Van Leer Australia Pty Ltd v Palace Shipping KK

High Court of Australia|1978-11-24|Before: Stephen J

For the reasons which appear in the passages which I have cited from the judgments of Bray C.J. and of Culliton C.J. I have concluded that in the exercise of discretion in renewal of a writ I should, with the support of this substantial body of Commonwealth authority, adopt the approach favoured by the South Australian Supreme Court and by the Canadian courts.

I turn now to the circumstances which have led to this application. It seems that a number of factors led to the plaintiff initially making no endeavour to serve Palace Shipping. Leave to serve notice of a concurrent writ upon Palace Shipping in Japan was granted by me on 15 December 1978, less than a month after issue of the writ. Palace Shipping was a Japanese company which had no presence within Australia which would have allowed it to be served here. On the other hand, the defendant Simsmetal was thought to be the demise charterer of the vessel which had carried the steel to Australia and could be served readily enough in Sydney. The plaintiff's solicitors accordingly sought an admission that it was the demise charterer, believing that if such admission were obtained it would be unnecessary to pursue the claim against Palace Shipping. As early as February 1979 there were discussions between the solicitors for the plaintiff and for Simsmetal, in which the latter suggested that pending investigations the writ should not be served upon their client or upon Palace Shipping. Thenceforth all question of service upon Palace Shipping seems to have been deferred for some seven months until, in September 1979, it became clear to the plaintiff that the desired admission was not forthcoming. The plaintiff then effected service upon Simsmetal but still took no step towards effecting service upon Palace Shipping.

Then, in October 1979, Simsmetal delivered its defence. According to the solicitor for the plaintiff, it was only then that it became clear that the plaintiff "would have to pursue proceedings against the firstnamed Defendant and that led to the first application for extension of the Writ", by which time almost twelve months had elapsed since its issue and almost two years since the consignments of steel had arrived in Australia. The plaintiff had taken no steps in those two years to inform Palace Shipping of its complaint about the condition of the steel. This was not, however, to be the full extent of delay in notifying that defendant of the claim made against it.

While, so far as appears, Palace Shipping continued to remain in ignorance of the claim against it, the plaintiff began for the first time to attend to service in Japan of notice of the writ.

Once leave to serve out is obtained there is a variety of ways in which writs issued out of this Court may be served on defendants out of the jurisdiction. Service under O. 10, r. 6 would seem to offer a prompt mode of service of notice of a writ. That rule directs such service to be "in the manner in which a writ of summons is served", that is to say, by personal service on the defendant. Had there, for any reason, been difficulty in effecting personal service in Japan, application could have been made for substituted service, although it would then have been necessary to prove that "prompt personal service" could not be effected. The interaction of O. 10, r. 6 and O. 9, r. 2(2) permits of substituted service in such cases [38] . Then again O. 10, r. 11 expressly provides for the grant of leave "to transmit any document by air mail". While the scope of this rule, apparently derived from the rather different terms of the English O. 11, r. 12A in its 1937 form, is not altogether clear, it would certainly authorize substituted service by airmail, to be proved by proof of airmail posting; subject, of course, to establishing the necessary foundation for an order for substituted service. Again, O. 10, r. 6 makes express provisions for the giving of directions as to "the manner in which the notice shall be served or brought under the notice of the defendant".

See Porter v Freudenberg , [1915] 1 K.B. 857; Laurie v Carroll (1958), 98 C.L.R. 310.

Instead the plaintiff sought to effect service by means of a letter of request, pursuant to O. 10, r. 7 of the High Court Rules and this it only accomplished some twelve months later. Service by letters of request may commend itself in terms of international comity, but is not always expeditious. In the present case it of course proved to be extraordinarily slow.

While the plaintiff is not to be criticized merely because of the mode of service which it chose, it might have been expected that, once it became clear that this method was leading to long delays, the availability of other speedier means of service would have been investigated. Especially is this so in view of the already substantial delays and obvious need, since September 1979, to serve Palace Shipping. Apart from the various practice books and, of course, the Rules themselves, detailed information as to modes of service out of the jurisdiction is contained in Smit, International Cooperation in Litigation [39] , in McClean & Patchett, Report on the Recognition and Enforcement of Judgments and Orders and the Service of Process within the Commonwealth [40] and in Harwood and Dumboyne's "Service and Evidence Abroad" [41] .

(1965), pp. 86-89. 2. (1977), pp. 175-202. 3. International and Comparative Law Quarterly, vol. 10 (1971), pp. 284-304.

To resume the narrative of events, the plaintiff's preparations for service began with procuring a translation of the concurrent writ into Japanese; this seems to have taken about a month. Then the period from November 1979 until February 1980 was taken up in amending the notice of writ at the instance of this Court's Registry and in then retranslating the amended notice. The fact that for some reason all translation was undertaken in Sydney exacerbated delays, as did the loss of documents in the post between Melbourne and Sydney on one occasion. Meanwhile, on 23 November 1979, the plaintiff had made an ex parte application to me on which an order was made for renewal of the writ for a further six months, this application being made one day before the anniversary of the issue of the writ.

It was not until 14 February 1980 that the documents thought to be necessary for service in Japan were filed with the Court. Further delays followed in late February and during March 1980 when queries by this Court's Registry concerning the Japanese translation of the notice of writ required further reference to the Japanese translators in Sydney. Only in mid-March 1980 were the documents finally forwarded by the Registry to the Attorney-General's Department for transmission to Japan.

The plaintiff's solicitors then apparently believed that service in Japan of the notice of writ would be effected soon after its transmission to the Attorney-General's Department. However this belief proved to be ill-founded. Instead there followed many months during which, according to the plaintiff's solicitors, repeated inquiries from this Court's Registry yielded no information about service of the notice of writ. Since I do not regard this period from March 1980 onwards as of critical significance, I do no more than note the plaintiff's solicitors' complaints about lack of information concerning service: the effecting of service was then entirely out of their hands, being in the hands of the Attorney-General's Department, the Department of Foreign Affairs and the Japanese authorities.

In mid-July 1980, the plaintiff's solicitors were told that the Japanese Ministry of Foreign Affairs required a further document to accompany the notice of writ. This led them to re-examine their files and to note that the six-months' period of extension of the writ had by then long since expired. This the principal responsible for the matter had not previously appreciated: he had mistakenly believed that the period of renewal had been for twelve months (although the Rules only permit of six months' extension at a time). His clerk had known all along that the renewal was only for six months but had both assumed that his principal knew likewise and that the latter's lack of concern was because it was enough that within the six-month period the plaintiff had taken the initiating steps necessary to effect service overseas. Moreover he apparently thought it likely that service had in fact been effected soon after dispatch of the notice of writ to the Attorney-General's Department, the delay being only in receiving confirmation of service rather than in the effecting of service.

I have recounted the events leading ultimately to the service of notice of the writ on the defendant in Japan in October 1980. However, in determining how I should exercise my discretion I will initially confine myself to what has now emerged concerning the position in November 1979, when the order was obtained ex parte to extend the writ for six months.

Some two years had then passed since delivery of the steel and almost a year since both issue of the writ and also expiration of the twelve months' limitation period. During that time the plaintiff had done nothing directly to inform Palace Shipping of the damaged condition of the steel; it had informed other parties, including Simsmetal, and may have assumed that Palace Shipping would have heard of the matter. However there is no evidence from which I can infer that Palace Shipping had in fact become aware of the claim against it before it was served with notice of the writ in October 1980.

Moreover, until October 1979 the plaintiff had done nothing in preparation for effecting service on Palace Shipping in Japan. For example, what proved to be the very time-consuming preliminary of having prepared in acceptable form a Japanese translation of the notice of writ had not been set in train. The reason for this inaction was neither mishap nor oversight. It seems, rather, to have been due to a calculated decision to incur no costs in prosecuting the case against Palace Shipping so long as there were thought to be prospects of a successful outcome against Simsmetal. It follows from what I have already said that Palace Shipping, who, for all that appears, knew nothing of the proceedings, can have played no part in encouraging the plaintiff to adopt this course.

In the light of the circumstances as they now appear, it is clear that in November 1979, when the ex parte application to renew the writ was made, it could not be said, as the terms of O. 8, r. 1(2) require, that "reasonable efforts have been made to serve the defendant". It follows that, unless "other good reason" existed, the writ should not then have been renewed.

In considering whether there did exist such "other good reason", I do not, for the reasons already stated, regard the expiration of the limitation period of twelve months as of itself casting upon the plaintiff that heavy onus which the English decisions would impose. However I do take account of the long delay in serving Palace Shipping. It bears at least three aspects: first, it involved a very considerable period, secondly, it was quite deliberate, there being no question of mishap or oversight; thirdly, no notice was given to the defendant in this case, although the giving of such notice may sometimes mitigate the prejudice which a defendant may otherwise suffer through delay in actual service of process.

These are all substantial considerations. To be weighed against them is the plaintiff's effective loss of its rights against Palace Shipping if the renewal of the writ in November 1979 is to be set aside. But this seriously prejudicial consequence will be present whenever renewal of a writ is in question after a limitation period has run its course; and in the present case the prejudice is self-inflicted in the sense that Palace Shipping did nothing to induce delay in service or to encourage a belief that the claim against it might be settled without recourse to litigation.

In these circumstances I conclude that, on a proper exercise of discretion and in the light of the facts as now known to me, the writ should not have been renewed as a result of the ex parte application made to me in November 1979.

Because of the particular sequence of events, Palace Shipping had little if any opportunity at the hearing of the present applications to furnish evidence of particular prejudice to it caused by the delay in service; Dr. Griffith sought an opportunity to make good this lack of evidence if that should prove necessary. I have been concerned as to whether I should require evidence of such prejudice before making an order setting aside the renewal of the writ, but have decided against doing so. Here all that can be said for the plaintiff is that it will suffer effective loss of its right to recover from the defendant unless the writ stands renewed; there can be no criticism of the first-named defendant's conduct in the action. In such circumstances, and without need to infer prejudice to the first-named defendant due to the great delay, with all its attendant problems of identification of witnesses and their recollection of events and of location of documents and their production, I think that I may properly exercise my discretion against renewal of the writ without evidence of particular prejudice suffered by the defendant.

Before considering the form of orders to be made there is one aspect of which brief mention should be made, although, in the outcome, it is of no present relevance. It relates to service by means of letters of request. As a result of this case it has come to my notice that no orders appear ever to have been made under r. 7 of O. 10 of the High Court Rules making the rule applicable to particular countries. I would understand r. 7 to require such a general order before its provisions can be availed of for service in any foreign country, although this has apparently not been the practice in the past. This Court is not alone in this report: in McLean & Patchett's comprehensive account of the working of the system of service out of the jurisdiction throughout Commonwealth countries they say that some Commonwealth jurisdictions, when asked, replied "that their Chief Justices had never used this power (and this could well be the case generally)" [42] .

On the first-named defendant's application, it is enough that I order that the service upon Palace Shipping of notice of the writ be set aside on the ground that the ex parte order for its renewal, made in November 1979, should not have been made. The plaintiff's application, which seeks a further renewal of the writ, will be dismissed. In the circumstances I have found it unnecessary to investigate in detail the delays in service which occurred after the first renewal of the writ; suffice it to say that even if I had concluded that the first renewal, in November 1979, should have been ordered, it by no means follows that the application for a renewal, made out of time and therefore requiring recourse to O. 60, r. 6, would have been granted. The defendant Palace Shipping should have its taxed costs of its application. I reserve liberty generally to apply.

High Court of Australia Stephen J. Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11

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