Morris v McConaghy Australia Pty Ltd

1. Prayer 1 of the interlocutory application filed on 27 July 2018 be dismissed.
2. The matter be listed for a case management hearing on 19 October 2018 at 9.30am for determination of costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PERRAM J: 1 This is an application for deemed service under r 10.48 of the Federal Court Rules 2011 (Cth) ('FCR') which provides: '10.48 Deemed service A party may apply to the Court without notice for an order that a document is taken to have been served on a person on the date mentioned in the order if: (a) it is not practicable to serve the document on the person in a foreign country in accordance with a convention, the Hague Convention or the law of a foreign country; and (b) the party provides evidence that the document has been brought to the attention of the person to be served. Note: Without notice is defined in the Dictionary.' 2 The order sought is that 'the Originating Application dated 18 July 2017 and Concise Statement dated 18 July 2017 be deemed to have been served on the second respondent, MC2 Composites Limited, pursuant to Rule 10.48 of the Federal Court Rules'. 3 The Second Respondent, which I shall refer to as MC2, is incorporated in the Cayman Islands. The Applicant, Mr Morris, has sued MC2 and others about the way the internal affairs of MC2 have been conducted. One of the orders sought is a winding up of MC2 in Australia although other relief is also sought. The proceeding was commenced in this Court on 18 July 2017 although related proceedings in the Federal Circuit Court predated this proceeding. On 19 October 2017 Rares J of this Court made orders granting Mr Morris leave to serve the originating application, the concise statement and his Honour's orders (together 'Documents') on MC2 in the Cayman Islands under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 ('Hague Convention'). 4 The procedure under the Hague Convention involves this Court requesting the Central Authority in the Cayman Islands to serve the Documents: Hague Convention Art 3. Under Art 5 the Central Authority is to serve the Documents itself or arrange to have them served by an appropriate agency. The designated Authority competent to receive requests for service in the Cayman Islands is the Grand Court of the Cayman Islands ('Grand Court'). 5 On 7 December 2017, following some requisitions to Mr Morris' solicitors about the form of the request, this Court forwarded a request under Art 3 to the Clerk of the Court of the Cayman Islands Judiciary seeking service the Documents on MC2 at its registered address. 6 The registered address of MC2 as notified by this Court to the Clerk of the Grand Court was: 'MC2 Composites Ltd 190 Elgin Avenue, Georgetown Grand Cayman, Ky 1-9005 Cayman Islands' 7 On 10 April 2018, the Chief Bailiff of the Grand Court purported to serve the Documents on MC2 by handing them to Ms Pamela Kelly, a receptionist at a firm called Genesis Trust. The Chief Bailiff swore an affidavit of service dated 11 April 2018 in which he says that he did this at 190 Elgin Avenue. 8 There are some difficulties, however, with that evidence. The registered address of Genesis Trust is not 190 Elgin Avenue but rather Elgin Court, Elgin Avenue. Genesis Trust is a corporate services firm which means that, inter alia, it permits its premises to be used as the registered office of companies. There is no suggestion, however, that MC2 uses the services of Genesis Trust in that regard or that its registered office is at the offices of Genesis Trust. In fact, a company search of MC2 shows that its registered office is at the offices of Intertrust Corporate Services (Cayman) Limited ('Intertrust'), which appears to be another corporate services firm. Unlike Genesis Trust, however, Intertrust does have its registered office at 190 Elgin Avenue. Although the request which was made by this Court to the Grand Court nominated the correct street address it did not indicate, as was in fact the case, that at that address was the offices of Intertrust and that the registered office of MC2 was at those offices. It is possible that this omission has contributed to the confusion which has now ensued. 9 In any event, the short of the matter is that the Chief Bailiff, with respect, cannot be correct when he says that he served the Documents at Genesis Trust, 190 Elgin Avenue because Genesis Trust is not at 190 Elgin Avenue but rather at Elgin Court. In fact, Elgin Court is around 400 metres down the road from 190 Elgin Avenue. The Court was provided with photographs of the buildings at both addresses and there is no doubt they are different premises. This raises two possibilities: (a) the Chief Bailiff is mistaken in thinking that he attended the offices of Genesis Trust but correct in thinking that he went to the premises at 190 Elgin Avenue; or, (b) correct in thinking he attended the offices of Genesis Trust but incorrect in thinking that he went to the premises at 190 Elgin Avenue. 10 It is at this point that the Chief Bailiff's evidence that he spoke to the receptionist, Pamela Kelly, becomes important. The evidence was that she did not work for Intertrust but that she had worked for Genesis Trust (although, as events have transpired, she is no longer employed there). This proves that the Chief Bailiff attended the offices of Genesis Trust at Elgin Court and I so find. This was not at 190 Elgin Rd and, on no view, was MC2 served by the Chief Bailiff at its registered office or at all. Thus, while the Chief Bailiff has sworn in his affidavit of 11 April 2018 that he served the Documents on 10 April 2018 on MC2 at it registered office, I conclude that he is mistaken and that he did not do so. 11 Coincidentally, perhaps, on the day before the Chief Bailiff mistakenly attended the offices of Genesis Trust, this Court had issued an anti-suit injunction against MC2 restraining it from taking any further step against Mr Morris in a proceeding commenced by it against him in the High Court of the Hong Kong SAR: Morris v McConaghy Australia Pty Ltd (No 3) [2018] FCA 606. That order, Mr Morris' interlocutory application and the affidavit in support thereof were ordered to be served on MC2 'in accordance with the methods set out in order 3 of the orders made on 6 April 2018'. Order 3 of 6 April 2018 provided: '3. Service of the applicant's interlocutory application dated 5 April 2018, the affidavit of Sherangan Maheswaran affirmed 5 April 2018 and a copy of this order be effected on the second respondent: i. by emails addressed to each of the directors of the second respondent, namely: , , and ; ii. by service on Haldanes, Solicitors, 702 Ruttonjee House, 11 Duddell Street, Central Hong Kong; and iii. by service on MC2 Composites Limited, 2111-2114, International Financial Centre, Tower 2, 8 Finance Street, Central, Hong Kong SAR.' 12 This order did not require the service upon MC2 of the originating process or the concise statement. However, there is no dispute that MC2 has notice of those two documents. The shareholders in MC2 are Mr Morris, the Third Respondent (Mr Evans), and the Fourth Respondent (Tiger Yacht Management Ltd, which is associated with Mr Porter). Mr Morris issued this proceeding and the Third and Fourth Respondents have been served with both documents. An appeal by the Fourth Respondent on the issue of service is currently reserved before the Full Court. Everyone involved in MC2 is aware of the originating process and concise statement. 13 As it happens, part of the reason this Court granted the anti-suit injunction was because of its view that the commencement of the proceeding by MC2 in the Hong Kong High Court against Mr Morris had occurred in circumstances where there was an arguable circumstantial case that this had been done in order to harass Mr Morris. 14 It is in that context that Mr Morris now applies for an order for deemed service on MC2 under FCR r 10.48 (set out above). He submits that both limbs of the rule are satisfied, that is, it is not practicable under subr (a) to serve the document under the Hague Convention (the other legal instruments referred to in (a) are not suggested to be relevant) and, under (b), that the Documents have been brought to the attention of MC2. 15 It is accepted by MC2 (who appeared conditionally to oppose the making of orders for deemed service) that (b) was satisfied. The only issue is, therefore, whether it is 'not practicable' to serve MC2 under the Hague Convention. As Allsop J noted in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124 at [13], 'impracticable' (that is, not practicable) is not the same word as 'impractical'. Generally, 'not practicable' means not capable of being carried out or not feasible. 16 Of course, 'not practicable' appears in FCR r 10.48 and it is in that context that it must be interpreted. One aspect of the drafting of the rule may be important. It is clear from the conjunctive nature of the two subrules that the mere fact that the documents have been brought to the attention of the party being served cannot suffice to satisfy subr (a). If it did subr (b) would be unnecessary. A construction of FCR r 10.48 which leaves subr (b) with a redundant operation is not to be preferred: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 382 [71] per McHugh, Gummow, Kirby and Hayne JJ. However, that does not really impact on the ordinary meaning of 'not practicable'. The fact that a party already has notice of the documents to be served does not render it not practicable to serve that party as a matter of ordinary English. It may be pointless to do so or even a waste of time but that is not what not practicable means. 17 The evidence satisfies me that it is inconvenient to serve MC2 again under the Hague Convention. Indeed one can perhaps go a little further than that. As I have already observed above, on the application for the anti-suit injunction the Court concluded that there was an arguable circumstantial case that the Respondents had commenced the proceedings in the Grand Court and the Hong Kong High Court to harass Mr Morris. It is not difficult also to infer that they have caused MC2 to take the position it has on service to make Mr Morris' life more difficult. 18 Be that all as it may lamentably be, it does not mean that service under the Hague Convention is not practicable. In that regard, whilst the delay which a second attempt at service under the Hague Convention is most likely going to engender is regrettable, and possibly scandalous, the current proceeding is not, in any relevant sense, urgent so that deemed service might be justified on that basis as it sometimes is: Australian Securities and Investments Commission v China Environment Group [2013] FCA 286 at [15]. 19 Mr Cox of counsel, for Mr Morris, submitted that the Court might order deemed service where satisfied that MC2 was 'playing technical games'. That expression derives from some comments made by Levinson J on a deemed service application which were quoted with approval by the United Kingdom Supreme Court in Abela v Baadarani [2013] UKSC 44; [2013] 1 WLR 2043 at [38]: 'The purpose of service of proceedings, quite obviously, is to bring proceedings to the notice of a defendant. It is not about playing technical games. There is no doubt on the evidence that the defendant is fully aware of the proceedings which are sought to be brought against him, of the nature of the claims made against him and of the seriousness of the allegations.' 20 However, these comments were made in the context of a deemed service rule (Civil Procedure Rules 1998 (UK) r 6.15(1)) which permitted deemed service where there was a 'good reason' to do so. The word in FCR r 10.48 is 'not practicable' and I do not think that the observations of the UK Supreme Court can assist. If it mattered, however, I do accept that MC2 is 'playing technical games'. 21 Nevertheless, I decline to make the deemed service orders sought. Mr Morris will need to serve MC2 under the Hague Convention again. 22 I will hear the parties further on the question of costs, however. My present thinking, to which I am not wedded, is that MC2 (or perhaps Mr Porter and Mr Evans) should pay all of Mr Morris's costs involved in serving the documents again under the Hague Convention on a full solicitor-client basis (i.e. including all costs, even those not reasonably incurred) and should do so forthwith. To that would be added the costs of the present application on a similar basis and any other expense Mr Morris encounters in going through this process. Further, as I indicated during the hearing, it seems to me unlikely that any timetable dispensations will be given to MC2 (once it is inevitably served) on account of its late arrival in the case. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.