Smirski v Macander [2010] NSWSC 929 (19 August 2010)

Last Updated: 25 August 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Smirski v Macander [2010] NSWSC 929


JURISDICTION:


FILE NUMBER(S):
2010/44692

HEARING DATE(S):
19 August 2010

JUDGMENT DATE:
19 August 2010

PARTIES:
Kamila Teresa Smirski
Zygmunt Macander

JUDGMENT OF:
Hallen AsJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Nicolas Kirby
No appearance by the Defendant

SOLICITORS:



CATCHWORDS:
Property relationships
Default judgment
service
service by post
proof of service
requirements of affidavit of service
requirement to give notice of application for default judgment
application for substituted service
application for ex parte hearing refused

LEGISLATION CITED:
Property (Relationships) Act, 1984
Civil Procedure Act 2005

CATEGORY:
Procedural and other rulings

CASES CITED:
Alstom Limited & Ors v Sirakas [2010] NSWSC 669
Amos Removals and Storage Pty Ltd v Small [1981] 2 NSWLR 525
Brown v Axam [2010] NSWSC 413
Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869
Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571
Chappell v Coyle (1985) 2 NSWLR 73
Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383
Hilaire v Harvey (1951) 68 WN (NSW) 61
Ndjamba v Toyota Finance Australia Ltd [2010] NTSC 23
Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216
Porter v Freudenberg [1915] 1 KB 857
Ricegrowers Co-op Ltd v ABC Containerline NV (1996) 138 ALR 480
Syndicate Mortgage Solutions Pty Ltd v Khaled El-Sayed and Ors [2009] NSWSC 207

TEXTS CITED:


DECISION:
1. Leave granted to the Plaintiff to amend her Statement of Claim on or before 2 September 2010, if it is thought necessary to do so.
2. Orders for substituted service as sought by the Plaintiff today made.
3. The proceedings stood over to the Registrar’s List at 9:00 a.m. on 14 October 2010.
4. No order as to the Plaintiff’s costs of the proceedings today.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


HALLEN AsJ

19 AUGUST 2010


2010/44692 SMIRSKI v MACANDER

JUDGMENT

1 HIS HONOUR: These are proceedings under the Property (Relationships) Act 1984, commenced by Statement of Claim, filed on 19 February 2010.

2 The first return date of the Statement of Claim was 19 April 2010. However, the Plaintiff acknowledges that the Statement of Claim had not, by then, been served upon the Defendant.

3 To date, the Defendant has not filed an Appearance, or otherwise appeared in the proceedings.

4 There is an affidavit of attempted service relied upon by the Plaintiff which discloses four attempts, between 22 March and 31 March 2010, to serve the Statement of Claim upon the Defendant at an address in Summer Hill.

5 Subsequently, the Plaintiff filed a notice of motion, on 26 May 2010, in which she sought an order that service of the Statement of Claim upon the Defendant could be by ordinary pre-paid post, addressed to the Defendant, at an identified business address at Summer Hill (which was different to the address referred to in the affidavit of attempted service).

6 In support of the notice of motion, the Plaintiff swore an affidavit in which she stated that she was not aware of the current residential address of the Defendant and of any means of communicating with him, other than at the business address (which was different to the address referred to in the affidavit of attempted service).

7 On 8 June 2010, the Registrar made orders regarding service of the Statement of Claim upon the Defendant at the address identified in the notice of motion. The orders made by the Registrar provided:

“1. That service of the Statement of Claim herein be effected by:

(a) posting same by ordinary prepaid post addressed to the defendant at the business address of the defendant as follows:

Mr Z Macander

...

SUMMER HILL NSW 2130;

and

(b) personal delivery thereof by a copy of the Statement of Claim in an envelope addressed to the defendant as above and, if there is no one in attendance at the time of attempted delivery, by leaving same in the letter box for the business or under the front door of the business premises.

2. That at the same time as the Statement of Claim herein is served, the defendant be notified by a letter from the plaintiff’s solicitors that the matter is listed for 15 June 2010 at 9.30am for further mention.”

8 The evidence, in an affidavit affirmed on 10 June 2010 of Tsan Kung Ko (“Mr Ko”), a paralegal in the employ of the Plaintiff’s solicitors, reveals that the following events occurred:

“3 On 10 June 2010 Mr Stichter asked me to effect personal delivery of

a. the Statement of Claim herein;

b. a copy of the Court’s Orders dated 8 June 2010, a copy of which is annexed and marked “A”; and

c. a letter dated 10 June 2010 to the defendant from Mr Stichter, a copy of such letter being annexed and marked “B”.

The above documents were inside an envelope addressed as follows:

Mr Z Macander

...

SUMMER HILL NSW 2130

Mr Stichter further advised me that if there was no one in attendance at the subject premises, that I was to leave the documents at the premises, either in the letter box or under the front door.

4. On 10 June 2010 at approximately 3.00pm I attended at ... Summer Hill, NSW, being premises at which I had previously attended and met the defendant.

5. The front door of the premises was unlocked. I knocked on the door and entered the premises into the factory area where I spoke to a male person who appeared to be a worker. I did not see Mr Macander.

6. I said to the male person “I have to give this envelope to Mr Macander.” The male person yelled “Hey Ziggy, I’ve got a yellow packet for you.” I still did not see Mr Macander but I did hear a male voice reply: “What is it?” The male person then walked behind some partitions, at which point I left the premises.

7. The envelope given was the envelope described in paragraph 3 above and it contained the documents described in paragraph 3 above.”

9 How the deponent knew that the documents referred to were inside the envelope is not disclosed in his affidavit. Mr N Kirby, of counsel who appeared for the Plaintiff, submitted that it was unnecessary for the deponent to state the source of his knowledge. I disagree.

10 Also, Mr Ko’s affidavit appears to be incorrect in one very important respect. The address to which he says he went, whilst it is the address referred to in the orders made by the Registrar, was not the correct address at which the business referred to was actually conducted (as to which, see later).

11 I have also read an affidavit, affirmed on 10 June 2010, of Otto Stichter, the Plaintiff’s solicitor, which states:

“3 On 10 June 2010 I caused a copy of the above Orders and a sealed Statement of Claim to be mailed to the defendant under cover of a letter of that date, a copy of such letter being annexed and marked “B”.

4 The letter was sent by ordinary prepaid post addressed to the defendant as follows:

Mr Z Macander

...

SUMMER HILL NSW 2130”

12 The incorrect address is referred to in this affidavit also.

13 Clearly, the evidence by Mr Stichter to which I have referred, does not establish service by post of the documents referred to in the affidavit. In this regard, I respectfully refer to Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216, in which Brereton J set out the requirements of an affidavit of service by post:

[12] ... Proof of service by post requires, at least:

Proof that the envelope bore the correct name and address;

Proof that the envelope contained the relevant document to be served;

Proof that the envelope bore the correct cost of postage; and

Proof that the envelope was placed in the post.

[13] Precedents may be found in Neville & Ashe, Equity Proceedings with Precedents (NSW), Butterworths, 1981, precedent 19(2), Court Forms Precedents & Pleadings (NSW), “Service of Process”, precedents 40.5, 40.15.

14 More recently, Barrett J in Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869, said:

[12] The requirements for proof of service by post have been described in a number of recent cases to which Mr Hughes, counsel for the defendant, referred, specifically, Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216; Dwyer v Canon Australia Pty Ltd [2007] SASC 100; Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 and Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262.

[13] In order to prove service by post, it is necessary that the evidence of one or more witnesses establish a number of core and indispensable matters: that the document said to have been served by posting of it to a given address was placed inside an envelope, that the envelope had that address written or typed on its face, that a postage stamp or franking of the necessary amount was affixed to the envelope and that the envelope so addressed and stamped or franked was physically deposited in the post either at a post office or by being dropped into a post box for the reception of mail articles.

15 The Plaintiff has not proved these things by Mr Stichter’s, or other, evidence. That evidence says nothing about an envelope, or the placing of anything into an envelope (in particular, the letter dated 10 June 2010 and the documents listed in it). Even if I accept that the evidence refers to the typing of the Defendant’s name and address on the face of the envelope, it says nothing about any stamp being placed on, or the franking of, the envelope. He does not depose to handing over a stamped and addressed envelope at a post office or depositing it into a post box for the reception of mail articles.

16 Furthermore, the evidence by Mr Stichter is that he “caused” certain things to occur, not that he did those things himself, or that he observed another person to have done them.

17 In all these circumstances, there is no evidence before me of any of the processes within the solicitors’ office that could give me any proper basis for concluding that the posting of the documents in question in an envelope addressed to the Defendant occurred.

18 Furthermore, the address at which the documents were served and, so it is said, posted is not, according to a Company Extract obtained from ASIC, on, or about, 16 June 2010, the principal place of business of a company of which the Defendant is a director. Nor is it the address shown in the Annual Return of a Company for the year ended 2002, a copy of which is annexed to the Plaintiff’s affidavit sworn 30 June 2010. The address referred to is the address referred to in the orders made by the Registrar.

19 In a letter dated 16 August 2010 (Ex A), sent to the Court, the Plaintiff’s solicitors acknowledge that due to their error, the substituted service order made by the Registrar contained a reference to the wrong address.

20 It is possible that the documents were delivered on 10 June 2010, personally, to the correct address, even if wrongly identified in the Court’s orders, on the envelope and on the letter referred to. According to Mr Ko’s evidence, the address to which he delivered the documents is the place at which the Defendant was known to be, and his presence appears to have been acknowledged by the person, at that address, to whom Mr Ko spoke, and to whom the envelope was handed. However, as I have said, there appears to be an error in Mr Ko’s affidavit as to the address to which the envelope was delivered. In these circumstances, I am not prepared to base my decision on that possibility, particularly in light of the sworn evidence of Mr Ko.

21 I have also read another affidavit of Mr Ko, this one affirmed on 12 July 2010. This affidavit refers to the deponent having “caused a letter ... to be sent by ordinary pre-paid post” to the Defendant at the correct Summer Hill address, together with a copy of an affidavit, sworn by the Plaintiff on 30 June 2010. This evidence by Mr Ko, suffers the same defect as the evidence given by Mr Stichter. I am not satisfied that service of these documents, by post, has occurred.

22 There is other evidence, by Thomas Skinner, a law student in the employ of the Plaintiff’s solicitors, confirming that a copy of the letter dated 18 July 2010, was delivered, personally, by him, on that day to premises at Summer Hill, on this occasion, by handing the letter dated 18 July 2010 to an unidentified male person who said: “Let me have it and I’ll see that he gets it”. Although the copy letter annexed to the affidavit refers to enclosing a sealed copy of the Statement of Claim, the deponent states that he “handed to him a letter dated 18 July 2010, a copy of which is annexed hereto and marked ‘A’”. There is no express reference to a sealed copy of the Statement of Claim being handed over.

23 In my view, this evidence does not establish that a sealed copy of the Statement of Claim was handed to the unidentified person.

24 It follows, that I cannot be satisfied that the Statement of Claim has been served upon the Defendant, either personally, or in accordance with the orders for substituted service made by the Registrar.

25 There is another problem facing the Plaintiff. The matter has been placed in the list today, presumably for final relief. There is no notice of motion, or other process, indicating the precise nature of the relief to be sought and/or the basis for the relief being granted.

26 Furthermore, the letter dated 18 July 2010, referred to in Mr Skinner’s affidavit, states, inter alia, that the matter is listed “for ex parte hearing on 19.08.2010” and that “the usual orders for hearing apply”.

27 This rather unhelpful letter does not disclose that final relief would be sought today; nor does it suggest that if the Defendant does not attend today, the Court would be asked to proceed with the Plaintiff’s claim in his absence. The letter does not refer to the nature of the relief that would be sought, or that final relief, if granted, would result in the proceedings coming to an end. The letter does not identify what “the usual orders for hearing” are, or what is to occur if the usual orders are not complied with.

28 The reference to an “ex parte hearing” does not convey any relevant matter. To the contrary, it might convey to a party, if those words were read, and understood, that he, or she, would not be permitted to appear, or that there was no need to appear. I cannot draw any inference from the letter, that the recipient of such a letter would conclude that the making of final orders today was likely or even possible.

29 The matter has been called this morning and there has been no appearance by the Defendant. The Plaintiff, tentatively urged me to proceed on an ex parte basis. In the circumstances, I am not prepared to do so. In my view, more should have been done, by the Plaintiff’s solicitors, to ensure that the Defendant was informed that the Plaintiff was seeking to have the matter dealt with today, on a final basis, and that costs of the proceedings would also be sought. A letter, written in clear, and easily understood, language would have achieved this if delivered to the correct address.

30 The Plaintiff submits that the conduct of the Defendant supports the Defendant’s stated intention to “not give her anything or make it easy for her”. However, dealing with the matter, in the present circumstances, and based upon the evidence relied upon by the Plaintiff, may have the result that the Plaintiff’s costs will be increased, even further, if the Defendant seeks to set aside any orders that are made as a result of a default judgment or as a result of an ex parte hearing.

31 The making of ex parte orders is a significant, and serious, process to be undertaken, and it should be undertaken with due care. Dixon CJ and Webb J in Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383, at 395, described as the “deep-rooted principle of the law that before any one can be punished or prejudiced in his person or property by any judicial or quasi-judicial proceeding he must be afforded an adequate opportunity of being heard”.

32 Rich J in Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571, at 589, expressed the principle in the following terms:

... It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside; and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside. In such a case there has been no valid trial at all. The setting aside of the invalid determination lays the ghost of the simulacrum of a trial, and leaves the field open for a real trial. (citations omitted)

33 The evidence regarding the communication to the Defendant that the process of dealing with the matter, finally, might be undertaken, should have been as precise as it could be, and not, as here, unclear, ambiguous and, possibly, misleading.

34 It is to be remembered that the primary considerations on whether to proceed ex parte concern whether there is urgency; whether irreparable damage would flow from making an ex parte order; whether hardship would flow to a party against whom an order is made and whether such an order can be set aside: Ndjamba v Toyota Finance Australia Ltd [2010] NTSC 23, per Blokland J at [8].

35 In this case, no urgency is disclosed. The proceedings were commenced 6 months ago. In my view, irreparable damage and hardship could flow to the Defendant, if orders sought by the Plaintiff were made ex parte based on the evidence presently available as to service of the Statement of Claim and other documents.

36 I have not forgotten that the Plaintiff’s application must be approached in accordance with the requirements of the Civil Procedure Act 2005 and with what is required by s 56 as to the overriding purpose of the Act, namely the just, quick and cheap resolution of the real issues in the proceedings. The requirements of s 57, s 58, s 59 and s 60 of that Act must also be borne in mind. However, I must weigh up the rights of both parties, and not only the rights of the Plaintiff.

37 I have considered whether I should deal with this matter on the basis of the substantive evidence that has been filed to date, and then make an order directing that a copy of this judgment and the orders that are made, and which could be temporarily stayed, should be served upon the Defendant and a further 28 days allowed to pass (as was done, for example, in Brown v Axam [2010] NSWSC 413, per Slattery J).

38 I have decided that this course should not be followed for the reasons set out above.

39 Finally, I should mention that in the letter dated 16 August 2010 (Ex A), the Plaintiff’s solicitors state:

“The Plaintiff requests that the Court makes an order under UCPR 10.14 (3) that service of the Plaintiff’s evidence was effected on 2 July 2010 and Service of the Summons and Orders was effected on both 2 July 2010 and 18 July 2010.”

40 There is no notice of motion seeking that relief and no notice of any intention to seek such relief appears to have been given to the Defendant. Taken with the error in the orders for substituted service already made by those representing the Plaintiff, and the errors in the evidence going to service, I am not prepared to proceed with a final ex parte hearing today.

41 Rule 10.14 of the Uniform Civil Procedure Rules 2005 provides:

(1) If a document that is required or permitted to be served on a person in connection with any proceedings:

(a) cannot practicably be served on the person, or

(b) cannot practicably be served on the person in the manner provided by law,

the court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person concerned.

(2) An order under this rule may direct that the document be taken to have been served on the person concerned on the happening of a specified event or on the expiry of a specified time.

(3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.

(4) Service in accordance with this rule is taken to constitute personal service.

42 Rule 10.14 relates to “a document” that “is required or permitted to be served on a person in connection with any proceedings”. It permits the court to dispense with service and to direct some other method of notification “instead of service”. Yet, the court’s power depends on establishing the impracticability of service in accordance with the rules: Amos Removals and Storage Pty Ltd v Small [1981] 2 NSWLR 525; Ricegrowers Co-op Ltd v ABC Containerline NV (1996) 138 ALR 480.

43 The Court must also be satisfied that the method of substituted service is one which is reasonably likely to bring the proceedings to the notice of the defendant: Porter v Freudenberg [1915] 1 KB 857 at 889; Hilaire v Harvey (1951) 68 WN (NSW) 61; Chappell v Coyle (1985) 2 NSWLR 73; Syndicate Mortgage Solutions Pty Ltd v Khaled El-Sayed and Ors [2009] NSWSC 207 at [3].

44 In Alstom Limited & Ors v Sirakas [2010] NSWSC 669, Palmer J held:

[40] “Impracticable” does not mean “impossible”: see eg Re Conan Doyle’s Will Trusts [1971] Ch 982, at 994; nor does it mean “inconvenient”: see eg Syndicate Mortgage Solutions Pty Ltd v El-Sayed [2009] NSWSC 207. Whether personal service is “impracticable” must be decided according to the particular circumstances of the case at the time that the application for substituted service is made and must have regard to:

— the requirement to do justice to a plaintiff who has demonstrated a prima facie case which may be defeated or frustrated if personal service of the originating process upon the defendant is insisted upon; and

— the requirement to do justice to a defendant who is entitled to receive proper and efficacious notice of proceedings commenced against him or her.

[41] One factor, out of an infinite variety of possible factors which may affect the question whether personal service is practicable is whether the evidence in support of an application for substituted service satisfies the court there is a real possibility — not a remote or fanciful possibility — that an attempt at personal service of originating process will result in the defeat or frustration of the plaintiff’s proceedings. Just as freezing orders are often made ex parte for fear that a forewarned dishonest defendant will remove assets before the court’s orders fasten upon them, so also may substituted service be ordered if there is a real possibility that the defendant, forewarned by an attempt at personal service, will take measures to ensure that further attempts are unsuccessful. Another factor may be that the time taken in effecting personal service may result in a delay which will completely frustrate the plaintiff’s proceedings: see eg Re Conan Doyle’s Will Trusts (above).

[42] In all cases, the practicality or impracticality of personal service will be coloured by the degree to which the court can be assured that substituted services will efficaciously bring the proceedings to the proper notice of the defendant. The more likely it is that substituted service will not be efficacious, the more difficult it will be to persuade the court to dispense with personal service.

45 I am not satisfied that the documents referred to could not practicably be served on the Defendant in this case, or at least brought to his attention. An order for substituted service has already been made to enable the service of the Statement of Claim. Fresh orders for substituted service are sought today.

46 Furthermore, there is no evidence of any other searches, or inquiries, including of the electoral roll, telephone listings, credit reference organisations, or inquiries of occupants of former addresses, or even at the premises at which documents have been left, which would regularly be undertaken to locate a person, or establish that a person cannot be found.

47 If the Plaintiff wishes to pursue final relief, any further application should, if so advised, be by notice of motion, stating the basis upon which final relief may be granted and by evidence of more extensive attempts to serve the Defendant with all of the documents to be relied upon in any such application, including, but not limited to, the Statement of Claim, any notice of motion and all affidavits to be relied upon.

48 I am not prepared to make any orders today other than in effect making an order for substituted service by including he correct address at which the Defendant may be served. In addition, I shall make no order for the Plaintiff’s costs. I direct that, before any costs, or disbursements, are sought from the Plaintiff herself, a copy of this Judgment should be provided to her.

49 In view of the conclusion reached regarding service of the Statement of Claim, and at the request of the Plaintiff, I grant leave to the Plaintiff to amend her Statement of Claim on or before 2 September 2010, if it is thought necessary to do so.

50 I make the orders for substituted service as sought by the Plaintiff today.

51 I stand the proceedings over to the Registrar’s List at 9:00 a.m. on 14 October 2010.

52 I make no order as to the Plaintiff’s costs of the proceedings today.

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LAST UPDATED:
24 August 2010