Darc Rasmussen v Eltrax Systems Pty Ltd

SECOND RESPONDENT: Christopher Ian Gribble PARTIES : THIRD RESPONDENT: Jo-Ann Schlein

FOURTH RESPONDENT: John Picardi

FIFTH RESPONDENT: Verso Technologies Inc. (Formerly Eltrax Systems Inc.)

FILE NUMBER: 4276 of 2001 CORAM: Staunton J CATCHWORDS : Notices of motion - summons for relief - appearance on behalf of Fifth Respondent constituted an appearance in substantive proceedings and submission to jurisdiction - procedural irregularities in the late service of summons - delay and difficulty in securing service - leave to reopen case in the interests of justice - application to waive strict compliance with procedural requirements - granting of extension of time - motions granted - orders made Industrial Relations Act LEGISLATION CITED : 1996 (NSW) Industrial Relations Commission Rules 1996 Taudevin v Egis Consulting Australia Pty Ltd and anor [2000] NSWIR Comm 63 CASES CITED : Urban Transit Authority of NSW v Nweiser (1992) 28 NSWLR 471 Amalgamated Television Services Pty Ltd v Marsden (2002) NSWCA 419 HEARING DATES: 04/04/2003; 05/02/2003 DATE OF JUDGMENT: 05/21/2003

APPLICANT: Ms Nomchong of counsel SOLICITORS: Carroll & O'Dea Solicitors

RESPONDENTS: LEGAL REPRESENTATIVES: Mr Newell of counsel SOLICITORS: Gadens Lawyers

JUDGMENT: - 27 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Staunton J 21 May 2003

Darc Rasmussen v Eltrax Systems Pty Ltd [formerly Sulcus (Australia) Pty Ltd]: (ACN 053 993 025) and others

Application under s106 of the Industrial Relations Act, 1996 (NSW) INTERLOCUTORY JUDGMENT NSWIR Comm 157

1 I have before me three applications by way of Notices of Motion. Two of the applications were filed on behalf of the Applicant on 3 October 2002 and 13 November 2002 respectively.

2 The third application was filed on behalf of the Fifth Respondent on 19 December 2002. That application was made by the Fifth Respondent pursuant to Rule 82 of the Industrial Relations Commission Rules 1996 (the Rules). In doing so, the Fifth Respondent relied on the provisions of Rule 82(2) stating that the Notice of Motion so filed was done without entering an appearance to the originating process or to the Applicant's Notices of Motions and, in accordance with Rule 82(3), was not be treated as voluntarily submitting to the jurisdiction.

3 The originating Summons for Relief pursuant to s106 of the Industrial Relations Act (the Act) was filed on 25 June 2001.

4 In brief terms that Summons pleads an employment contract with the First Respondent. That employment contract commenced in 1989 and ceased on 28 January 2000 in the circumstances as alleged in the Summons for Relief.

5 Overall, the Summons for Relief pleads contractual unfairness on the part of the respective Respondents in the circumstances that led to the Applicant's termination.

6 The First Respondent is the Australian subsidiary of the Fifth Respondent.

7 The Second, Third and Fourth Respondents are Directors of the First Respondent.

8 The claim as against the Fifth Respondent involves orders seeking a variation of the Fifth Respondent's stock option plan insofar as it affects share options offered to the Applicant. It is alleged that the First and Fifth Respondents failed to maintain and implement a rational and fair procedure in relation to the ability of the Applicant to exercise share options upon the termination of his employment by the First Respondent.

9 At the time of filing the originating Summons, the Applicant stated that the Fourth Respondent was a Vice President of the Fifth Respondent. In the material before me, there is evidence that states that the Fourth Respondent ceased to be a Director of the Fifth Respondent, identified as Eltrax Systems Inc. on 18 October 2000 - some eight months prior to the filing of the Summons for Relief in June 2001. Notwithstanding that, the Fourth Respondent was a Vice President of the Fifth Respondent during the period of the Applicant's employment with the First Respondent and was actively involved as a Director of the First Respondent in the circumstances culminating in the Applicant's termination.

10 The Fifth Respondent named as Eltrax Systems Inc. changed its corporate name to Verso Technologies Inc. on 29 September 2000.

11 The First, Second, Third and Fourth Respondents have each filed and served a Reply pursuant to Rule 18A of the Rules.

12 At all times and in all appearances to date before the Court concerning this matter all Respondents have been represented by the same solicitors, Gadens Lawyers.

13 The Notices of Motion filed by the Applicant and that on behalf of the Fifth Respondent go to, as I will describe it here, the issue of service of, and leave to proceed against, the Fifth Respondent. Conversely, the Notice of Motion on behalf of the Fifth Respondent seeks the striking out or setting aside of the originating Summons on diverse grounds including jurisdiction, service, and leave to serve the originating Summons outside the jurisdiction.

14 The Notices of Motion filed by the Applicant, in the order in which they were filed are:

· Notice of Motion filed 3 October 2002: Orders sought: 1. An order that the Applicant be granted leave to proceed against the Fifth Respondent, Verso Technologies (formerly Eltrax Systems Inc.) to the Summons for Relief. 2. Such further or other orders as appear to this Honourable Commission fit or just. 3. Costs.

· Notice of Motion filed 13 November 2002: Orders sought: 1. An order that service of the Fifth Respondent, Verso Technologies (formerly Eltrax Systems Inc.) on 10 July 2002 of the Summons for Relief was effective service for the purpose of these proceedings. 2. Further, or in the alternative, an order that the Applicant be granted leave to serve the Summons for Relief on the Fifth Respondent out of time. 3. Such further or other orders as appear to this Honourable Commission fit or just. 4. Costs.

15 The dates on which the two Notices of Motion were filed by the Applicant's solicitors were said by counsel for the Fifth Respondent to be particularly relevant in properly considering this matter.

16 In the hearing of the three applications before me, it was agreed between the parties that, in the first instance, I should determine those matters giving rise to the orders sought in the Applicant's Notices of Motion. The outcome of those matters should then affect the extent to which the Fifth Respondent's Notice of Motion and declarations sought would remain to be determined.

17 Those matters which the Applicant contends require determination were expressed as follows:

a. Did the Fifth Respondent enter an appearance in the proceedings on 30 October 2002?

b. If so, does that appearance amount to a voluntary submission to the jurisdiction and/or a waiver of any objection to jurisdiction by the Fifth Respondent?

c. If so, does that appearance constitute a positive step taken in the proceedings thereby amounting to a waiver by the Fifth Respondent of the irregularity in the late service of the Summons?

d. If the Fifth Respondent has not entered an appearance or such appearance does not cure the irregularity in service, should the Commission in Court Session exercise its discretion to grant an extension of time for service of the Summons on the Fifth Respondent?

e. If the Fifth Respondent has not entered an appearance in the proceedings, should leave be granted to proceed against it pursuant to Rule 112 (4) of the Industrial Relations Commission Rules 1996 ("the Rules")?

f. Should the Fifth Respondent's motion seeking, amongst other things, to strike out or set aside the proceedings against it be granted?

18 In determining those matters there is a particular factual background that requires elaboration. It would be proper to state at this point that, with the exception of any interpretation that may be put on some aspect of those facts, the factual sequence of events is not seriously in dispute as between the parties.

19 I turn in the first instance to the proceedings of 30 October 2002 relevant as they are to the determination as to whether or not the Fifth Respondent has entered an appearance in this matter.

20 The first Notice of Motion filed by the Applicant's solicitors on 3 October 2002 seeking leave to proceed against the Fifth Respondent was made pursuant to Rule 112(4) of the Rules seeking leave to proceed against the Fifth Respondent on the basis that no appearance had been entered but process had been served outside Australia. It came before me in the first instance on 30 October 2002 for directions. On that occasion, the following exchange occurred as between myself and Ms Scott, the solicitor who appeared for the Respondents: SCOTT: If I could appear for the first four Respondents and by your leave the Fifth Respondent and I will file my Notice of Appearance, as I have only just got these instructions this morning. HER HONOUR : Yes certainly. Thank you very much. This was a matter where there was a bit of a problem with the Fifth Respondent. Is that right? SCOTT: This matter has had a long history. HER HONOUR : For a matter that has not got to any sort of a hearing yet it has an enormous file. SCOTT: Your Honour, we have agreed on a timetable for filing of further material. HER HONOUR: You have now put a formal appearance for the Fifth Respondent? SCOTT : Yes and I will file the relevant bit of paper. HER HONOUR: You can do it here. I know that is generally not the way it is done but there is a practice if you want to do it in Court which I will allow you to do and we will undertake to provide a copy to the Registry. SCOTT : Thank you, your Honour but I only received these instructions to appear this morning so I have not even drafted it. HER HONOUR: You can take it to the Registry when you have got a moment. You have agreed upon a timetable, you say? SCOTT : Yes, your Honour. FISHER: It is the Applicant's Notice of Motion to proceed against the Fifth Applicant. (sic) HER HONOUR: That is still an issue notwithstanding your appearance. FISHER: Yes, your Honour. HER HONOUR : Would you undertake, forgive me again Ms Scott, I know you are here for the Fifth Respondent but you have put in appearance for all the other Respondents as well. SCOTT : Yes, and we have filed responses.

21 In addition to the above exchange the parties were directed to confer on counsel's available dates and notify my Associate in writing so that I could allocate a hearing date. 22 On the same day Ms Scott faxed a letter to my Associate in which she stated, inter alia: We are currently instructed by the First, Second, Third and Fourth Respondents in the substantive matter and have obtained instructions from the Fifth Respondent to appear on the Applicant's Notice of Motion seeking leave to proceed against the Fifth Respondent.

23 As subsequent matters transpired, the above exchange with Ms Scott became a crucial factor in the Applicant's submissions before me as to whether or not the Fifth Respondent had entered an appearance in the proceedings on 30 October 2002. The Applicant contends that on the basis of the above exchange, it did, and as such amounts to a voluntary submission and/or waiver of any objection to jurisdiction by the Fifth Respondent and a waiver by the Fifth Respondent of the irregularity in the late service of the Summons.

24 It should be said now that the import of what was said by Ms Scott on 30 October last was not readily apparent to the solicitor who appeared for the Applicant. It only became an issue when I raised it with counsel for the parties on 3 March last when the matter was before me. The relevance of that late awareness by the Applicant's solicitors as to the potential import of Ms Scott's words and her purported appearance for the Fifth Respondent on 30 October was critical to the claim by counsel for the Fifth Respondent that any appearance entered by Ms Scott on 30 October was only in relation to the Applicant's Notice of Motion and not to the proceedings generally. That the Applicant knew that, it was submitted, is clear because otherwise they would not have filed the further Notice of Motion they did on 13 November 2002, seeking the orders that they have.

25 Not surprisingly, counsel for the Applicant claimed that the filing of the later Notice of Motion is irrelevant to the primary issue. That is, that Ms Scott's appearance on 30 October on behalf of the Fifth Respondent was clear and unequivocal. Both parties conceded that any such appearance entered by Ms Scott could not be conditional relying on the decision of Wright P in Taudevin v Egis Consulting Australia Pty Ltd and anor [2000] NSWIR Comm 63.

26 Further, it was submitted by counsel for the Applicant, any appearance entered by Ms Scott on 30 October could not be considered an appearance pursuant to Rule 82(2) or 82(3). The Fifth Respondent did not file a Notice of Motion in relation to these proceedings until 19 December 2002 - well after 30 October. In other words, there could be no suggestion that Ms Scott was appearing pursuant to any Notice of Motion filed by the Fifth Respondent. Given the inability to enter a conditional appearance, the only conclusion that was available, it was submitted, was that in entering the appearance for the Fifth Respondent that she did on 30 October and the terms she did, Ms Scott was entering a general appearance on behalf of the Fifth Respondent to the proceedings before the Court, including the originating process as well as the Notice of Motion then before the Court.

27 Having regard to the history of this matter that I will elaborate upon in due course I am of the view that the appearance by Ms Scott on 30 October last, when the matter was before me, was an appearance by her on behalf of the Fifth Respondent in relation to the Applicant's Notice of Motion then before the Court. It was not an appearance pursuant to Rule 82 of the Rules.

28 I agree with the submission of counsel for the Applicant that such appearance as entered by Ms Scott was not and could not be seen as conditional. If anything, it went directly to the Fifth Respondent as a party to the substantive proceedings. As such, it constituted an appearance in those proceedings for all purposes and a submission to the jurisdiction of the Court.

29 If I am wrong in that conclusion then I am of the view that, having regard to the history, facts and circumstances of this matter, the Applicant should be held to have effectively served the Fifth Respondent for the purposes of the substantive proceedings before me, procedural irregularities notwithstanding. Further, that leave should be granted to proceed against the Fifth Respondent in the Summons for Relief.

Relevant history, facts, circumstances and considerations

30 Before the s106 Summons was filed in June 2001, the Applicant had tendered his resignation from the First Respondent on 22 December 1999. In doing so the Applicant gave the First Respondent six months notice. The First Respondent then advised the Applicant that it was not necessary to work out the notice period and that the last day of employment of the Applicant would be 28 January 2000.

31 At that time, the then solicitors for the Applicant sought to deal with the issues surrounding the termination of the Applicant's services with the First Respondent in accordance with the Employment Service Agreement that existed as between the parties. That Employment Service Agreement contained a dispute resolution clause that included provision for a 'good faith negotiation period' to run, with certain fall back provisions should such negotiations fail.

32 The steps that were then undertaken on behalf of the Applicant to effect those provisions are detailed in the affidavit of the Applicant's solicitor Mr Gerard Phillips which is exhibit 3 before me.

33 It is not my intention to detail all of that background, none of which was disputed by counsel for the Respondents, except to say that, in October 2000 the solicitors for the Respondents had advised the Applicant's solicitors of their in principle agreement to proceed to mediation of the dispute between the Applicant and the First Respondent as required in the Employment Service Agreement. Because of the time provisions contained in that agreement the solicitors for the Respondents sought an extension of the negotiating period, stating, inter alia: At present we are seeking instructions from our client in the United States of America.

34 Ultimately, a date was set for mediation to occur to be conducted by Mr Trevor Morling QC in February 2001.

35 In November 2001 verbal advice was received by the Applicant's solicitors from the Respondent's solicitors to the effect that 'Eltrax has been sold' and that there was no longer agreement to continue with the proposed mediation of the dispute with the Applicant. This position was confirmed by correspondence from the Respondent's solicitors to the Applicant's solicitors in January 2001 in which the Respondent's solicitors stated: We have received instructions to withdraw from the mediation process, scheduled to take place on 21 and 22 February 2001.

and: We are instructed to withdraw from the mediation on the basis that the directors of Eltrax are looking into the prospect of winding up the Company, and are not inclined to incur the costs of mediation in those circumstances. We are instructed to accept service of any proceedings you may issue in future . (my emphasis)

36 The solicitors for the Applicant sought information from the solicitors for the Respondents as to the identity of the purchaser of Eltrax. In correspondence dated 29 March 2001, the solicitors for the Respondents advised as follows: Our client has instructed us not to reveal the identity of the purchaser of Eltrax to you. Further, we are not instructed to accept service of any process . (my emphasis)

37 At first glance, when considering the correspondence from the Respondent's solicitors of 16 January 2001, where it says 'We are instructed to accept service of any proceedings you may issue in future' compared with their correspondence of 29 March 2001 which says, 'Further, we are not instructed to accept service of any process,' one could be left wondering as to exactly which client the solicitors for the Respondents were referring to. At all times the two items of correspondence are headed Eltrax Systems Pty Ltd (Eltrax) ats Darc Rasmussen. At no time in those two items of correspondence do the solicitors for the Respondents seek to distinguish as between the First Respondent in these proceedings and the Fifth Respondent who, at that time, was Eltrax Systems Inc. - the American parent company. Further, in earlier correspondence of 6 November 2000, solicitors for the Respondents had indicated that they were seeking instructions from their client in the 'United States of America.'

38 Overall, I would have to say that that sequence of correspondence is on any view totally misleading, particularly on the question of instructions to accept service as far as the First and Fifth Respondents are concerned. As well, what that correspondence tells me is that the Fifth Respondent was at all times completely aware of the matter raised by Mr Rasmussen and was actively involved in giving Gadens Lawyers relevant instructions. 39 Admittedly, the correspondence from the Respondent's solicitors was sent before the originating Summons for Relief was filed in June 2001. That fact does not alter the significance of that correspondence in my view. That is that:

· The Fifth Respondent, as the American parent company, was aware of and involved in decisions being made in relation to Mr Rasmussen's claim;

· The Fifth Respondent was aware that formal litigation was potentially pending; and

· The Fifth Respondent gave instructions deliberately designed to frustrate or avoid service.

40 Following the failure to get the mediation proceedings on foot, the originating Summons for Relief was filed in June 2001. The Applicant's solicitors then took steps to serve the five named Respondents.

41 In relation to the First, Second and Third Respondents, Gadens Lawyers accepted service at the outset and entered an appearance on their behalf. They declined, presumably on instructions, to accept service on behalf of the Fourth and Fifth Respondents requiring the Applicant to undertake personal service on those Respondents.

42 In relation to the Fourth and Fifth Respondents, the Fourth Respondent was resident in the United States and the Fifth Respondent is an American corporation. In September 2000 the Fifth Respondent, formerly known as Eltrax Systems Inc. changed its corporate name to Verso Technologies Inc. It is a company incorporated in the State of Minnesota in the United States of America.

43 Shortly after that change of name, in fact on 18 October 2000, the Fourth Respondent's position as Vice President with the Fifth Respondent was terminated. According to the affidavit evidence of Mr Gracie, solicitor for the Respondents, sworn on 19 December 2002, the termination of the Fourth Respondent's position with the Fifth Respondent occurred as 'a result of the sale of the Hospitality, Lodging and International Division of the Fifth Respondent to AremisSoft Corporation, who employed the Fourth Respondent as part of that transaction.'

44 At or about the same time, the Applicant took up employment in the United States and currently still resides there.

45 The Applicant's solicitors advised him of the necessity to take steps to effect service upon the Fourth and Fifth Respondents in the United States.

46 The steps identified and actions undertaken to secure service on the Fourth and Fifth Respondents by the Applicant is detailed in the affidavit of Ms Theresa Nielsen, solicitor for the Applicant, sworn 13 November 2002 (exhibit 1).

47 It is not my intention to detail all that is contained in that affidavit of Ms Nielsen. None of it was significantly challenged by the Respondents. What that affidavit material does evidence is that there was delay and difficulties in securing service on the Fourth and Fifth Respondents. Some of that delay was occasioned as a result of an accident to the Applicant which required a period of hospitalisation and delayed his attention and his ability to take steps to secure service on the Fourth and Fifth Respondents. The other reason for delay on the part of the Applicant can only be put down to the pressure of work commitments of the Applicant who at all times was being advised by his solicitors in Sydney to take the necessary steps to secure service. There is no doubt that there was a hiatus of some three months where little if any steps appear to have been taken by the Applicant to do that. The only explanation for doing so is the pressure of work commitments already referred to. At the same time however, it must be stated that the Fifth Respondent and, on instructions, Gadens Lawyers were not doing anything to facilitate service upon the Fifth Respondent. That much is evidenced by their refusal, on instructions, to disclose to the Applicant's solicitors in Australia the name of the new company that had taken over the business of Eltrax. There is also evidence in the affidavit material of Ms Neilsen that not only was there the change of name but the 'new' Fifth Respondent changed addresses, had 'taken all the signs down' and was, as described by the Applicant, 'hiding' the company. Whether that is an accurate depiction of the Fifth Respondents actions is not certain but it would tend to accord with the Fifth Respondent's instructions to Gadens Lawyers not to disclose its identity. In any event, those actions understandably caused a further delay while steps were taken by attorneys and process servers in the United States to locate the address of the Fifth Respondent under the name of Verso Technologies Inc.

48 The Fourth Respondent was served on 18 March 2002. As Ms Neilsen states in para [18] of her affidavit sworn on 13 November 2002: On 18 March 2002, the Fourth Respondent was served with the Summons for Relief. I seek leave to refer to the affidavit of service of the Summons for Relief served upon the Fourth Respondent, filed in the Industrial Relations Commission on 3 April 2002 without annexing a copy of that document.

49 That document constituted the original sealed and sworn document titled Sheriff's Entry of Service originating from the Sheriff's Office of Cobb County in the state of Georgia, United States of America. That document was relied upon by the Applicant's solicitors as evidence of service upon the Fourth Respondent. As will be seen, the procedure adopted by the Applicant's solicitors in respect of service of the Fourth Respondent was exactly the same procedure as the Applicant relied upon in relation to service of the Fifth Respondent as far as filing of the original sealed and sworn Sheriff's Entry of Service with the Court Registry. No issue was ever taken by the Respondent's solicitors as to the form of the document filed by the Applicant's solicitors attesting to service on the Fourth Respondent.

50 Counsel for the Respondents submitted that I could not infer from the Notice of Appearance filed on behalf of the Fourth Respondent on 9 April 2002 that the Fourth Respondent was responding to the service of the Summons on him on 18 March 2002 following which the original sealed and sworn Sheriff's Entry of Service was filed in the Court Registry in Sydney on 3 April 2002.

51 While I accept that I cannot come to such a conclusion with the finality I would like, I believe such an inference does certainly arise. That is, that the Fourth Respondent did accept service and gave instructions to Gadens Lawyers to enter an appearance on his behalf on 9 April 2002 following the filing of the Sheriff's Entry of Service on 3 April 2002 by the solicitors for the Applicant. In my view, the sequence of events is more than mere coincidence.

52 There were continuing problems in locating the Fifth Respondent, particularly having regard to its change of name and address. That much is evident from annexures to Ms Nielsen's affidavit already referred to.

53 As earlier indicated, the Applicant seems to have 'dropped the ball' so to speak as far as pursuing service on the Fifth Respondent for some few months. Between March and June of 2002, little effort was made to locate the Fifth Respondent. In an email sent by the Applicant to his solicitors on 16 June 2002, he says as follows: 'I am sorry that you have not heard from me earlier. My position with SAP has been very demanding, but also very rewarding with a recent promotion, and I have not had time to attend to this matter earlier. I hope I have not put my position at risk in this case by not responding earlier and attach an update.'

54 The update referred to was a copy of a letter from the Applicant's US attorneys in New Hampshire to the Cobb County Sheriff's Office in Marietta, Georgia, United States of America requesting service on the Fifth Respondent.

55 This was done on 10 July 2002 and the original sworn and sealed Sheriff's Entry of Service was filed by the Applicant's solicitors in the Court Registry at Sydney on 18 July 2002.

56 While Rule 108(1) of the Rules states that service of an originating process must be done 'promptly' it does not specify the validity of the originating process for the purposes of service.

57 Rule 89(5) of the Rules provides that in the absence of relevant provisions, the relevant practice and procedure of the Supreme Court of New South Wales, is, 'as far as practicable to regulate the practice, procedure or usage of the tribunal.' On that issue regard must be had to Part 7, Rule 7(1) of the Supreme Court Rules which states: 7(1) Subject to subrule (1A), for the purposes of service an originating process shall be valid for 1 year from the date on which it was filed, unless the Court otherwise orders.

58 It was conceded by counsel for the Applicant that, relying on Part 7, Rule 7(1) of the Supreme Court Rules, the originating process was only valid until 24 June 2002 - 12 months after it was filed on 25 June 2001. Accordingly, on 10 July 2002 the originating process for the purposes of service was out of time by some 16 days.

59 That the Respondent's solicitors knew that the Fifth Respondent had been served on 10 July 2002 was apparent from the transcript when this matter was before the Deputy Industrial Registrar on 11 July 2002. On that occasion Mr Rodney appeared for the Applicant and Ms Calderone appeared for the First, Second, Third and Fourth Respondents. The following appears relevantly on the transcript of that day: REGISTRAR: That was my next question then, wasn't it? The reply of the Fourth Respondent is to be filed by the close of business on 25 July. That then leaves us to the position of the Fifth Respondent. RODNEY: Indicate to the Court that the Fifth Respondent was served in America yesterday. REGISTRAR : Okay. RODNEY : I've spoken to my friend. My friend's firm is not instructed on behalf of the Fifth Respondent at this point.

60 This matter was back before the Deputy Industrial Registrar on 29 August 2002. On that occasion, Ms Fisher appeared on behalf of the Applicant and also, it would seem, mentioned the matter on behalf of the First, Second, Third and Fourth Respondents. In relation to the Fifth Respondent and the issue of service, the following exchange appears on the transcript: FISHER: Registrar, initially we had suggested that perhaps that all matters be administratively referred - that's one to four - without coming before you again, but after speaking with the Respondents' solicitors, they have, in relation to the Fifth Respondent, still not received instructions as to whether they act for the Fifth Respondent. The Summons has been served on the Fifth Respondent and I've just spoken to the Respondents' solicitors and they will get those instructions within the next four weeks. ……………… REGISTRAR : What I'm thinking, is there any reason why you can't file an affidavit of service about the Fifth Respondent. FISHER: Not at all, no. REGISTRAR : Then we can get it going. FISHER: I'd imagine we have the affidavit of service on file because we always … REGISTRAR : Have they filed a notice of … FISHER : No. REGISTRAR: No, they haven't filed a notice of appearance. FISHER : No, because they're still - in relation to their instructions, that hasn't been clarified. REGISTRAR: Sorry, my sympathy is running a bit short on the Fifth Respondent's position. Why don't you file an affidavit of service with respect to the Fifth Respondent? FISHER: Yes. ……………….. REGISTRAR: Good, we're in agreement. I'll stand it over for further mention; 26th of the 9th. The response to the Fourth Respondent's reply is to be filed by that date. If you could also file an affidavit of service re the Fifth Respondent. If all the documentation is on and if there's no appearance or no notice of appearance by the Fifth Respondent on that occasion, I think we should refer it. Okay?

61 No affidavit formally verifying the Sheriff's Entry of Service on the Fifth Respondent was undertaken by the Applicant's solicitors as directed by the Deputy Industrial Registrar on 26 September 2002.

62 There can be no dispute that the Fifth Respondent's solicitors knew that service had purportedly been undertaken. It was mentioned before the Deputy Industrial Registrar on 11 July 2002 - one day after it had been undertaken in the United States. To the extent of appearances entered up to that time the Respondents were all legally represented by Gadens Lawyers. Further, Gadens Lawyers were sent a copy of the original sworn Sheriff's Entry of Service on 13 December 2002 in the following terms: We refer to previous correspondence and, in particular, your telephone discussion with our Ms Neilsen's secretary on Thursday 12 December 2002 in relation to the above matter. Please find enclosed a copy of affidavit of service to the Fifth Respondent, as requested.

63 There were a number of procedural irregularities surrounding both the service on the Fifth Respondent and the steps taken, or not taken as the case may be, by the Applicant's solicitors once the sealed and sworn original of the Sheriff's Entry of Service signed by the Deputy Sheriff of Cobb County, Georgia was filed in the Court Registry in Sydney on 18 July 2002.

64 In the first instance, the service of a copy of the originating Summons on the Fifth Respondent was not served on the Fifth Respondent in conformity with Rule 112(2) of the Rules which states: 112(2): Process or documents may be served outside Australia, but must bear a note in the appropriate form.

65 The Applicant's solicitors have acknowledged that no such note was attached with the copy of the Summons served on the Fifth Respondent. The only explanation from the Applicant's solicitor is that he is 'unaware of the reason for that omission' and apologises for the error.

66 Next, when the Applicant' s solicitors did file the original sealed and sworn Sheriff's Entry of Service on 18 July 2002, it was not filed with a covering affidavit as required in accordance with the Rules. The only indirect reference to that original Sheriff's Entry of Service is to be found in the affidavit of Ms Neilsen that accompanies the Notice of Motion filed on behalf of the Applicant on 3 October 2002. In paras [5] and [6] of that affidavit Ms Neilsen stated: On 10 July 2002, the Fifth Respondent in these proceedings was served with the Summons for Relief filed on 25 June 2001. On 18 July 2002, I caused an Affidavit of Service of the Fifth Respondent to be filed in the Industrial Relations Commission. I seek leave to refer to that document without annexing it to this Affidavit.

67 In a further affidavit from the Applicants solicitor filed on 1 May this year, Mr Phillips stated at para [11]: The 'affidavit of service' referred to in the immediately preceding paragraph was actually the original Sheriff's Entry of Service. I am unaware of the reason why this document was not attached to an affidavit prepared in accordance with the Industrial Relations Commission Rules (the Rules) and I apologise to the Commission in Court Session for that error.

68 In the initial hearing of these matters before me, counsel for the Respondents, and in particular the Fifth Respondent, submitted, after the Applicant's counsel had closed her evidentiary case, that there was no proper evidence before me of any service on the Fifth Respondent. To the extent that the original sealed and sworn Sheriff's Entry of Service was on the Court file it was not before me for evidentiary purposes as it had not been formally tendered by counsel for the Applicant. Further, he contended, even if it had been formally and properly tendered by counsel for the Applicant, it did not comply with the provisions of Rule 112(2) which could not be cured by applying the provisions of Rule 88(1) of the Rules.

69 I heard further submissions from the parties as to whether counsel for the Applicant should be granted leave to re-open the Applicants case to formally tender the original sealed and sworn Sheriff's Entry of Service attesting to service of the Fifth Respondent. I have determined to grant such leave relying, as was acknowledged by counsel for both parties, for the proper exercise of that discretion on the decision of Clarke J in Urban Transit Authority of NSW v Nweiser (1992) 28 NSWLR 471 where at p478 his Honour stated: The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the court to reject an application where the decision not to call the witness in the party's case was a deliberate one. Of course that does not mean that that is not a very relevant consideration. It is. Where, for instance, a decision was based on tactical grounds it may be difficult to resist the conclusion that the interests of justice were better served by the rejection of the application. But even in that circumstance there may be cases in which it is felt that the client whose application it is should not have to suffer for his or her counsel's deliberate decision. Where the decision is not made for tactical reasons and is based on a mistaken apprehension of the law or the facts the case is more appropriately considered as one in which the application has resulted from an error by counsel.

70 The above principle was cited with approval in Amalgamated Television Services Pty Ltd v Marsden (2002) NSWCA 419 at para 620ff.

71 I believe that, in the circumstances here, the interests of justice require me to grant leave to the Applicant's counsel to re-open her case and formally tender the relevant document in its sealed and sworn form. On one view there seems to be a belief by the Applicant's solicitors that that had been done by reference to it in paras [4] and [5] of Ms Neilsen's affidavit of 2 October 2002 - which was the affidavit filed with the Notice of Motion on behalf of the Applicant on 3 October 2002. If anything, I would characterise the failure to formally attach the original Sheriff's Entry of Service to an affidavit and include it with the evidentiary material on behalf of the Applicant as a procedural oversight on the part of the Applicant's legal representatives. The Applicant should not be required to suffer for that oversight.

72 Counsel for the Fifth Respondent submitted that, to the extent that Rule 112(2) had not been complied with, that I could not utilise the provisions of Rule 88(1) to waive strict compliance with procedural requirements because Rule 112(2) provides that in serving process or documents outside Australia they 'must' bear a note in the appropriate form. In other words, he submitted the use of the word 'must' was mandatory and I had no discretion to waive the requirement. I do not agree.

73 Rule 88 of the Rules state: 88(1) [Application to waive compliance] Application to a tribunal to waive strict compliance with any procedural requirement or to exempt any party from compliance with any such requirement either before or after the occasion for compliance arises, may be made by notice of motion or orally in the course of the proceedings and if made separately must, unless the tribunal otherwise directs, be supported by affidavit. 88(2) [Granting extension of time] Subject to any direction of the Commission, the Presidential Member of the Contracts of Carriage Tribunal or the Chairperson of an Industrial Committee, the Registrar may extend the time fixed by these Rules for the lodging of any document or the doing on any act (whether or not that time has expired).

74 The use of the word 'must' in Rule 112(2) is not unique as far as the procedural requirements of the Rules generally - there are any number of Rules that contain the word. The words of Rule 88(1) do not impose any curtailment on the general discretionary power that resides within the Rule subject only, it seems to me, that the exercise of that discretion is done as a matter of fairness, practicability and in the interests of justice.

75 In the matter before me the failure of the Applicant's solicitors to attach a note to the copy of the originating Summons prior to service upon the Fifth Respondent as required by Rule 112(2) should not, in all the circumstances of this matter, be a failure such as to provide in effect a permanent stay to the proceedings. In this matter the Fifth Respondent could hardly be said to have been taken by surprise by the service of the Summons. It is a party that is only too aware of what has been happening as far as this matter is concerned. 76 The overwhelming impression I have to date is that the Fifth Respondent has remained active behind the scenes, instructing its solicitors, directing proceedings, fully appraised of all that has occurred and is occurring.

77 I am of the view that the Fifth Respondent has been served. True it is it has been served out of time and the Applicant and his solicitors have been tardy is some respects in locating and formally serving the Fifth Respondent. On the issue of the discretion available to the Court to allow leave to serve out of time, I have regard to the decision of Wright P in Taudevin and particularly at para [42]: …the relevant principles as to the extension of time issue, could be usefully gathered from a number of recent decisions … the granting of an extension of time is not automatic and in order to exercise its discretion to extend time the Court requires inter alia proof that compliance with the rules will work an injustice upon the applicant for an extension of time. This requires the Court to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal to extend time: New South Wales Teachers Federation v The New South Wales Office of the Board of Studies [2000] NSWIR Comm 1 at 21-24 , where I held: …the grant of an extension of time is not automatic and the object of statutory provisions fixing a time to appeal is to ensure, so far as is reasonable, that the times fixed are obeyed. However, it is clear on the authorities that the times fixed - be they fixed by rules or statute - are not intended to be instruments of injustice and generally speaking the discretion to extend time is given for the sole purpose of enabling justice to be done between the parties. The discretion can only be exercised in favour of an extension of time upon proof that compliance with the rules will work an injustice upon the applicant therefore which necessarily requires regard be had to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application to extend time. …it is relevant that no serious argument has been put in relation to the question of futility of the appeal or as to any prejudice if the application is granted. That is significant.

78 Having regard to those principles the balance must, in my view, favour the Applicant. In other words, having regard to the history of these proceedings particularly the conduct of the parties, and most notably the conduct of the Fifth Respondent that I have already referred to, I am satisfied that the Applicant should be granted an extension of time until 10 July 2002 in which to serve the Fifth Respondent. Further, there is no doubt that there would be an injustice visited upon the Applicant should such a discretion not be exercised in favour of him. Further, the extension of time that is being considered is some sixteen days, which in all the circumstances is not excessive in my view. Finally, and most persuasively, it has not been submitted at any time in the proceedings before me that the Fifth Respondent would suffer any prejudice if this application for leave to proceed and serve out of time was granted, nor has it been suggested that the substantive issue in the originating Summons involving the Fifth Respondent is a futility.

79 For all of the above reasons, I am of the view that the irregularity in service upon the Fifth Respondent should be waived and that the Applicant should be granted the extension of time until 10 July 2002 in which to serve the Fifth Respondent.

1. The Applicant be granted leave to proceed against the Fifth Respondent, Verso Technologies (Eltrax Systems Inc.) to the Summons for Relief. 2. The Applicant is granted leave to serve the Summons for Relief on the Fifth Respondent out of time. 3. Service of the Fifth Respondent, Verso Technologies (formerly Extrax Systems Inc.) on 10 July 2002 of the Summons for Relief was effective service for the purpose of these proceedings.

81 I reserve the question of costs until I hear further from the parties.

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