Schweitzer v Kronen Verwaltungs GmbH [1998] VSC 190

86. On p.291-2 of my judgment and when referring to an application such as is presently the subject of consideration by the court on this appeal I stated - "On these applications it is for the plaintiff to persuade the court that in respect of each cause of action on which he relies against the first four defendants there is a strong arguable case that service out of the jurisdiction of that claim is justifiable on one or other of the sub-rules of r.7.01 as is relied on ... If at the end of the day the plaintiff has been successful in discharging the onus in respect of some of the claims made but not others it is for him to elect whether he will proceed only with those claims in respect of which he has established that r.7.01 authorises him to serve the proceedings out of the jurisdiction or have the whole proceeding stayed on the basis that the statement of claim contains a cause or causes of action in respect of which the defendants could not be served out of the jurisdiction. Such claims cannot be tacked on to the claims which the plaintiff is justified in serving out of the jurisdiction."

89. No decision of a superior court which binds me has been referred to me during the course of the hearing of this appeal which has expressed an opinion contrary to those statements made by me, nor has there been referred to me any decision which causes me to alter or vary the statements of principle as expressed by me in Williams. Accordingly, it is such principles that I apply on this appeal.

92. By the further amended statement of claim the plaintiff has alleged that the first defendant (which I shall hereafter refer to as Kronen) and the second defendant (which I shall hereafter refer to as Igedo) are and were at all relevant times legal entities recognised in the Federal Republic of Germany. She alleges that a company, Logenstone Corporation Pty Ltd was at all relevant times a company incorporated in this State and owned and controlled by herself and Ebner. She alleges that at all relevant times she and Ebner carried on a business of marketing and promotion agents under the name of Logenstone Corporation which business they carried on jointly. The plaintiff alleges that Ebner was declared bankrupt on 29 August 1994 and asserts that she maintains the action and sues the defendants in accordance with s.62 of the Bankruptcy Act 1966 (Cth).

95. By her further amended statement of claim the plaintiff alleges that by an agreement entered into between Logenstone Corporation Pty Ltd and Igedo on 8 December 1989, Logenstone Corporation Pty Ltd agreed to act as Igedo's agent to promote and market in Victoria and in Australia, fashion fairs conducted by Igedo in Germany. She alleges that pursuant to that agreement it was agreed that Igedo would pay to Logenstone Corporation Pty Ltd various payments and moneys identified. She alleges that between November 1988 and October 1990 Logenstone Corporation Pty Ltd acted as Igedo's agent in Australia and at its request carried out special promotions of Igedo's fashion fairs. She alleges that in October 1990 the business of Logenstone Corporation Pty Ltd was transferred to her and Ebner or alternatively, that its right title and interest in the agreement was assigned to her and Ebner or alternatively, that Igedo, Logenstone Corporation Pty Ltd and she and Ebner agreed to the novation of the agreement such that in October 1990 she and Ebner would perform obligations under the agreement previously carried out by Logenstone Corporation Pty Ltd. She alleges that between October 1990 and February 1991 she and Ebner, trading as Logenstone Corporation, acted as Igedo's agent in Australia and carried out promotions for and on behalf of Igedo at its request. She alleges that in or about February 1991 Igedo informed her and Ebner that it had transferred all its right, title and interest in the agreement to Kronen, or alternatively, Igedo informed her and Ebner that it had assigned its rights and interests in the agreement to Kronen or in the further alternative, that Igedo, Kronen, she and Ebner agreed to the novation of the initial agreement such that from February 1991 the obligations previously performed by Igedo would be performed by Kronen.

98. The plaintiff further alleges by her further amended statement of claim that between February 1991 and 4 August 1993 she and Ebner, trading as Logenstone Corporation, acted as Igedo's and/or Kronen's agents in Australia in promoting and marketing Igedo's and/or Kronen's fashion fairs pursuant to the terms of the agreement, that they carried out special promotions at the request of Igedo and/or Kronen and rendered invoices pursuant to the terms of the agreement for the work undertaken by she and Ebner. The plaintiff further alleges that by a notice dated 30 July 1993 Igedo and Kronen, or one or other of them, purported to terminate the agreement which notice was received by she and Ebner on 4 August 1993. She alleges that the termination of the agreement constituted a breach of the agreement which was accepted by her and Ebner as a repudiation of the agreement and that by reason thereof and in consequence of the breach and repudiation, she and Ebner suffered and continue to suffer loss and damage. She alleges that the damages so suffered total $1,247,702.80 plus DM750,000.

101. In the alternative, the plaintiff has alleged by her further amended statement of claim that between February 1991 and August 1993 she and Ebner, trading as Logenstone Corporation, at the request of Igedo and Kronen or one or other of them, acted as the agent of Igedo and/or Kronen in Australia for marketing and promoting fashion fairs and carried out special promotions at the request of Igedo and/or Kronen to market and promote Igedo and/or Kronen's fashion fairs. By paragraph 18 she pleads, "Schweitzer and Ebner claim the sum of $1,045,472.30 being reasonable remuneration on a quantum meruit basis for the work done and services performed in Victoria at the request of Igedo and/or Kronen".

104. At the commencement of the appeal, counsel for the plaintiff informed the court that in these proceedings the plaintiff relied entirely on her claim to be entitled to payment in quantum meruit and that the plaintiff abandoned all other claims as pleaded and that accordingly the plaintiff's entitlement to service the further amended writ out of Australia was limited to the plaintiff's claim in quantum meruit. The amended writ served on Igedo, endorsed with the further amended statement of claim, contained a further amended endorsement pursuant to Rule 7.02. It identified the particular paragraph of Rule 7.01 relied upon by the plaintiff in support of such service on Igedo. By the further amended endorsement, the plaintiff relied on paragraphs (f) and (g) of Rule 7.01 in support of such service.

107. Such paragraphs as are relevant and relied on by the plaintiff are -

"7.01(1)(f) The proceeding is one brought to enforce, rescind, dissolve, rectify, annul or otherwise affect a contract, or to recover damages or other relief in respect of the breach of a contract, and the contract -

(i) was made within Victoria;

(g) the proceeding is brought in respect of a breach

committed within Victoria of a contract wherever made

even though the breach was preceded or accompanied by

a breach out of Victoria that rendered impossible the

performance of that part of the contract which ought to

have been performed within Victoria."

111. The facts stated in the further amended endorsement on the Writ and dated 2 July 1996 in support of the service and under paragraph (f) of Rule 7.01(1) relevant to the plaintiff's claim against Igedo on a quantum meruit were as follows -

"3. Further or alternatively the plaintiff claims against the defendants moneys due on a quantum meruit basis for work undertaken between February 1991 and November 1993 which work and services were performed by the plaintiff in the State of Victoria at the request of the defendants.

4. The plaintiff claims reasonable remuneration on a quantum meruit basis for work done and services performed by the plaintiff for and on behalf of the defendants in the State of Victoria.

5. The defendants have failed to pay the plaintiff money due in breach of a contract implied by law that the defendants would pay the plaintiff a fair and reasonable remuneration for the work performed and services rendered by the plaintiff on an indebitatus assumpsit at common law.

6. The breach of the contract implied by operation of the law of the State of Victoria and thereby in breach of contract made within the State of Victoria the defendant have failed and refused to pay the plaintiff moneys due to the plaintiff on a quantum meruit basis."

115. The facts stated in the further amended endorsement under paragraph (g) of Rule 7.01(1) relevant to the plaintiff's claim on a quantum meruit are -

"14. Further or alternatively the plaintiff claims against the defendants moneys due on a quantum meruit basis for work undertaken between February 1991 and 8 November 1993 which work and services were performed by the plaintiff in the State of Victoria at the request of the defendants.

15. The plaintiff claims reasonable remuneration on a quantum meruit basis for work done and services performed by the plaintiff for and on behalf of the defendants in the State of Victoria.

16. The defendants have failed to pay the plaintiff moneys due in breach of a contract implied by law that the defendants would pay the plaintiff a fair and reasonable remuneration for work and services rendered by the plaintiff upon an indebitatus assumpsit at common law.

17. In breach of the contract implied by operation of the law of the State of Victoria and thereby in breach of a contract made within the State of Victoria the defendants have failed and refused to pay the plaintiff moneys due to the plaintiff on a quantum meruit basis.

18. In the premises the plaintiff relies on the provisions of order 7.01(1)(f) and (g) of the Supreme Court Rules to serve the further amended statement of claim out of Australia on the defendants and relies upon the facts contained in this further amended endorsement for such service."

119. In Earthworks and Quarries Ltd v. FT Easement and Sons Pty Ltd [1966] VicRp 5; [1966] VR 24 the plaintiff issued proceedings in this court for moneys alleged to be due to it under a contract made in New South Wales. The proceedings were served on the defendant in New South Wales which was a company incorporated in New South Wales. The writ was endorsed in accordance with the provisions of the Service and Execution of Process Act 1901-1963 (Cth). In serving the writ out of the State of Victoria the plaintiff relied upon s.11(c) of the Act and in particular that a breach of contract had occurred within the jurisdiction, namely, by the defendant failing to make payment of money alleged to be due under the contract to it at its registered office in Victoria. In the proceedings the defendant applied by notice of motion to set aside the writ and service. By its statement of claim the plaintiff in part claimed against the defendant on a quantum meruit alleging that the moneys due for the work performed in the State of New South Wales were to be paid by the defendant to it in Victoria. Deane, J addressed the question as to whether a claim founded on a quantum meruit came within s.11(1)(c) of the Act. At p.29 he stated -

"Accepting as I do the view that a claim founded on a quantum meruit does not arise out of an actual contract express or implied but out of an obligation imposed by law, I still consider that such a claim arises out of a breach of contract within s.11(1)(c)."

123. His Honour stated that he took that view for three reasons which he set out at p.29 when he further stated -

"(a) It appears from what I have already said that an action upon a quantum meruit is an action upon an indebitatus assumpsit at common law. The word 'assumpsit' means 'agreed' and shows that the claim is based upon a contract even though a fictional contract implied by law. It has been held that an action for money had and received, also an indebitatus assumpsit count is a contract for the purpose of service out of the jurisdiction ...

(b) The authorities upon the nature of a claim based on a quantum meruit constantly referred to such a claim as being founded on a contract implied by law ...

(c) The law always implies a promise to do that which a party is legally liable to perform ... "

127. The plaintiff's case as pleaded against Igedo in reliance on a claim on a quantum meruit is that it expressly requested her and Ebner as partners to perform work and provide services, thereby incurring expenses, which gave rise to an implied contract to pay quantum meruit for the services performed and expenses incurred in performing them.

130. The plaintiffs claim that the originating process may be served out of Australia in reliance on Rules 7.01(f) and/or (g), is that the work and services were performed in Victoria thereby giving rise to the implied contract, made in Victoria, to pay quantum meruit for the services performed and expenses incurred and that such obligation to pay the same was that the plaintiff be paid in Victoria which contractual obligation has been breached.

133. I am of the view that a claim by a plaintiff based on a quantum meruit may be served out of Australia pursuant to Rule 7.01 in reliance on facts relevant to sub-paragraphs (f) on (g) of that Rule. However, insofar as reliance is placed on paragraph (f), the notional contract or implied contract giving rise to a claim based on a quantum meruit must be one as identified in sub-paragraphs (i), (ii) and (iii) of paragraph (f). It is not suggested in these proceedings that sub-paragraph (ii) is relevant. Insofar as paragraph (g) is relied on, on a claim founded as a quantum meruit the "breach committed within Victoria", in my opinion, must be the failure to pay in Victoria that which the plaintiff is entitled on a quantum meruit where the obligation was to make payment in Victoria.

136. Counsel for the defendant submitted that the further amended endorsement on the amended writ served did not comply with Rule 7.02 and on that ground alone service of the amended writ ought to be set aside. He submitted that the further amended endorsement did not comply with the provisions of that rule as it did not state the facts said to give rise to the claim on a quantum meruit and based on paragraphs (f) and (g) of Rule 7.01(1).

139. In Whinnen v. Cussons (International) Ltd (unreported; Beach, J., 24 February 1998) after observing that in that case the plaintiff had conceded that the endorsement did not comply with rule 7.02 his Honour at p.3 of his judgment stated -

"As is pointed out in Williams at p.2559 - the purpose of the endorsement is to give a defendant notice of the grounds on which a plaintiff claims to be entitled to serve the originating process out of the jurisdiction. To do that the endorsement must identify not only the paragraph or paragraphs of rule 7.01 the plaintiff relies upon, but also state the facts which bring the case within that rule. In this way a defendant is given an appropriate opportunity to determine whether to object that the court ought not hear and determine the proceedings on the ground that the proceeding is not within rule 7.01(1) before filing an appearance or conditional appearance in the proceeding."

143. Insofar as by the further amended endorsement the plaintiff relied on Rule 7.01(1)(f) the plaintiff did state sufficient facts to comply with Rule 7.02(1). The plaintiff, by paragraph 3 of the further amended endorsement, stated that her claim against the defendants was for moneys due for work undertaken between February 1991 and 8 November 1993 which work and services were performed by the plaintiff in the State of Victoria at the request of the defendant. The plaintiff further stated that she claimed a reasonable remuneration for the work done and services performed by her on behalf of the defendants in the State of Victoria. Again, she stated that the defendants had failed to pay to her money due in breach of a contract implied by law that the defendants would pay her a fair and reasonable remuneration for work performed and services rendered by her. Insofar as the plaintiff places her claim on a quantum meruit, that statement of facts is sufficient, in my view, to give the defendants an appropriate opportunity to determine whether to object to the jurisdiction of the court. Insofar as the claim now pursued is limited only to that against the second defendant, Igedo, the facts stated were sufficient to give it an appropriate opportunity to make the relevant decision.

146. The endorsement relating to Rule 7.01(1)(g) and relating to the plaintiff's claim on a quantum meruit again states the facts that her claim was for moneys due for work undertaken between February 1991 and 8 November 1993 for work performed by her in the State of Victoria at the request of the defendants and that she claims reasonable remuneration for the work done and services performed by her on behalf of the defendants in the State of Victoria. She further has stated that the defendants have failed to pay moneys due in breach of a contract implied by law that the defendants would pay a fair and reasonable remuneration for such work and services rendered. Although within paragraphs 14 to 18 of the further amended endorsement the plaintiff does not specifically state as a fact that the payment was to be made to her in the State of Victoria, when one has regard to the statements of fact contained in paragraphs 7 to 13 of the further amended endorsement, the only reasonable conclusion that a defendant ought to arrive at when reading the facts stated in paragraphs 14 to 18 is that the failure to pay the plaintiff moneys due on a quantum meruit was a failure to pay those moneys in the State of Victoria. In my view, the further amended endorsement states facts sufficient for it to comply with Rule 7.02(1).

149. On this application Igedo contested that the plaintiff and Max Ebner did the work and rendered the services alleged whether in Victoria or otherwise, it contested that it or the first defendant as its agent requested the plaintiff and Ebner to do the work alleged to have been done whether that request was made in Victoria or elsewhere. It further contested that there was any implied agreement to pay the plaintiff and Ebner in Victoria for work allegedly performed at its request. Accordingly, it contested that there was any implied contract between it and the plaintiff and Ebner made within Victoria, entitling the plaintiff to recover moneys against it on a quantum meruit and it contested that there was any breach of any such implied contract by failing to pay moneys to the plaintiff in Victoria.

152. Further, the defendant, Igedo, on this application joined issue on the question of whether the plaintiff on the evidentiary material before the court ought to be found to have persuaded the court that there was a strong arguable case that service out of Australia was justified on the two paragraphs of Rule 7.01(1) relied on by the plaintiff. In support of the submission that the court ought to conclude that it is not satisfied that the plaintiff had a strong arguable case for service out of the jurisdiction on the cause of action relied upon by the plaintiff, Igedo relied upon a considerable body of evidence put before the court in affidavits at this point of time.

155. In addressing the claim that between February 1991 and November 1993 the plaintiff and Ebner, trading as Logenstone Corporation, at the request of Igedo or Kronen or one or other of them acted as the agent of Igedo and did work entitling the plaintiff to recover the amount claimed on a quantum meruit, it is first necessary to ascertain from the evidentiary material put before the court on this appeal the relevant facts preceding the first date mentioned and then during the relevant period.

158. It is common ground that an agreement was entered into on or about 8 December 1988 between Igedo and Logenstone Corporation Pty Ltd. Pursuant to that agreement, Igedo appointed Logenstone Corporation Pty Ltd as its agent for Australia. In its business, Igedo arranged three annual fashion fairs in Dusseldorf, Germany. The fashion fairs were the world's largest fashion fairs, concentrating largely on the industries concerning ladies apparel. Igedo utilised agents in various countries around the world to market the fairs, to approach manufacturers, wholesalers and retailers for the purpose of attracting them to be exhibitors at the fairs. Pursuant to the agreement, Igedo was to pay Logenstone Corporation Pty Ltd commission of 10% of rate rental received from Australian exhibitors procured; DM$5,000 per month for general office services and marketing, payable quarterly; reimbursement of expenses incurred distributing circulars and other special actions undertaken on Igedo's behalf with its agreement and a commission of 25% on entrance ticket to the fashion fairs sold by Logenstone Corporation Pty Ltd. The agreement did not provide that moneys paid under the agreement would be paid into Logenstone Corporation Pty Ltd bank account at Melbourne. As events transpired during the relevant period, numerous payments were made into the bank account of Logenstone Corporation Pty Ltd in Germany.

161. It was further common ground that Igedo gave notice terminating this agreement, which notice was dated 30 July 1993 and which was addressed to Logenstone Corporation Pty Ltd. To that notice I shall later return.

164. In an affidavit sworn by the plaintiff on 15 September 1997 she deposed that from October 1990 the interest held by Logenstone Corporation Pty Ltd under the agreement was transferred to her and her husband, Ebner, and that thereafter they continued to operate as the agents for Igedo pursuant to the agreement and under the business name Logenstone Corporation. In an affidavit sworn by the defendant's solicitor Wright on 20 January 1997 he deposed that on 26 July 1994 he caused a business name search to be made for the name Logenstone Corporation. In consequence of that search the Office of Corporation Affairs Victoria reported that there was no evidence of Logenstone Corporation ever being registered as a business name. The written report did, however, record that on 23 December 1993, that is, after termination of the agreement previously referred to and subsequent to the period the subject of the plaintiff's claim, there was registered the business name of "Logenstone and CIE" and that the persons who carried on that business as registered were Ebner and the plaintiff.

167. Ebner, in an affidavit sworn 17 June 1994 has deposed that from 8 October 1990 he and the plaintiff carried on business under the name of Logenstone Corporation. He has further deposed that the identity of the party carrying out the instructions of Igedo was never any matter of significant concern and that the defendants were aware of the change of the Australian identity from a company to a partnership. This fact is disputed, as I shall hereafter refer to, in an affidavit sworn by Manfred Kronen, the managing director or Igedo. In his affidavit, Ebner has further deposed that the fact that Logenstone Corporation Pty Ltd was no longer acting as Igedo's agent was the subject of express agreement. Not only is that fact disputed by Kronen in his affidavit but no further evidentiary material is forthcoming from the plaintiff or Ebner providing any details as to such agreement or whether the same was oral or in writing or how it was constituted.

170. In her affidavit the plaintiff deposed that in February 1991 Kronen told her and Ebner that there was to be a restructure of the corporate arrangement between the defendants such that the first defendant would take over the interests of the second defendant under the agreement. She deposed that at such time she confirmed that she and Ebner had transferred the interest of Logenstone Corporation Pty Ltd under the agreement to the business name conducted by them and known as Logenstone Corporation and that the re-arrangement of the interest of the parties under the agreement was mutually acceptable and clear from the discussions at such meeting. These facts are disputed in the affidavit of Kronen sworn 7 April 1998. He denies that the plaintiff and Ebner so informed him of this matter at this or at any time. He denies that he told Ebner and/or the plaintiff that there was a re-structuring of the defendants and that the first defendant would take over the interests of Igedo under the agreement or that Igedo had transferred or assigned its rights under the agreement to the first defendant. The assertion by the plaintiff in her affidavit that from February 1991 the agreement was performed on a basis that it was an agreement between the first defendant and the business name conducted by them and known as Logenstone Corporation is contrary to the present claim pursued by the plaintiff that she is entitled to recover from Igedo on a quantum meruit reasonable remuneration for services performed and expenses incurred in acting as its agent and performing services at its request.

173. The plaintiff has deposed in her affidavit that moneys due to her and Ebner under the agreement from or about 26 October 1991 were paid on occasions into a bank account in Germany and on other occasions into a bank account in Melbourne. The plaintiff has deposed that despite the arrangement whereby moneys were paid into an account in Melbourne and of other occasions into an account in Germany, the principal obligation of the defendants in respect of the moneys payable in Australian dollars was to make these payments to the account held by herself and her husband at the bank at Melbourne which she opened in October 1990 when the interest under the agreement was transferred from Logenstone Corporation Pty Ltd. Other than asserting this fact the plaintiff provides no evidence from which it can be concluded or inferred that the principal obligation contended for by her was in fact the case. It is to be noted that in correspondence signed by Ebner in October 1988 and addressed to Igedo, the letterhead contains the name Logenstone Corporation Pty Ltd as well as the name Logenstone Corporation and was signed by Ebner under the typed name Logenstone Corporation. It is further to be noted that in a faxed letter dated 26 May 1993 addressed to Igedo and signed by Ebner above the typed name Logenstone Corporation there appears to be the image of two business cards stating that Ebner is the managing director and that the plaintiff is a director of Logenstone Corporation. Further, notwithstanding the assertion of Ebner and the plaintiff as to the transfer of the interest in the agreement from Logenstone Corporation Pty Ltd to a business Logenstone Corporation, invoices addressed to Igedo in May, July and August 1991 were stated to be from Logenstone Corporation Pty Ltd. Further, an invoice directed to Igedo on 6 May 1993 for services alleged to have been rendered during the period 7 February 1993 to 6 May 1993 and again an invoice on 6 August 1993 addressed to Igedo for services alleged to be rendered from 1 July 1993 to 6 August 1993 were each stated to be from Logenstone Corporation Pty Ltd.

176. In his affidavit sworn on 7 April 1998, Manfred Kronen, the managing director of Igedo, has deposed that from early in the relationship between Igedo and Logenstone Corporation Pty Ltd the latter used the name Logenstone Corporation either in conjunction with Logenstone Corporation Pty Ltd or interchangeably with Logenstone Corporation Pty Ltd. He has sworn that all invoices received by Igedo during the period from 7 February 1989 to 6 August 1993 were in the name of Logenstone Corporation Pty Ltd. In his affidavit, Kronen has confirmed facts deposed to in an affidavit sworn by the defendant's solicitor Wright on 20 January 1997. In particular, he has confirmed that Igedo became concerned as to the existence of Logenstone Corporation Pty Ltd and commissioned a report be obtained relating to the same, which report on or about 30 July 1993 advised that one Taylor had been appointed liquidator of Logenstone Corporation Pty Ltd on 17 February 1992 and that the company had been de-registered by the Australian Securities Commission on 19 April 1993. Kronen has deposed that he was not aware of such matters until that time and that following the receipt of the report and on 30 July 1993 in a letter addressed to Ebner, Logenstone Corporation Pty Ltd, Igedo terminated its agreement, referred to in the letter as "our representative contract" with the company. The letter concluded, "We regard the contractual relationship as being dissolved immediately since we regard this [current circumstance] to be an extraordinary cause for termination and your company is not to become commercially active again on our behalf". In a letter addressed to Igedo dated 4 August 1993 and signed by Ebner and in response to the letter of Igedo, Ebner stated

"Re: Your termination notice.

Please take note that, due to a culmination of newly imposed business and taxation regulations in this country, it became preferable for Logenstone Corporation to change its structure from that of a company, to a partnership.

The Australian Securities Commission was advised of this change on the 15th of January 1992, and the company underwent the usual winding-up procedure.

The Logenstone Corporation partnership took over the functions of the company, and has continued to represent Igedo, without any adverse effect or loss of credibility whatsoever, to either Logenstone Corporation or, to The Igedo Company.

We therefore ask you to reconsider your position, and assure you of our best intentions, at all times.

Yours faithfully,

LOGENSTONE CORPORATION."

180. Kronen, in his affidavit has sworn that it was a result of the receipt of that letter that he first became aware of an assertion being made of a partnership known as Logenstone Corporation.

183. During the course of the hearing of this appeal it became common ground that for the purpose of this proceeding, that on 17 February 1992 the Federal Court of Australia made an order placing Logenstone Corporation Pty Ltd in liquidation on the application of the Australian and New Zealand Banking Corporation Group Ltd and on that day appointed Taylor as the liquidator. Such facts as accepted on behalf of the plaintiff fly in the face of the statements and assertions made by Ebner in his letter as referred to. The statement of fact that the company "underwent the usual winding-up procedure" in the circumstances stated was untrue. In consequence, facts sworn to by Ebner in his affidavit in this proceeding where not otherwise confirmed must be looked at with considerable care before being accepted. The fact that the statement of Ebner in the letter was not true against must be had regard to when facts sworn to by him in his affidavit are contradicted in other affidavit material before the court.

186. As deposed to by Wright in his affidavit, it was on 26 July 1994 that he caused a business name search to be made for the name Logenstone Corporation and in consequence of that, searched the facts previously referred to were revealed.

189. As pleaded by the plaintiff in her further amended statement of claim, on 29 August 1994 her husband and alleged partner was declared a bankrupt. It is relying on that fact that she seeks to maintain this action and seeks to recover moneys from Igedo relying on s.62 of the Bankruptcy Act 1966 (Cth). Relevant to the acceptance of the plaintiff's claim that she is entitled to recover from Igedo on a quantum meruit, moneys being reasonable remuneration for services performed and expenses incurred by her and Ebner trading as Logenstone Corporation at the request of Igedo while acting as its agent in Australia and carrying out special promotions at its request to market and promote it, is the statement "of affairs" made by Ebner in his bankruptcy and dated 3 October 1994. In paragraph five of that statement, in the box headed, "List debt owed to you or jointly to you and another person" there is written the word "None".

192. From these facts it is to be seen that in this proceedings, and on the evidentiary material placed before the court there is very much in issue the claim made by the plaintiff, and on which she relies on her claim in quantum meruit, that the work performed and services rendered during the period from February 1991 to November 1993 were performed at the request of Igedo directed to her and her husband trading as Logenstone Corporation. From the invoices placed before the court and as previously referred to, during the relevant period and notwithstanding that Logenstone Corporation had been placed in liquidation, on 17 February 1992 invoices directed to Igedo continued to be in the name of Logenstone Corporation Pty Ltd. The plaintiff and Ebner held out to Igedo that it was dealing with Logenstone Corporation Pty Ltd. Even the letter of Ebner to Igedo on 4 August 1993 following the termination of the agreement by Igedo supports that conclusion. It is not consistent with Igedo knowing and appreciating that the plaintiff and Ebner trading as Logenstone Corporation would perform the company's obligations and perform work as requested. It is inconsistent with Igedo agreeing to such an arrangement. It is inconsistent with the allegation that Igedo requested the plaintiff and Ebner as individuals to perform work and services for it.

195. I next turn to have regard to the issues on the evidentiary material before the court relating to the specific claims made by the plaintiff. The first to which I have regard is that identified as particular B in paragraph 18 of the further amended statement of claim. That in turn relates to particular (XII) in paragraph 13 of the further amended statement of claim. In her affidavit the plaintiff has asserted that she has read the further amended statement of claim and that the contents of the document are true and correct. Where matters are in dispute such an assertion in my view carries little or no evidentiary weight at all. The claim made in the further amended statement of claim is for payment of $99,923.75, being professional time $87,750 and total expenses $12,173.75. It is to be noted however that in the affidavit of Ebner sworn 17 June 1994 the amount calculated for these alleged services were $58,630, being total expenses of $6,130 and professional time at $52,500. No evidence is forthcoming as to how this variation in the amount now claimed and the amount previously identified occurs, other than an assertion by the plaintiff in her affidavit that her claim has been "refined and amended". .

198. To the extent that the claim relates to work allegedly performed during the period subsequent to April 1993 as appears to be the claim identified in paragraph 18 of the affidavit of Ebner, in which the claim is limited to $58,630, it is challenged and its basis in fact denied. It is deposed in the affidavit of Wright, which is confirmed by Kronen in his affidavit, that in or about March 1993 Kronen, on behalf of Igedo, had discussions with the plaintiff or Ebner on behalf of Logenstone Corporation Pty Ltd regarding the possibility of Igedo entering into a joint venture with Logenstone Corporation Pty Ltd for the establishment of a fashion house in Melbourne. It is deposed that these discussions were held in Dusseldorf, however, during the same, Kronen did not request or give any instructions for the plaintiff or Ebner to carry out investigations into the establishment of the fashion house in Australia, nor did Kronen commit Igedo to Logenstone Corporation Pty Ltd or the plaintiff or Ebner financially or otherwise to enter into a joint venture for an Australian fashion house. Clearly, this evidence puts in dispute any basis for the claim of the plaintiff that Igedo requested her and/or Ebner or Logenstone Corporation Pty Ltd to do work on its behalf. In his affidavit Kronen has deposed that when he discussed this matter with the plaintiff or Ebner he indicated that he considered the proposal put forward as not feasible, that they wanted to investigate it and would keep him informed. He denies this work was done for or at the request of Igedo.

201. The next claim made by the plaintiff is for $65,589.60 for the "cost charges and expenses in relation to the proposed Igedo press conference in Australia". This is particularised in paragraph 18C of the further amended statement of claim. In Ebner's affidavit the claim identified under this head is quantified in a total sum of $29,986. In Ebner's affidavit, he has deposed that the time spent on this work was a total of 216 hours. However, as particularised in the further amended statement of claim, it is alleged that the times occupied in this work is more than double that time, being 442 hours. The claim of the plaintiff has in its origins a letter from Ebner to Igedo dated 10 July 1992 and a response to that letter from Igedo dated 23 July 1992. In that latter letter Igedo referred to the suggestion of Ebner that it conduct a press conference in Australia and stated that Igedo would be grateful if Ebner would inform it of cities in his opinion which should be taken into account and to forward quotations for functions so that they could make a final decision. On 9 September 1992 Ebner communicated with Igedo providing to it basic cost figures provided by the Hilton Hotel, Sydney and Melbourne. No press conference was forthcoming as Igedo decided not to proceed. In his letter to Igedo dated 9 September 1992, Ebner stated, "Please let us know if we can be of any further assistance in this matter". There appears to be no further response to that. In the affidavit of Wright as confirmed by Kronen, it is deposed that Igedo paid to Logenstone Corporation Pty Ltd DM5,000 per month agency fee as well as reimbursing it for expenses pursuant to the agreement and that neither Logenstone Corporation Pty Ltd or its servants or agents informed Igedo that such enquiries for the arrangement of a press conference were to be for remuneration in excess of entitlements under the agency agreement. The particularisation of this claim in paragraph 22 of the affidavit of Ebner, on its face, makes the claim grossly inflated and disproportionate to any evidence supporting work performed in respect of this matter. It is to be noted that notwithstanding the closing statement in the letter of Ebner dated 9 September 1992 in his affidavit he identifies and particularises the work being performed until February 1993.

204. The next claim made by the plaintiff and in paragraph 18D of the further amended statement of claim is for $475,170.35 for "cost charges and expenses in relation to establishing markets for end of season garments in Australia". In his affidavit sworn on 17 June 1994 the claim as identified and deposed to amounted to $245,229. Other than the statement of the plaintiff previously referred to, there is no explanation forthcoming from the plaintiff as to this vast difference for the basis of the same. Under the further amended statement of claim the claim is for 3,372 hours of work performed. However, Ebner has deposed that the time spent on this work was 1,700 hours. This claim along with the others is also contested by Igedo. In his affidavit, Wright has deposed that in or about March 1990 there were discussions held in Dusseldorf between the plaintiff and Ebner on behalf of Logenstone Corporation Pty Ltd and Kronen regarding the possibility of marketing and selling end of northern hemisphere season garments in Australia, and that it was agreed that the possibility would be investigated without committing Igedo financially. These facts have been confirmed by Kronen in his affidavit. He has further deposed that this matter was solely for the benefit of Logenstone Corporation Pty Ltd and that it wanted to develop that line of business and Igedo assisted Logenstone Corporation Pty Ltd and introduced it to a manufacturer. It is deposed by Ebner that in March 1993 Kronen was advised that a substantial amount of time and considerable expenses had been expended in performing this task for them and that Kronen said that he was disappointed that all the effort had been allowed to go to waste and accepted substantial responsibility for failing to co-ordinate the project and oversee the relationship more directly and that at that time it was made clear to Schweitzer that they should cease their further involvement. Kronen, in his affidavit, denies that such conversation took place. The claim under this head as identified and particularised by Ebner in his affidavit is a claim for services performed during the period March 1990 to February 1993 and involves a claim for 1,720 hours work at $125 per hour. By reference to the correspondence placed before the court the subject of this claim and its contents, the amount of hours claimed to have been occupied by the plaintiff and Ebner on this activity seem to be out of all proportion. It is further deposed by Wright in his affidavit and confirmed by Kronen in his affidavit that neither the plaintiff or Ebner in their capacity as officers and directors of Logenstone Corporation Pty Ltd or on their own behalf at any stage sought from or discussed with Kronen or Igedo payment or any remuneration in respect of this claim but rather the first time that a claim was made for remuneration and refund of expenses under this head was following service of the writ and the statement of the claim upon them.

207. The next head of claim made by the plaintiff is that under paragraph 18E of the further amended statement of claim, "cost charges and expenses in relation to establishing the Igedo Travel Service in Australia". Under this head the plaintiff claims $81,524.85. In the affidavit of Ebner the claim made under this head was for $36,180. Again no explanation was forthcoming on these proceedings as to the vastly increased amount of the claim and how it differed from that previously identified other than the plaintiff's general assertion. The time frame in respect of which this claim for services and expenses as deposed to by Ebner is between 30 April 1992 and September 1992. As appears from the affidavit of Wright, as confirmed in the relevant respect by Kronen in his affidavit, by a newsletter dated 24 April 1992 despatched by Igedo to all its overseas agents, including Logenstone Corporation Pty Ltd, it informed them of its intention to set up "Igedo Travel Service" with the agency "Hartmann incoming and incentive service". The circular provided an interim list of travel agents co-operating with Hartmann, pending finalisation of a binding agreement with Hartmann for the "Igedo Travel Service". The newsletter sought from each overseas agent a recommendation for a travel agent on the list co-operating with Hartmann or any other travel agent to organise overseas travel to the 1993 fashion fairs within each overseas agent's area on or before 12 May 1992. On 30 April 1992 Ebner, in a faxed letter to Igedo, acknowledged receipt of the circular and stated, "With your approval we will approach a number of good and credible Australian travel agencies and ask them to give us their written submissions for providing our Igedo visitors with suitable travel packages." On 4 May 1992 Igedo communicated by fax with the plaintiff and Ebner advising that the travel service contract had to be signed the following day and advising what the package offered in 1993 would include. On 28 May 1992 the plaintiff, on letter head "Logenstone Corporation Pty Ltd" advised Igedo that they had sent out briefs to a selection of travel agents (14 in all) with an invitation to submit their proposals to become involved with the new Igedo Travel Service. As deposed by Wright, thereafter Logenstone Corporation Pty Ltd did not forward any other memorandum to Igedo concerning the "Igedo Travel Service". Again, it is deposed that the defendants became aware for the first time of this claim following service of the writ and statement of claim. In his affidavit, Ebner has deposed that the representatives of Igedo with whom the plaintiffs were associated and from whom they obtained instructions to carry out the work the subject of this claim were a Mrs Bergmann and a Mrs Kaczorowski. In his affidavit, Kronen has deposed that he has been informed by each of those two persons and believes that they did not give approval sought by Logenstone Corporation Pty Ltd in its fax dated 30 April 1992, that other than the information sought in a fax from Logenstone Corporation Pty Ltd by Igedo in its fax dated 4 May 1992 they did not make any further request in connection with the travel service and that prior to 12 May 1992, being the date by which overseas agents were to provide a list of travel agencies, no response had been received from Logenstone Corporation Pty Ltd. He deposes further that he has been informed by such persons and believes that they did not authorise the forwarding of the brief referred to in the letter dated 28 May 1992 from Logenstone Corporation Pty Ltd to Igedo and further, they did not receive any other information in connection with forwarding of briefs to travel operators as asserted. It is again clear that Igedo substantially and on a factual basis joined issue with the plaintiff's claim under this head and denies her entitlement to any sum claimed with respect to it.

210. The next claim by the plaintiff is for the sum of $285,725.70 being, "costs charges and expenses in relation to investigating alternative advertising options in Australia". By the particulars under paragraph 18F of the further amended statement of claim the plaintiff alleges that 2,080 work was expended on this activity. No reference to this claim is made by Ebner in his affidavit. In the affidavit of Kronen he has deposed that the first time that the defendants became aware of this claim was following the receipt of a copy of the further amended writ and further amended statement of claim. He has deposed that Igedo did not approve of any work or expense of this kind. He has further deposed that any request to consider alternative advertising options and any work performed in that regard (if any) would be performed by the Logenstone Corporation Pty Ltd pursuant to its normal duties as the foreign representative of Igedo.

213. The final claim made by the plaintiff is that identified in particular A of paragraph 18 of the further amended statement of claim is a claim for $37,538.08 for "unpaid invoices". Ebner, in his affidavit, exhibits the invoices referred to in this paragraph. It is to be noted that the first invoice dated 6 August 1993 is from Logenstone Corporation Pty Ltd and bears the common seal of that company. The services rendered and amounts claimed in that invoice are for the period from 1 July 1993 to 6 August 1993. In his affidavit, Kronen has deposed that in relation to the claim for $14,720 being the subject of the invoice dated 6 August 1993, despite several requests for evidence of expenditure there identified, such details have not been supplied by the plaintiff. In the affidavit of Kronen he has deposed that amount referred to in Exhibit SMW10 were paid by Igedo without having received evidence that the debts had been properly incurred or without Igedo's prior agreement to pay the expenses. One such amount was that for the expenses allegedly incurred during period 1 July 1993 to 6 August 1993 and being the amount previously referred to of $14,720. By his affidavit, Wright has deposed, which Kronen has confirmed, that the expenses allegedly incurred by the plaintiff during the period from 7 August 1993 to 6 November 1993 were incurred without the defendants' consent or approval and following termination of the agreement. It is to be observed that the letter enclosing the invoice dated 6 August 1993 for $14,720 requested payment of that invoice into a German bank account. This contradicts the contention that moneys for work performed were to be paid in Victoria, and that by Igedo failing to so pay there is breach of the implied agreement giving rise to a claim on a quantum meruit, which is able to support service out of Australia under Rule 7.01(g). The assertion by the plaintiff that the principal obligation of the defendants was to pay moneys due into a bank account in Melbourne, is not evidence of that fact as contended for.

216. Insofar as the plaintiff's claim is pursued against Igedo in respect of service out of Australia is limited to a claim on a quantum meruit as identified and particularised in the further amended statement of claim and the plaintiff relies on Rules 7.01(f) and (g) as providing authority for this court to serve its originating process out of Australia, at the very foundation of that claim is that the work done and expenses incurred were done and incurred by her and Ebner at the request of Igedo or its agent made to them as individuals carrying on business together.

219. For the purpose of argument on this application but without conclusively determining the point, I accept that s.62 of the Bankruptcy Act 1966 (Cth) enables the plaintiff to bring proceedings relying on a quantum meruit, without joining Ebner, where it is alleged that the work done and expenses incurred were done and incurred in circumstances enabling a quantum meruit to be relied on it being alleged that at the relevant time the plaintiff and Ebner did the work and incurred the expenses acting as partners.

222. In this case it is the plaintiff's claim that the work done and expenses incurred, as alleged by her in her further amended statement of claim, were in fact done and in fact incurred, as alleged and that the alleged work was done and alleged expenses were incurred at the request of Igedo. On the evidentiary material on this application Igedo has denied that it dealt with the plaintiff and Ebner as partners contending that until terminating the agreement referred to its relationship was with the company Logenstone Corporation Pty Ltd. By evidence comprising in particular the affidavits sworn by Wright and Kronen, Igedo has put clearly in issue whether the work allegedly done and expenses allegedly incurred was in fact done and incurred as alleged by the plaintiff in her further amended statement of claim. By that evidentiary material Igedo has denied that it requested the relevant work to be done but where it may have been done it is the case of Igedo that any work done was within the agreement between it and Logenstone Corporation Pty Ltd. Igedo by this evidentiary material has denied that it is indebted to the plaintiff for work allegedly done and expenses allegedly incurred by the plaintiff and Ebner as is claimed by the further amended statement of claim in the proceedings.

225. It is at the very foundation of the plaintiff's claim on this application that she must establish to the satisfaction of the court that there is a strong, arguable case that service out of Australia of the originating process containing the further amended statement of claim and the further endorsement made pursuant to Rule 7.02(1), is justified. To be justified the plaintiff must establish in turn on the evidentiary material before the court that she has a strong arguable case against Igedo, that the work was done and expenses were incurred and that such work was done and expenses incurred by her and Ebner at the request of Igedo or its agent as is alleged in the further amended statement of claim, such request being directed to them as individuals carrying on business together.

228. The evidence of Ebner as contained in his affidavit is central to the plaintiff's case on this application. It was in answer to the affidavit of Ebner sworn on 17 June 1994 that the detailed affidavit of Wright sworn on 20 January 1997 was filed in the proceedings which was affirmed in the affidavit of Kronen sworn on 7 April 1998. The affidavit of Wright set out extensive evidentiary material and a large number of documents providing evidence of the basis of Igedo's denial of liability to the plaintiff in this case. The plaintiff in her affidavit, sworn after the affidavit of Wright, and sworn by her on 15 September 1997 did not seek to deal with the details of the matter as raised by Wright in his affidavit. She deposed, inter alia, that she had read the affidavit of Ebner and that "save for the quantification of my claim which has been refined and amended since my husband's affidavit was sworn and now appears in full in the further and amended statement of claim, the contents of that affidavit are true and correct". She provides no detail or evidence in her affidavit as to how particular parts of the claim now made against Igedo has greatly increased in amount, nor does she provide any evidentiary material, other than that statement made by her as to how there is such a large variation in the claim now pursued by her as against that detailed by Ebner in his affidavit. The plaintiff's assertion in her affidavit that the contents of the further amended statement of claim are true and correct have little evidentiary weight on this application and in the absence of any real explanation by her as to how the claim now pursued is different in amount detailed by Ebner in his affidavit, carries her case on this application no further against Igedo.

231. For the reason that I have previously expressed in this judgment concerning the untruthfulness of the statement of Ebner in his letter to Igedo, concerning the reason for the liquidation of Logenstone Corporation Pty Ltd, I am unable on this application to place any real reliance on matters deposed to by Ebner where they are contested on oath by Wright and Kronen in their respective affidavits. The plaintiff has not on this application sought to put forward any evidence by herself detailing how her claim is made, nor has she sought to have any further affidavit of Ebner put forward on this application giving some reason or explanation as to how the claim of the plaintiff has now been "refined and amended" since he swore his affidavit. The statement of Ebner in his bankruptcy proceedings, to which I have previously referred, strikes at the very root of the plaintiff's claim against Igedo in this action in which the plaintiff contends that Igedo is indebted to her and Ebner jointly.

234. In the manner that I have referred to when reviewing the evidentiary material before the court on this application, Igedo, relying on the affidavit of Wright and Kronen in particular, has contested the claims made by the plaintiff on a quantum meruit in these proceedings and relies on such affidavit in denying that it is liable to the plaintiff in any amount claimed by her by the further amended statement of claim against it.

237. On the evidentiary material which I have reviewed in this judgment I am not persuaded that the plaintiff has demonstrated that she has a strong arguable case against Igedo to recover the amount claimed in the further amended statement of claim based on a quantum meruit and particularised in that further amended statement of claim. I am not persuaded that the plaintiff has a strong arguable case that the work allegedly performed was done or the expenses allegedly incurred were incurred or if done and incurred if at all were done by her and Ebner or incurred by them at the request of Igedo or its agent made to them as individuals carrying on business together. The large variances in the amounts deposed to in the affidavit of Ebner as compared to those claimed in the further amended statement of claim and without any satisfactory explanation forthcoming with respect to that other than by a general statement deposed to by the plaintiff, concerning the same gives rise to very considerable doubt as to the veracity of the amounts now sought to be recovered. I am not persuaded that the plaintiff has on the evidentiary material presently before the court established a strong arguable case that she and Ebner, carrying on business together, performed the services or incurred the expenses now alleged and particularised in the further amended statement of claim.

240. Accordingly, the plaintiff has not established to my satisfaction that she has a strong arguable case against Igedo for the amount claimed in her further amended statement of claim on a quantum meruit and particularised in that further amended statement of claim as would justify service out of Australia on Igedo of the amended Writ endorsed with the further amended statement of claim and being endorsed with the further amended endorsement made pursuant to Rule 7.02(1).

243. In such circumstances it must follow that the plaintiff has not established a strong arguable case that she is entitled to recover against Igedo and be paid the amount claimed. That being the case it does not arise for decision whether the plaintiff has established a strong arguable case as would justify service out of Australia of the court's originating process against Igedo in reliance upon Rule 7.01(g). That cannot arise unless the plaintiff establishes in the circumstances of this application a strong arguable case that there existed an implied contract pursuant to which Igedo was obliged to pay quantum meruit. This the plaintiff has not done on the evidence before the court on this application.

246. In those circumstances the conclusion that I have reached is that the plaintiff has not established a strong arguable case that service of the amended Writ on Igedo out of Australia is justified pursuant to Rule 7.01(f) or (g).

249. Accordingly, in my view the service on Igedo in Germany of the amended Writ filed 2 July 1996, should be set aside.

252. In such circumstances the appeal from the Order of the Master made 6 May 1998 must be dismissed and the orders made by the Master on that day in the proceedings ought to be confirmed.

255. I order That the appeal of the plaintiff against the Order of the Master made in the proceedings on 6 May 1998 be and is dismissed and that such order be confirmed.