Westpac Banking Corporation v P & O Containers Ltd

[1991] FCA 728

Re: WESTPAC BANKING CORPORATION and FEDGOLD PTY. LTD.
And: P. and O. CONTAINERS LIMITED; P. and O. CONTAINERS SHIPPING LIMITED; P.
and O. FERRYMASTERS A.B. (formerly FERRYMASTERS A.B.); JOHAN i HALLEN
PARTIHANDEL A.B. (formerly JOHAN ANDERSON CHARKUTERIAFFAR A.B.)
Nos. Q G94 and Q G96 of 1990
FED No. 728
Practice
(1991) 105 ALR 90
(1991) 32 FCR 540

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Practice - service of cross-claim - whether waiver of jurisdictional objections - whether right of service on solicitors where their address given as address for service on conditional appearance - whether service should be validated under O.7 r.10 of the Federal Court Rules.

Federal Court Rules, O.5 r.10; O.7 rr.4, 10; O.9 rr.4, 6, 7

HEARING

BRISBANE

#DATE 25:11:1991

Counsel for the first
cross-respondent and the third
cross-claimant: Mr J. Sullivan

Solicitors for the first
cross-respondent and the third
cross-claimant: Morris Fletcher and Cross

Counsel as amicus curiae: Mr G.A. Thompson

ORDER

Declares that service on 14 May 1991 of the cross-claim of P. and O. Ferrymasters A.B. upon the solicitors for Johan i Hallen Partihandel A.B. was and remains valid service of that cross-claim upon Johan i Hallen Partihandel A.B.

Gives leave to amend the said cross-claim in terms of the draft produced.

Orders that the costs of and incidental to the notice of motion of P. and O. Ferrymasters A.B. be its costs in the proceedings against Johan i Hallen Partihandel A.B. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In each of these two matters, I made orders on 24 July 1991 with respect to service of a cross-claim on Johan i Hallen Partihandel A.B. ("Johan i Hallen") which is in two capacities a party to these proceedings. I set aside an order giving leave to serve a cross-claim upon Johan i Hallen and struck out service of that cross-claim.

1. The notice of motion with which I am presently concerned raises another question about service upon Johan i Hallen. There are two similar principal applications on foot and (as in the previous case) it is convenient to discuss the facts in one only, namely Q G94 of 1990, an application brought by Westpac Banking Corporation ("Westpac"). The facts in the other case are such as to make it unnecessary to discuss that case separately; the same result must ensue in both.

2. To the extent that my account of the nature of the case covers the same ground as dealt with in my reasons of 24 July, I shall abbreviate. The applicant sued two respondents for damages in respect of goods sold to Johan i Hallen. The applicant's case was that these respondents were liable because the goods were delivered to Johan i Hallen in Sweden without the production of a bill of lading and that Johan i Hallen had not paid for them. Those respondents then served claims against P. and O. Ferrymasters A.B. ("Ferrymasters") and against Johan i Hallen, complaining that Ferrymasters delivered the goods to Johan i Hallen in Sweden without production of the bill of lading and that Johan i Hallen got Ferrymasters to do that by misrepresentation. Having given leave to the respondent to serve these cross-claims on Ferrymasters and Johan i Hallen, on 24 July last I set aside that order giving leave, so far as it concerned Johan i Hallen, and set aside service of the cross-claim on Johan i Hallen. The respondents have since obtained leave to serve an amended cross-claim upon Johan i Hallen, in the hope of overcoming the difficulties which led to the striking out of service on 24 July.

3. The matter which is the subject of these reasons is a cross-claim by Ferrymasters against Johan i Hallen, under which Ferrymasters seeks to set up an entitlement to indemnity, on the basis that Johan i Hallen requested Ferrymasters to deliver the goods on an implied representation, viz. that it would hand over the bill of lading on the following day. That representation is alleged to be misleading and to constitute deceit. The pleading sets up that if Ferrymasters is liable, then Johan i Hallen is also liable to the applicant Westpac and/or to the respondents. It also asserts that, as between Ferrymasters and Johan i Hallen, any liability must fall primarily on Johan i Hallen and secondarily on Ferrymasters and that therefore Ferrymasters is entitled to be indemnified by Johan i Hallen.

4. The notice of motion filed by Ferrymasters seeks a declaration that service on 14 May 1991 of its cross-claim upon Johan i Hallen's Brisbane solicitors was valid, leave to amend the cross-claim and leave to serve the amended cross-claim out of the jurisdiction upon Johan i Hallen. The last mentioned order is sought, however, only as an alternative. The primary case put forward by Mr Sullivan, counsel for Ferrymasters, was for a declaration along the lines mentioned.

5. When the case was called on, Mr G.A. Thompson sought and was granted leave to appear as amicus curiae. He did so, in substance, to argue against the granting of the declaration sought. Leave was given to Mr Thompson to appear because it seemed to be a convenient course to have argument against what Mr Sullivan proposed and, indeed, I found Mr Thompson's argument helpful. No argument was advanced by Mr Thompson against my giving leave to serve Ferrymasters' proceedings on Johan i Hallen in Sweden, but that is not to say that if I do give such leave and service is effected, that will not be attacked; it has to be kept in mind that, in form at least, Mr Thompson's appearance was merely as amicus curiae.

6. Some further facts require to be set out. The principal application having been filed, leave was, as I have mentioned, granted to the respondents to serve cross-claims out of the jurisdiction against Ferrymasters and Johan i Hallen. Those cross-claims were served and Ferrymasters entered an unconditional appearance. On 17 October 1990, Ferrymasters filed its cross-claim against Johan i Hallen. On 12 April 1991, Johan i Hallen's Brisbane solicitor, Mr C.H. Gasteen, spoke on the telephone with Ferrymasters' Brisbane solicitor, Mr D.T. O'Brien. Mr Gasteen told Mr O'Brien (as was the fact) that he had caused to be filed a notice of motion seeking to set aside service of the respondents' claim. Mr O'Brien told Mr Gasteen that Ferrymasters proposed to cross-claim against Johan i Hallen. Mr Gasteen asked Mr O'Brien if he could see a copy of the intended cross-claim.

7. On 17 April, Mr Gasteen wrote to Mr O'Brien asking that "you serve us with a copy of your proceedings against our client". There was other correspondence between the parties about the case which does not need to be set out; it was clear from that correspondence that Mr Gasteen was acting for Johan i Hallen. Mr Gasteen has given evidence that he did not intend to convey, by his letter of 17 April, that he had instructions to accept service and that he had no such instructions; that is not challenged.

8. On 13 May 1991, Ferrymasters filed an amended cross-claim against Johan i Hallen and on the following day served it on Mr Gasteen's firm. On 24 July, as I have mentioned previously, I gave judgment striking out service of the respondents' claim on Johan i Hallen.

9. There has been no appearance, either absolute or conditional, to Ferrymasters' cross-claim against Johan i Hallen and a question arises whether it has been, or should be treated as having been, served.

10. Last year, Mr Gasteen's firm instituted three actions in the Supreme Court of Queensland at Brisbane relating to a policy of marine insurance and two claims under bills of lading. It is said by Mr Sullivan that the institution of these actions should be taken into account in favour of the relief which Ferrymasters seeks.

11. The questions raised are basically of a technical character. It seems clear that Mr Gasteen is acting for Johan i Hallen in all the four cases I have mentioned, including this one; presumably, if Ferrymasters can overcome the procedural obstacles and Johan i Hallen wishes to advance any substantive defence, Mr Gasteen will continue to act.

12. When Mr Thompson appeared for Johan i Hallen on the application to strike out service of the respondents' proceedings on Johan i Hallen, an opportunity was proffered to raise the question of the validity of the service of Ferrymasters' proceedings on Johan i Hallen, but that was declined. Although, as it appears to me, Mr Thompson was quite entitled to take that stance, I must say that the picture emerging is one in which a suspicion arises that Johan i Hallen may wish to obstruct the resolution of this dispute by raising procedural hurdles. It has never been suggested that there is any practical reason why the whole dispute should not be resolved in this Court, rather than partly here and partly in Sweden. Nor, although a number of affidavits have been filed on behalf of Johan i Hallen and in particular by its solicitor, Mr Gasteen, has there been any suggestion that Johan i Hallen would, if the technicalities were overcome and the case proceeded to matters of substance, put forward any defence.

13. Mr Sullivan argued that, at its request, John i Hallen was properly served at the office of its solicitors within the jurisdiction, on 17 April 1991. The answer made is that on the proper construction of the letter from Mr Gasteen, he merely asked for a copy of the proceedings. In some contexts, a party's requesting service of a copy of a claim might be taken as a waiver of jurisdictional objections; the letter relied on here goes perilously close to a waiver. However, it is my opinion that in the context Mr Gasteen's letter should not be so read. In the very same sentence Mr Gasteen refers to his clients having filed an entry of conditional appearance and in the next refers to the notice of motion filed to set aside service of the respondents' proceedings. Although Mr Gasteen's letter asked that a copy be "served" rather than that it be furnished for information only, the better interpretation of the letter is that put forward by Mr Thompson, namely it involved no submission to jurisdiction.

14. The next question raised is whether Ferrymasters had a right to serve the proceedings on Mr Gasteen, whether or not he consented, because the address of his firm was Johan i Hallen's address for service. Johan i Hallen entered a conditional appearance on 30 January 1991 and that was entered, it appears, in response to service on Johan i Hallen of the respondents' cross-claims.

15. Mr Sullivan referred to Order 5 rule 10 of the Federal Court Rules and argued that it permitted service of the cross-claim at the address for service given by Johan i Hallen; in my opinion, that is correct. Order 5 rule 10 permits, and indeed requires, where a "respondent to a cross-claim has ... an address for service in the proceeding", service on that respondent on the date of filing of the cross-claim; it also says that in those circumstances personal service is unnecessary. Under Order 7 rule 4, where personal service of a document is not required, it may be served at the "proper address", an expression which means, where the person to be served has an address for service, that address: Order 7 rule 4(2). The address for service was given in a notice of conditional appearance; the form of notice of appearance (form 15) applies to conditional appearances and provides for the giving of an address for service, as does the rule prescribing the contents of a notice of appearance: Order 9 rule 4.

16. But Order 9 rule 6(2) says:
    

"A conditional appearance shall have effect for all purposes as an unconditional appearance, unless the Court otherwise orders or the respondent applies under and in accordance with rule 7 and the Court makes an order under that rule".

1. Order 9 rule 7 is the rule which allows the Court to set aside service of originating process; as has been mentioned, that was done. The contention is that my order setting aside service, by necessary implication from Order 9 rule 6, retrospectively erased the effect of the conditional appearance.

2. One would readily agree that some implication must be made in Order 9 rule 6(2). That implication must be along the lines that the conditional appearance is not taken to have had effect for any purpose as an unconditional appearance, if an order is made under Order 9 rule 7; there is little difficulty in regarding the setting aside of service as having that retrospective effect.

3. But can the setting aside of service invalidate Ferrymasters' service upon Johan i Hallen at the latter's address for service? The general problem may be stated thus: suppose A sues R in this Court and serves R out of the jurisdiction, R enters a conditional appearance in due form; may another party to the proceeding overcome difficulties with respect to territorial jurisdiction by serving claims on R at its address for service, shown in the conditional appearance? The point is not answered by saying that after an order setting aside service upon R, Order 9 rule 6(2) operates retrospectively; that does not altogether expunge the notice of appearance, but merely obliges one to treat it as conditional. I cannot read Order 9 rule 6(2) as requiring that the notice of appearance be treated as devoid of all content.

4. Although the result may be unintended, the way in which the Rules have been framed achieves, in my opinion, the consequence for which Mr Sullivan argues. Johan i Hallen had an address for service, and service of Ferrymasters' claim was effected there. The setting aside of service of the respondents' claim on Johan i Hallen does not, under the Rules, make the service of Ferrymasters' claim at Johan i Hallen's address for service bad. It would, I suppose, be possible to imply a restriction in the rules so as to avoid this consequence, but to do so would go further than is permissible under conventional methods of statutory construction.

5. Mr Sullivan argued in the alternative that I should validate the service on Johan i Hallen under Order 7 rule 10:
   

"Where for any reason it is impractical to serve a document in the manner set out in the Rules, but steps have been taken to bring the document to the notice of the person to be served, the Court may order that the document be taken to have been served on that person on a date specified in the order".

1. I shall deal with this argument, in case the conclusion reached above is held to be incorrect. It was contended that service is "impractical" but it is not clear to me in what sense this is so. The Court of Appeal has in Paragon Group Ltd. v Burnell (1991) 2 WLR 854 given rather a narrow construction to the word "impracticable" in a somewhat similar context, disapproving In Re Conan Doyle's Will Trusts (1971) Ch 982. But here, there is nothing particularly impractical in service on Johan i Hallen in Sweden; it has been served there with other processes, in these very proceedings. Had I not accepted Mr Sullivan's primary argument on the construction of the Rules, I would not have been prepared to validate service under Order 7 rule 10.

2. There will be a declaration that the service on 14 May 1991 of the cross-claim of P. and O. Ferrymasters A.B. upon the solicitors for Johan i Hallen Partihandel A.B. was and remains valid service of that cross-claim upon Johan i Hallen Partihandel A.B. There will also be leave to amend the said cross-claim in terms of the draft produced. The costs of the notice of motion of P. and O. Ferrymasters A.B. will be its costs in its proceedings against Johan i Hallen Partihandel A.B.