Thomson v Raute Corporation [No 2] - [2011] WADC 28

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: THOMSON -v- RAUTE CORPORATION [No 2] [2011] WADC 28

CORAM: EATON DCJ

HEARD: 18 FEBRUARY 2011

DELIVERED : 1 MARCH 2011

FILE NO/S: CIV 3208 of 2009

BETWEEN: IAN JOHN THOMSON
Appellant
AND
RAUTE CORPORATION
Respondent

Catchwords:

Practice and procedure - Rules of the Supreme Court 1971, O 10 r 1 - Service out of the jurisdiction - Whether the cause of action asserted a tort committed within the jurisdiction - Appeal from a registrar setting aside an ex parte order for service in Finland

Legislation:

Rules of the Supreme Court 1971

Result:

Appeal dismissed

Representation:

Counsel:

Appellant: Mr A J Stewart
Respondent: Ms K Vernon

Solicitors:

Appellant: Chapmans
Respondent: DLA Phillips Fox

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

Hartwell Trent (Australia) Pty Ltd v Tefal Societe Anonyme [1968] VR 3
ICI Australia Operations Pty Ltd v Kidde‑Graviner Ltd [1999] WASCA 65
Koranna Nominees Pty Ltd v Roberts (unreported; WASC; Library No 4289; 15 October 1981)
Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

EATON DCJ: By an originating motion filed 8 April 2009 the appellant sought leave pursuant to O 5 r 9 of the Rules of the Supreme Court 1971 (RSC) to issue a writ in a form as set out in a minute of proposed writ of summons. The appellant was the proposed plaintiff and the respondent was the proposed defendant. The minute of proposed writ indicated that the writ would be directed to the respondent at:
Rautetie 2
PO Box 69
FI - 15551
Nastola, Finland
The proposed writ was indorsed with a claim as follows:
The plaintiff's claim is for damages for personal injuries caused to the plaintiff as a result of the negligence and/or breach of statutory duty by the defendant, its servants and/or agents on or about 14 March 2007.
The application proceeded ex parte and, following several adjournments, Deputy Registrar Hewitt, on 20 October 2009, made the following orders:
1.The plaintiff have leave to issue proceedings against the defendant in the terms of the minute of proposed writ of summons and to serve notice of that writ on the defendant at its head office in Finland;
2.The defendant have 42 days after service within which to file and serve an appearance; and
3.The costs of the application be in the cause in the prospective action.
Order 5 r 9 provides that a writ for service out of the jurisdiction or of which notice is to be given out of the jurisdiction shall not be issued without the leave of the court. It is apparent that Deputy Registrar Hewitt not only granted leave pursuant to O 5 r 9 but did so also under O 10 r 1, that rule providing that service of a writ or notice of a writ out of the jurisdiction is permissible with the leave of the court whenever the question of jurisdiction is satisfied. In the case of an action founded on tort, service of a writ or notice of a writ out of the jurisdiction is permissible with the court's leave if the tort alleged was committed within the jurisdiction.
The material before Deputy Registrar Hewitt comprised an affidavit sworn by Ian John Thomson, the appellant, on 1 October 2009 and an affidavit of James Grant sworn 18 May 2009. He made orders ex parte.
On 29 October 2009 the appellant filed a writ of summons with an indorsement of claim as outlined in the minute of proposed writ. On 23 July 2010, by chamber summons, he applied for leave to serve the writ and a notice of the writ on the respondent by substituted service by way of facsimile transmission. The appellant, specifically, sought an order that the facsimile sent to the respondent on 5 February 2010 stand as substituted service. On 26 August 2010 Deputy Registrar Hewitt ordered, ex parte, that service of notice of the writ of summons and of his order be effected by faxing a true copy of the same to the respondent at a particular fax number and that such service would be deemed good and sufficient service of the notice on it. The respondent was to have 42 days within which to file an appearance following service.
On 8 September 2010 the respondent filed a memorandum of conditional appearance and applied by chamber summons to set aside service of the writ and notice of it. The application relied upon two grounds. The first asserted that Deputy Registrar Hewitt lacked jurisdiction to make an order for substituted service by facsimile by reason of failure to comply with O 11B of the RSC. This ground was not subsequently pursued before Principal Registrar Gething or me.
The second asserted that the action was not founded on a tort committed within the jurisdiction as required by O 10 r 1(1)(k) and that service of notice of a writ out of the jurisdiction was therefore not permissible. That application came before Principal Registrar Gething on 10 November 2010. The respondent relied upon the affidavit of Kalle Antero Hyvonen sworn 6 October 2010. The appellant relied upon the affidavits that were before Deputy Registrar Hewitt on the original ex parte application and the additional affidavit of Ian John Thomson, the proposed plaintiff, sworn 4 November 2010.
On 29 November 2010 Principal Registrar Gething delivered reasons for judgment and ordered that:
1.Leave to serve the notice of the writ of summons outside the jurisdiction be set aside;
2.The action being discontinued; and
3.The plaintiff do pay the defendant's costs of the application and of the action and any reserve costs to be taxed if not agreed and paid within 21 days of taxation.
On 2 December 2010 the appellant filed a notice of appeal from the decision of Principal Registrar Gething, proposing final orders that the respondent's application of 8 September 2010 be dismissed and that it file and serve its defence within seven days.
The appeal from the decision of Principal Registrar Gething was heard before me on 18 February 2011. I reserved my decision.
An appeal from a registrar is by way of a new hearing of the matter that was before him or her. An application for leave under O 10 r 1 RSC is required by O 10 r 4 to be supported by an affidavit stating the grounds upon which the application is made and that in the deponent's belief the plaintiff has a good cause of action and showing in what place or country the defendant is or probably may be found. By O 10 r 4(2) no such leave shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of the jurisdiction.
In Koranna Nominees Pty Ltd v Roberts (unreported; WASC; Library No 4289; 15 October 1981) Burt CJ observed that the provisions of O 10 r 4 should be strictly complied with and said further:
In my opinion, on an application by a defendant served with a writ out of the jurisdiction pursuant to O 10 r 1 to set the service aside - O 12 r 6(1) - the plaintiff is required to sustain the service on the ground or grounds relied upon by him in the affidavit upon which the order was made and he cannot at that stage sustain the service upon some other ground.
That passage was cited by both Kennedy J and Pidgeon J in ICI Australia Operations Pty Ltd v Kidde‑Graviner Ltd [1999] WASCA 65.
As mentioned, when Deputy Registrar Hewitt gave leave to the appellant to serve notice of the writ on the defendant at its head office in Finland there were two affidavits before him, that of the appellant sworn 1 October 2009 and that of James Grant sworn 18 May 2009. In the former the appellant deposed to the ground upon which the application was made and to his belief that he had a good cause of action. He said, in par 6:
In my view, Raute Corporation as the manufacturer/installer of the conveyer on which I was hurt, are liable in negligence to me and in that regard I believe that I have a good cause of action against Raute Corporation as they installed the conveyer system with faults in it, and specifically a fault whereby the conveyer was capable of starting up without warning to operators who were involved in its maintenance.
The affidavit of James Grant annexed his interim report on 23 November 2008 and selected photographs, he being an accident investigator, and a document which, he said, he believed to be an incident report as to the appellant's accident. In essence, the description of the event giving rise to the appellant's injuries was that, on 14 March 2007 at about 12.30 pm, the appellant was removing a blockage in the machine having isolated and tagged the conveyer when it unexpectedly re‑started, causing the appellant to fall onto his back, arm and leg. Annexed to James Grant's affidavit are various photos of the machine which appears to bear the respondent's name. James Grant concluded, in his report of 23 November 2008, that the respondent was the manufacturer of the machine. The photos, he said, depicted circuit‑breakers located on 'the other side of Ian's workstation which he was not made aware of, in particular, circuit‑breaker 762Q1'. The reference to Ian is a reference to the appellant.
Clearly, before Deputy Registrar Hewitt the appellant had deposed to his belief that he had a good cause of action against the respondent in negligence, the basis of that cause of action being that 'they installed the conveyer system with faults in it, and specifically a fault whereby the conveyer was capable of starting up without warning to operators who were involved in its maintenance'.
Before Principal Registrar Gething was a further affidavit, as mentioned, that of the appellant sworn 4 November 2010. That affidavit was, clearly, not before Deputy Registrar Hewitt. I take the view that the further affidavit was admissible before him and is admissible before me provided that the appellant does not, by the content of that affidavit, seek to sustain the service on other than the ground or grounds relied upon him in his affidavit before Deputy Registrar Hewitt. In Hartwell Trent (Australia) Pty Ltd v Tefal Societe Anonyme [1968] VR 3 at 6, Pape J considered the admissibility of further affidavit evidence on such an application and concluded:
Having considered those authorities, I am satisfied that on a motion such as this, or on an appeal from an order confirming or reversing an order to serve out of the jurisdiction, further evidence is receivable, provided that the evidence is directed to sustaining the cause of action alleged in the pleadings, and not a different cause of action altogether.
When Deputy Registrar Hewitt made his order on 20 October 2009 there were no pleadings but rather a proposed writ with an indorsement of claim and the appellant's affidavit along with that of James Grant. The further affidavit of the appellant in the matter before me is receivable provided that his evidence is directed to sustaining the cause of action asserted before Deputy Registrar Hewitt, that being that the respondent had installed a faulty conveyer system the fault being that the conveyer was capable of re‑activating without warning to operators involved in its maintenance.
The appellant's second affidavit was sworn subsequent to and in response to the affidavit of Kalle Antero Hyvonen sworn 6 October 2010. By reference to that affidavit I accept that the respondent is a supplier of technology to the wood products industry worldwide and that its core expertise lies in manufacturing processes for selected wood products. Its head office and main production unit are in Nastola, Finland. It has a global sales network. On 11 April 2003 the respondent entered into a contract with Wesbeam Pty Ltd, a Western Australian company involved in the manufacture of laminated veneer products. By that contract, Wesbeam Pty Ltd purchased certain machinery from the respondent.
Annexed to the affidavit of Kalle Antero Hyvonen is a copy of the contract between those two entities. The machinery purchased was a laminated veneer lumber and special plywood mill for processing pinus pinaster and pinus radiata. The machinery components involved are listed in Appendix 2A to the contract. Article 2.2 provides for the machinery and equipment to be delivered and commissioned by the seller and installed by the buyer at the site in accordance with the instructions of the seller (to be verified by the experts) and under supervision by the experts as part of the services as agreed in the contract.
Article 13 deals with installation, providing that the buyer is to install the machinery and equipment at the site in accordance with the seller's reasonable and proper advice and that the seller shall send experts to supervise its installation. By Article 13.2 the buyer is to bear the responsibility for installation according to valid safety stipulations and is required to perform appropriate testing of the installed machinery and equipment to verify compliance with those stipulations. By Article 13.4, before any piece of machinery or equipment is operated under production conditions, a certificate for the completion of installation is to be completed and signed by the representatives of each party, confirming completion and its date. The contract includes, as Appendix 7C‑43, a certificate of acceptance certifying that the performance of the machinery and equipment meets all requirements set forth in the contract and that the seller has fulfilled all its contraction obligations (to the exclusion of a limited mechanical guarantee granted by the seller). That certificate, signed by Wesbeam Pty Ltd on 23 June 2005, establishes 'acceptance of 100% test certified by Wesbeam Pty Ltd'.
Kalle Antero Hyvonen confirmed in his affidavit that the respondent had designed and manufactured the machinery in Finland asserting that the business of installation was contractually the obligation of Wesbeam Pty Ltd, an obligation to be carried out under the supervision of the respondent's experts.
By reference to the appellant's second affidavit I conclude, as a matter of fact, that he commenced work as an employee of Wesbeam Pty Ltd as a production operator on 17 February 2006 and in that capacity worked on the purchased machine. It is the case, therefore, that he commenced work some seven months after the final certification of the completion of the respondent's obligations to Wesbeam Pty Ltd. In par 18 of his second affidavit the appellant deposes:
From 17 February 2006 until 8 March 2008, the engineers employed by the defendant continued working at the Wesbeam factory and were directly responsible for maintaining and modifying the press‑line to ensure it worked correctly.
The basis of the grant of leave by Deputy Registrar Hewitt was the assertion by the appellant that the respondent had installed a faulty system, not that the respondent's installation was faulty, but rather that the conveyer system itself had a fault, that being that it was capable of re‑activating without warning to operators who were involved in its maintenance. It does appear from the affidavit of James Grant that before climbing onto the conveyer to remove the blockage the appellant had engaged circuit‑breakers in order to render the machine inactive so that he could safely remove glue sheets causing the problem. He had, according to the detailed description of the incident, isolated and tagged the conveyer. It appears, according to the affidavit of James Grant, that there was another circuit‑breaker not at the appellant's workstation of which he was unaware.
The essence of the plaintiff's claim is that the respondent was negligent, not in its installation of the machinery purchased by Wesbeam Pty Ltd or in its supervision of its installation in accordance with the terms of its contract with Wesbeam Pty Ltd, but rather that it was negligent in that it installed faulty machinery, designed and manufactured by it in Finland. Substantially, the affidavit sworn by the appellant on 4 November 2010 is directed to the proposition that, subsequent to his employment by Wesbeam Pty Ltd, the respondent had some ongoing responsibility for the operation of the machine at Wesbeam Pty Ltd's premises. Given the ground upon which the grant of leave to serve the writ or notice of it outside Australia was made, the assertions of the appellant in his second affidavit would appear to be largely irrelevant. More particularly, the material before Deputy Registrar Hewitt does not assert faulty installation on the part of the respondent giving rise to a claim in negligence by the appellant against the respondent but rather the manufacture and installation of equipment that was, in its design and manufacturer, faulty. That assertion suggests that the tort relied upon giving rise to liability to the appellant was not, in fact, committed in Australia but rather in Finland.
In Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 566 the High Court was called upon to consider whether the tort alleged in that case was a foreign tort. A New South Wales company had sued an accountant, a citizen of the United States of America practising in Missouri for damages for professional negligence. The action was commenced in the Supreme Court of New South Wales. Mason CJ, Deane, Dawson, Toohey and Gaudron JJ held that the act on which the company relied for its cause of action was committed in Missouri and thus the tort, if there was one, was committed there. In that context their Honours said at (567):
The authority of Jackson v Spittall was expressly affirmed in Distillers (46). In the latter case Lord Pearson said (47) that '[t]he right approach is … to look back over the series of events … and ask … where in substance did this cause of action arise?
This approach can be traced to what was said by Winn J in Cordova Land Co Ltd v Victor Brothers Inc (48). And that approach was later expressly approved, although in a slightly different legal context, in Metall & Rohstoff v Donaldson Inc (49).
The court went on to explain that the approach involves ascertaining, in a commonsense way the act on the part of the respondent which gives the appellant his cause of action. It is, it was said, some act of the respondent and not its consequences that must be the focus of attention.
In ICI Australia Operations Pty Ltd v Kidde‑Graviner Ltd Pidgeon J said at [24] that jurisdiction under O 10 r 1 was to be exercised with great care and doubt resolved in favour of the intended defendant. He relied upon the authority of Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869 at 889 in that regard.
Returning to the matter before me, Principal Registrar Gething concluded that, as a matter of principle, negligence in the installation of machinery in Western Australia could found a tort committed within Western Australia. He concluded, however, that the relevant machinery was not installed by the respondent. According to the contract as between Wesbeam Pty Ltd and the respondent installation, as mentioned, was the obligation of Wesbeam Pty Ltd, the task to be undertaken by Wesbeam Pty Ltd in accordance with the respondent's reasonable and proper advice. The respondent was obliged, under the contract, to send experts to supervise the installation of the machinery. Wesbeam Pty Ltd was to bear the responsibility that the installation work complied with valid safety stipulations and was obliged to perform testing of the installed equipment to verify compliance with those stipulations.
The appellant's claim against the respondent was not asserted to be that it was negligent in its supervision of Wesbeam Pty Ltd in the installation of the machinery or in its proffered expertise in that regard. The appellant's second affidavit tends to advance the proposition that there was, on the part of the respondent, some vague continuing responsibility for the operation of the machinery. The statement of claim filed by the respondent on 4 November 2010 attempts to expand the alleged negligence of the respondent beyond that which was before Deputy Registrar Hewitt. For example, it seeks to allege a failure to properly supervise the installation of 'the circuit breaker' and 'the sensor', a failure to inform the appellant of all circuit‑breakers located on the conveyer and so on. Such allegations fall well outside the scope of the allegation of negligence put before Deputy Registrar Hewitt. The essence, however, of the appellant's claim against the respondent is that the respondent installed the conveyer system with faults in it. That is not an allegation of negligent or faulty installation but rather an allegation relating to the design and manufacture of the equipment. There can be no doubt that, as a matter of fact, the design and manufacture of the equipment took place in Finland. It follows, therefore, that the tort alleged against the respondent by the appellant is not a tort committed within the jurisdiction. In any event, the contractual obligations as between Wesbeam Pty Ltd and the respondent clearly cast Wesbeam Pty Ltd in the role of installer under the supervision or guidance of the respondent. Compliance with safety stipulations was the responsibility of Wesbeam Pty Ltd, not of the respondent. As such, leave to serve the respondent outside the Commonwealth Australia with a writ or a notice of a writ should not have been granted as service outside the Commonwealth Australia is, in the circumstances, impermissible. The appeal must, in my view, be dismissed.