FEDERAL COURT OF AUSTRALIA Immerman v London Pie Co Pty Ltd [2000] FCA 97 MARK IMMERMAN v LONDON PIE COMPANY PTY LTD and HERBERT WOLPE No WG 27 of 1999 CARR J 11 FEBRUARY 2000 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WG 27 OF 1999 BETWEEN: MARK IMMERMAN Applicant AND: LONDON PIE COMPANY PTY LTD (ACN 070 619 055) First Respondent HERBERT WOLPE Second Respondent JUDGE: CARR J DATE OF ORDER: 11 FEBRUARY 2000 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicant have leave, pursuant to Order 8 rule 2(2), to serve the amended application, amended statement of claim, the applicant's affidavit filed on 23 August 1999, this order and the reasons for judgment published on 11 February 2000 on the second respondent in the Republic of South Africa. 2. The applicant have leave to cause the above-mentioned documents to be served personally on the second respondent by a person engaged on behalf of the applicant. 3. The applicant have liberty to apply generally. 4. The costs of the application be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WG 27 OF 1999 BETWEEN: MARK IMMERMAN Applicant AND: LONDON PIE COMPANY PTY LTD (ACN 070 619 055) First Respondent HERBERT WOLPE Second Respondent JUDGE: CARR J DATE: 11 FEBRUARY 2000 PLACE: PERTH REASONS FOR JUDGMENT Introduction 1 The Court has before it, in the context of a directions hearing, an application that the applicant be granted leave to serve the principal application on the second respondent out of the jurisdiction pursuant to Order 8 of the Federal Court Rules. 2 In his principal application, the applicant sues the first respondent and, or in the alternative, the second respondent for damages and other relief by reason of the first respondent's contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act") and other sections of the Act and the second respondent's alleged involvement in those contraventions. 3 On 3 September 1999, in default of any appearance of the first respondent and in further default of any appearance by the first respondent at any directions hearings up to and including that date, orders were made against the first respondent. In summary, those orders were that judgment be entered in favour of the applicant against the first respondent for damages, to be assessed, for its contravention of s 52 of the Act, and costs (including costs of assessing such damages) to be taxed. Certain directions were made in relation to the assessment of damages. The outcome of those directions was that on 23 September 1999 an order was made that the assessment of the damages be referred to Judicial Registrar Boon pursuant to Order 79 rule 3 of the Federal Court Rules. On 6 October 1999 the applicant's solicitors requested that the assessment of damages be adjourned indefinitely so that it could be heard concurrently with the assessment of damages as against the second respondent. Judicial Registrar Boon's appointment expired in December 1999. Accordingly, in due course, it will be necessary for further directions to be made in relation to the assessment of damages. I now turn to the allegations made by the applicant in his amended statement of claim. 4 In summary, the applicant pleads that the second respondent, Mr Herbert Wolpe, was at all material times a director of the first respondent and made certain representations on its behalf. Those representations are said to amount to misleading or deceptive conduct by the first respondent which led the applicant to enter into a franchise agreement with the first respondent to conduct a business of selling pies from premises in Manly in New South Wales. It is not entirely clear, but it would appear from the applicant's affidavit filed on 23 August 1999, that this conduct i.e. the representations by Mr Wolpe, took place in South Africa. The applicant says that, pursuant to the franchise agreement, he paid $100,000 to "the respondents" as a franchise fee, took delivery of a quantity of pies and commenced trading from the premises in Manly. The applicant claims that he has suffered loss and damage comprising accumulated trading losses from operating the business, capital loss in the franchise and the loss of opportunity of obtaining a return on the capital invested in the franchise. The applicant pleads that the second respondent procured, was knowingly concerned in or was party to the misleading or deceptive conduct of the first respondent. On the basis of the applicant's affidavit, it would appear that all of the relevant conduct by the first respondent was constituted by the second respondent's conduct, being conduct which took place in South Africa. The basis of the claim against the second respondent is that he was thus "a person involved in" the contravention by the first respondent (see s 75B of the Act) from whom the applicant may recover damages under s 82. 5 On 7 December 1999 the Minister for Financial Services and Regulation signed a consent pursuant to s 5(3) of the Act to the applicant relying upon conduct alleged to have been engaged in outside Australia (in South Africa) by the first and second respondents for the purposes of claims under s 82 of the Act. 6 Order 8 rule 1 of the Federal Court Rules sets out the cases in which originating process may be served outside the Commonwealth. Relevantly it provides: "1. Subject to rule 2 and Divisions 2 and 3 of this Order, originating process may be served outside the Commonwealth in the following cases – . . . (c) where the proceeding is founded on a breach, wherever occurring, of an Act, and is brought in respect of, or for the recovery of, damage suffered wholly or partly in the Commonwealth; . . . (g) where the proceeding is properly brought against a person served or to be served in the Commonwealth and the person to be served outside the Commonwealth is properly joined as a party to the proceeding. . . ." 7 Order 8 rule 2 sets out the conditions that have to be satisfied before the Court can grant leave to serve originating process outside the Commonwealth under Order 8. Order 8 rule 2(2) provides: "Where the Court is satisfied of the following matters – (a) that the proceeding is a proceeding in which the Court has jurisdiction; (b) that the proceeding is a proceeding to which rule 1 applies; and (c) that the applicant has a prima facie case for the relief which he seeks, the Court may, by order, grant leave to serve originating process outside the Commonwealth under this Order." Jurisdiction 8 On the evidence before me to date, I am satisfied that this application is a proceeding in which the Court has jurisdiction. It has general jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth). It also has jurisdiction under s 86(1) of the Act. 9 Part V of the Act (in which are to be found the sections which the applicant alleges the first respondent to have contravened) extends to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia. 10 I am satisfied from the evidence comprised in the company search annexed to the affidavit of Ms Jaqueline Ann Stone sworn on 30 June 1999 that the first respondent was incorporated within Australia. Accordingly the conduct in which it was caused to engage by Mr Wolpe falls within the extended application of the sections of the Act upon which the applicant relies. 11 In my view, the proceeding is thus a proceeding in which the Court has jurisdiction even though there is no evidence about whether Mr Wolpe is an Australian citizen or ordinarily resident within Australia. Application of rule 1 12 On the materials before me to date I am satisfied that the proceeding is founded on a breach of the Act and is brought in respect of, or for the recovery of damage suffered wholly or partly in the Commonwealth. Accordingly Order 8 rule 1(c) applies to the proceeding. Furthermore, I am satisfied that the proceeding is properly brought against the first respondent who has been served in the Commonwealth and that the person to be served outside the Commonwealth (Mr Wolpe) is properly joined as a party to the proceeding. Prima facie case 13 I am satisfied on the pleadings and on the state of evidence to date, and in particular the applicant's affidavit filed on 23 August 1999, that the applicant has a prima facie case for the relief which he seeks. Conclusion on the question of service out of the jurisdiction 14 I consider, for the reasons set out above, that the applicant should be granted leave to serve his application and associated documents upon the second respondent outside the Commonwealth and in the Republic of South Africa. Manner of service 15 The applicant seeks an order dispensing with the requirements of Order 8 Division 3 in relation to service upon the second respondent. 16 Ms Stone's affidavit sworn 18 October 1999 has annexed to it a document received by her from the International Civil Procedures Section of the Attorney-General's Department in relation to service of documents in civil proceedings in South Africa. That document includes a recommendation that private service should be used wherever possible to avoid delays in using official channels and that a private agent should be employed in South Africa to serve documents. Order 7 rule 9 makes provision for alternative means of serving a document where for any reason it is impractical to serve a document in the manner set out in the Rules i.e. in this case the requirements of Division 3 of Order 8 concerning service in a non-Convention country. 17 Order 7 rule 9 has been held not to be confined to impracticality of service within the Commonwealth: Swan Brewing Co Ltd v Atlee (unreported, Federal Court of Australia, 27 February 1998, R D Nicholson J); Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (unreported, Federal Court of Australia, 14 July 1998, R D Nicholson J). I propose to follow those authorities. I am satisfied that it would be appropriate to make the order sought. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Justice Carr. Associate: Dated: 11 February 2000 Counsel for the Applicant: Mr J D Steedman Solicitor for the Applicant: Karp & Steedman Date of Hearing: 3 September 1999 (written submissions filed on 18 October 1999, 5 November 1999 and 25 January 2000 Date of Judgment: 11 February 2000