Young v Healy
[2018] VSC 546
•19 September 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2016 05154
| JANET YOUNG | Plaintiff |
| v | |
| STEVE HEALY | Defendant |
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JUDICIAL OFFICER: | Clayton JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27 July 2018 |
DATE OF RULING: | 19 September 2018 |
CASE MAY BE CITED AS: | Young v Healy |
MEDIUM NEUTRAL CITATION: | [2018] VSC 546 |
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PRACTICE AND PROCEDURE – Informal Service – Extension of the validity of a Writ – rr 5.12 and 6.11 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Limitation of Actions Act 1958 (Vic), s 5 – Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Currie | Hall & Wilcox |
| For the Defendant | Mr A Anderson, solicitor | Macpherson + Kelley |
JUDICIAL REGISTRAR:
Background
Ms Young alleges that between 19 December 2015 and 10 January 2016, while she was a director of Tennis Australia, Mr Healy, then President of Tennis Australia, made defamatory remarks about her in meetings with, and emails to, Tennis Australia board members.
Pursuant to s 5(1AAA) of the Limitation of Actions Act 1958 (Vic) an action for defamation ‘must not be brought after the expiration of 1 year from the date of the publication of the matter complained of’. As the first publication that Ms Young complained of occurred on 19 December 2015, Ms Young was required to issue proceedings within 12 months of that date. Ms Young accordingly filed a Writ and Statement of Claim on 16 December 2016 and an amended Statement of Claim on 29 November 2017.
Pursuant to r 5.12(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’), the writ was valid for 12 months, that is, until 15 December 2017.
It is common ground between the parties that formal service was not effected on or prior to 15 December 2017.
Informal Service
Ms Young seeks orders that informal service was validly effected on or before 15 December 2017 and that judgment in default of an appearance be entered in her favour. Alternatively, Ms Young seeks an order extending the validity of the writ to 16 December 2018.
Ms Young says that she has known Mr Healy for about 18 years and served with him as a director of Tennis Australia between 2008 and 2016. During that time she regularly communicated with him by telephone to his mobile phone, and by email to three email addresses - one at Tennis Australia; one at the law firm, Dentons, where he is currently a partner; and one at his former law firm, Gadens.[1]
[1]Affidavit of Janet Anne Young sworn 24 January 2018 and filed 27 July 2018 [6].
She also says that she knows his home address and that a name extract search of the Australian Securities and Investments Commission undertaken in May 2017 confirmed his home address as the address known to her.[2] She knows his work address and says that his name and image appear on Denton’s website where he is listed as a partner and ‘Australia Region Chief Executive Officer, Sydney’.[3]
[2]Ibid [6]–[7].
[3]Ibid [8]–[9].
She says that on 7 and 8 December 2017 she tried to contact Mr Healy several times by calling his mobile and work numbers. At about 5.30pm on 8 December 2017 she spoke with him and informed him that she had filed an amended statement of claim and intended to serve him the following week. She asked whether he would be in Denton’s office to accept service. He told her that he would be ‘moving around next week’. She asked whether his solicitors had instructions to accept service on his behalf. He told her to ‘put it in writing’.[4]
[4]Ibid [10].
Ms Young then asked her lawyers to contact Mr Healy’s lawyers. The following email was sent on 11 December 2017 at 3.10pm by Mr Graydon Dowd of Hall & Wilcox to Mr Justin Quill of Macpherson Kelley:
Justin
I understand our respective clients had a telephone conversation last week. Our client noted that she had filed an amended statement of claim and she asked your client if you had instructions to accept service on his behalf. Your client asked that this request be set out in writing.
I tried to call you to seek those instructions and to discuss the matter more generally, but you were not available.
Can you please confirm if you have your client’s instructions to accept service of our client’s amended statement of claim on his behalf.
If we have not heard from you by 5pm tomorrow, we will need to arrange the effecting of personal service.[5]
Regards
Graydon Dowd | Partner
[5]Ibid Exhibit JAY-4.
At 4.17pm on 12 December 2017, Mr Quill responded as follows:
Graydon,
I don’t have instructions to accept service.
Justin.[6]
[6]Ibid Exhibit JAY-5.
Ms Young says that on 13 December 2017 she instructed Hall & Wilcox to engage a process server to personally serve Mr Healy. Michael Guest, a Licensed Commercial Agent, swore an affidavit of attempted service on 24 January 2018, which stated that:
·On 13 December 2018, he attempted to serve Mr Healy by attending his home address. No one was home. He spoke with a neighbour and confirmed that he had the correct address. He left his calling card in the letterbox.
·On 14 December 2017, he attended Dentons, the law firm where Mr Healy works, spoke with a female receptionist, and confirmed that Stephen Healy worked there. She told him that he was not in today. He gave her his calling card.
·On 14 December 2017, he again attended Mr Healy’s home address. Although he heard noises coming from inside the property, no one answered his knock. He left another calling card.
·On 15 December 2017, he attended Mr Healy’s workplace and home address again. He was told by the receptionist that Mr Healy was not in and there was no answer at the home address.
Ms Young says that on 15 December she called Mr Healy’s mobile phone but he did not answer her call. She left a message advising him that she was trying to serve him. She followed this up with a text message that read:
Good afternoon Steve. Further to my telephone call I confirm that we have been trying to serve you for 3 days. Please advise a suitable time and place to be served today. Thank you, Janet.[7]
There was no response to that text message, although a screen shot of the text message shows that it was read on 15 December 2017.
[7]Ibid Exhibit JAY-8.
On 15 December 2017, Ms Young also emailed Mr Healy setting out that she wished to serve him, the steps she had taken to serve him, and attaching a copy of the documents to be served.[8] Mr Dowd at Hall & Wilcox also emailed a copy of the documents to Mr Quill at Macpherson Kelley.[9]
[8]Ibid Exhibit JAY-9.
[9]Ibid Exhibit JAY-10.
On 15 December 2017, Hall & Wilcox couriered a copy of the documents to Mr Healy’s work address where they were left with a receptionist, and to his home address where they were left in his letterbox.[10]
[10]Ibid Exhibits JAY-11, JAY-12.
In light of the steps Ms Young took to serve Mr Healy, she says that informal service of the writ and statement of claim was validly effected on or before 15 December 2017.
On 24 January 2018, Macpherson Kelley wrote to Hall & Wilcox as follows:
It is our view that our client was clearly not properly served with the Documents in the manner or time prescribed under the Rules. …
In addition, we are instructed our client did not open or read the Documents before your client ran out of time for service. As you are no doubt aware, the weeks leading up to the Christmas break are often some of the busiest during the calendar year for people who work in professional services. This was certainly the case for our client. …
Your client never made an application to the Court for substituted service when it was open to her to do so and when the mode of substituted service would have been easy to identify.
Macpherson Kelley informed Hall & Wilcox that their client did not intend to file a notice of appearance and any application for default judgment would be opposed and ‘fought vigorously’ and that their client would seek its costs on an indemnity basis.
On 24 January 2018, Ms Young, by her solicitors, sought Interlocutory and Final Judgment for Damages in Default on the basis that the proceedings had been served and no appearance had been filed.
Rule 21.01 of the Rules relevantly provides that:
(2)Where a defendant does not file an appearance within the time limited, the plaintiff may enter or apply for judgment against that defendant in accordance with this Order.
(3)Judgment shall not be entered or given for the plaintiff unless there is filed-
(a)a notice to the Prothonotary requesting the Prothonotary to search for an appearance by the defendant;
(b)an affidavit proving service of the writ on the defendant.
On 8 February 2018, Hall & Wilcox was informed that the application for Interlocutory Judgment had not been granted as the affidavits provided did not prove service of the writ on the defendant. Further, the affidavits provided did not satisfy r 6.11 of the Rules which provides for informal service.
On 23 February 2018, Hall & Wilcox requested that the decision not to grant the application be reconsidered and provided further information. Hall & Wilcox’s submissions to the Prothonotary were that:
Order 6.11 exists to prevent a person from relying on the fact that personal service was not effected on him or her in circumstances where the documents came to the notice of that person. In this respect, Order 6.11 exists to overcome the problem of people trying to evade service.[11]
[11]Letter from Hall & Wilcox to The Supreme Court of Victoria dated 23 February 2018 [8].
By letter dated 11 May 2018, the Principal Deputy Prothonotary informed Hall & Wilcox that the Prothonotary was unable to enter interlocutory judgment as there was no affidavit proving service of the writ on the defendant and none of the material provided in support of the application established that the writ had come to the notice of the defendant.
On 15 June 2018, Ms Young sought a hearing date for this application. At the hearing of this application she relied on her affidavit of 24 January 2018 and an affidavit of Mr Dowd dated 14 June 2018.
In his affidavit, Mr Dowd sets out the sequence of events outlined above and says:
in view of the matters deposed to herein, to the matters deposed to in the Plaintiff’s Affidavit and to the Plaintiff’s Submissions, I believe that the Documents came to the notice of the defendant on or before 15 December 2017 and should be taken to have been served on that day in accordance with rule 6.11 of the Rules.[12]
[12]Affidavit of Graydon Francis Dowd sworn 14 June 2018 [17].
Mr Dowd also deposed that he believes that the plaintiff made reasonable attempts to contact the defendant to arrange for service before 16 December 2018, made reasonable efforts to personally serve the defendant before 16 December 2017, and ‘the documents will come to the attention of the defendant if proposed substituted service orders were made’.[13]
[13]Ibid [18(d)].
Ms Young submitted that the evidence supported her claim that the documents had come to the attention of Mr Healy by 15 December 2017. Crucially, Mr Healy had not filed an affidavit or put on any evidence in opposition to Ms Young’s evidence, and a Jones v Dunkel[14] inference should be drawn. In the letter of 24 January 2018, Mr Healy’s lawyers state that he had not opened or read the documents prior to 15 December 2017. His lawyers did not say that he had not received those documents and Ms Young submitted that this careful choice of words should be taken to indicate that he had in fact received the documents.
[14](1959) 101 CLR 298.
Ms Young submits that Rowland v Commonwealth of Australia[15] stands for the proposition that becoming aware of the essential contents of the writ may be sufficient to establish service and that there is no requirement that the document be read for a finding of informal service. In that case, however, the judge did not determine whether that interpretation was correct or whether the alternative interpretation that the Commonwealth pressed - that r 6.11 is confined to situations where by indirect means a copy of the document comes to the direct notice of the defendant - was correct. Instead, he found that even though the Commonwealth had knowledge of the essential contents of the writ it did not know the identity of the plaintiff and therefore he was not satisfied that an order under 6.11 should be made.
[15](Unreported, Supreme Court of Victoria, Smith J, 2 July 1993).
No Notice of Appearance has been filed for the defendant but Mr Healy was represented for the purposes of this application.
Mr Healy has not put any evidence before the Court. His counsel says that none of the plaintiff’s evidence demonstrates that service was effected on Mr Healy, or that Mr Healy saw or was in possession of the writ prior to its expiry. Counsel for Mr Healy agrees that his client’s home, work, and email addresses were well known to Ms Young, who had twelve months to serve the writ but chose not to attempt service until shortly before its expiration. There has been no explanation by the plaintiff of the delay in serving the writ.
Had she encountered difficulty effecting personal service during the 12 months preceding the expiry of the writ she could have sought an order for substituted service. Counsel submitted that Mr Healy is entitled to be served in the manner established by the rules and the fact that the plaintiff chose to delay serving the writ does not mean that the defendant has any obligation to forego his entitlements to appropriate service.
Counsel for Mr Healy submitted that knowing that a writ had been issued, and knowing in a general sense what the claim was about, could not constitute informal service, and no case law supports such a proposition. The onus is on the plaintiff to prove that Mr Healy had the documents, which she has not done.
Consideration
Rule 6.11 of the Rules provides that:
Where for any reason a document has not been served in the manner required by these Rules, but the document has come to the notice of the person to be served, the document shall be taken to have been served on the day it came to the person’s notice.
There is no doubt that Mr Healy was aware that a writ had been filed and the general gist of what was contained in that writ. Merely being aware that a writ has been filed, even if the substance of the writ is also known, does not constitute service in accordance with the rules and is not sufficient for informal service. The rule requires that the document itself ‘has come to the notice’ of the party to be served.
It is possible that, when the documents were emailed to him, left in his letterbox, and left at his place of work, he saw those documents and that they came to his notice. However the rule does not temper the requirement that the documents came to his notice by using words such as ‘reasonably likely’ or ‘probable’. I do not agree that r 6.11 of the Rules exists in this circumstance to overcome the problem of people trying to evade service. An application for substituted service can be made to overcome such a problem. The rule under 6.11 is clear.
In the absence of evidence that the documents had come to Mr Healy’s notice, for example an affidavit from the receptionist with whom the documents were left saying that she handed them to him, I cannot be satisfied that the documents had come to his notice prior to 16 December 2017.
The application for an order that informal service occurred fails and consequently the application for judgment in default fails.
Extension of the validity of the Writ
Rule 5.12 of the Rules provides that:
(2)Where a writ or originating motion has not been served on a defendant, the Court may, from time to time, by order extend the period of validity for such period from the day of the order as the Court directs, being not more than one year from that day.
(3) An order may be made under paragraph (2) before or after expiry.
Ms Young submits that the Court ought to exercise its discretion in the interests of justice. There is no evidence of any actual prejudice to the defendant in not having been served within time and the defendant was clearly on notice of the proceeding. In contrast, the consequences of not granting the extension would be significant as Ms Young may be statute barred from pursuing her claim.
Counsel for Mr Healy submitted that the following points weigh against the exercise of the Court’s discretion to extend the validity of the writ:
i.There has been an unexplained delay between the cause of action arising and the issue of the writ;
ii.There has been no explanation for the delay in the attempt to serve the writ;
iii.There has been an unexplained delay in bringing this application;
iv.In a defamation action, Parliament has seen fit to ascribe a short time limit for claims to be brought;
v.The onus was on the plaintiff to serve her proceedings promptly and she did not do so;
vi.There is real prejudice caused by the delay in that the publication of the allegedly defamatory material occurred at meetings. The recollection of the people at those meetings is crucial to determine what imputations arose, and the passage of time is likely to detrimentally impact on those recollections;
vii.The plaintiff has not complied with her obligations under s 25 of the Civil Procedure Act 2010 (Vic) (‘the CPA’) which requires a party to use reasonable endeavours to act promptly and minimise delay and that, pursuant to s 28 of the CPA, this ‘contravention’ of the overarching obligations should be taken into account by the Court when exercising any power in relation to the proceeding.
Consideration
In Howard v Power,[16] Derham AsJ helpfully sets out the applicable principles to be applied in exercising the Court’s discretion to grant an extension of the validity of the writ:
[16][2013] VSC 198.
(a) Although the power conferred by Rule 5.12 is wholly discretionary, a judge has to approach the exercise of the discretion in accordance with established principles: Dagnell v Freedman & Co [1993] 2 All ER 161 at 165 (“Dagnell”);
(b) The jurisdiction given by the rule ought to be exercised with caution: Battersby v Anglo-American Oil Co Ltd (“Battersby”); Ramsay v Madgwicks (“Madgwicks”);
(c) It is the duty of a plaintiff to serve a writ promptly: Battersby at 32;
(d) An application to extend time for service is not granted as a matter of course: Battersby at 32; Madgwicks; Savcor Pty Ltd v Cathodic Protection International APS (“Savcor”);
(e) The first question to consider is whether the plaintiff has taken reasonable steps to serve the writ. If not, it then becomes necessary to consider whether there was “some other good reason” for making the order to extend time for service of the writ: Soper v Matsukawa (“Soper”); Battersby;
(f) The plaintiff carries the onus of showing that there is a good reason for extending the time to serve the writ (Soper at 952; Madgwicks at 6; Savcor at [41]); the applicant’s burden is no greater if the limitation period has expired between the date of issue of the writ and the date on which the application is made: Findlay at 187.
(g) Whether there is good reason depends on all the circumstances of the case: Dagnell at 165; Kleinwort Benson Ltd v Barbrak Ltd& Ors [1987] AC 597 at 622-3 (“Kleinwort”); and it is not possible to define or circumscribe the scope of the expression “good reason”: Kleinwort;
(h) Where the application is made after the period for service has expired, the reason must be one of substance (Savcor at [41]);
(i) The selection of relevant factors to establish that there is a good reason for making the order, and the significance to be given to each of the factors, are matters of discretion (Soper at 954);
(j) The fact that the plaintiff decides not to serve the writ whilst some other case is tried, or to await some future development, is generally not a good reason to justify extending time for service. Madgwicks at 4 and 5; Savcor at [42]); Dagnell at 165-168. It is for the Court and not for one of the litigants to decide whether there should be a stay, and it is not right that people should be left in ignorance that proceedings have been commenced against them if they are there to be served: Battersby at 32;
(k) It is a relevant factor against the exercise of the discretion that the renewal of the writ might deprive the defendant of a limitation defence where the plaintiff has been aware that the passage of time might be dangerous: Battersby at 31–2; Madgwicks at 7; Soper at 953; see also Finlay v Littler [1992] VicRp 59; [1992] 2 VR 181 at 187 (“Finlay”).
(l) It is a relevant factor against the exercise of the discretion that the defendant was unaware of and had no reason to expect that a writ had been issued against them: Madgwicks at 7; Kleinwort at 623–4).
(m) The lapse of time is itself generally to be regarded as prejudicial to the defendant (Madgwicks at 7; Finlay at 188). In this contest, the relevant delay is to be measured from the time at which the plaintiff’s cause of action arose (Tyson v Morgan [200] 1 Qd R 100 at 104.50);
(n) Any delay in making the application to extend the time for service of the writ is a relevant factor against the exercise of the discretion (Finlay at 187); delay preceding (as well as following) the issue of the writ is material (Soper at 953);
(o) The expiration of the limitation period will not in itself constitute a good reason for extending the validity of the writ (Finlay at 187), although it is relevant (Soper at 952); and
(p) It may be appropriate to have regard to the balance of hardship: Kleinwort at 622; Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337 at 343 and 346 (“Van Leer”) (adopting the approach of Bray CJ in Victa Ltd v Johnson (1975) 10 SASR 496 at 502 (“Victa”)).[17]
[17]Ibid [10].
These principles must be considered in light of the overarching purpose of the CPA to ensure the just, timely, cost effective, and efficient resolution of the real issues in dispute.
The first question to consider is whether the plaintiff has taken reasonable steps to serve the writ.
There is no evidence before me about the reasons for the delay in serving the writ until the weeks before it expired. I can only conclude that the reasons for the delay would not assist Ms Young’s case and would be factors that weigh against granting an extension. However, the rules allow Ms Young to serve the writ at any time prior to its expiry and, had she served it even on the very last day, she could not have been criticised for undue delay. Therefore, any criticism of her for not attempting service until close to the writ’s expiry must be tempered by the fact that she is entitled to serve the writ on the very last day of its validity. She had no reason to think that there would be any difficulty in effecting service. Mr Healy was a lawyer who understands the importance of service of documents. It would be extremely improper for him to take any steps to avoid or evade service and no such allegation against him is made. He had lawyers acting on his behalf and she could reasonably have assumed that, in the event that he was too busy to arrange a time for service to be personally effected, he would instruct his solicitors to accept service on his behalf. For unexplained reasons, those lawyers were not instructed to accept service. In my view Ms Young has undoubtedly taken reasonable steps to serve the writ, including directly contacting the defendant to try to arrange for personal service, engaging a process server to personally serve him, engaging lawyers to contact his lawyers to arrange for service, and providing the documents themselves to his home, work, and email addresses.
Having found that reasonable steps were taken to serve the writ, I now turn to whether there is a good reason to make an order to extend the validity of the writ.
The fact that Ms Young’s defamation action would now be out of time is a factor to be considered in favour of Mr Healy’s argument that an extension should not be granted. If the extension is granted, he is prejudiced by losing a defence that would otherwise be open to him. This is a not-insignificant factor to be considered in the weighing exercise before me. On the other hand, Mr Healy and his lawyers were aware, and had been aware for some time, both that the writ had been issued and the general nature of the claim. He could have made arrangements to accept formal service in the days prior to the expiry of the writ, or could have instructed his solicitors to accept service.
The lapse of time, whilst prejudicial in a general sense, has not been excessive and there is no evidence of any other actual prejudice occasioned by the delay.
Ms Young could have taken a different course than the one she embarked on. She could have applied urgently for an order for substituted service or an application to extend the validity of the writ, instead of applying for judgment in default of appearance; an application which was doomed to fail given that she could not establish either formal or informal service. This decision caused consequential delays before this application was filed. Not all of these delays are the responsibility of Ms Young but they do derive from the course of action she chose. These are not significant delays in the context of a Court proceeding and were delays in the context of her taking steps to pursue her proceeding. I do not consider that they weigh heavily against Ms Young.
The fact that the expiration of the limitation period might mean that Ms Young is precluded from bringing her claim, while not in itself a good reason to extend the writ is also to be considered in assessing all of the circumstances.
Mr Healy is entitled to have defamation proceedings brought and served against him in accordance with the rules. This has not happened and, consequently, there is prejudice to him in a general sense due to the lapse in time, and specifically as a result of a potential defence not being available. Weighed against this is Ms Young’s entitlement to pursue a claim against Mr Healy, the steps she has taken to pursue that claim, and whether the failure to serve the writ in time ought to extinguish that entitlement. I am satisfied that the circumstances of this case provide a good reason for the order to be made.
I am reinforced in my view by the requirements of the overarching purpose of the CPA to ensure a just outcome. It is my view that not extending the validity of the writ would not result in a just outcome. It is, therefore, appropriate to extend the validity of the writ.
Further, in order to ensure that service is effected, I make orders that pursuant to r 6.10 of the Rules in lieu of person service of the writ and statement of claim, the following steps are to be taken by the plaintiff by 31 October 2018 to bring the documents to the notice of the defendant:
(i) Posting a sealed copy of the documents together with a copy of the orders in an envelope addressed to the defendant at his home address;
(ii) Emailing a sealed copy of the documents and a copy of the orders to the defendant at his email address;
(iii) Emailing a sealed copy of the documents and this order to the defendant’s lawyers, Macpherson Kelley.
The costs of this application are costs in the proceeding.
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