Verso Technologies Inc. (formerly Eltrax Systems Inc) v Rasmussen and Ors

FIFTH RESPONDENT Eltrax Systems Pty Ltd (Formerly Sulcus (Australia) Pty Ltd) FILE NUMBER: IRC 3114 of 2003 CORAM: Wright J President; Walton J Vice-President; Boland J Appeal - Application for leave to appeal and appeal - Practice and procedure - Whether a respondent had entered a submitting appearance - Service on a foreign corporation - Rules 82 and 112 of the Industrial Relations Commission Rules 1996 considered - Procedural irregularities - Application of Supreme Court Rules 1970 - Comity - Leave to appeal granted - Appeal upheld CATCHWORDS : Practice and procedure - Whether a respondent had entered a submitting appearance - Service on a foreign corporation - Rules 82 and 112 of the Industrial Relations Commission Rules 1996 considered - Procedural irregularities - Application of Supreme Court Rules 1970 - Comity - Leave to appeal granted - Appeal upheld Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Commission Rules 1996 Supreme Court Rules 1970 Bell v Macquarie Bank Limited (No.4) (1999) 93 IR 191 Castagna & Anor v Conceria Pell Mec SpA (unreported, BC9601018, NSWCA, 15 March 1996) Darc Rasmussen v Eltrax Systems Pty Ltd & Ors [2003] NSWIRComm 157 CASES CITED : Harding v Bourke (2000) 48 NSWLR 598 Mitchforce Pty Ltd v Starkey (No. 2) [2003] NSWIRComm 458 National Australia Bank Ltd v Cassino [2002] NSWIRComm 241 Taudevin v Egis Consulting Australia Pty Ltd (2000) 97 IR 165 Western Sydney Area Health Service v Gibson (2001) 109 IR 359 HEARING DATES: 03/16/2004 DATE OF JUDGMENT: 04/14/2004

APPELLANT Mr A R Moses of counsel Solicitor: Mr J Howard Cowley Hearne LEGAL REPRESENTATIVES: RESPONDENT Mr B D Hodgkinson, SC Solicitor: Mr G Phillips Carroll & O'Dea

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J Wednesday 14 April 2004

VERSO TECHNOLOGIES INC. (FORMERLY ELTRAX SYSTEMS INC.) v RASMUSSEN AND OTHERS

Application for leave to appeal and appeal against the decision of Justice Staunton given on 21 May 2003 in Matter No. IRC 4276 of 2001 JUDGMENT [2004] NSWIRComm 90

1 This matter concerns an application for leave to appeal and, if leave be granted, appeal by Verso Technologies Inc. (formerly Eltrax Systems Inc.) against a judgment and orders of Staunton J in Darc Rasmussen v Eltrax Systems Pty Ltd & Ors [2003] NSWIRComm 157.

2 The principal respondent on appeal is the first respondent, Mr Darc Rasmussen. The second to fifth respondents on the appeal entered a submitting appearance except as to costs and took no further part in the appeal.

3 Her Honour's judgment at first instance related to two notices of motion concerning the issue of service on, and leave to proceed against, the appellant, a foreign corporation, who was named as the fifth respondent in proceedings brought by Mr Rasmussen under s 106 of the Industrial Relations Act 1996. The outcome of the proceedings before her Honour was reflected in her orders: 1. The Applicant be granted leave to proceed against the Fifth Respondent, Verso Technologies (Eltrax Systems Inc.) to the Summons for Relief. 2. The Applicant is granted leave to serve the Summons for Relief on the Fifth Respondent out of time. 3. Service of the Fifth Respondent, Verso Technologies (formerly Eltrax Systems Inc.) on 10 July 2002 of the Summons for Relief was effective service for the purpose of these proceedings.

4 There were some 25 grounds of appeal but essentially the appeal went to three issues: 1. Whether Staunton J erred in finding that on 30 October 2002 the fifth respondent had entered an appearance in the substantive proceedings under s 106 of the Act and thereby had submitted to the jurisdiction of the Commission. 2. Whether her Honour erred in deciding that the applicant in the proceedings at first instance should be held to have effectively served the fifth respondent [appellant] for the purpose of the substantive proceedings, procedural irregularities notwithstanding. 3. Whether her Honour erred in deciding that leave should be granted to the applicant at first instance to proceed against the fifth respondent [appellant].

5 The substantive proceedings before Staunton J concerned an application by Mr Rasmussen for relief under s 106 of the Act. The summons for relief pleaded that the applicant was an employee of Eltrax Systems Pty Limited, the fifth respondent on the appeal. This corporation was the Australian subsidiary of Eltrax Systems Inc. a US corporation that on 29 September 2000 became Verso Technologies Inc. The second, third and fourth respondents at first instance (and on appeal) were directors of Eltrax Systems Pty Limited.

6 In the proceedings at first instance Mr Rasmussen filed two notices of motion. The first was on 3 October 2002, which sought the following orders: 1. An order that the Applicant be granted leave to proceed against the Fifth Respondent, Verso Technologies (formerly Eltrax Systems Inc.) to the Summons for Relief. 2. Such further or other orders as appear to this Honourable Commission fit or just. 3. Costs.

7 The second motion was filed on 13 November 2002 and sought the following orders: 1. An order that service of the Fifth Respondent, Verso Technologies (formerly Eltrax Systems Inc.) on 10 July 2002 of the Summons for Relief was effective service for the purpose of these proceedings. 2. Further, or in the alternative, an order that the Applicant be granted leave to serve the Summons for Relief on the Fifth Respondent out of time. 3. Such further or other orders as appear to this Honourable Commission fit or just. 4. Costs.

8 Staunton J identified six matters that required determination arising out of the applicant's motions: a. Did the Fifth Respondent enter an appearance in the proceedings on 30 October 2002? b. If so, does that appearance amount to a voluntary submission to the jurisdiction and/or a waiver of any objection to jurisdiction by the Fifth Respondent? c. If so, does that appearance constitute a positive step taken in the proceedings thereby amounting to a waiver by the Fifth Respondent of the irregularity in the late service of the Summons? d. If the Fifth Respondent has not entered an appearance or such appearance does not cure the irregularity in service, should the Commission in Court Session exercise its discretion to grant an extension of time for service of the Summons on the Fifth Respondent? e. If the Fifth Respondent has not entered an appearance in the proceedings, should leave be granted to proceed against it pursuant to Rule 112 (4) of the Industrial Relations Commission Rules 1996 ("the Rules")? f. Should the Fifth Respondent's motion seeking, amongst other things, to strike out or set aside the proceedings against it be granted?

9 As to the first matter, her Honour referred to proceedings before her on 30 October 2002. On this occasion her Honour was dealing with the first notice of motion filed by Mr Rasmussen's solicitors on 3 October 2002 seeking leave to proceed against the appellant pursuant to r 112(4) of the Industrial Relations Commission Rules 1996 on the basis that no appearance had been entered but process had been served outside Australia. On that occasion her Honour noted at [20] of her judgment that the following exchange occurred between herself and Ms A Scott, an employed solicitor with Gadens Lawyers, solicitors: SCOTT: If I could appear for the first four Respondents and by your leave the Fifth Respondent and I will file my Notice of Appearance, as I have only just got these instructions this morning. HER HONOUR : Yes certainly. Thank you very much. This was a matter where there was a bit of a problem with the Fifth Respondent. Is that right? SCOTT: This matter has had a long history. HER HONOUR : For a matter that has not got to any sort of a hearing yet it has an enormous file. SCOTT: Your Honour, we have agreed on a timetable for filing of further material. HER HONOUR: You have now put a formal appearance for the Fifth Respondent? SCOTT : Yes and I will file the relevant bit of paper. HER HONOUR: You can do it here. I know that is generally not the way it is done but there is a practice if you want to do it in Court which I will allow you to do and we will undertake to provide a copy to the Registry. SCOTT : Thank you, your Honour but I only received these instructions to appear this morning so I have not even drafted it. HER HONOUR: You can take it to the Registry when you have got a moment. You have agreed upon a timetable, you say? SCOTT : Yes, your Honour. FISHER: It is the Applicant's Notice of Motion to proceed against the Fifth Applicant. (sic) HER HONOUR: That is still an issue notwithstanding your appearance. FISHER: Yes, your Honour. HER HONOUR : Would you undertake, forgive me again Ms Scott, I know you are here for the Fifth Respondent but you have put in appearance for all the other Respondents as well. SCOTT : Yes, and we have filed responses.

10 Her Honour then referred to the fact that on the same day Ms Scott faxed a letter to her Associate in which she stated, inter alia: We are currently instructed by the First, Second, Third and Fourth Respondents in the substantive matter and have obtained instructions from the Fifth Respondent to appear on the Applicant's Notice of Motion seeking leave to proceed against the Fifth Respondent.

11 Nevertheless, Staunton J found that: 27 Having regard to the history of this matter that I will elaborate upon in due course I am of the view that the appearance by Ms Scott on 30 October last, when the matter was before me, was an appearance by her on behalf of the Fifth Respondent in relation to the Applicant's Notice of Motion then before the Court. It was not an appearance pursuant to Rule 82 of the Rules.

28 I agree with the submission of counsel for the Applicant that such appearance as entered by Ms Scott was not and could not be seen as conditional. If anything, it went directly to the Fifth Respondent as a party to the substantive proceedings. As such, it constituted an appearance in those proceedings for all purposes and a submission to the jurisdiction of the Court.

29 If I am wrong in that conclusion then I am of the view that, having regard to the history, facts and circumstances of this matter, the Applicant should be held to have effectively served the Fifth Respondent for the purposes of the substantive proceedings before me, procedural irregularities notwithstanding. Further, that leave should be granted to proceed against the Fifth Respondent in the Summons for Relief.

12 Her Honour's finding that the appellant had entered an appearance and thereby submitted to the Commission's jurisdiction, answered the questions (a) to (c) posed by her Honour to which we earlier referred. However, her Honour considered it appropriate to deal with the remaining questions.

13 In relation to the extension of time issue her Honour said at [47]: [T]here was delay and difficulties in securing service on the Fourth and Fifth Respondents. Some of that delay was occasioned as a result of an accident to the Applicant which required a period of hospitalisation and delayed his attention and his ability to take steps to secure service on the Fourth and Fifth Respondents. The other reason for delay on the part of the Applicant can only be put down to the pressure of work commitments of the Applicant who at all times was being advised by his solicitors in Sydney to take the necessary steps to secure service. There is no doubt that there was a hiatus of some three months where little if any steps appear to have been taken by the Applicant to do that. The only explanation for doing so is the pressure of work commitments already referred to. At the same time however, it must be stated that the Fifth Respondent and, on instructions, Gadens Lawyers were not doing anything to facilitate service upon the Fifth Respondent. That much is evidenced by their refusal, on instructions, to disclose to the Applicant's solicitors in Australia the name of the new company that had taken over the business of Eltrax. There is also evidence in the affidavit material of Ms Neilsen that not only was there the change of name but the 'new' Fifth Respondent changed addresses, had 'taken all the signs down' and was, as described by the Applicant, 'hiding' the company. Whether that is an accurate depiction of the Fifth Respondents actions is not certain but it would tend to accord with the Fifth Respondent's instructions to Gadens Lawyers not to disclose its identity. In any event, those actions understandably caused a further delay while steps were taken by attorneys and process servers in the United States to locate the address of the Fifth Respondent under the name of Verso Technologies Inc.

14 Her Honour went on to refer to the circumstances relating to service on the fourth respondent who was residing in the US and then addressed the position regarding the appellant at [52] to [55]: 52 There were continuing problems in locating the Fifth Respondent, particularly having regard to its change of name and address. That much is evident from annexures to Ms Nielsen's affidavit already referred to.

53 As earlier indicated, the Applicant seems to have 'dropped the ball' so to speak as far as pursuing service on the Fifth Respondent for some few months. Between March and June of 2002, little effort was made to locate the Fifth Respondent. In an email sent by the Applicant to his solicitors on 16 June 2002, he says as follows: 'I am sorry that you have not heard from me earlier. My position with SAP has been very demanding, but also very rewarding with a recent promotion, and I have not had time to attend to this matter earlier. I hope I have not put my position at risk in this case by not responding earlier and attach an update.' 54 The update referred to was a copy of a letter from the Applicant's US attorneys in New Hampshire to the Cobb County Sheriff's Office in Marietta, Georgia, United States of America requesting service on the Fifth Respondent. 55 This was done on 10 July 2002 and the original sworn and sealed Sheriff's Entry of Service was filed by the Applicant's solicitors in the Court Registry at Sydney on 18 July 2002.

15 The applicant in the proceedings below [first respondent on the appeal] conceded that the purported service on the appellant was out of time by some 16 days. Nevertheless, her Honour observed that it was apparent that "the Respondent's solicitors knew that the Fifth Respondent had been served on 10 July 2002". Her Honour commented that: The overwhelming impression I have to date is that the Fifth Respondent has remained active behind the scenes, instructing its solicitors, directing proceedings, fully appraised of all that has occurred and is occurring.

16 Staunton J decided to grant an extension of time for the first respondent to serve the appellant. In doing so her Honour relied on Taudevin v Egis Consulting Australia Pty Ltd (2001) 97 IR 165, particularly [42]. Her Honour said: [H]aving regard to the history of these proceedings particularly the conduct of the parties, and most notably the conduct of the Fifth Respondent that I have already referred to, I am satisfied that the Applicant should be granted an extension of time until 10 July 2002 in which to serve the Fifth Respondent. Further, there is no doubt that there would be an injustice visited upon the Applicant should such a discretion not be exercised in favour of him. Further, the extension of time that is being considered is some sixteen days, which in all the circumstances is not excessive in my view. Finally, and most persuasively, it has not been submitted at any time in the proceedings before me that the Fifth Respondent would suffer any prejudice if this application for leave to proceed and serve out of time was granted, nor has it been suggested that the substantive issue in the originating Summons involving the Fifth Respondent is a futility.

17 There were a number of other "procedural irregularities" identified by her Honour relating to service on the appellant. Firstly, the service of a copy of the originating summons on the appellant was not served on the appellant in conformity with r 112(2) of the Rules which states: 112(2): Process or documents may be served outside Australia, but must bear a note in the appropriate form.

18 Her Honour noted in this respect that "The only explanation from the Applicant's solicitor is that he is 'unaware of the reason for that omission' and apologises for the error."

19 In relation to service on the appellant her Honour noted that: This was done on 10 July 2002 and the original sworn and sealed Sheriff's Entry of Service was filed by the Applicant's solicitors in the Court Registry at Sydney on 18 July 2002.

20 However, the appellant submitted to Staunton J after the applicant's counsel had closed her evidentiary case, that there was no proper evidence before her Honour of any service on the appellant. Her Honour observed that to the extent that the original sealed and sworn Sheriff's Entry of Service was on the Court file it was not before her for evidentiary purposes, as counsel for the applicant had not formally tendered it. It was submitted at first instance by counsel for the appellant that even if the Entry of Service had been formally and properly tendered by counsel for the applicant, it did not comply with the provisions of r 112(2) which could not be cured by applying the provisions of r 88(1) of the Rules.

21 Staunton J decided to grant leave to the applicant to re-open in order that the applicant might formally tender the original sealed and sworn Sheriff's Entry of Service attesting to service of the appellant. This was done. As to the submission that the provisions of r 112(2) had not been complied with and the non-compliance could not be cured by applying the provisions of r 88(1) of the Rules, her Honour said: 74 The use of the word 'must' in Rule 112(2) is not unique as far as the procedural requirements of the Rules generally - there are any number of Rules that contain the word. The words of Rule 88(1) do not impose any curtailment on the general discretionary power that resides within the Rule subject only, it seems to me, that the exercise of that discretion is done as a matter of fairness, practicability and in the interests of justice.

22 As to the failure of the applicant's solicitors to attach a note to the copy of the originating summons prior to service upon the fifth respondent as required by r 112(2), her Honour said it should not: be a failure such as to provide in effect a permanent stay to the proceedings. In this matter the Fifth Respondent could hardly be said to have been taken by surprise by the service of the Summons. It is a party that is only too aware of what has been happening as far as this matter is concerned.

23 Returning to the question of service on the appellant, Her Honour appears to accept that service on the appellant was in fact effected and the evidence of that was the Sheriff's Entry of Service originating from the Sheriff's Office of Cobb County in the state of Georgia in the United States of America. In this respect, her Honour referred to a similar mode of service on the fourth respondent as follows: 48 The Fourth Respondent was served on 18 March 2002. As Ms Neilsen states in para [18] of her affidavit sworn on 13 November 2002: On 18 March 2002, the Fourth Respondent was served with the Summons for Relief. I seek leave to refer to the affidavit of service of the Summons for Relief served upon the Fourth Respondent, filed in the Industrial Relations Commission on 3 April 2002 without annexing a copy of that document. 49 That document constituted the original sealed and sworn document titled Sheriff's Entry of Service originating from the Sheriff's Office of Cobb County in the state of Georgia, United States of America. That document was relied upon by the Applicant's solicitors as evidence of service upon the Fourth Respondent. As will be seen, the procedure adopted by the Applicant's solicitors in respect of service of the Fourth Respondent was exactly the same procedure as the Applicant relied upon in relation to service of the Fifth Respondent as far as filing of the original sealed and sworn Sheriff's Entry of Service with the Court Registry. No issue was ever taken by the Respondent's solicitors as to the form of the document filed by the Applicant's solicitors attesting to service on the Fourth Respondent.

50 Counsel for the Respondents submitted that I could not infer from the Notice of Appearance filed on behalf of the Fourth Respondent on 9 April 2002 that the Fourth Respondent was responding to the service of the Summons on him on 18 March 2002 following which the original sealed and sworn Sheriff's Entry of Service was filed in the Court Registry in Sydney on 3 April 2002.

51 While I accept that I cannot come to such a conclusion with the finality I would like, I believe such an inference does certainly arise. That is, that the Fourth Respondent did accept service and gave instructions to Gadens Lawyers to enter an appearance on his behalf on 9 April 2002 following the filing of the Sheriff's Entry of Service on 3 April 2002 by the solicitors for the Applicant. In my view, the sequence of events is more than mere coincidence.

24 Her Honour appears to have taken a similar view on the validity of service in respect of the appellant as that expressed in relation to the fourth respondent.

25 In relation to all of the procedural irregularities, Staunton J decided that any non-compliance with the Rules could be waived and her Honour proceeded to make the orders earlier referred to.

26 Section 188(1) of the Industrial Relations Act provides that an appeal from a member of the Commission may only be made with leave of the Full Bench. Section 188(2) provides that leave will be granted if the Full Bench is of the opinion that the matter is of such importance that, in the public interest, leave should be granted. Section 188(3) provides that the Full Bench may deal with an application for leave to appeal separately and without conducting a hearing into the merits of the appeal.

27 The appellant contended there were proper grounds upon which the Full Bench would grant leave to appeal. In summary, the appellant submitted: · The present appeal raises matters of general importance which make the grant of leave appropriate in this case: Knowles v Anglican Church Property Trust (No. 2) (2000) 95 IR 380 at 381-382.

· The joinder of foreign corporations to proceedings under section 106 of the Act is an important part of the jurisdiction. Despite this, the jurisprudence of the Commission on this point is very limited. There is a public interest in the matter being clarified particularly where, as here, her Honour's decision is affected with a significant error in relation to the proper approach which to be taken in joining foreign corporations to proceedings.

· Her Honour has made seriously adverse findings against the Appellant based on no evidence or against the weight of evidence. These findings appear to have infected the exercise of her Honour's discretion pursuant to Rule 112 of the Rules.

· The fact that her Honour's judgment is styled an "interlocutory judgment" is not a factor that tells against the grant of leave. 28 The first respondent opposed leave to appeal being granted. In summary, the first respondent submitted: · The determinations made by her Honour were interlocutory matters. The substantive matters raised in the proceedings are yet to be heard and determined. The determinations made by Her Honour involved questions of practice and procedure.

· "A party who appeals against an order made in the exercise of a discretion upon a matter of practice and procedure undertakes 'a formidable task'. ": Lenijamar Pty. Limited v AGC (Advances) Limited (1990) 27 FCR 388, per Wilcox and Gummow JJ.

· The governing principle is that leave should only be granted where there are substantial reasons to allow an appellate review: Johnson Tiles Pty. Limited v Esso Australia Pty. Limited (2000) 104 FCR 564.

· An appellate court should be loathe to interfere in a matter of practice and procedure: Adam P. Brown Male Fashions Pty. Limited v Phillip Morris Inc (1981) 148 CLR 170 at 176-177; Mudginberri Station Pty. Limited v AMIEU (1986) 12 FCR 10 at 12-13; Ahearn v DCT (Queensland) (1987) 76 ALR 137 at 146 -147.

· The principles as to interlocutory appeals have been determined in National Australia Bank Ltd v Cassino [2002] NSWIRComm 241, particularly at [7] and [8].

· The first determination involved a factual finding based upon an appearance entered by Ms Athena Scott. The evidence before Her Honour clearly supported the factual determination made.

· The second determination involved the exercise of discretion. Her Honour only considered the relevant issues for this determination in circumstances where her conclusion in relation to the factual matter was wrong. It follows that unless the appellant is, contrary to our submission granted leave to appeal in respect of the first determination there is no need for the Full Bench to consider the second determination at all.

· The appellant contended that the leave ought be granted because there was limited jurisprudence in this Court in relation to the joinder of foreign corporations. This issue involves an application of the Commission Rules, including the capacity to waive compliance with those Rules. There is no confusion associated with the Rules or their application. Nor is the relevant exercise of discretion in the application of those Rules to a particular situation a novel or unusual matter for the Court. Reconsidering matters dealt with by Her Honour such as the Rules do not serve the public interest. The terms of the Rules are clear.

· It was contended that the appellant's rights have been affected because it will now be required to participate in the proceedings. Whilst the appellant will now be required to participate on a more open, active basis, the orders put the appellant in no different position that any other respondent in proceedings under section 106. In that regard, there is no substantial injustice or matters of general importance that would warrant the grant of leave to appeal against the said interlocutory orders. For example, in Amalgamated Wireless (Australia) Limited v McDonnell Douglas Corporation (1987) 16 FCR 238 at 242 at 243 leave to appeal was refused by the Full Bench of the Federal Court from an order directing that service on an overseas corporation was effected by service upon a firm of solicitors. In that matter the Court held that the issue was a factual one that had nothing to do with the ultimate determination of the merits of the case or even with the entitlements of the parties to conduct themselves in any particular way.

· This is an appropriate matter for the Court to order that the costs of and associated with the appeal be paid forthwith: See United GlobalCom Inc v McRann (No 2) [2004] NSWIRComm 16. 29 In National Australia Bank Ltd v Cassino [2002] NSWIRComm 241 the Full Bench made some observations as to the appropriateness and availability of appeals to the Full Bench of this Court in respect of interlocutory procedural motions. At [7] and [8] the Full Bench observed that: 7 The general situation as to leave to appeal is to that extent somewhat different to that in other jurisdictions such as the Supreme Court although there appeals of the present kind are also subject to leave. We consider that a similar reticence to grant leave to appeal as to such matters as occurs in other jurisdictions should at least equally apply here. That is the approach which has been taken since the 1996 Act came into force and also by this Court's predecessors. For example, in Caltex Petroleum Pty Limited v Harmer (1999) 92 IR 264 at 265 - 266 the following statement of principle was made: Principles as to interlocutory appeals

So far as we are aware, these proceedings are the first occasion on which this Court has had an opportunity to consider the principles applicable to appeals from interlocutory procedural decisions since the Industrial Relations Act 1996 (the Act) came into force some three years ago.

It is therefore appropriate for this Full Bench to state shortly the appropriate approach which should be adopted in relation to such appeals. The predecessors of this Court and Commission, in line with the approach of the ordinary courts, have generally deprecated and discouraged such interlocutory appeals: see, for example Re Social & Community Welfare Services (State) Award and Other Awards (1984) 9 IR 305; Parramatta City Council v Health and Building Surveyors Association (NSW) (1988) 26 IR 398 at 401-402; Re Laundry Employees (State) Award (No 2) (1993) 49 IR 91 at 103; Chamber of Manufactures of New South Wales v Australian Chamber of Manufactures, New South Wales Branch (1994) 56 IR 307 at 310-311.

The approach in this jurisdiction has paralleled that of the ordinary courts which is set out in, for example, Re the Will of F B Gilbert (1946) 46 SR (NSW) 318 at 323; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177; Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399-400; Partnership Pacific Ltd v Killen (unreported, Court of Appeal, but noted in Ritchie's Supreme Court Procedure NSW, Vol 2, at paragraph 13013); Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 at 644; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (No 4) (1986) 6 NSWLR 674 at 685; Bank of New Zealand v Spedley Securities Ltd (In Liq) (1992) 27 NSWLR 91 at 95. The classic statement of the rationale for the approach adopted by the courts is the statement of Sir Frederick Jordan CJ in Re the Will of F B Gilbert where his Honour said at 323: I am of the opinion that there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal. [emphasis added]

8 The approach in principle is indeed further emphasised in this jurisdiction by the Legislature including, in the 1996 legislation, s 191(3) which obliges the Full Bench to "follow the principles applying to appeals from discretionary decisions". The significance of this situation has been recently considered and, in the course of that consideration, emphasised in a number of recent Full Bench decisions. See, for example, Western Sydney Area Health Service v Gibson and Pacific Healthcare (Australia) Ltd v AHI Healthcare Systems Pty Limited [2001] NSWIRComm 297 and the references in these cases to the judgment of the Court of Appeal in Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274. The significance of s 191(3) and those authorities is that interlocutory procedural motions invariably involve the exercise of judicial discretion and often depend essentially upon exercises of discretion. That is certainly the situation here. In addition, Peterson J's judgment was consistent with the longstanding approach of this Court and its predecessors which has always been to deal with procedural issues in accordance with "modern judicial practice", on a essentially pragmatic basis: see, for example, Hyde v Energy Australia (1999) 92 IR 409 at 423, Western Sydney Area Health Service v Gibson at [24] and the cases cited therein, and Hitchcock v CSR Limited [2002] NSWIRComm 170 at [7] to [8].

30 The observations by the Full Bench in National Australia Bank v Cassino remain the jurisprudence of this Commission in relation to appeals from interlocutory procedural motions, particularly those involving the exercise of judicial discretion. That is, such appeals are to be discouraged and it will only be in the most unusual case and where circumstances require it that leave to appeal will be granted.

31 In the present appeal, of course, the issue is not confined to the exercise of judicial discretion. It is a question of fact whether Ms Scott, in entering an appearance on 30 October 2002 for the appellant, did so in such a manner as to submit to the Commission's jurisdiction in relation to the substantive proceedings before Staunton J and thereby waived any right on the part of the appellant to object to defects in service. We consider that her Honour erred as to this question of fact. We consider that leave should be granted to correct this error in the interests of justice.

32 Further, we consider that her Honour erred in relation to the issue of whether the appellant, as a foreign corporation, had been properly served. An important aspect of the appeal is whether, as a matter of fact and law, service was actually effected on the appellant. The jurisprudence of the Commission in these respects is, as the appellant submitted, limited and it is in the public interest that it be clarified. Accordingly, we grant leave to appeal.

33 We deal firstly with the issue of whether the applicant, by entering an appearance on 30 October 2002, submitted to the Commission's jurisdiction. The Commission's Rules provide that a person must not, except by leave of the tribunal, take any step in the proceedings unless, before taking that step, that person has filed originating process or has entered an appearance: r 76. Rules 77 and 78 address the mode of entering an appearance and the form and content of the notice of appearance respectively. Rule 79 prescribes the time in which an appearance must be entered. Rule 80 addresses the issue of late appearances by a respondent and r 81 provides for service of the notice of appearance.

34 Rule 82 is in the following terms: 82 Setting aside originating process etc (1) A tribunal may, on notice of motion filed by a respondent in accordance with subrule (2), by order: (a) set aside the originating process, or (b) set aside the service of the originating process on the respondent, or (c) declare that the originating process has not been duly served on the respondent, or (d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State, or (e) discharge any order extending the validity for service of the originating process, or (f) protect or release property seized, or threatened with seizure, in the proceedings, or (g) declare that the tribunal has no jurisdiction over the respondent in respect of the subject matter of the proceedings, or (h) decline in its discretion to exercise its jurisdiction in the proceedings, or (i) grant such other relief as it thinks appropriate. (2) Notice of motion under subrule (1): (a) may be filed without entering an appearance, (b) must bear a note "The respondent's address for service is" and state the address, (c) must be filed within the time limited for entering an appearance. (3) The making of an application under subrule (1) is not to be treated as a voluntary submission to jurisdiction.

35 Until 30 October 2002 the appellant had entered no appearance. Her Honour found at [27] of her judgment that Ms Scott's appearance on that day: was an appearance by her on behalf of the Fifth Respondent in relation to the Applicant's Notice of Motion before the Court. It was not an appearance pursuant to Rule 82 of the Rules.

36 Staunton J took the view that Ms Scott's appearance for the appellant "was not and could not be seen as conditional". That is, her Honour held that the appellant did not in fact, and relying on Taudevin v Egis Consulting Australia Pty Ltd, could not have, entered an appearance only in relation to the first respondent's notice of motion.

37 We are satisfied, having regard to the whole of the evidence in relation to this issue that Ms Scott, whilst not expressing her position as clearly as she might have, was not seeking leave to enter an appearance in the substantive proceedings pursuant to r 76 but rather, consistent with her facsimile message to her Honour's Associate later in the day of 30 October 2002, had sought to enter an appearance on the first respondent's notice of motion filed on 3 October 2002 seeking leave to proceed against the appellant. The purpose of Ms Scott in entering the appearance was to challenge the first respondent's attempt in his motion to bring the appellant within the Commission's jurisdiction. We have come to this conclusion for the following reasons: (a) The relevant notice of motion specifically referred to the need for an appearance to be filed in respect of it. (b) Her Honour found that Ms Scott entered an appearance on the notice of motion. (c) Ms Scott's testimony was that she was not instructed to and did not intend to enter an appearance that would have the effect of causing the appellant to submit to the jurisdiction of the Commission in Court Session. There was no contrary evidence to this testimony. (d) At no time prior to the question of the appearance by the appellant being raised in proceedings by her Honour on 3 March 2003 did the solicitors for the first respondent ever suggest the appellant had submitted to jurisdiction. This is evident from the following facts: (i) In the proceedings before Staunton J on 30 October 2002, Ms Fisher, solicitor appearing for the first respondent, in answer to a question from her Honour, indicated that she wished to proceed with the applicant's notice of motion. She would not have needed to do so if she had understood that the appellant had only moments prior submitted to the Commission's jurisdiction by having been granted leave to appear. (ii) On 13 November 2002 the first respondent filed a notice of motion seeking an order that service on the appellant on 10 July 2002 was effective service. There would have been no need to file such a motion if the first respondent was of the belief that the appellant had submitted to jurisdiction. (iii) There was no evidence led before Staunton J of any communication between the solicitors for the first respondent and the solicitors then acting for the appellant suggesting that the first notice of motion had become unnecessary by reason of the Appellant's purported submission to jurisdiction prior to the matter being raised by her Honour on 3 March 2003.

38 Staunton J considered, however, that having failed to follow the procedure in r 82, which provides that any application under r 82(1) is not to be treated as a voluntary submission to jurisdiction, what Ms Scott had sought to do was enter a conditional appearance. As it had been held in Taudevin that conditional appearances were not permissible under the Commission's Rules, her Honour considered that Ms Scott must be taken to have entered a appearance under r 76, thereby submitting to the Commission's jurisdiction in relation to not only the notice of motion but also the substantive proceedings.

39 In Taudevin, in relation to the issue of conditional appearances, Wright J, President held [17] that: [N]ot only do the Rules not provide a facility for a notice of conditional appearance to be filed but it is not appropriate for any respondent who does not consent to, or seeks to resist the Commission's jurisdiction, to proceed by filing such a document. Indeed, any such filing or purported filing should be rejected if an attempt is made to file a conditional appearance.

40 Taudevin, however, does not remove a judge's discretion under r 88 to deal appropriately with circumstances where it is plain that a respondent is seeking to resist the Commission's jurisdiction but under some misapprehension regarding practice and procedure enters an appearance on an applicant's motion instead of using the processes under s 82. Taudevin does not in fact deal at all with the situation of an appearance being entered merely to resist a notice of motion seeking leave to proceed against a party. It is undoubtedly the case here that the appellant's intention in seeking leave to appear was only to challenge the first respondent's attempt to bring the appellant within the Commission's jurisdiction. If such an intention was not discernible on the part of Ms Scott at the hearing on 30 October 2002, given that she was only appearing on the first respondent's motion, it was plainly obvious once Ms Scott faxed her position to her Honour's Associate later that day.

41 As the Full Bench observed in Western Sydney Area Health Service v Gibson (2001) 109 IR 359 at [16], after citing Harding v Bourke (2000) 48 NSWLR 598 at 603, the Rules of the Commission should not act so as to frustrate or otherwise limit the requirements of justice. The appropriate course in those circumstances would have been to remind the appellant of the requirements of r 82 and deal with any subsequent motion on its merits. In the result, Staunton J did deal with the question of whether the first respondent should be given leave to proceed against the appellant, notwithstanding her finding that the appellant had submitted to jurisdiction. However, we consider her Honour erred in finding that the appellant had submitted to the Commission's jurisdiction and we make the observation that if her Honour had brought the appellant into the substantive proceedings on the basis of what was essentially a procedural mistake on the part of the appellant's solicitor, it would have involved a further error.

42 We turn to the issue of service on the appellant. The purported service of the summons for relief was affected by a number of procedural defects: It was served out of time and did not bear the note required by r 112(2) of the Commission's Rules. The appellant also submitted no evidence was led by the first respondent to show that service had been effected in accordance with the laws applicable in the place of service, namely, the state of Georgia in the United States. As counsel for the appellant submitted, the first respondent relied on a document styled "Sheriff's Entry of Service". However, it was submitted there was no evidence before her Honour as to whether that document was evidence that would be accepted by a court in the state of Georgia as proper service. Secondly, there was no evidence that the address used for service, namely, 400 Galleria Parkway, Suite 300, Atlanta, Georgia 30339, was the registered office of the appellant.

43 The Commission's Rules do not prescribe with any particularity the mode of service to be used where a document is to be served outside Australia. Rule 89(5), however, provides that: (5) Where: (a) there are no relevant provisions, and (b) there is no established practice, procedure or usage, and (c) there is no Rule, order, direction or Practice Direction in force, the practice, procedure or usage for the time being of the Supreme Court or, in the case of appeals, the practice, procedure or usage for the time being of the Court of Appeal or the Court of Criminal Appeal, as may be appropriate, is, as far as practicable, to regulate the practice, procedure or usage of the tribunal. 44 The relevant rule in the Supreme Court Rules 1970 is r 5 in Pt 10: A document which is to be served outside Australia need not be served personally on the person required to be served so long as it is served on him in accordance with the law of the country in which service is effected.

45 We do not consider that r 112 of the Commission's Rules, widely expressed as it is, ousts the relevant Supreme Court Rule relating to mode of service outside Australia. Given this, there was no evidence in this case that the requirements of Pt 10 r 5 had been met. Moreover, the documents purportedly served on the appellant did not " bear a note in the appropriate form" as required by r 112(2). The Commission's Rules do not indicate what the form of the note under r 112(2) is to be but again this may be ascertained from the Supreme Court Rules: Pt 10 r 2A which is in the following terms: 2A Where an originating process is served outside Australia, a notice in the prescribed form shall be served with the originating process.

46 The prescribed form is form 13A: (Notice to defendant served outside Australia) To the Defendant: 1. The Court may, on application made by you in accordance with the rules of Court, set aside the service on you of this statement of claim (or summons or as the case may be) where - (a) service is not authorised by the rules of the Court; or (b) this Court is an inappropriate forum for the trial of the proceedings. 2. Alternatively you may submit to the jurisdiction of the Court by filing the prescribed form of unconditional notice of appearance. 3. If you do not make an application under paragraph 1 or file a notice under paragraph 2, the Court may give leave to the plaintiff to proceed against you.

47 The rules governing the Supreme Court in relation to service outside Australia are, as observed by the Full Bench in Bell v Macquarie Bank Limited (No.4) (1999) 93 IR 191, different in a number of respects to that applying to the Commission in Court Session and care must be taken in simply following decisions of the Supreme Court in this area of practice and procedure. However, we consider the judgment of the Court of Appeal in Castagna & Anor v Conceria Pell Mec SpA (unreported, BC9601018, NSWCA, 15 March 1996) is directly relevant to the issue we are called upon here to decide. Although this judgment was expressly relied on by the appellant at first instance, there is no reference to it in the judgment under appeal. In Castagna the Court of Appeal considered whether leave should have been granted at first instance to proceed against the appellant. The question arose on appeal as to the effectiveness of service on the appellant in the United States of America in the state of California. There were irregularities in the purported service of a summons described by Handley JA at 3-4 thus: The difficulty in sustaining the order granting leave to proceed lies in the very terms of the affidavit of Steven Tso on which the plaintiff relied. This, so far as relevant, stated: "On the 29th day of January 1992 at 10.30 o'clock in the forenoon I duly served the co-defendant, Anthony Castagna, with a sealed copy of each of the following documents annexed to this affidavit and labelled A, B and C respectively, namely an amended summons, notice to defendant served outside Australia and letter addressed to the co-defendant stating the time and date for the Court hearing by delivering them to a female person over the age of 16 years and employed at the co-defendant's usual place of employment at 766 Palomar Avenue, Sunnyvale, California". Annexure A comprised the amended summons with its expired return date of 29 November 1991, which was indeed sealed with the seal of the Court. Annexure B was the notice to absent defendant which was not sealed with the seal of the Court or signed. Annexure C, described as letter addressed to the co-defendant stating the time and date of the Court hearing, bore the date 28 February 1992 and stated that the date for hearing was 14 February 1992 at 10.30 am. Annexure C therefore purports to be dated 28 February and to notify a hearing date on 14 February, but according to the affidavit was served on 29 January. The letter therefore contains a fundamental internal contradiction and there is a similar contradiction between it and the affidavit. The letter was neither signed nor sealed. These inconsistencies were not drawn to the attention of the trial Judge and were not noticed by him. They were apparently also overlooked by the plaintiff's legal advisers. However, now that they have been drawn to the Court's attention, it is clear in my opinion that the service and the evidence of service were fundamentally irregular. Had these matters been drawn to the attention of Cole J or had his Honour noticed them, he would have been bound to refuse leave to proceed.

48 Importantly, Handley JA stated at 5-6: These inconsistencies were not drawn to the attention of the trial Judge and were not noticed by him. They were apparently also overlooked by the plaintiff's legal advisers. However, now that they have been drawn to the Court's attention, it is clear in my opinion that the service and the evidence of service were fundamentally irregular. Had these matters been drawn to the attention of Cole J or had his Honour noticed them, he would have been bound to refuse leave to proceed. In my opinion the structure of Pt10 and in particular the relationship of r2 with r1A make proper service on an absent defendant an essential issue in any application for leave to proceed. While the Court is also necessarily concerned with the question whether the case falls within one or other of the subparagraphs of r1A, valid and effective service on the defendant is also a material consideration. In my opinion the evidence before Cole J on the application for leave to proceed demonstrated that Dr Castagna had not been properly served and accordingly the order granting leave to proceed was not properly made.

49 At 11-12 of the judgment Mahoney P stated: The argument was put also upon the basis of the provisions of s81 of the Supreme Court Act and in particular by reference to the thrust of s81 (3) of that Act. It was put generally that because, as it was said, Dr Castagna knew of the documents left for him, knew that the documents included a statement of claim and understood the effect of them that, and because he stood by and allowed the matter to proceed, he is debarred from taking advantage of these matters upon an appeal of the present kind. I do not think that in the circumstances those arguments should be upheld. This is a case in which the plaintiff has sought to serve documents in a State of the United States of America. What is the law in that part of the world in relation to the enforcement of a judgment obtained here has not been the subject of argument in the present case; it may or may not be able to be enforced as such. But it is in my opinion proper that, when service is to be effected of an originating process of the present kind, claiming relief such as that which is here in question, the requirements of the New South Wales law in relation to service should be adhered to, if not with the utmost particularity, at least with such a degree of particularity as will ensure that the substance of the rules and the law have been complied with. It is for this Court, as the final Court of Appeal accessible as of course within this State, to indicate the approach to be adopted to requirements of this kind. In the present case I do not think that such compliance occurred. I do not think that there has been in the circumstances such a standing by that on any basis Dr Castagna is not in a position to take advantage of this matter upon appeal. The Court of Appeal allowed the appeal and set aside the order granting leave to proceed.

50 Although the deficiencies in service in Castagna were only irregularities and did not constitute a nullity, it is apparent from the judgment that the Court of Appeal considered that in relation to foreign respondents, proper service is essential. As the Full Bench observed in Bell v Macquarie Bank Limited (No.4) (1999) 93 IR 191 at 201, subjecting a non-resident, non-submitting foreign respondent to the jurisdiction of the Court is a serious matter.

51 In the present case as we have already noted, there were a number of deficiencies in the purported service on the appellant: the service was out of time; the documents purportedly served on the appellant did not contain the note required by r 112(2); and, there was no evidence that service was effected according to the laws of the state of Georgia. We would also observe that there was no evidence that the address at which the originating process was purportedly served was the appellant's registered office and so to that extent the service would not even have satisfied the requirement for service within the state of New South Wales: See r 105(c).

52 In relation to the first respondent's failure to include a note in the form of form 13A, we regard such an omission as significant in the context of the whole of the circumstances of the proceedings. The note informs the foreign respondent of the options that are available to it upon being served with the originating process. A failure to include the note should not be lightly set aside as an unimportant irregularity. In this case the first respondent was unable to explain why the note had not been included.

53 The first respondent submitted that the appellant knew of the proceedings before Staunton J but had taken "active steps to deny the First Respondent information as to its whereabouts and location and instructed its lawyers to thwart effective service". In Castagna it was also said that the appellant: [K]new of the documents left for him, knew that the documents included a statement of claim and understood the effect of them that, and because he stood by and allowed the matter to proceed, he is debarred from taking advantage of these matters upon an appeal of the present kind.

54 Nonetheless, the Court of Appeal did not consider those arguments should be upheld. As to the alleged thwarting of service by the appellant, we do not consider the evidence sustains such a conclusion.

55 In Bell v Macquarie Bank Limited (No.4) at 201-202 the Full Bench considered that, notwithstanding the differences between the Supreme Court and the Commission in Court Session in relation to the Rules governing service outside Australia, for reasons of comity and uniformity the Commission should have regard to the way in which the Supreme Court approached similar questions. In Mitchforce Pty Ltd v Starkey (No. 2) [2003] NSWIRComm 458 at [37] the majority (Wright J President and Walton J Vice President) also referred to the importance of judicial comity between the Commission in Court Session and the Supreme Court.

56 In the circumstances, we consider that it is appropriate to follow the Court of Appeal in Castagna notwithstanding the differences in the respective Rules relating to service outside Australia. We would add, however, even in the absence of the authority in Castagna, given the serious considerations attaching to the bringing of a foreign respondent within the Court's jurisdiction, we would have required evidence of proper service, which in this case has not been adduced. It was not sufficient for Staunton J to infer that because the fourth respondent entered an appearance following purported service by way of a "Sheriff's Entry of Service", service had also been effected in that way on the appellant.

57 Given that the appellant was not properly served, it must follow that the order granting leave to proceed was not properly made. The costs of the appeal should be reserved. .

58 We make the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The judgment and orders made by Staunton J in matter no. IRC 4276 of 2001 on 21 May 2003 are set aside. 4. The stay order made by Walton J, Vice President on 3 July 2003 is dissolved. 5. Costs of the appeal are reserved.

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