This is an application by amended notice of motion dated 26 August 2021 seeking orders for substituted service on the first defendant, Mr Novakovic. The plaintiff, Mr Wong, presses for that relief pursuant to r 10.14 of the Uniform Civil Procedure Rules 2005 (NSW) and, relevantly for substituted service in matters pertaining to the possession of land, r 10.15.
The original application was made by notice of motion dated 26 July 2021. That application was refused by the Principal Registrar on the basis that there was insufficient evidence of adequate attempts made to locate and trace Mr Novakovic.
The substantive proceedings relate to a second unregistered mortgage over the first and second defendant's registered property in Silverdale, NSW, in the amount of $395,000. The loan was reduced by $116,498 by part repayment of the principal on or about 24 July 2019. The mortgage contemplated the repayment of interest by 1 August 2019. To this date, no interest has been paid to Mr Wong, nor has there been any further reduction of the principal sum. He thus applies for possession of the property.
By way of cross-claim under the Contracts Review Act 1980 (NSW), Ms Novakovic seeks declarations that the second mortgage instrument be set aside as void and unenforceable against her, and that her husband is not entitled to possession of her interest in the property. She says that she and Mr Novakovic separated sometime in late 2018 or early 2019. She deposes that his company, Custom Built Projects Pty Ltd, began having financial difficulties in 2019. The company had tax liabilities of some $200,000 and a liquidator had been appointed.
On her affidavit, her husband requested that she attend his lawyer's office in Burwood to sign some documents, being the second loan agreement. At the office, which she described as an ordinary house, she was asked to sign a document without anyone explaining the substance of it to her. Present at the time were Mr Novakovic, Mr Wong (who had contracted with Mr Novakovic for building work), Mr Novakovic's lawyer, John Ay-Yeung, and a man named Gary, whose name appears on the later registered caveat over the property. In Mr Wong's affidavit of 18 August 2021, this account is disputed. He states that Mr Novakovic had told him that his wife had agreed to the loan, and that, following the signing of the loan agreement, Ms Novakovic thanked Mr Wong for helping save their home.
Ms Novakovic also deposed to a history of domestic violence between her and her husband. An apprehended domestic violence order was made against him on 12 January 2016 and again on 12 January 2021. He was charged with breaching the latter order in April 2021 when she reported to police that he had contacted her with threats to shoot her and the children. At the date of her affidavit, 4 August 2021, she says that she has not had any contact with her husband and nor did she know of his whereabouts.
From the affidavits of both Mr Wong and Ms Novakovic, it appears that they were both aware that Mr Novakovic was renting residential premises in Vaucluse, I infer, in the wake of the couple's marital breakdown. Although, on the evidence before me, I am unable to conclude that they knew of his exact address. Ms Novakovic continues to reside at the Silverdale property.
Mr Wong states that last time he knew of the whereabouts of Mr Novakovic was when Mr Novakovic was required to appear at Waverley Local Court for a "serious driving offence", the particulars of which are not in evidence. He failed to appear and has since not responded to the Mr Wong's phone calls, text messages or emails.
Further, a senior paralegal employed at the Mr Wong's solicitor's firm attached to her affidavit evidence of a number of attempts to locate Mr Novakovic. Requests for information were made to his father through his lawyer, who indicated he had not heard from his son in several months, and to Mr Novakovic's solicitor, who relayed he had no instructions to accept service on Mr Novakovic's behalf.
Mr Wong also relied on an affidavit of service dated 26 July 2021. That affidavit detailed attempts to serve the statement of claim to Mr Novakovic by pushing the document under the front door of the Silverdale property on 19 April 2021, and personal service of both copies of the statement of claim to Ms Novakovic on 7 April 2021.
Rule 10.14 of the Uniform Civil Procedure Rules 2005 (NSW), insofar as it is relevant for the present application, states:
"(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."
Rule 10.15 is relevant as it applies to applications for substituted service of any originating process relating to the possession of land. It provides that upon an application under r 10.14, the court may order that the plaintiff serve the originating process by affixing a copy of it to a conspicuous part of the land in question.
In the circumstances of this case, r 10.15 is of little utility to Mr Wong's application. Due to their matrimonial separation, Mr Novakovic has not resided at the Silverdale property for some time. The successful attempt to serve his wife at the Silverdale property also indicates that the steps that have already been taken to effect service at the disputed property have not been effective in bringing the proceeding to the attention of Mr Novakovic. Attempting to serve him again in this manner appears futile.
I am satisfied that the statement of claim cannot be practicably personally served on Mr Novakovic. The evidence before me indicates numerous attempts by Mr Wong to contact Mr Novakovic regarding his outstanding debt, to no avail. Phone calls made to his last known mobile number return with the message, "The mobile service call has incoming call restriction"; texts and emails go unanswered. His wife and his father do not know of his whereabouts. Moreover, although there is evidence he was living in Vaucluse, none of the evidence suggests that anyone is aware of the actual specific address. In particular, the evidence of his failing to appear at court, although not necessarily indicating he is "on the run", does lead to the conclusion he is being evasive and thus difficult to serve in the ordinary manner.
Mr Wong's solicitor, in written submissions, drew my attention to the obiter dicta of Austin J in ASIC v Sweeney (No 2) [2001] NSWSC 477 in support of their application to have the need for service dispensed with entirely. His Honour states at [76] "that in exceptional circumstances a case of impracticability can be made out even if there have been no attempts at service in the jurisdiction of residence". Mr Wong also relies on his Honour's adoption of Tamberlin J's formulation in Ricegrowers Cooperative Ltd v ABC Containerline NV [1996] FCA 657; (1996) 138 ALR 480 (at 482) that "in order to establish impracticability … evidence should be led that it is so obviously futile as not to warrant an attempt at service".
Such exceptional circumstances have not been made out in this case. For one thing, although the attempts to telephone Mr Novakovic indicate that his mobile service has been discontinued, disconnected or otherwise, the same cannot be said of the attempts to email him. None of the emails sent to Mr Novakovic 'bounced back' or were returned undelivered, indicating that if he were so minded to check his emails they would likely remain in his inbox. Also, the response from his solicitor to the attempts to locate him, that "we do not have instructions to accept service of legal process … for Ivan Novakovic nor Susan Novakovic", is consistent with an ongoing legal relationship between them. The solicitor does not say that he no longer acts for Mr Novakovic and nor does he actually deny having knowledge of his whereabouts.
Assuming that the criminal proceedings are still on foot against him (and there is nothing to suggest otherwise), providing his solicitor with the statement of claim by way of substitution would be an appropriate method of service. Such a course was taken by McCallum J (as her Honour then was) in Hochroth v Milecki [2018] NSWSC 112 upon evidence that the defendant's solicitors in that case were actively conducting his defence to an appeal against a decision in his favour in the Equity Division of this Court.
For these reasons, I would not so readily dispense with such an essential component of the Court's authority to decide as service of the originating process.
Noting that Mr Novakovic's father is unaware of his whereabouts, that he does not know of his contact details and that they have not been in contact for many months, it is my view that substituting service through delivery of the statement of claim to him would be inappropriate in the circumstances.
For these reasons, I make the following orders:
1. Pursuant to r 10.14(2) of the Civil Procedure Rules 2005 (NSW), service of the statement of claim on Mr Novakovic shall be sufficiently effected by:
1. Service of a sealed copy of the statement of claim upon John Au-Yeung solicitor xxxxxx xxxxxxxxxxxxx by express post, together with a sealed copy of this order for substituted service; and
2. Service of a sealed copy of the statement of claim upon Mr Ivan Novakovic by email to xxxxxxxxxxxxxxxxx and xxxxxxxxxxxx
1. Substituted service shall be deemed to have been effected after four days from the expiry of the date of express posting or sending of the email, whatever date is later.
1. I reserve the question of costs of the amended notice of motion.
[2]
Amendments
08 September 2021 - Correction in the numbering of the orders
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Decision last updated: 08 September 2021