The third defendant, UNIQA Versicherungs AG, is a company incorporated in Liechtenstein.
On 16 September 2016, on the application of the plaintiff, Mobis Parts Australia Pty Ltd, I made an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 10.14(3) that the amended summons and amended commercial list statement be taken to have been served on UNIQA on 25 July 2016.
These are my reasons for making that order.
Mobis owns a warehouse at Eastern Creek which was damaged during a storm in April 2015.
The warehouse was at that time insured by a Property Damage and Business Interruption policy (which the parties referred to as the "Local Policy") issued by the first defendant, XL Insurance Company SE.
In these proceedings, XL denies liability to indemnify Mobis under the Local Policy for the damage caused to the warehouse by reason of, amongst other things, an exclusion.
On 28 June 2016, during the hearing of the successful application by XL for leave to amend its defence to rely upon that exclusion, Mobis foreshadowed that if (as happened) that application was successful, it would seek to bring an alternative claim under another policy (which the parties have referred to as the "Master Policy") issued by XL, by the second defendant, AIG Europe Ltd, and by UNIQA which, it is said, does not contain such an exclusion.
During the hearing on 28 June 2016, senior counsel for XL said:
"We're the lead on the [Master Policy], we'll accept service, we'll deal with it, we don't think it's going to be a problem."
Thereafter, events occurred as set out in the following passage from the judgment of Ball J of 25 August 2016 (Mobis Parts Australia Pty Ltd v XL Insurance Company SE [2016] NSWSC 1170 at [11]-[12]):
"By letter dated 4 July 2016, the solicitors for Mobis Australia asked McCabes [the solicitors for XL] to confirm that they had instructions to accept service on behalf of AIG Europe and UNIQA. McCabes replied affirmatively on 7 July 2016. They had no express authority from UNIQA to do so and UNIQA did not become aware of the proceedings until 15 July 2016.
On 15 July 2016, XL SE informed UNIQA of the proceedings and asked if it agreed that McCabes act on its behalf and whether it submitted to the jurisdiction of court. UNIQA replied on 21 July 2016 declining to submit to the jurisdiction of the court and indicating that it would retain its own Australian lawyers."
On 22 July 2016 Bergin CJ in Eq made an order granting Mobis leave to amend its commercial list statement to include a claim under the Master Policy.
On that day, Mobis served its amended summons and amended commercial list statement on McCabes.
In the meantime, UNIQA had appointed Hicksons as its solicitors.
On 25 July 2016, McCabes sent Hicksons sealed copies of the amended summons and amended commercial list statement.
UNIQA appeared conditionally, and without submitting to the jurisdiction of the Court and, by notice of motion filed on 12 August 2016 on its behalf by Hicksons, sought orders:
1. setting aside the purported service of the amended summons and amended commercial list statement on McCabes;
2. that service had not been effected on it;
3. that this Court had no jurisdiction over it; and
4. that the Court decline to exercise jurisdiction over it, and other related orders.
That notice of motion was heard by Ball J on 19 August 2016. On 25 August 2016 his Honour delivered the judgment to which I have referred in which his Honour concluded that:
1. UNIQA had not been duly served because, on the proper construction of the Master Policy, XL (and thus McCabes) did not have authority to accept service on behalf of UNIQA;
2. nonetheless, service of the amended summons and amended commercial list statement outside of Australia was permitted by UCPR Sch 6 par (i) as the proceedings had been properly commenced against XL and UNIQA was a person "properly joined as a party to the proceedings"; and
3. effect should not be given to a choice of jurisdiction clause in the Master Policy which provided that any dispute under the Master Policy be resolved in Bratislava under Slovakian law.
By notice of motion filed on 7 September 2016, Mobis sought an order under UCPR r 10.14(3).
I heard that notice of motion on 16 September 2016.
Before me, Mobis accepted that an order for confirmation of informal service within New South Wales will not be made if a foreign defendant is not amenable to the jurisdiction of the court other than through personal service in the jurisdiction (see Laurie v Carroll (1958) 98 CLR 310; HCA 4).
However, Mobis submitted, and I accept, that that principle does not apply where, as here, service on the foreign defendant is permitted under UCPR Sch 6 such that the court would have jurisdiction over that foreign defendant once service was effected (see Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 at [40] per Austin J; Building Insurers' Guarantee Corporation v Eddie [2008] NSWSC 195 at [20] per Rein AJ (as his Honour then was) and Floth Pty Ltd v Bulseco [2015] NSWSC 2076 at [6] per Brereton J).
The first two of those cases dealt with orders for substituted service, but Brereton J in Floth made clear that the same principles apply to orders for confirmation of informal service.
In Building Insurers' Guarantee Corporation Rein AJ said at [20] and [26]:
"In my view, nothing said by the Court in [Laurie v Carroll] undermines the proposition that an order for substituted service can be made if the Court otherwise has jurisdiction so that service could be effected overseas. I agree, with respect, with Austin J's view [in ASIC v Sweeney] that an order under the earlier rule equivalent to Part 10 Rule 4(1) and (4) UCPR could be made, provided the defendant could, by reason of provisions such as Part 11 of the UCPR, be served overseas.
…
I would add that there is no reason of policy in this case that would encourage a restrictive view of the ambit of Part 10 Rule 14. A party who is not amenable to the jurisdiction of the Court ought not be compelled to defend a case here by resort to a side door that undercuts the need for jurisdiction but once it is clear that there is jurisdiction over a party, as is the case here, there can be no concerns of that kind. S.56(2) of the Civil Procedure Act [2005 (NSW)] provides that the Court must, in interpreting the Act and rules, seek to give effect to the overriding purpose of the Act set out in s.56(1), namely the facilitation of the just, quick and cheap resolution of the real issues in the proceedings."
Very properly, Mr Mehigan, who appeared for Mobis, also drew my attention to Bagg v Angus Carnegie Gordon as liquidator of Salfa Pty Limited (in liq) [2014] NSWCA 420 in which Ward JA and Sackville AJA, when considering an application for leave to appeal, were prepared to accept that it was arguable that UCPR r 10.14(3) did not apply to service on foreign defendants, but nonetheless refused leave on other grounds. I do not read that decision as authority for the proposition that UCPR r 10.14(3) does not apply in such a case.
In this case, it is clear that UNIQA is well and truly on notice of the form and effect of the amended summons and amended commercial list statement.
As I mentioned, a sealed copy of those documents was provided to Hicksons on 25 July 2016. Further, in an affidavit sworn in support of UNIQA's notice of motion of 12 August 2016, Dr Timothy Channon from Hicksons, who described himself as the "contact solicitor" of UNIQA with the "day to day care and conduct of the file", made specific reference to particular paragraphs of those documents.
Nonetheless the position adopted by UNIQA in relation to these proceedings is that service should be effected on it in the usual way in Liechtenstein.
It is regrettable that UNIQA has adopted this position. As one of the parties to the Master Policy, it wrote insurance in relation to Mobis's warehouse. In the circumstances I have set out, it must now appreciate that, one way or the other, it will become involved in these proceedings. And it must be well aware of the issues it will have to deal with in the proceedings.
UNIQA has been on notice of the precise allegations made against it by Mobis since 25 July 2016. In those circumstances I see this as a clear case in which an order should be made under UCPR r 10.14(3) confirming informal service.
As Liechtenstein is not party to the Hague Convention, the alternative would have been to authorise the registrar to send a letter of request to the relevant court in Liechtenstein (the Princely Court of Justice) requesting that the court effect service in Liechtenstein.
To adopt such a course would have been to cause undue expense and delay inconsistent with the overriding purpose of the Civil Procedure Act and the UCPR to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
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Decision last updated: 23 September 2016