Yunghanns v Colquhoun-Denvers
[2016] VSC 403
•19 JULY 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2016 01170
| PETER NICHOLAS YUNGHANNS | Plaintiff |
| v | |
| NICHOLAS COLQUHOUN-DENVERS | Defendant |
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JUDGE: | JOHN DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 12 JULY 2016 |
DATE OF JUDGMENT: | 19 JULY 2016 |
CASE MAY BE CITED AS: | YUNGHANNS v COLQUHOUN-DENVERS |
MEDIUM NEUTRAL CITATION: | [2016] VSC 403 |
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PRACTICE AND PROCEDURE – Service of originating process out of Australia – Application to set aside service on the basis that service of the writ out of Australia not authorised under r 7.01(1) – Relevant test – Whether tort committed in Victoria – Whether damage partially suffered in Victoria– Failure to indorse the writ – Discretionary considerations – No prejudice – Compliance with r 7.02 dispensed with – Supreme Court (General Civil Procedure) Rules 2005 (Vic), rr 7.01(1) (i) & (j), 7.02.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W Houghton QC with Mr B Holmes | Strongman & Crouch Solicitors |
| For the Defendant | Dr S Bogan | Batten Sacks Harvey Bruce |
HIS HONOUR:
By summons dated 31 May 2016, the defendant applied to set aside service on him out of Australia of the writ.
The plaintiff’s writ, issued on 31 March 2015, claims damages for defamation consequent on the publication of two emails. A statement of claim accompanied the writ. It states the plaintiff’s address to be Collins Street, Melbourne and the defendant’s address to be London, England. A certificate from the Senior Court of England and Wales, Foreign Process Section, dated 16 May 2016 certifies that the originating process was served on the defendant on 10 May 2016 at the defendant’s address in London as noted in the writ. The certificate states that the documents were served by posting them through the defendant’s letterbox, which is described as good service under rule 6.3(1)(c) of the Civil Procedure Rules of England and Wales.
The defendant’s solicitor, Mr Harvey Bruce, has deposed that he has been instructed by the defendant to act for him. Concerning service, he stated that the defendant was handed a copy of the writ and statement of claim in London on 20 April 2016. On or after 6 May 2016, the defendant received a further copy of the writ and statement of claim in London purportedly being served under the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters (The Hague Convention). For present purposes, it is not necessary to reconcile the precise date of service. There is no dispute that service was effected in accordance with The Hague Convention and that, pursuant to Order 80 of the Supreme Court (General Civil Procedure) Rules 2016, the writ and statement of claim came to the notice of the defendant.
The defendant’s summons raises a different issue. The summons alleges that service out of Australia was not authorised by r 7.01(1).
Correspondence between the parties’ solicitors about that matter followed service of the summons. On 2 June 2016, the plaintiff’s solicitor stated, inter alia, that it was clear from the writ and statement of claim that the proceeding is founded on a tort committed within Victoria and also that the proceeding is brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring.[1] The plaintiff’s solicitor also stated:
Having further regard to the obligations under the [Civil Procedure] Act, our client requests that, if your client does not agree with our client’s position as set out above, you tell us, and provide us with the reasons why. In our client’s view, the matters raised in your client’s application ought to be resolved by sensible dialogue between practitioners, and without the need to trouble the court.
[1]See r 7.01(1)(i), (j).
On 9 June 2016, the defendant’s solicitor maintained his objection that the plaintiff had improperly invoked the jurisdiction of the court and that the only appropriate resolution was withdrawal of the writ, stating that the defendant would not seek costs if the writ was withdrawn, but would otherwise seek costs on an indemnity basis. In response, the plaintiff’s solicitor maintained that jurisdiction had been correctly invoked and reserved his right to seek costs on an indemnity basis.
On 14 June 2016, the defendant gave notice of intention to amend the summons to raise, as a further basis for setting aside service of the writ, the absence of the indorsement required by r 7.02. The defendant had not, apparently, been troubled by the absence of the indorsement when determining to apply to set aside service or in considering the plaintiff’s solicitor’s response.
The plaintiff’s solicitor next advanced a contention, since abandoned, that an indorsement in accordance with r 7.02 was unnecessary where service was being effected pursuant to O. 80 under The Hague Convention. However, without prejudice to that position, a copy of the writ indorsed in accordance with r 7.02 was provided to the defendant’s solicitor. That indorsement stated the basis for service out of Australia, as set out above, and added:
(a)The November email referred to at paragraph 3 of the Statement of Claim and the December email referred to at paragraph 5 of the Statement of Claim were each downloaded and read in Victoria (see the particulars to paragraphs 3 and 5 of the Statement of Claim and paragraph 8 of the affidavit of Peter Nicholas Yunghanns sworn 1 July 2016 served herewith (Yunghanns affidavit); and
(b)By reason of the publication of the November email and the December email, the plaintiff has been gravely injured in his feelings, credit and reputation, has been humiliated and embarrassed and has suffered loss and damage in Victoria (see paragraph 7 of the Statement of Claim and paragraphs 4 to 7 of the Yunghanns affidavit served herewith). The plaintiff resides in Victoria and his business address is in Victoria (see paragraphs 6 and 7 of the Yunghanns affidavit served herewith).
The Yunghanns affidavit, sworn 1 July 2016, stated that the plaintiff’s business interests relate to corporate investments and corporate turnarounds and reconstructions in Australia, including in Victoria, and were conducted through a company, of which he was a director and shareholder, and its wholly owned subsidiaries that had its registered address in Collins Street, Melbourne. The plaintiff stated that he resided in Exhibition Street, Melbourne and further stated:
I am informed by each of the following persons that they read the two emails that are annexed to the Statement of Claim filed on 31 March 2016 in this proceeding, and that they were in the State of Victoria at the time that they first read the emails:
(a) Tim Clarke;
(b) Greg Keyte;
(c) Laurie Meyer;
(d) Peter Evans;
(e) Sean O’Brien;
(f) Emma Lindell; and
(g) Alan Myers AC, QC.
Two particular features of the plaintiff’s statement of claim were scrutinised during submissions. First, the plaintiff’s particulars of publication included the following:
The November [or December] Email was downloaded and read in Australia by the President, delegates, registered players of the Australian Polo Federation and others not yet presently known by the plaintiff.
Secondly, the plaintiff alleged loss and damage in the following terms:
By reason of the publication of the November Email and the December Email (the Emails), the plaintiff has been gravely injured in his feelings, credit and reputation, has been humiliated and embarrassed and has suffered loss and damage.
The document annexed to the statement of claim as annexure A (the November email) is a forwarded message apparently from [email protected] (Federation of International Polo) to [email protected], the subject being communication from the President and Executive Committee, and the body of which is a message of approximately two pages from the defendant and others.
Also annexed to the statement of claim as annexure B (as the December email) is a document described as an email from the defendant to ‘members’. The annexure does not, on its face, appear to be an email, rather it appears to be a letter signed by the defendant addressed to ‘Dear Members’ on the letterhead of the Federation of International Polo. However, the defendant described it as an email in his affidavit.
The defendant submitted, correctly, that the plaintiff failed to identify by way of the indorsement required by r 7.02(1) the facts and the particular paragraph of r 7.01 relied on to support service out of Australia. Relying on the text of the rule and Rowe v Grünenthal GmbH & Ors,[2] the defendant submitted that the plaintiff’s failure to comply with r 7.02(1) is a defect that cannot be cured by amendment after service of the originating process.[3] The indorsement in purported compliance with r 7.02 was sent to the defendant’s solicitor after service of the originating process.
[2][2011] VSC 657, [40]-[51].
[3]Rowe, ibid [46]; Transfield Philippines Inc v Pacific Hydro Ltd [2006] VSC 175, [44]-[53].
Next, the defendant submitted that the plaintiff had not disclosed sufficient information to enable the defendant to determine how the claims made in the proceeding fell within r 7.01(1) or the facts relied on to bring the proceeding within each paragraph. Accordingly, there was no proper basis for dispensing with the requirement of r 7.02(1) and the service of the writ ought to be set aside. However, the defendant did seek to set aside service before the proposed indorsement was sent to his solicitor and after receiving an explanation from the plaintiff’s solicitor.
By his written submission, the defendant developed a further argument that I will refer to as ‘the constitutional point’, primarily in response to a submission made by the plaintiff that has now been abandoned.
The plaintiff submitted that he need only show merely that, according to the allegations made, the subject matter of the proceeding is within one or other of the descriptions in r 7.01(1) and that it is clear, according to the allegations made in the proceeding, that the subject matter of the claim falls within each of r 7.01(1)(i) and r 7.01(1)(j). Further, the plaintiff is permitted to refer to evidence beyond the pleaded allegation if necessary and he points to the correspondence, the proposed indorsement and the Yunghanns affidavit. The question is not whether such claims have merit. Rather, it is whether allegations that bring the claim within a subparagraph of the rule have, prima facie, been made.
The plaintiff submitted that subparagraph (1)(j) was plainly engaged as the claim alleges damage to the plaintiff’s reputation suffered at least partly in Victoria and alleged to have been caused by a tortious act. It is clear from the writ alone (including its statement of the address of the plaintiff) but also from the plaintiff’s affidavit sworn 1 July 2016 that the plaintiff is resident in Victoria, conducting a business with its headquarters in Victoria, and who alleges that he has been gravely injured in his reputation by reason of defamatory emails published by the defendant. The plaintiff submitted that it does not matter that the plaintiff may have also suffered reputational damage outside of Victoria.
Alternatively, the plaintiff submitted the proceeding is founded on a tort committed within Victoria within subparagraph (1)(i) of the rule. Damage to reputation for the purposes of the tort of defamation occurs when a defamatory publication is comprehended by the reader,[4] and both the pleadings and the evidence make clear that the plaintiff alleges that the publication of the defamatory emails occurred in Victoria.
[4]Dow Jones v Gutnick (2002) 210 CLR 575, 608 [48].
The defendant disputed this contention in two respects. Firstly, the defendant submitted, correctly, that the statement of claim does not distinctly allege publication in Victoria. Except by reference to extraneous facts, all that can be concluded was that publication occurred in Australia. On the other hand, it cannot be inferred that publication is alleged to have occurred in Australia outside of Victoria. In any event, the Yunghanns affidavit makes clear in the paragraph set out above that publication is alleged to have occurred in Victoria.
To meet the plaintiff’s reliance on the Yunghanns affidavit, the defendant produced during argument two further affidavits that had been neither filed nor served. The first was an affidavit of the defendant sworn 11 July 2016 in response to the Yunghanns affidavit in which the defendant stated that with reference to the persons named in the paragraph set out above, with the exception of Tim Clarke:
a.I do not believe that I know or have ever communicated with any of these persons;
b.I did not send either of the two emails that are annexed to the Statement of Claim filed on 31 March 2016 in this proceeding to any of these persons, or ask anyone to send on my behalf either of these two emails to any of these persons.
Mr Bruce swore the second affidavit deposing that he was served with the Yunghanns affidavit on 5 July 2016 and with a further affidavit sworn by the plaintiff’s solicitor on 6 July 2016. The solicitor asserted that he needed to obtain the defendant’s detailed instructions before making inquiries, in order to put in evidence matters ‘that will be highly relevant to the allegations made by the plaintiff in his affidavit’. The solicitor had sought further information from the plaintiff’s solicitor about the manner in which the plaintiff had been informed by the named persons that they had read the two emails and were in the State of Victoria at the time that they did so. Further, the defendant’s solicitor asserted that Mr Clarke had informed him that he would swear an affidavit that he had not at any point informed the plaintiff of any of the matters stated by the plaintiff. The defendant also sought the full addresses and contact details of each of the persons named in the Yunghanns affidavit in order that the defendant might make further inquiries.
The plaintiff had no opportunity to respond to this request prior to the hearing. On this basis, the defendant sought an adjournment of its application.
The plaintiff submitted that any adjournment would be futile.
I informed the parties that I would receive their submission on the issue of an adjournment and also as to the disposition of the application in the event that the adjournment was refused.
Before turning to those submissions, it is convenient to state the applicable principles. Until recently, some controversy was discernible in the cases as to whether the rule required that the plaintiff demonstrate a ‘strongly arguable case’ that service out of Australia was permitted in respect of the pleaded claim. This controversy was settled recently by the Victorian Court of Appeal in Madden International Ltd v Lew Footwear Holdings Pty Ltd.[5] The leading judgment was delivered by Mandie JA, with the other members of the Court concurring, who examined the relevant authorities and concluded that he expressly agreed with what was said by the primary judge. Mandie JA adopted the primary judge’s statement of principle, which applied the decision of the plurality in Agar v Hyde.[6]
[5][2015] VSCA 90.
[6](2000) 201 CLR 552.
The primary judge, Elliott J, had stated:[7]
In summary, if I had been at liberty to do so, I would have found the correct approach for the court to take, when an application is made by an Overseas Defendant to set aside the originating process or stay the proceeding, is as follows:
(1)The court must determine whether the subject matter of the proceeding is within r 7.01(1).
(2)The question as to the subject matter of the proceeding, ordinarily, is to be answered by reference to the allegations made in the originating process, plus any evidence beyond the pleaded allegations to the extent that the pleading does not contain allegations necessary to establish the claim is of a requisite kind to satisfy a paragraph or paragraphs of r 7.01(1). (It is possible that the Originating Party must also produce an affidavit or other evidence showing the grounds on which the application is made.)
(3)The court may consider further evidence beyond that referred to in (2) above, directed towards whether the facts as alleged or the additional facts put forward by way of evidence are plainly incorrect.
(4)Save for the circumstances in (3), for the purpose of determining whether or not r 7.01(1) has been complied with, the court should not consider the merits of the claims. If a party demonstrates the subject matter is within the paragraph or paragraphs of r 7.01(1) relied upon, then, prima facie, the party is entitled to proceed with its claims.
[7][2014] VSC 320, [153] (emphasis in original; citations omitted).
The proper inquiry is whether the plaintiff has made allegations, whether in the pleading or from any evidence beyond the pleading, that demonstrate the claim to be of the requisite kind. The merits of the claim are not considered and the party is entitled to proceed with its claim if the subject matter is demonstrated to fall within the rule, save that the court may consider further evidence directed towards whether the facts relied on by the plaintiff are ‘plainly incorrect’. Given that the language of the rule does not permit the court to engage in any assessment of the merits of the dispute, the concept ‘plainly incorrect’ must refer to an allegation of fact that, beyond argument, cannot be established, or to a proposition that has no real prospect of being established, that is, a fanciful proposition.
The plaintiff submitted, and I agree, that the subject matter of the proceeding is within r 7.01(1)(j). It cannot be disputed that the plaintiff lived in Victoria and that his business interests have their headquarters in Victoria. A sufficient connection is established in respect of damage suffered partly in Victoria by reason of the publication of defamatory material and it is fanciful to suggest that the pleading does not, prima facie, allege that damage was partially suffered in Victoria. A plaintiff personally experiences injuries to feelings or humiliation and embarrassment and such injury would only be felt where the plaintiff was personally resident. The pleaded allegation of damage, set out above, in respect of a plaintiff who lives in Victoria and has his business interests headquartered in Victoria is to be taken, in the absence of any reference to another specific geographical location, as referring to Victoria.[8] That is not to say that the plaintiff may not also be alleging damage suffered in other places, but the rule is satisfied where damage is suffered at least partly in Victoria.
[8]Cf Barach v University of New South Wales [2011] NSWSC 431 [40].
The defendant responded that because such injury was alleged to be consequent upon publication of the emails, unless such publication occurred in Victoria it would not follow that that injury had been sustained in Victoria. I reject this submission. In my view, it invites an inquiry into the merits of the allegation. It would be open for the plaintiff to allege that he had been gravely injured in his feelings and had been humiliated and embarrassed, experiencing such hurt where he was domiciled, notwithstanding that he became aware of a publication occurring, for example, in New South Wales.
For these reasons I am satisfied that the subject matter of the proceeding is within r 7.01(1)(j). It does not matter whether r 7.01(1)(i) is also satisfied, but in my view it is, and that conclusion can fairly be reached on the material presently before the court.
What remains is to explain my reasons for accepting the plaintiff’s submission that an adjournment would be futile. The plaintiff submitted that the defendant’s suggestion was plainly incorrect that further inquiries were appropriate to permit the defendant to demonstrate to the court that the evidence contained in the Yunghanns affidavit of publication within Victoria was plainly incorrect. Even if I assume, for the purposes of the argument, that an adjournment would result in an affidavit from Mr Tim Clarke to the effect described above, the plaintiff submitted it was speculative to suggest that the defendant has any reasonable prospect, on the basis of the generic assertion made by him in his affidavit of 11 July 2016, of establishing that all of the named persons would swear affidavits to the same effect.
I do not accept that the material relied on by the plaintiff was short served. In this age of instantaneous communication, the defendant has had sufficient opportunity to respond to this application. I accept the plaintiff’s submission that the proposition that underlies the defendant’s submission is speculative. Even if it was not, properly understood, all that the defendant is doing is foreshadowing a factual challenge on the issue of publication that could not be determined other than at trial on the basis of all of the circumstances that might be revealed by the evidence led at trial. On this application, the merits of the claim are not taken into account.
The defendant’s application for an adjournment of its summons is refused.
Further, although it is not strictly necessary to do so, I am satisfied that, notwithstanding the assumed rejection by Mr Clarke of the proposition that, when in the State of Victoria, he read the two emails annexed to the statement of claim, the plaintiff has demonstrated that the claim in the proceeding also falls within r 7.01(1)(i) because there is a sufficient prima facie allegation of publication in Victoria evident on the material before the court.
When the summons was called on, the defendant had the benefit of the plaintiff’s statement of the grounds on which the application of r 7.01(1) was being asserted from multiple sources, including the writ and statement of claim, solicitor’s correspondence, an affidavit sworn by the plaintiff, and a belated form of the indorsement required under r 7.02. The plaintiff had disclosed sufficient information to enable the defendant to determine how the claims made in the proceeding fell within r 7.01(1) (i) and (j) and the facts relied on to bring the proceeding within each paragraph.
I am satisfied that the indorsement of the writ as required under r 7.02 was not consciously or deliberately omitted. It was a mistake arising from an incorrect interpretation of O. 80 or oversight that was initially justified by reference to that incorrect interpretation. The failure to indorse the writ is an irregularity. The defendant could not point to any prejudice if compliance with the obligation to indorse the writ was dispensed with. If the defendant succeeded on its application, the writ could be re-issued with an appropriate indorsement as the claim is not statute barred.
I will order that the defendant’s summons filed 31 May 2016 be dismissed and that pursuant to r 2.01(1) compliance with r 7.02 be dispensed with. The proceeding will be listed for directions on 29 July 2016 at 9.30 am when I will hear from counsel on the question of costs and further directions.
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