By notice of motion filed in Court on 29 April 2022, the plaintiffs sought orders for the extension of the time for service of the originating process and substituted service in respect of the first defendant, Mr Brandon Evertz. The notice of motion was supported by an affidavit of Andrew Sutherland, solicitor, sworn on 28 April 2022.
On 29 April 2022, I granted the order extending the time for service (giving ex tempore reasons at the time) and stood over the notice of motion to 3 May 2022 to determine the application for the orders for substituted service, which orders were revised by the plaintiffs and were granted by me that day. These are my reason for making those orders.
In these proceedings, the plaintiffs bring claims against Mr Evertz and the other three defendants in their capacity as directors and officers of Big Un Limited (in liq) for contraventions of s 180 of the Corporations Act 2001 (Cth) (Corporations Act) and seek relief under s 1317H of that Act. The second plaintiff is the liquidator of the first plaintiff, Big Un.
Big Un was placed into liquidation on 23 October 2019. After his appointment as liquidator, the second plaintiff undertook investigations into the affairs of Big Un which were initially impacted by, amongst other things, limited resources in an unfunded liquidation, incomplete books and records and the complexity of Big Un's affairs.
Big Un Limited (in liq) & Anor v Evertz & Ors [2022] NSWSC 546 | Case summary | Zoe
On 17 August 2021, this Court approved funding arrangements in respect of further investigations, including examinations under the Corporations Act. Given that approval, the second plaintiff determined that in was in Big Un's interests to commence proceedings in respect of the claims that had been identified in the course of the investigations and were subject to the expiration of impending limitation periods.
On 29 October 2021, these proceedings were commenced by the plaintiffs by a statement of claim filed that day.
The plaintiffs did not attempt to serve the statement of claim on the defendants as the second plaintiff wished to conduct the examinations and incorporate any information or further claims arising out of the examinations and the production of records into an amended statement of claim.
The public examinations under the Corporations Act took place in February 2022. Various attempts to locate and serve an examination summons on the first defendant were unsuccessful. Press reporting at the time about the public examinations referred to the difficulty the second plaintiff was having serving the first defendant. This led to contact by some members of the public with information regarding his whereabouts.
On 29 March 2022, the plaintiffs filed an amended statement of claim in the proceedings pursuant to leave granted that day. Service of the amended statement of claim was effected on the third and fourth defendants on 22 April 2022.
The evidence disclosed that numerous attempts to effect service of the examination summons and the amended statement of claim in these proceedings on the first defendant had been made. Those attempts included attendances at an address identified for him in a Current and Historical ASIC Extract of Big Un, at two addresses disclosed in a Personal Current and Historical Search on the first defendant, at an address identified by a representative of the office of the Cor Cordis and at a place of employment for the first defendant that had been identified by a member of the public. The process servers who attempted service at those addresses were unable to obtain information from persons who were spoken to as to where the first defendant might be residing or located. Contact was also made with the last known solicitors for the first defendant who advised that they no longer acted for him, did not have any contract with him and could not volunteer any further information.
The evidence also disclosed that searches undertaken of the electoral roll, the white pages and Facebook returned no results for the first defendant, that an attempt to contact him on 10 February 2022 on his last known mobile number was unsuccessful as the phone was either switched off or unavailable, but that the first defendant had a LinkedIn profile although it showed no recent activity.
On 22 April 2022, the plaintiffs' solicitor requested Australian Legal Support Services Pty Ltd (who had previously been engaged in relation to locating and serving the first defendant) to attempt service on the first defendant at another address, in Rock Valley NSW, which had been provided to plaintiffs' senior counsel by a member of the public as an address where the first defendant was residing.
On 26 April 2022, a representative of ALSS attended the premises at the Rock Valley address. According to an affidavit from that representative, she spoke to and delivered documents to a female person who would not disclose her name, was apparently over the age of 16 and apparently residing at the Rock Valley address. The conversation was in the following terms:
ALSS representative: "Does Brandon Charles Evertz live here?"
Female person: "Yes"
ALSS representative: "Would you give these documents to Brandon Charles Evertz"
(The documents were a letter from the plaintiffs' solicitor and a copy of the amended statement of claim in these proceedings which were placed into an envelope marked "Private & Confidential" that was addressed to "Brandon Charles Evertz")
Female person: "Yes"
As at 29 April 2022, the second plaintiff had been unable to locate the second defendant.
Under r 6.2(4)(a) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) originating process is valid for service for six months after the date on which it is filed. The Court may extend the time for service under r 1.12 of the UCPR.
The discretion in this respect is broad and unfettered but must be exercised judicially. The Court need not find any more than a good reason to grant the order. Factors that may be relevant include whether efforts have been made to serve the defendant, whether any prejudice would be suffered through delay in the actual service of process and the length of delay: Smith v Shilkin (No 2) [2019] NSWSC 969 at [207] - [212] and the cases there cited.
Having regard to the matters referred to previously, I was satisfied that an order extending the time for service of the amended statement of claim to 29 July 2022 should be made. In my view, there were sound reasons for the delay in service, in particular, the plaintiffs' decision not to seek to engage the defendants with the proceedings and put them to any expense of responding to the statement of claim until the further investigations were completed and the difficulties in locating and serving the first and second defendants. I was also persuaded that an extension of time for a further three months would not cause any real prejudice to the defendants, whereas refusing the application may cause hardship to the plaintiffs having regard to possible limitation issue.
Accordingly, on 29 April 2022, I made an order under rule 1.12 of the UCPR that the time for service under r 6.24(4)(a) of the Amended Statement of Claim filed on 29 March 2022 be extended to 29 July 2022.
The second aspect of the relief sought was an order for substituted service on the first defendant.
Rule 10.14 of the UCPR provides:
Substituted and informal service generally
(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.
The plaintiffs' initial application sought an order under r 10.14(3) that the amendment statement of claim be taken to have been personally served on the first defendant on 26 April 2022. At the hearing on 29 April, plaintiffs' counsel acknowledged that as an order was to be made extending the time for service for a further three months, the substituted order sought was no longer urgent. He also acceded to comments made during the course of hearing that further steps might be taken to bring the proceedings to the attention of the first defendant.
On 3 May 2022, the plaintiffs' proposed alternative orders provided for a range of steps to be undertaken by 17 May 2022 in order to bring the proceedings to the attention of the first defendant. Those steps were to deliver the amended statement of claim and copies of the court orders to the Rock Valley address and three addresses identified for the first defendant in the ASIC records and by Cor Cordis, and to send messages to the first defendant indicating that he was a defendant in these proceedings via text (on his last known mobile number which the evidence indicated was not disconnected) and to the first defendant's existing LinkedIn profile. Those messages were to indicate that the court documents had been delivered to his attention at the various addresses and that enquiries should be directed to the plaintiffs' solicitor.
In circumstances where there had been lengthy attempts to locate the first defendant and the evidence disclosed that he was likely living at the Rock Valley address, I was satisfied that personal service in the usual manner may not practicably be effected and that the steps contemplated by the plaintiffs' proposed orders were ones which would, in all probability if not certainty, be effective to bring the knowledge of the proceedings to the first defendant: Thevar v Maharaj [2021] NSWSC 993 at [12]; Wardle v Crinitis Castle Hill Trading Pty Ltd [2020] NSWSC 894 at [17];
For these reasons, on 3 May 2022, I made the following orders:
1. In lieu of personal service, service on the First Defendant be effected by the plaintiffs taking the following steps, by 17 May 2022:
1. delivery to the following properties of copies of the Amended Statement of Claim filed on 29 March 2022 (ASOC), the orders made by the Court on 29 April 2022 and these orders enclosed with a cover letter, in an envelope marked "Urgent" and to the attention of Brandon Evertz, identifying the documents and indicating that the documents were being served on Brandon Evertz as a defendant in these proceedings:
1. xx Road, Rock Valley NSW;
2. xx Avenue, Blackheath NSW;
3. xx Street, Ashfield NSW; and
4. xx Street, Mount Coolum NSW;
1. sending a text message, from a mobile telephone number of Cornwalls NSW, to the mobile telephone number xxxx, indicating that:
1. Brandon Evertz is a defendant in these proceedings;
2. the ASOC and recent orders of the Court had been delivered to his attention, by way of service, at the addresses referred to in Order 1(a); and
3. enquiries about the documents could be directed to the plaintiffs' solicitor, Andrew Sutherland, at Cornwalls NSW on xx01; and
1. sending a message on the LinkedIn social media platform from the LinkedIn profile of Andrew Sutherland (linkedin.com/in/xx) to the LinkedIn profile of Brandon Evertz (linkedin.com/in/xx), indicating that:
1. Brandon Evertz is a defendant in these proceedings;
2. the ASOC and recent orders of the Court had been delivered to his attention, by way of service, at the addresses referred to in Order 1(a); and
3. enquiries about the documents could be directed to the plaintiffs' solicitor, Andrew Sutherland, at Cornwalls NSW on xx01.
1. Service be deemed to have been effected upon compliance with Order 1.
2. These orders be entered forthwith.
[2]
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Decision last updated: 06 May 2022