Victorian WorkCover Authority v Orientstar Shipping Corporation

[2003] VSC 311

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

ADMIRALTY LIST

No. 8172 of 2002

VICTORIAN WORKCOVER AUTHORITY	First Plaintiff
and
ACN 007 724 834 PTY LTD	Second Plaintiff
v
ORIENTSTAR SHIPPING CORPORATION	Defendant

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JUDGE:	Balmford J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 August 2003
DATE OF JUDGMENT:	26 August 2003
CASE MAY BE CITED AS:	VWA v Orientstar
MEDIUM NEUTRAL CITATION:	[2003] VSC 311

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PRACTICE AND PROCEDURE – Service of process – Service out of Australia – whether service of writ and statement of claim in accordance with rules 7.02 and 7.03 of the Supreme Court (General Civil Procedure) Rules 1996 – whether proceedings arose from a tortious act or omission pursuant to rule 7.01(1)(j) - meaning of rule 7.03 – found to be statutory claims for indemnification and contribution falling outside of rule 7.01(1)(j) – service ineffective.

Accident Compensation Act 1958 – s.138
Wrongs Act 1958 – Part IV, ss.23B(1) and (2)
Supreme Court (General Civil Procedure) Rules 1996 – rr.6.01, 6.02(1), 6.03(1), 6.04(a), 7.01(1)(j), 7.02, 7.03

Australian Mutual Provident Society v GEC Diesels Australia Ltd [1989] VR 407
Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213
Buttigieg v Universal Terminal & Stevedoring Corporation [1972] VR 626
Laurie v Carroll (1958) 98 CLR 310
Mackender v Feldia AG [1967] 2 QB 590
Pivot v Hoechst [2000] VSC 262
Saltram Wines Estates Pty Ltd v Independent Stave Co (1992) 57 SASR 156
Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VR 484
Victorian Workcover Authority v Esso Australia Ltd (2001) 207 CLR 520
Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581
Whinnen v Cussons (International) Ltd (unreported, delivered on 24 February 1998)
Williams v Lips-Heerlen Bv (unreported, delivered on 1 November 1991)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Rose SC with Mr D Masel	Wisewoulds
For the Defendant	Mr MNC Harvey	Middletons

HER HONOUR:

Introduction

1. This is the return of a summons issued by the defendant on 25 March 2003 seeking orders:

1.that the service of the writ and statement of claim on the defendant be set aside pursuant to Rule 7.02 or Rule 7.03 of the Supreme Court (General Civil Procedure) Rules 1996 (“the Rules”);

2.that the proceeding be set aside or stayed as against the first and second plaintiffs, or either of them, pursuant to Rule 8.09 of the Rules.

1. The substantive proceeding arises from an incident when an employee of the second plaintiff, a stevedoring company, was injured while performing work in the course of his employment on a ship owned and occupied by the defendant (“Orientstar”).   Payments are said to have been made to the worker and on his behalf by the first plaintiff.   He sued the second plaintiff for damages, alleging that its negligence was a cause of his injury, and that proceeding was settled.

1. The first plaintiff sues pursuant to section 138 of the Accident Compensation Act 1958 (“the AC Act”) seeking indemnification of payments claimed to have been made by it pursuant to the provisions of the AC Act in consequence of the injury sustained by the worker.   The second plaintiff claims contribution pursuant to Part IV of the Wrongs Act 1958 (“the Wrongs Act”) in respect of the settlement. Both allege that the accident and injury were caused or contributed to by Orientstar’s negligence or breach of duty.

1. Copies of the writ and statement of claim were provided to Orientstar on 28 January 2003, and Orientstar subsequently filed a conditional appearance, pursuant to Rule 8.08 of the Rules . Orientstar is incorporated in and operates from the Philippines.

1. The relevant provisions of the Rules are Rules 6.01, 6.02(1), 6.03(1), 6.04(a), 7.01(1)(j), and 7.03, which read as follows, so far as relevant:

ORDER 6

SERVICE

6.01When personal service necessary

Any document required or permitted to be served in a proceeding may be served personally, but unless personal service is required by these Rules or by order, need not be served personally.

6.02Personal service of originating process

(1)Except where otherwise provided by or under any Act or these Rules, originating process shall be served personally on each defendant.

6.03How personal service effected

(1)Personal service of a document is effected by leaving a copy of the document with the person to be served or, if he does not accept the copy, by putting the copy down in his presence and telling him the nature of the document.

6.04Service on particular defendants

Personal service of a document may be effected by serving the document in accordance with Rule 6.03, in the case of¾

(a)a corporation, on the  .  .  .  manager , secretary or other similar officer of the corporation;

ORDER 7

SERVICE OUT OF AUSTRALIA

PART 1¾WHEN SERVICE OUT IS ALLOWED

7.01For what claims

(1)Originating process may be served out of Australia without order of the Court where¾

..  .

(j)the proceeding is brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring;

7.02Indorsement on originating process

(1)Originating process served on any defendant out of Australia in accordance with this Order shall, at the time of service on that defendant, contain an indorsement stating the facts and the particular paragraph of Rule 7.01 relied upon in support of such service.

7.03Mode of service out of Australia

Originating process which is to be served out of Australia need not be served personally as long as it is served in accordance with the law of the country in which service is effected.

Service of process:  Rule 7.03

1. The first submission of Mr Harvey, for the defendant, was that his client had not been legally served with the writ and statement of claim.   He cited Laurie v Carroll[1] where Dixon CJ, Williams and Webb JJ quoted with approval from Dicey’s Conflict of Laws:

The service of the writ, or something equivalent thereto, is absolutely essential to the foundation of the court’s jurisdiction.   Where a writ cannot legally be served upon a defendant the court can exercise no jurisdiction over him.   In an action in personam the converse of the statement holds good, and wherever a defendant can be legally served with a writ, there the court, on service being effected has jurisdiction to entertain an action against him.

[1](1958) 98 CLR 310 at 323

1. It is not in issue that in order to serve the writ and statement of claim on Orientstar it was necessary to do so in the Philippines, Orientstar having no presence in Australia.   Mr Ben Dominic R Yap deposes that he is an associate at a law partnership in the Philippines, and that on a request from Wisewoulds (the solicitors for the plaintiff) he served a duplicate original of the writ and statement of claim on the general manager of Orientstar on 28 January 2003.

1. It is not suggested that, had that service been effected on a defendant in Victoria, it would not have complied with the Rules relating to personal service. However, Mr Del Rosario, an attorney practising in the Philippines since 1975, and a partner in a law firm specialising in maritime and admiralty law, deposes that the jurisdiction of a Philippines court over a defendant is acquired (in the absence of voluntary submission to the jurisdiction) by the service on the defendant of a summons, following the filing by the plaintiff of a complaint; and that Rule 14, Section 3 of the 1997 Rules of Civil Procedure of the Philippines (“the Philippines Rules”) provides:

   The summons may be served by the sheriff, his deputy, or other proper court officer, or for justifiable reasons by any suitable person authorised by the court issuing the summons.

2. It is not in issue that Mr Yap was not the sheriff, his deputy, or a proper court officer, and had not been authorised by a court to serve the writ and statement of claim on Orientstar.

1. Mr Harvey submitted that Rule 7.03 required compliance with Philippines law;  the documents had not been served in accordance with Philippines law, and accordingly the service should be set aside.   However, he most  properly brought to my attention the decision of Giles J of the Supreme Court of New South Wales in Williams v Lips-Heerlen Bv [2] , where His Honour was concerned with Part 10 Rule 5 of the New South Wales Supreme Court Rules 1970, which was for all relevant purposes in identical terms to Rule 7.03 of the Rules. His Honour was dealing with a submission that service on a defendant in the Netherlands, in a manner which did not comply with Dutch law, was a nullity. He said [3] :

The submission cannot be correct. The validity of the service is to be judged by compliance with the Supreme Court Act and Rules. By no process of reading them with regard to international comity or the respect which one State has for the sovereignty of another to which Rogers J referred in Arhill Pty Ltd v General Terminal Co Pty Ltd [unreported, decided on 19 December 1990] can there be written into the rules here in question a requirement that service in accordance with the Rules also comply with the law of the country of service. The Rules themselves in Part 10 Rule 5 provide for service outside Australia in accordance with the law of the country in which service is effected as an alternative to personal service, and it is impossible to treat the alternative as a constant requirement.

[2]unreported;  delivered on 1 November 1991

[3]at p 20

1. Mr Harvey submitted, however, that the Court should not follow that decision.   He referred to a number of matters of principle which had not been put before Giles J.  He first cited Mackender v Feldia AG[4] where Diplock J said:

The jurisdiction which the High Court claims over defendant who are neither present nor ordinarily resident in this country, when it grants leave under RSC Ord 11, is wider than any corresponding jurisdiction which it recognises as possessed by a foreign court over defendants who are not present or ordinarily resident in the foreign state.   And because it is a claim which conflicts with the general principles of comity between civilised nations, it is one which should be exercised with caution.

[4][1967] 2 QB 590 at 599

1. He then referred to passages from the judgments of Crockett J in Buttigieg v Universal Terminal & Stevedoring Corporation[5] and Matheson J in Saltram Wine Estates Pty Ltd v Independent Stave Co[6] to the effect that any doubt in the interpretation of the Rules relating to service on a foreign party should be exercised in favour of that party.

   [5][1972] VR 626 at 630

   [6](1992) 57 SASR 156 at 159

1. Finally, he cited from the judgment of Dixon J in Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society [7] to the effect that general words should not be understood as extending to cases which, according to the rules of private international law, are governed by foreign law.

   [7](1934) 50 CLR 581 at 601

1. However, while the decision of Giles J in Williams v Lips-Heerlen of course is of persuasive authority only, it is deserving of respect.   And while it appears the several principles quoted by Mr Harvey were not put before His Honour, it seems to me that the circumstances for their operation are not present in this case.   Those principles are applicable only when there is doubt as to the meaning of the enactment which is in question.   In my view the meaning of Rule 7.03 is clear, and there is not room for the exercise of any discretion such as would bring those principles into play.   I see no reason not to follow the decision of Giles J.   I find that the effect of Rule 7.03 is that service according to the law of the foreign country is an alternative to personal service, and accordingly the service effected on Orientstar in the Philippines, in compliance with the requirements for personal service in Victoria, was authorised by that Rule.

Service of Process:  Rule 7.02(1)

1. In his written outline Mr Harvey submitted that the indorsement on the writ did not accord with Rule 7.02(1) of the Rules, in that it failed to state the facts on which the jurisdiction was based, and it purported to rely on paragraphs in the statement of claim which did not support the jurisdiction of the Court. He made no oral submissions on this point.

1. The indorsement on the writ, headed “Order 7 Endorsement” appears to me to be adequate to comply with the Rule, the purpose of which, as Beach J said in Whinnen v Cussons (International) Ltd [8] is, “to give a defendant notice of the grounds on which a plaintiff claims to be entitled to serve the originating process out of the jurisdiction”.   Like Hedigan J in Pivot v Hoechst[9] I am of the opinion that the combination of the indorsement and the statement of claim disclosed sufficient facts to satisfy that purpose.

   [8]unreported, decided on 24 February 1998

   [9][2000] VSC 262 at [13]

Jurisdiction:  Rule 7.01(1)(j)

1. Mr Harvey then submitted that the Court should make orders under Rule 8.09(a) setting aside the originating process on the ground that neither of the claims in the writ satisfied Rule 7.01(1)(j), in that the claim of each plaintiff arose by operation of a statutory right and not by a tortious act or omission, and that neither plaintiff had suffered any damage. He further submitted that no order of the Court had been obtained to authorise service out of Australia, no other paragraph of Rule 7.01(1) could be relied on to authorise service out of Australia without a Court order, and as paragraph (j) did not apply, the Court was without jurisdiction.

1. I turn now to consider the submission that neither claim arose from a tortious act or omission.   The claim of the first plaintiff is brought, as has been said, pursuant to section 138 of the AC Act, which reads:

138.Indemnity by third party

(1)Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, an authorised insurer, a self-insurer or an employer was caused under circumstances creating a legal liability in a third party to pay damages  .  .  .  the Authority, authorised insurer, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.

1. Mr Harvey relied on the following passage from the judgment of Gleeson CJ, Gummow, Hayne and Callinan JJ in Victorian Workcover Authority v Esso Australia Ltd [10] :

In the present case, Winneke P, who delivered the leading judgment in the Court of Appeal, considered the nature of the entitlement conferred by section 138.   His Honour said, with respect, correctly, that it was abundantly clear that:

.  .  .  the statutory right of indemnity conferred by the [AC Act] upon the person who has paid the compensation is not to be equated to the cause of action which the worker would, but for the [AC Act], have had against the person liable to pay damages to him.   This is so notwithstanding the fact that it is an ingredient of the statutory right, sought to be enforced, that the person from whom the indemnity is sought was liable to pay damages to the worker.   The claim to enforce the entitlement to indemnity is not a claim in tort.   It is a cause of action created by statute for an indemnity against a person liable to pay damages to another.

[10](2001) 207 CLR 520 at [14]

1. The claim of the second plaintiff is brought under Part IV of the Wrongs Act, presumably under sections 23B(1) and (2), which read:

23B.     Entitlement to contribution

(1)Subject to the following provisions of this section, a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with the first-mentioned person or otherwise).

(2)A person shall be entitled to recover contribution by virtue of sub-section (1) notwithstanding that that person has ceased to be liable in respect of the damage in question since the time when the damage occurred provided that that person was so liable immediately before that person made or was ordered or agreed to make the payment in respect of which the contribution is sought.

1. Mr Harvey relied first on Brambles Constructions Pty Limited v Helmers[11] where Barwick CJ approved a decision of the Supreme Court of New South Wales that:

the claim of the tort-feasor for contribution is a cause of action apart from and independent of the cause of action which the injured party has or would have had against the tort-feasor from whom contribution is sought, and that the failure of the injured party to take formal steps such as the giving of notice of action to the tort-feasor from whom contribution is sought is an irrelevant circumstance in the action between the one tort-feasor and the other tort-feasor for contribution.

[11](1966) 114 CLR 213 at 218

1. The first part of that passage was adopted by Kaye J, with whom Gray and Phillips JJ agreed, in Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [12] . His Honour concluded:

Furthermore, the relief sought by the City of Kew is in substance and effect contribution and indemnity in respect of its liability as a tortfeasor to pay damages to Van Win, and the relief sought is against Ramchen as a tortfeasor.   Notwithstanding Ramchen’s concession and the relief sought expressed to be for damages, the City of Kew’s cause of action is not in an action in tort;  it is a cause of action for contribution conferred by statute and not founded in tort.

[12][1986] VR 484 at 490

1. However, in Australian Mutual Provident Society v GEC Diesels Australia Ltd[13] the Full Court (Young CJ, Marks and Ormiston JJ) found that a third party claim for contribution under the predecessor of section 23B of the Wrongs Act, was made in respect of damage which was the same as that damage for which the claimant was liable, being the damage suffered by the plaintiff. Thus the claim was for “damage caused by a tortious act or omission” in terms of Rule 7.01(1)(j). However, in the present case the second plaintiff, as plaintiff under the Wrongs Act, is not claiming in respect of damage, so the position is not the same as in GEC Diesels.

   [13][1989] VR 407 at 410

1. I am satisfied, on the basis of the passages I have cited from Esso Australia, Brambles Constructions and Van Win, that neither plaintiff brings its proceeding in respect of damage caused by a tortious act or omission;  both are statutory claims, for indemnification and contribution respectively.   Accordingly, without needing to consider the submission of Mr Harvey that neither plaintiff has suffered damage, I accept his submission that neither proceeding falls within Rule 7.01(1)(j), and thus that service of the originating process in the Philippines was ineffective in the absence of an order of the Court, and will be set aside.

1. Mr Harvey drew to my attention Rule 8.1(ad) and (d) of the Federal Court Rules, Rule 124(1)(l) and (n) of the Uniform Civil Procedure Rules 1999 of Queensland and Rule 10.1A(1)(e) and (f) of the Supreme Court Rules 1970 of New South Wales. In each case a provision corresponding to Rule 7.01.(1)(j) is accompanied by a provision authorising service outside the jurisdiction of originating process in a proceeding for contribution or indemnity in respect of a liability enforceable by proceedings in the relevant court. However, while I note the existence of those several provisions, they have not been a factor in my decision.

1. Counsel may wish to make submissions as to the form of the orders to be made and as to costs.

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