Frisken v Holdsworth, in the matter of Realmark Services Pty Limited

1. Pursuant to r 1.10 of the Federal Court (Corporation) Rules 2000 (Cth) and r 1.39 of the Federal Court Rules 2011 (Cth), the time in which the originating process and supporting affidavit filed 12 August 2022 is to be served on the defendant be further extended to 12 May 2023.
2. If the defendant is served with a summons for examination by the first plaintiff in proceeding VID 560 of 2022, the first plaintiff must also give written notice to the defendant of this proceeding and provide the defendant with a copy of the orders made on 30 September 2022 and accompanying reasons of the Court, together with a copy of these orders.
3. These proceedings are to proceed by way of pleadings.
4. Leave is granted to the plaintiffs to file and serve a statement of claim in a similar form to that contained at annexure C to the affidavit of Dajana Malnersic sworn on 12 August 2022.
5. The proceeding be listed for further case management at 9.30am on 26 May 2023.
6. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

O'BRYAN J 1 The first plaintiff, Mr Daniel John Frisken (liquidator), was appointed as liquidator of the second plaintiff, Realmark Services Pty Limited (In Liquidation) (the Company), on 13 August 2019. The plaintiffs commenced this proceeding on 15 August 2022 by filing an originating process and supporting affidavit of Ms Dajana Malnersic dated 12 August 2022. 2 On 30 September 2022, I made orders in this proceeding extending the time by which the plaintiffs were to serve the originating process and affidavit in support on the defendant, Ms Samantha Holdsworth, to 27 February 2023. I also made an order that, if the defendant is served with a summons for examination by the liquidator in the related proceeding VID 560 of 2022, the liquidator must give written notice to the defendant of this proceeding and provide her with a copy of the orders made on 30 September 2022 and the accompanying reasons of the Court. My reasons for making those orders are recorded in Frisken v Holdsworth, in the matter of Realmark Services Pty Limited (in liq) [2022] FCA 1173 (Frisken (No 1)), which decision also sets out the background to the present proceeding. 3 A case management hearing in the proceeding took place on 24 March 2023. At that hearing, the plaintiffs sought various orders, including: (a) a further extension of time by which the originating process and supporting affidavit filed 12 August 2022 is to be served on the defendant until 12 May 2023, pursuant to r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) and r 1.39 of the Federal Court Rules 2011 (Cth) (Federal Court Rules); (b) an order requiring the liquidator to provide to the defendant, if the defendant is served with a summons for examination in related proceeding VID 560 of 2022, written notice of this proceeding, a copy of the orders made on 30 September 2022 and the accompanying reasons of the Court, as well as a copy of any orders made on 24 March 2023; (c) an order that the proceedings are to proceed by way of pleadings; and (d) an order granting leave to the plaintiffs to file and serve a statement of claim in a similar form to that contained at annexure C to the affidavit of Ms Dajana Malnersic sworn on 12 August 2022. 4 In support of the orders sought, which were sought on an ex parte basis, the plaintiffs relied on the affidavit of Mr Dominic Dragicevic sworn 22 March 2023. 5 In his affidavit, Mr Dragicevic deposed to the following matters. (a) In October 2022, the plaintiffs obtained orders in the related proceeding VID 560 of 2022 for the production of documents by Australian Bullion Company (Aust) Pty Limited (ABC Bullion) and the defendant in this proceeding. Subsequently, in November 2022, the plaintiffs obtained and later reviewed documents produced by ABC Bullion. (b) Since December 2022, the plaintiffs and their legal representatives have taken steps to personally serve the defendant with the documents required to be served in this proceeding, and the documents required to be served in the related proceeding VID 560 of 2022. (c) The steps undertaken by the plaintiffs and their legal representatives include: (i) conducting various searches and investigations to ascertain the defendant's contact details, including: obtaining a title search of the property at which the defendant was personally served with a letter of demand in relation to the subject matter of these proceedings; reviewing documents lodged with the Australian Securities and Investments Commission in respect of the Company as well as documents lodged in the liquidation; and obtaining a copy of the defendant's driver's licence; (ii) engaging a process server to attend, on several occasions, properties identified as being associated with the defendant, and to attempt to personally serve the defendant. A progress report prepared by the process server summarising attempts made to serve the defendant was annexed to the affidavit of Mr Dragicevic; and (iii) calling, on several occasions, a mobile number recorded by the defendant as her individual number in the Report on Company Activities and Property form completed by the defendant and executed on 21 August 2019. (d) The steps undertaken by the plaintiffs and their legal representatives have, to date, been unsuccessful. As at 22 March 2023, the defendant had not been personally served with the documents required to be served in this proceeding, nor any of the documents required to be served in the related proceeding VID 560 of 2022. (e) On 14 March 2023, orders were made in the related proceeding VID 560 of 2202 adjourning that proceeding to 8 May 2023 to enable further attempts at service on the defendant to be made. (f) It remains the liquidator's intention to conduct a public examination of the defendant in the related proceeding VID 560 of 2022. Following the public examination, the plaintiffs may seek to refine their claims in this proceeding or, alternatively, they may seek to discontinue these proceedings. 6 The principles governing the extension of time for service in a proceeding of this kind pursuant to r 1.10 of the Corporations Rules and r 1.39 of the Federal Court Rules are summarised in Frisken (No 1) at [7]-[9]. In short compass, the Court's discretion to grant an extension of time is broad, and the Court need only be satisfied that there is a "good reason" for the extension sought: Weston v Publishing and Broadcasting Ltd [2007] NSWSC 1318 at [2] (Barrett J) and the cases cited therein. 7 On the basis of the evidence provided by the plaintiffs, I am satisfied that there is a "good reason" to grant the extension of time sought. The extension sought is confined in duration and will provide the liquidator with further time to effect service on the defendant of the originating documents in this proceeding, which proceeding the liquidator presently seeks to pursue. I accept that the liquidator has made real attempts to effect service in the period between the making of the orders of 30 September 2022 and the hearing on 24 March 2023. Moreover, I consider that there is utility in granting a further extension of time in circumstances where there are additional steps that may be taken to effect service. I accept the submission made by counsel for the liquidator during the hearing that all possible avenues have not yet been exhausted. 8 I am also satisfied that the extension sought will not cause irremediable prejudice to the defendant. To the extent that there is any prejudice to the defendant at all, the Court may remedy such prejudice by making an order to vary or set aside the order for an extension in circumstances where it was made in the absence of the defendant, pursuant to r 39.05(a) of the Federal Court Rules. 9 For these reasons, at the case management hearing on 24 March 2023 I made an order extending the time for service in the form sought by the plaintiffs. I also considered it appropriate in all of the circumstances to make the other orders sought by the plaintiffs regarding the provision to the defendant of material relating to this proceeding in the event that she is served with a summons for examination in the related proceeding VID 560 of 2022, and the filing of pleadings in this proceeding. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan.