Maschmann v Wenzel

Supreme Court of NSW|2007-07-31|Before: Neil J, Harrison J

Background 3 Mr Maschmann is the trustee in bankruptcy for the estate of Fred Wenzel. Fred Wenzel is the father of the defendant, Andreas Wenzel. On 8 November 2005, Ulrich Maschmann obtained in the District Court of Wiesbaden in Germany ("Landgericht Wiesbaden") a judgment against Andreas Wenzel in the sum of EUR 32,201.79 plus interest thereon from 6 September 2005 at the rate of 5% above the base interest rate fixed by the Federal Bank of Germany for the relevant period of time and costs. 4 On 6 February 2007, the plaintiff obtained the registration of the judgment in this Court. On 13 March 2007, the notice of motion seeking to set aside the registration was filed.

The facts 5 Mr Wenzel deposed (aff, 23/03/2007) that he was formerly the sole director and sole shareholder of a company called IQ Distribution - Andrea Wenzel Projektmanagement (IQ Distribution). Mr Wenzel says that company was engaged in project management and had accumulated a debt with the Deutsche Bank. In about 1999, the defendant's father Fred Wenzel, paid off the debt of IQ Distribution to the Deutsche Bank and as the director of his own company, Excell Logistics acquired the assets of IQ Distribution for use in his own company. It was specifically agreed between the defendant and his father that the money paid by him to the Deutsche Bank was not advanced by way of loan and was not repayable by the defendant. In other words, Mr Andreas Wenzel says that he has a defence to the action taken by the trustee. 6 On 7 August 2001, the defendant left Germany and moved to Ireland to start work with IBM Dublin. His wife and child followed him to Ireland in May 2002. He had resided in Ireland for almost three years and his family for approximately two years. 7 On 2 April 2004, the defendant and his family moved to Switzerland. The defendant worked for IBM. The defendant and his family resided in Zurich until 31 July 2005. In April 2005, there was an exchange of emails between Anja Diefenbach, solicitor for the liquidator, and Andreas Wenzel in relation to the subject bankruptcy proceedings against Fred Wenzel. 8 On 13 April 2005 at 12.02pm, Ms Diefenbach wrote to Mr Wenzel as follows: "Dear Mr Wenzel, As you know, bankruptcy proceedings against the estate of your father Fred Wenzel have been instituted. Fro the purpose of service of documents we require your current address for service. Please pass it on to us. We inform you that if you do not give us your address, there is the option of service by public notice. We ask you for your co-operation in this respect. Many Thanks" 9 On 13 April 2005 at 9.04pm, Mr Wenzel replied by email as follows: "Mrs Diefenbach, What kind of documents we are dealing with???" 10 On 15 April 2005 at 12 noon, Ms Diefenbach replied: "Dear Mr Wenzel, It is a statement of claim. We ask you once again to notify us of your address for service as otherwise we will have to initiate service by public notice. Many thanks. …" 11 On 15 April 2005 at 12.09 pm, Mr Wenzel replied: "Hallo (sic) Mrs. Diefenbach, I am not sure why I should be sued, but we shall look into it when the time comes. Here is the address: [address supplied] Switzerland

Andreas Wenzel" 12 Two weeks later in late April 2005, Ms Hilke Wenzel, the wife of Andreas Wenzel, spoke to Ms Diefenbach and said "I would like to see the documents. Would you send them or email them." Ms Diefenbach replied "I am definitely filing a lawsuit against your husband, you will receive further documents through the official channels." Ms Wenzel said that Ms Diefenbach did not give her any further details as to why her husband was being sued. Had Ms Diefenbach emailed a copy of the statement of claim, there could be no dispute that Andreas Wenzel had notice of "those proceedings" would be. 13 On 31 July 2005, the defendant and his family left Switzerland as Mr Wenzel was transferred by his employer IBM to Australia. Andreas Wenzel and his family have resided in Australia since then. 14 On 15 or 16 March 2006, the defendant received an email from the plaintiff advising him that judgment had been obtained against him in German proceedings. Ms Diefenbach asked Mr Wenzel to advise her how he intended to meet that judgment. Shortly after receipt the defendant emailed the plaintiff's solicitor requesting details of the German proceedings and judgment. 15 On 30 March 2006, the plaintiff's solicitor, by email, provided the defendant with a copy of a certificate issued by the postal authorities for the City of Zurich, Switzerland on 6 September 2005. The effect of that document was that in accordance with provision of Swiss law, documents were deemed to have been served on him on 6 September 2005 as the postal officer had on two occasions left cards in the letterbox of the Swiss property, asking the defendant to collect the documents from the post office. As the defendant had already been transferred to IBM Australia, he failed to attend the post office to collect the documents. 16 The defendant did not actually receive the copy of the statement of claim in the German proceedings and says that as a result he did not defend the German proceedings. I accept that Mr Wenzel did not actually receive the statement of claim as he had left the premises by 31 July 2005. The defendant says that had he received notice of such proceedings he would have strenuously defended them.

The relevant statutory provision 17 Section 7 of the Foreign Judgments Act 1991 (Cth) provides: "(1) A party against whom a registered judgment is enforceable, or would be enforceable but for an order under section 8, may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered, or (where applicable) a court in which the judgment was registered under Part 6 of the Service and Execution of Process Act 1992, to have the registration of the judgment set aside.

(2) Where a judgment debtor duly applies to have the registration of the judgment set aside, the court: (a) must set the registration of that judgment aside if it is satisfied:

… (v) that the judgment debtor, being the defendant in the proceedings in the original court, did not (whether or not process had been duly served on the judgment debtor in accordance with the law of the country of the original court) receive notice of those proceedings in sufficient time to enable the judgment debtor to defend the proceedings and did not appear; or …" 18 The defendant bears the onus of satisfying the Court in relation to s 7(2)(a)(v) - see Esso v Chan [1999] VSC 294. 19 Section 7(2)(a)(v) does not require Mr Wenzel to be served with the statement of claim in accordance with the law of the German Court. The issue to be decided is a narrow one. It is whether the exchange of emails and telephone conversation with Mr Wenzel's wife constitutes "notice of those proceedings". If these communications do constitute notice, such notice was given in sufficient time for Mr Wenzel to defend those proceedings. The notice must be actual notice - see Esso. 20 In April 2005, Mr Wenzel knew that bankruptcy proceedings against his father had been instituted and that he was required to provide his current address for service to Ms Diefenbach, a solicitor. He also knew that the statement of claim was to be served upon him. He knew that he had supplied the solicitor for the liquidator with his address for service and that he was going to look into it "when the time comes". Hence, he was expecting to be served with a statement of claim. Also in April 2005, the defendant's wife telephoned the solicitor for the liquidator and asked to see the documents by means of email. The solicitor declined this request but informed Mrs Wenzel that she was definitely filing a lawsuit against her husband and that further documents would be received through official channels. 21 I accept that in July 2005, Mr Wenzel could have forwarded details of his forwarding address in Australia to the solicitor acting for the liquidator and chose not to do so. Nor did Mr Wenzel take steps with the post office to have his mail forwarded to his address in Australia. In April 2005, the defendant was expecting that a statement of claim was going to be filed and served upon him through official channels. The defendant knew that the statement of claim involved his father's bankruptcy proceedings and he would be named as the defendant. He did not know the nature of the proceedings or what relief was claimed against him. He did not know in which Court these proceedings were about to be commenced, nor a file number which would identify those proceedings. It should be remembered that the proceedings were commenced in Germany not Switzerland, the latter country being the country where the defendant had resided. At that stage, even if he wanted to, he could not make his own enquiries with the Court concerning the progress of the proceedings. Giving someone "notice of the proceedings" requires more than simply informing them that proceedings either exist or will exist. 22 It is my view that in the circumstances, the defendant did not receive actual notice of "those proceedings". The judgment registered in this matter in this Court on 6 February 2007 is set aside in accordance with s 7(2)(a)(v) of the Foreign Judgments Act. 23 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

(1) The judgment registered in this matter in this Court on 6 February 2007 is set aside.

(2) The plaintiff is to pay the defendant's costs as agreed or assessed. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Maschmann v Wenzel [2007] NSWSC 850

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