke with Ms Fox of Quinn Emanuel Urquhart & Sullivan (Quinn Emanuel), who is a solicitor who previously represented the defendant prior to the issue of this proceeding, to see if Quinn Emanuel held instructions to accept service. Mr Hazell said that he was informed by Ms Fox that Quinn Emanuel were no longer instructed to act on behalf of the defendant and that the defendant had emigrated to the United States.
The GetSwift company search extract obtained by Mr Hazell on 14 April 2023 records the defendant as a previous director and records his address as 116 East 62nd Street, New York, NY, United States. Page 70 of that search extract reveals that this change of address was recorded following lodgement of a Form 484A1 that was received and processed by ASIC more than three years ago on 6 March 2020.[1] This address is not one of the addresses sought to be used by the plaintiff in the Proposed Service Methods.
[1]The Form 484A1 is recorded as having document number 1EEH37517 on page 70 of the search extract, being page 96 of 216 of Exhibit MTH 1 to the Hazell Affidavit.
Mr Hazell also deposed that he had been engaged in discussions with a representative of GetSwift’s liquidator in Australia, Mr Domanko, from as early as August 2022. Mr Domanko informed Mr Hazell that he was not in contact with the defendant and therefore could not assist.
This was followed up with Mr Domanko by another of the plaintiff’s solicitors, Ms Santilli, on 6 February 2023. Mr Hazell deposed that Ms Santilli was informed that: Mr Domanko has had no direct contact with the defendant ‘in the past’; Mr Domanko has had indirect contact with the defendant through a New York attorney, Ms Grubin, ‘whereby he conveyed information to the defendant and vice versa’; and that Mr Domanko still does not know of the whereabouts of the defendant.
The Hazell Affidavit detailed conversations with a solicitor, Mr Zawa, of Phi Finney McDonald (Phi Finney) in connection with Phi Finney’s attempts to locate and serve on the defendant some documents in a class action against GetSwift and the defendant that was being conducted in the Federal Court of Australia. Among other things, Mr Hazell was informed that the defendant’s former solicitor in the class action proceeding had filed a notice of ceasing to act and that in this document it was stated that the defendant’s last known residential or business address was 1185 Sixth Avenue, New York. Mr Hazell said that he had since become aware that this address was the business address of GetSwift’s now parent company, GetSwift Technologies, in the United States. The plaintiff does not seek to serve documents on this address as one of the Proposed Service Methods.
Mr Hazell also deposed to GetSwift Technologies, and its holding company, GetSwift Inc, being subject to a bankruptcy petition in the United States, parts of which were exhibited. Based on information provided to Mr Hazell by Mr Zawa, Mr Hazell referred to Ms Grubin of Barclay Damon LLP being the New York attorney representing GetSwift Inc and GetSwift Technologies in the bankruptcy petition. This was supported in part by aspects of the petition exhibited to the Hazell Affidavit because they recorded Ms Grubin of Barclay Damon LLP as acting for the ‘Debtor’, GetSwift Inc. Mr Zawa provided Ms Grubin’s email contact details to Mr Hazell by email dated 5 December 2022 and informed him that Ms Grubin ‘was the main contact’ and that she had been receiving instructions from the defendant regarding the financial position up to and including the liquidation. Mr Hazell said he was also aware from his discussions with Mr Zawa that Phi Finney had been attempting to locate the defendant for some time to serve him with documents in the class action proceeding but that this had been unsuccessful.
In a telephone call on 30 January 2023, Mr Zawa informed Ms Santilli that: Phi Finney had been making continuing attempts to locate the defendant but this had not been successful; documents in the class action proceeding had been unable to be served; Mr Zawa had been in contact with Ms Grubin to inform her that the class action was proceeding before the court in early February 2023 for a settlement approval hearing; and that Mr Zawa believed that Ms Grubin had conveyed this to the defendant. The basis of Mr Zawa’s belief was not referred to. Mr Hazell deposed that the class action settlement hearing proceeded and a settlement was approved, although neither GetSwift nor the defendant appeared either personally or through legal representation.
Mr Hazell also referred to an ASIC proceeding against GetSwift and the defendant that was the subject of a penalty hearing before Lee J in the Federal Court on 31 January 2023. It was said that neither GetSwift nor the defendant appeared personally or through legal representation in that ASIC penalty hearing. Media articles regarding the recent class action settlement hearing and the ASIC penalty hearings were exhibited to the Hazell Affidavit.
Mr Hazell detailed further attempts by the plaintiff in August and September 2022 to contact the plaintiff by three emails to discuss the proceeding and said that no response had been received to those emails. Each of these emails was to the same ‘@getswift.co’ email address, from which it was said there was ‘no bounce back to the emails … thus indicating they were still valid’. Reference was also made to the plaintiff contacting an ex-football team member of the defendant, Mr Couch, in about January 2023. It was said that the plaintiff understood that Mr Couch either resides with or did reside with the defendant in the United States. Why the plaintiff had or has that understanding was not referred to. In any event, the evidence was that Mr Couch was unaware of the defendant’s precise whereabouts.
Notwithstanding the various unsuccessful attempts to locate the defendant by the plaintiff, the plaintiff’s solicitors, and Phi Finney, Mr Hazell expressed the opinion that the defendant ‘is on notice’ of the proceeding and ‘is aware of its existence’. Mr Hazell reached this view because of an article published in The Age on 9 August 2022, being the day after the proceeding was filed. The article was said to have been published online and in print on the front page of the paper as well as being republished by other media organisations.
Mr Hazell also deposed that he had sent a ‘friend request’ to the defendant’s Instagram account but that the defendant had not yet responded to that request.
On 13 January 2023 the plaintiff informed Mr Hazell that the defendant was attending a wedding on that day in Mexico. This was said to have been apparent from a picture of the defendant at that wedding from what appears to be the Instagram account of a person who is not the defendant. Mr Hazell said that he then attempted to get in contact with someone at the wedding to assist him with contacting the defendant but that his attempts were unsuccessful as the wedding had concluded by that time.
In response to an enquiry made of Mr Hazell during the hearing the court was appropriately informed that:
(a) a conscious strategic decision had been made not to contact Ms Grubin directly because the plaintiff’s solicitors considered it likely that this might close out an avenue of substituted service; and
(b) no attempts had been made to engage a process server in the United States given the difficulty in locating the defendant, the cost involved, and what were said to be the plaintiff’s modest means.[2]
[2]Although there was no evidence before the court regarding these matters and the plaintiff’s statement of claim contained allegations regarding material amounts received by him when he sold his GetSwift shares.
As a result of the matters referred to in the Hazell Affidavit, Mr Hazell deposed that he had formed the view that personal service of the writ and statement of claim on the defendant is impracticable. He also said that he had formed the view and believed that if the writ and statement of claim were sent to the defendant by the following means they would come to his attention:
(a) directly to his various email addresses. Those email addresses were said to be an @getswift.co email address and an @gmail.com email address;
(b) an electronic message to the defendant’s Instagram account, which was specified in the evidence but need not be recorded in these reasons;
(c) a text message to the defendant’s mobile phone, the number of which was specified, and in respect of which Mr Hazell said ‘we understand still remains the phone number for the defendant’;
(d) an email to the solicitor who acted for the defendant in relation to pre-action correspondence, being Ms Fox the Managing Partner (Australia) at her Quinn Emanuel email address;[3] and/or
(e) sent by email and post to Ms Grubin of Barclay Damon LLP in the United States at her postal address and her email address referred to in the Hazell Affidavit.
[3]Which was also specified but need not be recorded in these reasons.
Submissions
The plaintiff relied upon his written submission filed 17 April 2023, which was supplemented orally by his solicitor, Mr Hazell, at the hearing.
Reference was made to the terms and operation of r 6.10 of the Rules and a number of the well-rehearsed authorities dealing with its terms and operation, including the principles and observations I referred to in Sanc (Australia) Pty Ltd v Dixon & Ors (Sanc).[4]
[4][2020] VSC 872, [17]–[19].
In substance, the plaintiff submitted as follows:
(a) Although the plaintiff was aware of the terms of r 7.09 of the Rules in relation to alternatives to personal service on a person served out of Australia, it was considered that using r 7.09 was ‘not practical’ when the plaintiff had been unsuccessful in both locating and personally serving the defendant, and was unsure in which State in the United States the defendant was residing in or located.
(b) The evidence demonstrated that personally serving the defendant is impracticable and that the plaintiff has made reasonable attempts to locate the defendant to effect service.
(c) The evidence regarding the difficulties in locating the defendant in connection with the class action and the ASIC proceeding supported the evidence regarding the difficulty of locating the defendant ‘… let alone serving the defendant in this proceeding …’. It was submitted that the Proposed Service Methods would ‘in all reasonable probability’ put the defendant on notice of the proceeding.
(d) The defendant was likely already aware of the proceeding given the media attention and other steps taken.
During oral submissions the plaintiff submitted that it was also relevant for the court to take into account: considerations under the Civil Procedure Act 2010 (Vic) (CP Act); that the writ will expire in August 2023; and that the claim was substantial and seeks damages in the order of $14–16 million.
It was also stated in the written submission that the plaintiff understood that if orders for substituted service were to be made, then r 7.02 of the Rules allows the writ and statement of claim to be served outside of Australia without leave, and that the plaintiff would file with the court and serve a Form 7AAA to ensure that the defendant is informed of the scope and grounds of the claimed jurisdiction, and his right to apply for an order setting aside the proceeding.
It was further stated that if orders for substituted service were made, it was proposed to serve the following documents on the defendant by the Proposed Service Methods:
(a) cover letter prepared by Macpherson Kelley, solicitors for the plaintiff;
(b) the writ and statement of claim;
(c) a Form 7AAA;
(d) a copy of rr 7.01–7.09 of the Rules; and
(e) the orders made by this court for the purpose of substituted service.
(collectively, Service Documents).
Principles and Observations
As the plaintiff observed, a number of relevant principles and observations regarding substituted service were recently addressed in Sanc[5] and it is convenient and efficient to set out again what I said in that case in almost identical terms.[6]
[5][2020] VSC 872, [17]–[19].
[6]Which I do in paragraphs 30 to 32 below.
Rules 6.10(1), (2) and (3) of the Rules provide as follows:[7]
[7]See also rr 6.10(1.1) and (1.2) regarding service by email, discussed further below.
6.10Substituted service
(1)Where for any reason it is impracticable to serve a document in the manner required by these Rules, the Court may order that, instead of service, such steps be taken as the Court specifies for the purpose of bringing the document to the notice of the person to be served.
(2)Where the Court makes an order under paragraph (1), the Court may order that the document be taken to have been served –
(a)on the happening of any specified event; or
(b)on the expiry of any specified time.
(3)The Court may make an order under paragraph (1) notwithstanding that the person to be served:
(a)is out of Victoria; or
(b)was out of Victoria when the proceeding commenced.
As the terms of r 6.10(1) of the Rules make clear, the purpose of any permitted method of substituted service is to bring the relevant documents to the notice of the person to be served.
As Garde J noted in Austin v Dobbs (Austin),[8] r 6.10 ‘… has a long history, and there are many past decisions …’.[9] Observations that have been made regarding the operation of r 6.10 and similar rules include the following:
[8][2018] VSC 755.
[9]Ibid at [28], noting also the cases cited at footnote 5 in that paragraph.
(a) The primary object of substituted service is to bring to the knowledge of the person in respect of whom substituted service is sought the whole proceeding, so that the person can take such steps as they think proper to protect their interests and rights. It is not proper to substitute service of process in a court of law where there is no belief that the service will bring the proceedings to the knowledge of the person in question or of any person representing their interests.[10]
[10]See Miscamble v Phillips and Hoeflich (No. 2) [1936] 2 St R QD 272 at 274 (Starke J) (Miscamble).
(b) The ‘operative condition’ in the opening words of the rule is that it be ‘impracticable to serve a document in the manner required by [the] Rules’. The expression ‘for any reason’ has been said to be broad and to be given a wide meaning. What is required is that, for any reason, it is impracticable to serve the document in the manner required by the Rules. Where the court finds that this condition is satisfied and it is proper to do so in the exercise of the court’s discretion, an order for substituted service may be made, including with respect to a person who is outside Australia. As Bell J has observed, Order 7 does not derogate from the breadth and operation of r 6.10.[11]
[11]See generally Carter Holt Harvey Woodproducts Australia Pty Ltd v David [2015] VSC 393 (Carter Holt Harvey), [9]–[12] (Bell J).
(c) The mere fact that a person is outside Australia is not sufficient in and of itself to establish that it is impracticable, and it is not permissible to use substituted service only for the purpose of side stepping the obstacles to personal service abroad.[12] By parity of reasoning it may be added that, unless the requirements of r 6.10(1) are satisfied and it is a proper exercise of the court’s discretion to order substituted service, it is similarly not permissible to use substituted service for the purpose only of sidestepping other obstacles to serving documents in accordance with the Rules.
[12]See Carter Holt Harvey at [9]–[12] (Bell J).
(d) It does not inexorably or necessarily follow that because a document cannot be served promptly that this will mean that service in accordance with the Rules is impracticable. It will always depend on the facts, and in every case it is necessary to consider the requirements of the rule by reference to the individual circumstances in question.[13]
[13]See Austin at [28]–[33] (Garde J).
(e) As was the case in Howse v Campbell (Howse),[14] substituted service has been ordered in cases where a defendant could not be served and there were just grounds to believe that the defendant was withdrawing from service.
[14][1881] VII VLR 145.
(f) As Garde J observed in Austin,[15] r 6.10 is also to be read and applied in the context of the CP Act, including the overarching purpose of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute.[16]
(g) Once r 6.10 is engaged, the principal matter for the court to consider, having regard to the particular facts and circumstances of each case, is whether steps can be taken for the purpose of bringing the document to the notice of the person to be served. If no such steps can be identified where little is known about the actual whereabouts or domestic connections of a person then that may be a discretionary reason for refusing an order for substituted service. However, where the steps proposed are very likely to bring the court documents to the attention of the person in question, then an order may be made.[17]
(h) Some cases have involved orders directing service on a former solicitor, whether they acted in relation to the same matter or a different matter. Howse[18] is an example where Holroyd J noted that the solicitor who had acted for the defendant previously had said in his affidavit that ‘… he has no instructions to accept service ...’. His Honour observed that, in the particular circumstances of that case, this was ‘not a satisfactory answer’ and concluded that the solicitor having recently acted for the defendant he (Holroyd J) ‘… should infer that he [the solicitor] could communicate with [the defendant] if he liked …’.[19]
[15][2018] VSC 755, [31]–[32].
[16]Section 7 of the CP Act. See also the obligations imposed upon the court in this context by ss 8 and 9 of the CP Act.
[17]See Carter Holt Harvey at [15].
[18][1881] VII VLR 145.
[19]Ibid at 148.
A review of a number of the authorities also reveals some differences of language used by judges when considering the exercise of discretion in the context of the object of the proposed method of service being bringing the relevant proceeding or documents to the attention of the person to be served. For example, in Foxe v Brown,[20] Mason J sitting as a single judge in the High Court referred to the need to establish that the proposed service method was ‘likely’ to bring the writ to the attention of the defendant. The same approach was taken by Wilson J in Permanent Custodians Limited v Massey.[21] Justice Bell in Carter Holt Harvey[22] referred to the proposed service methods as being ‘very likely’ to bring the relevant court documents to the attention of the defendant. Justice Garde in Austin[23] was satisfied that the proposed service steps ‘will’ be effective in bringing the proceeding to the attention of the defendant. Judicial Registrar Clayton in Hassan v Noa[24] endorsed the view expressed by the Court of Appeal in Porter v Freudenberg[25] that the methods of service must ‘in all reasonable probability, if not certainty, be effective in bringing knowledge of the writ to the defendant’. After referring to this case, Sloss J in Chen v Blockchain Global Limited & Anor[26] made substituted service orders, observing that she was satisfied that the proposed steps taken together ‘would be likely’[27] to bring the originating process to the attention of the relevant defendant.
[20](1984) 58 ALR 542, 546–7.
[21][2009] QSC 4, [6], [12].
[22][2015] VSC 393, [15].
[23][2018] VSC 755, [39].
[24][2020] VSC 308, [44]–[57].
[25][1915] 1 KB 857.
[26][2020] VSC 751.
[27]Ibid [23].
Given that I have determined that it has not been established that it is likely that one or more of the Proposed Service Methods will bring the proceeding or documents to the attention of the defendant, it is not necessary to address this potential issue further. It is also to be remembered that each case is dependent upon its own facts and that the choice of language adopted by different judges is in some instances impacted by the peculiar circumstances of the case in question.[28] That said, in my view it is open to this court to make a substituted service order under r 6.10 of the Rules where it is established that the proposed service method would be likely to bring the relevant documents to the attention of the person to be served.
[28]Including, at times, differences in the terms of the relevant rule.
I refer also to the recent observations of Elliott J in Foris GFS Australia Pty Ltd v Manivel (Foris GFS),[29] including:
(a) his Honour’s observations regarding the need for appropriate caution, depending on the facts of the case, where substituted service is sought to be effected by the use of a link in an email; and
(b) his Honour’s observations about considering whether it is necessary or desirable in the circumstances of a given case to provide to the email recipient a means for independently verifying that the email sent to effect substituted service is authentic.[30]
[29][2022] VSC 482, [43]–[46], [56]–[60].
[30]For completeness I refer more generally also to the recent observations made by Delany J in Jabiru Satellite Ltd v Societe Generale [2021] VSC 544 and Lyons J in Rio Tinto Shared Services Pty Ltd v English DataSystems LLC [2021] VSC 660 regarding ord 80 and r 7.09 of the Rules. I refer also to Macaulay J’s decision in Andrianakis v Uber Technologies (Ruling No 1) [2019] VSC 850 and the Court of Appeal’s appeal decision from the judgment of Macaulay J in Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186.
I add that the issues raised by Elliott J in Foris GFS were addressed by recent amendments to r 6.10 of the Rules, which introduced rr 6.10(1.1) and (1.2). Among other things, these rules impose specific additional requirements when substituted service is to be effected by email, with the requirements being directed in part to providing the email recipient with notice of the means by which they can independently verify the authenticity of the email. Rules 6.10(1.1) and (1.2) are in the following terms:
(1.1) Unless the Court otherwise orders, where an order under paragraph (1) specifies that a step to be taken includes service by email, the order shall require that the email contain within the body of the email, in the same size font as the rest of that part of the email, the following—
(a) a statement that the email has been sent pursuant to an order of the Supreme Court of Victoria;
(b) the address of the Court’s website ( together with a statement that the website may be found by using a search engine without the need to use this address directly;
(c) where applicable, the name of the judicial officer in charge of the conduct of the proceeding, together with the contact details of that judicial officer’s associate;
(d) a statement that the judicial officer’s associate may be contacted, and that their contact details are available on the Supreme Court website, to verify the existence of the proceeding and the fact that the court order for substituted service has been made;
(e) where applicable—
(i) the name, address and telephone number of the solicitor’s firm of the originating party;
(ii) the name and email address of an individual in the firm of solicitors to whom reference can be made in respect of the proceeding;
(f) any other matter that the Court considers should be included in the email.
(1.2) Paragraph (1.1) applies in addition to the requirements for service by email under Rule 6.07(2.2) to (2.4).
Consideration and Disposition
Impracticable to Serve the Defendant in the Manner Required by the Rules
The evidence demonstrated that, notwithstanding the efforts made by the plaintiff, his solicitors and others to locate the defendant, they have not yet been able to locate the defendant so as to facilitate personal service on him of the writ and statement of claim in this proceeding.
The efforts to locate the defendant since July 2022 have been at least reasonable and demonstrate a practicable impossibility of personally serving the defendant[31] during the period referred to in the evidence, including at the time of the hearing of the application.[32] That this position pertains at the hearing date of the application is supported by: the evidence regarding the inability to locate the defendant; the attempts to locate the defendant since July 2022; the evidence regarding the further steps taken in January and February 2023, including the steps relating to the ‘Latest Spotting’[33] of the defendant at the wedding in Mexico earlier referred to; Ms Santilli’s engagement with the plaintiff on 30 January 2023; and her engagement with KordaMentha’s Mr Domanko on 6 February 2023. The position is also supported by the absence of any additional evidence in the Hazell Affidavit, sworn on 17 April 2023, regarding the defendant’s current whereabouts.
[31]See, for example, Foxe v Brown (1984) 58 ALR 542, 547 (Mason J).
[32]Ibid.
[33]See the Hazell Affidavit at [40]–[42].
I add that, although the plaintiff believes it is likely that the defendant remains in the United States, on the evidence currently before the court[34] that is not clear or certain. Whilst it is at least possible that this is so, the end point on the evidence is that the defendant has been unable to be located to date.[35] This remains so even if I was to proceed on the basis that the evidence established that the defendant remains in the United States.
[34]Including the statement of Ms Fox made to Mr Hazell shortly before the proceeding was commenced.
[35]In this regard there is some similarity to the position with the facts in Carter Holt Harvey [2015] VSC 393, [9]–[12] (Bell J), where the relevant party could not be located although there was evidence that the party was believed to be in Ghana. However, each case falls to be determined by reference to its own facts and circumstances, as has occurred in this case.
I accept that the impracticality of personally serving the defendant with the writ and statement of claim does not arise ‘merely’ because the defendant is thought to be outside of Australia, assuming for the moment that this remains the position. The evidence that I have earlier referred to reveals that there have been numerous attempts to locate the defendant for service. In addition, the evidence does not establish or suggest that the plaintiff’s approach to this application involves an attempt to sidestep the obstacles to personal service overseas. As Mr Hazell said, the plaintiff cannot locate the defendant and therefore the use of such methods is not practical.
If the defendant is currently located or residing in an unknown location in the United States — or elsewhere out of Australia — I also accept that in the circumstances of this case the evidence regarding the inability to locate the defendant establishes that it is also impractical to serve the writ and statement of claim in accordance with the law of the country in which service is to be effected (as referred to in r 7.09 of the Rules). As the plaintiff submitted, if the defendant is located or residing in the United States, it is not known in which State. It is therefore not possible to ascertain or apply the relevant State law regarding the service of the writ and statement of claim. The position is the same if the defendant is located in another country because, if that is so, the plaintiff does not know and cannot currently ascertain what country the defendant is in.
It is plain that the plaintiff and his solicitor believe that the defendant is taking positive steps to evade service. Mr Hazell said as much during the hearing. It is also apparent from the evidence how a question arises as to whether the defendant is seeking to evade being located by the plaintiff or his solicitors in connection with the service of the writ and statement of claim filed in this proceeding. While I accept that this may be the case, it is not in the circumstances of this case necessary to draw such an inference at this point[36] in order to be satisfied that the plaintiff has established that it is impracticable to serve the defendant in accordance with the Rules.
[36]Assuming that such an inference is open to be drawn, which is not necessary to decide.
The end point regarding the ‘impracticable’ threshold requirement in r 6.10(1) of the Rules is that the plaintiff has established by the evidence that, at the time of the hearing of the application (and previously), it is impracticable for the plaintiff to serve the writ and statement of claim on the defendant in accordance with the requirements of the Rules. Notwithstanding the reasonable steps that have been taken by the plaintiff, the defendant has been unable to be located.
Should the Court Make the Substituted Service Orders?
The question that remains is whether the court should exercise its discretion under r 6.10(1) of the Rules in favour of the plaintiff by making substituted service orders in respect of one or more of the Proposed Service Methods.
Keeping firmly in mind that, as is reflected by the express terms of r 6.10(1), the object or purpose of an order for substituted service is to bring the documents to the notice of the person to be served, the central remaining issue on this application is whether the plaintiff has established on the evidence that one or more of the Proposed Service Methods will likely bring the Service Documents to the attention of the defendant.[37]
[37]The observations of Starke J in Miscamble, [1936] 2 St R QD 272 at 274, referred to above resonate in this context.
Having given careful consideration to each of the Proposed Service Methods, on the evidence currently before the court I am not satisfied that the plaintiff has established that it is likely that resort to one or more of the Proposed Service Methods[38] will bring the documents to the attention of the defendant. In so concluding I have also taken into account that r 6.10 is to be read and applied in the context of the CP Act, including the court’s obligations under that Act and the overarching purpose of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute.[39]
[38]Or any combination of them.
[39]As referred to earlier in the principles and observations section of these reasons.
I elaborate briefly below as to why I have reached this conclusion by reference to each of the Proposed Service Methods.
Documents Being Sent Directly to the Defendant’s ‘Various Email Addresses’
On the evidence as it stands the plaintiff has not established that sending the Service Documents to the two specified email addresses will likely bring the documents to the attention of the defendant. As mentioned, one email address is an ‘@getswift.co’ address and another is an ‘@gmail.com’ address.[40]
[40]It is not necessary to include the email addresses in these reasons.
The @getswift.co Email Address
The evidence regarding the @getswift.co email address is very limited and includes the three unanswered emails sent to that address by the plaintiff on 24 and 26 August 2022 and 6 September 2022. The defendant did not respond to these emails and Mr Hazell deposed that there was no ‘bounce back’ of the emails. However, there is no additional persuasive evidence supporting the contention that this email address was or remains an email address for, or controlled by, the defendant, or that it is currently being used or controlled by the defendant. The ‘no bounce back’ evidence is not enough in the circumstances.
It may also be observed that it is an ‘@getswift.co’ email address, which raises questions about the ongoing status of such an address given the evidence regarding the bankruptcy petition in the United States relating to at least the ultimate holding company, GetSwift Inc.
Further, in the absence of other evidence regarding the current use of this email address by the defendant, the absence of any response to the emails sent in August and September 2022 to this email address tends to detract from, rather than support, the use of this email address as a mode for effective service of the Service Documents on the defendant.[41]
[41]However, even if that was not so, the result of this application would not change.
It may also be noted that the GetSwift ASIC search extract records that the defendant is no longer a director of GetSwift and that it appears that this has been the position since March 2020.
The evidence does not establish that the use of the @getswift.co email address will likely bring the Service Documents to the defendant’s attention.
The @gmail.com Email Address
The evidence regarding the @gmail.com email address is even more limited, noting also that it was not used by the plaintiff for the emails he sent in August and September 2022 — although in the circumstances it would make no difference to the result if it had been used and no response was received from the defendant. There is no substantive evidence regarding this email address being the defendant’s former or current email address, or any evidence regarding its previous, recent, current or likely use or control by the defendant.
The end point is that it has not been established on the evidence that the use of this @gmail.com email address will likely bring the Service Documents to the notice of the defendant. Whilst it may be that additional steps can be taken and additional evidence adduced to alter the position, this does not assist the plaintiff on this application at this time.
I add for completeness that even if the plaintiff had established that sending the Service Documents by email to one or both of the email addresses referred to would bring them to the attention of the defendant, it would also be necessary for the requirements of r 6.10(1.1) of the Rules to be addressed, which was not a matter raised or referred to by the plaintiff. These requirements were referred to earlier above and will need to be taken into account if the substituted service application is to be further pursued in the future.
Use of the Defendant’s Instagram Account
The outcome of the application to effect service by the proposed use of what is said to be the defendant’s Instagram account is the same. Mr Hazell’s evidence that he sent a ‘friend request’ to this Instagram account that has not been accepted does not advance the plaintiff’s position in any material way on this application. Such evidence as there is also suggests that this method could only potentially be engaged if the defendant had responded in a particular way to Mr Hazell’s ‘friend request’, which he has not. In any event, even if there had been a response, its terms would need to have been considered and it seems likely that additional evidence would have been required regarding how, why and when it is said that it is at least likely that what is proposed would likely have brought the Service Documents to the attention of the defendant.
It is also the case that the evidence before the court does not establish that the said Instagram account is the defendant’s account, or give any insight into its current use, activity, monitoring or control by the defendant.
The plaintiff has not established on the evidence that sending a message of the kind proposed to the Instagram account referred to is likely to bring the documents to the attention of the defendant.
Text Message to the Defendant’s Mobile Phone Number
The result is the same in respect of the proposed sending of a text message to the ‘defendant’s mobile phone’, which Mr Hazell says ‘we understand still remains the phone number for the defendant’. Although that phone number is specified in the affidavit, there is no meaningful evidence regarding the basis upon which the court could conclude that the phone number remains the defendant’s mobile phone number, that it is operating wherever the defendant is located, or that it is currently in use and used by the defendant. The basis of Mr Hazell’s ‘understanding’ that the specified number remains the phone number for the defendant is not exposed in the evidence and cannot be assessed. I add that this is not a criticism of Mr Hazell. It is an observation regarding the state of the evidence which, in turn, appears to follow from the current challenges faced by the plaintiff in this context.
The plaintiff has not established that by sending a text message to the specified telephone number it will likely bring the Service Documents to the attention of the defendant.
Email to Ms Fox at Quinn Emanuel
I am not satisfied that sending an email to the solicitor at Quinn Emanuel, who previously acted for the defendant prior to the issue of the proceeding, has been shown to establish that it is likely that it will bring the documents to the attention of the defendant. Mr Hazell’s evidence on the topic does not allow for an inference to be drawn that if this method is used Ms Fox can or will provide the Service Documents to the defendant or draw them to his attention. It will be recalled that Ms Fox informed Mr Hazell on a date in August 2022 that Quinn Emanuel were no longer acting and that the defendant had emigrated to the United States of America. There is no material evidence that provides more detail regarding the communications or a basis for establishing that the use of this service method will likely bring the Service Documents to the attention of the defendant. There is also no evidence about there being more recent communications or direct and specific enquiries with Ms Fox, or evidence as to whether Ms Fox was asked about the defendant’s current or past location, contact details, or her ability and willingness to contact the defendant.
Whilst further steps may be able to be taken in this context, or additional evidence adduced, that remains to be seen. As things stand, it has not been established that sending an email to Ms Fox attaching the Service Documents — or posting or delivering them to her — will likely bring the documents to the attention of the defendant.
Email and Post to Ms Grubin of Barclay Damon LLP in New York
The last of the Proposed Service Methods is to send the documents by email and post to Ms Grubin of Barclay Damon LLP, with the postal material being sent to the New York address of that firm.
Whether considered alone or in combination with one or more of the other Proposed Service Methods, the plaintiff has not established that it is likely that either of these proposed methods of service will bring the Service Documents to the attention of the defendant. In this context I note the following:
(a) The evidence is that the defendant has not been able to be located and it is not clear on the evidence whether the defendant remains in the United States or is located somewhere else.
(b) The evidence does not suggest that Ms Grubin acts for the defendant or has acted for him in the past.
(c) There is no evidence of any direct contact by the plaintiff’s solicitors with Ms Grubin (at any time) regarding the defendant’s location, contact details, Ms Grubin’s communications (if any) with the defendant, or Ms Grubin’s ability or willingness to contact the defendant. This is so notwithstanding that the plaintiff’s solicitors have had access to an email address, postal address and telephone numbers for Ms Grubin so as to be in a position to readily and directly seek to contact Ms Grubin and enquire as to these and other relevant matters. As mentioned, upon enquiry from the Bench Mr Hazell responsibly informed the court that a strategic decision had been made not to make direct contact because he considered that it would likely foreclose a possible avenue of substituted service.
(d) The information regarding Ms Grubin was provided by Mr Zawa to Mr Hazell in December 2022 in relation to a bankruptcy petition that showed a date of August 2022. Mr Zawa’s 5 December 2022 email to Mr Hazell contains an assertion that Ms Grubin ‘… has been receiving instructions from McDonald [the defendant] regarding the financial position of the companies leading up to and including their liquidation.’ The email provides Ms Grubin’s email address together with a link regarding an aspect of the bankruptcy. However, this information raises further questions and, in my view, its weight is limited having regard to its brevity and the absence of any evidence regarding direct contact made by the plaintiff’s solicitors with Ms Grubin at that time or subsequently, including shortly before the filing of the application and the Hazell Affidavit. The basis for Mr Zawa’s belief is not exposed and is not sufficiently capable of assessment. It may also be noted that Phi Finney was unable to serve any documents on the defendant in the class action.
(e) Although Mr Zawa is said to have informed Ms Santilli on 30 January 2023 that he ‘believed’ some information he conveyed to Ms Grubin regarding a February 2023 hearing in the class action had been passed on to the defendant, this evidence is also of limited weight and utility. Among other things, it also gives no material insight into the basis of the belief or the circumstances, and it is unclear as to when the conversation occurred. Taken alone or together with the other evidence it does not provide a basis for being satisfied that sending the Service Documents to Ms Grubin will likely bring the documents to the attention of the defendant.
Again, whilst it may be that further steps can be taken in connection with Ms Grubin, or further evidence adduced on this proposed service method, given the importance of the purpose of an order for substituted service, I am not satisfied that it has been established that sending the documents by email or post to Ms Grubin at Barclay Damon LLP will likely bring the documents to the attention of the defendant.
Defendant Aware by Reason of Media Content
To the extent that the plaintiff pressed its contention that the court could be satisfied that the defendant was aware of the proceeding by reason of the article in The Age newspaper,[42] I do not accept that submission. Whilst it is possible that the defendant had or has access to this article from wherever he is or was at the time, or subsequently,[43] there is in my view no sufficient evidentiary basis on the material now before the court for being so satisfied.[44] However, even if the defendant is aware of the proceeding it would not affect the outcome of this application given the matters raised above.
[42]And its republication.
[43]And/or is otherwise aware of the proceeding.
[44]Which also takes into account the plaintiff’s unanswered assertion in his email that the defendant is aware of the proceeding.
Other Matters
The fact that the damages claim against the defendant is substantial does not relevantly assist the plaintiff on this application. If anything, it tends to underscore in part why the object of a substituted service application under r 6.10(1) of the Rules is to bring the documents to the attention of the person to be served.
The fact that the writ may become stale in August 2023 also does not assist the plaintiff. This prospect contributes not at all to establishing that the Proposed Service Methods will likely bring the documents to the attention of the defendant. I note that the Rules also expressly cater for applications to be made for extending the period of validity of a writ for service. [45]
[45]See r 5.12 of the Rules.
The position is the same with the plaintiff’s decision not to engage process servers in the United States, which remains so even if it is assumed, as was submitted, that costs and the prospects of successfully serving the defendant have played a material role in the plaintiff’s decision not to engage a process server. Although there was no evidence regarding these matters, even if there had been, it is difficult to see how such evidence could assist in establishing that one or more of the Proposed Service Methods would likely bring the documents to the attention of the defendant.
Given the outcome of this application it is neither necessary nor desirable to say anything further at this point regarding the operation of r 6.10 in the context of r 7.09 or r 7.02 of the Rules regarding the service out of Australia without the grant of leave.
Conclusion and Proposed Orders
Although the plaintiff has established that service of the documents on the defendant in accordance with the Rules is currently impracticable because he cannot be located, the plaintiff has not established on the evidence currently before the court that one or more of the Proposed Service Methods (or any combination of them) will likely bring the Service Documents to the attention of the defendant. I therefore decline at this point to exercise the court’s discretion in favour of the plaintiff by making orders for substituted service of the kind sought.
Consequently, it is not necessary to address the plaintiff’s application for an ‘effective service’ deeming order under r 6.10(2) of the Rules.
It may be that there are additional steps that can be taken, and further evidence adduced, about other service methods or the Proposed Service Methods, noting also that the impracticability of service on the defendant in accordance with the Rules has thus far been established.[46] Subject to hearing further from the plaintiff, rather than dismissing the application I propose to adjourn it to a future date to enable the plaintiff to consider his position and to take such additional steps (if any) as he may be advised to take.
[46]At least at this point, but noting that if the application is to be further pursued or renewed it will also be necessary for the court to be satisfied of the threshold impracticability requirement under r 6.10(1) of the Rules at that time.
I will also reserve the costs and reserve liberty to apply.
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