FEDERAL COURT OF AUSTRALIA Combis (Trustee) v Spottiswood [2011] FCA 1082 Citation: Combis (Trustee) v Spottiswood [2011] FCA 1082 Parties: NICK COMBIS AND PETER DINORIS AS TRUSTEES IN BANKRUPTCY OF THE ESTATE OF GRAHAM CLINTON CLEMENT SPOTTISWOOD (A BANKRUPT) v SUZANNE LESLEY SPOTTISWOOD File number: QUD 223 of 2011 Judge: LOGAN J Date of judgment: 16 September 2011 Catchwords: PRACTICE AND PROCEDURE – substituted and deemed service – whether service can be deemed after multiple unsuccessful attempts – where no evidence that documents came to the attention of respondent – where impracticable to personally serve respondent – substituted service ordered in lieu of deeming service Legislation: Bankruptcy Act 1966 (Cth) s 139ZQ Federal Court Rules 2011 (Cth) r 10.23, r 10.24 Cases cited: Ricegrowers Co-Operative Ltd and Seatide Pty Ltd v ABC Containerline Nv, Med Containerline Antwerp Nv, Maritime Carriers Luxembourg SA and De Norske Bank (Luxemborg) SA [1996] FCA 1663 followed Scott V.-C, Adams, Bassett Cross et al, The Supreme Court Practice (The White Book) (Sweet and Maxwell, 1999) Vol 1 at pp 1291-1292 Date of hearing: 16 September 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 18 Counsel for the Applicant: Mr GJ Handran Solicitor for the Applicant: Tucker & Cowen Solicitors Counsel for the Respondent: The respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 223 of 2011 BETWEEN: NICK COMBIS AND PETER DINORIS AS TRUSTEES IN BANKRUPTCY OF THE ESTATE OF GRAHAM CLINTON CLEMENT SPOTTISWOOD (A BANKRUPT) Applicant AND: SUZANNE LESLEY SPOTTISWOOD Respondent JUDGE: LOGAN J DATE OF ORDER: 16 SEPTEMBER 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Service of the originating application, the affidavit of Daniel Gregory Arthur Davey filed on 23 August 2011, such application, if any, as the trustees may be advised in respect of judgment in default and any further affidavits in support of either the originating application or the application for judgment in default will be taken to be served on the respondent, Suzanne Lesley Spottiswood, on the happening of the last of the following events: (a) The sending by pre-paid post in an envelope addressed to the respondent at 5 McMillan Court, Southport QLD 4215 of those documents together with this order and a letter from the trustees' solicitors appointing a date and time on which the trustees or their agent will attend at that address for the purpose of serving those documents upon the respondent and also offering the respondent the opportunity to nominate by email, to a specified email address, an alternative week day and time between the hours of 9:00 am and 5:00pm not later than Monday 26 September 2011 at which time service might be effected on her of the documents; and (b) An attendance by the trustees or their agent at 5 McMillan Court, Southport QLD 4215 on the date and time nominated in the letter, or such alternative date or time as the respondent may nominate in accordance with this order, and the leaving of the documents at that address in the event that the respondent is not able there and then to be located by the trustees or their agent. 2. The applicant is to file an affidavit deposing to the occurrence of the events nominated in order 1 as soon as possible after the happening of those events; 3. The application, including the application for summary judgment, be adjourned for hearing to 10:15am on 12 October 2011. 4. The return date for any application for judgment in default of appearance be listed for 10:15am on 12 October 2011. 5. Liberty to apply. 6. Costs are reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 223 of 2011 BETWEEN: NICK COMBIS AND PETER DINORIS AS TRUSTEES IN BANKRUPTCY OF THE ESTATE OF GRAHAM CLINTON CLEMENT SPOTTISWOOD (A BANKRUPT) Applicant AND: SUZANNE LESLEY SPOTTISWOOD Respondent JUDGE: LOGAN J DATE: 16 SEPTEMBER 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 Mr Nick Combis and Mr Peter Dinoris are the trustees of the bankrupt estate of one Graham Clinton Clement Spottiswood. The present application relates to a number of transfers of funds made by Mr Spottiswood to the respondent, Suzanne Lesley Spottiswood, his wife. I assume for the purposes of the present application that the trustees are able to prove such transfers. They seek a declaration pursuant to s 139ZQ(8) of the Bankruptcy Act 1966 (Cth) that an amount is payable by Mrs Spottiswood to them in the total sum of $3,693,412.85 together with interest. 2 The application made today by the trustees is that either steps taken to date to serve the originating application on Mrs Spottiswood be deemed service pursuant to r 10.23 of the Federal Court Rules 2011 (Cth) (the Rules) or, alternatively, that an order be made pursuant to r 10.24 of the Rules for substituted service. 3 The evidence read today discloses that the trustees have made, by their solicitors and process servers, numerous attempts to serve Mrs Spottiswood with the originating application and supporting affidavits. They have used the following means: email to Mrs Spottiswood's last known email address; pre-paid post of the material to the address which she gave as her residence in the course of an examination under the Bankruptcy Act 1966 (Cth); and leaving that material at that address. The email and postal correspondence were sent on 24 August 2011. The material was delivered to Mrs Spottiswood's residential address on 9 September 2011. 4 The affidavit material read today also discloses that, in the past, and in respect of bankruptcy related proceedings, Mrs Spottiswood has not readily been amenable to personal service. Indeed, the conclusion is open, having regard to the evidence in relation to attempts personally to serve her in respect of those earlier bankruptcy related proceedings, that she avoided personal service in respect of a summons requiring her to appear for oral examination in respect of her husband's bankrupt estate. 5 There was an order for substituted service made in relation to that summons. Mrs Spottiswood subsequently appeared and was examined. It was in the course of that examination, which occurred on 30 March 2011, that she identified that she resided at 5 McMillan Court, Southport. 6 The evidence read today further discloses that communications over the intercom at that address between the process server retained by the trustees and an unidentified person at that property resulted in the process server being informed that Mrs Spottiswood still had a connection with that address. 7 So far as deemed service is concerned, r 10.23 requires two conditions to be met: (a) it is not practical to serve a document on the person in the way required by these Rules; and (b) the party provides evidence that the document has been brought to the attention of the person to be served. 8 The originating application is one which, in the absence of an order to the contrary, is required to be served personally. 9 What amounts to "not practicable" is no new subject. In Ricegrowers Co-Operative Ltd and Seatide Pty Ltd v ABC Containerline Nv, Med Containerline Antwerp Nv, Maritime Carriers Luxembourg SA and Den Norske Bank (Luxemborg) SA [1996] FCA 1663 (Ricegrowers case), a judgment to which Mr Handran has helpfully drawn my attention today, Tamberlin J observed at para 8 and para 9: 8. The meaning of the expression "practicable" for the purpose of a substituted service application under the corresponding UK rule was considered by the Court of Appeal in Paragon Group Ltd v Burnell (1991) 2 All ER 388. Lloyd LJ considered that the word "practicable" should be given a wide meaning and that the simple question was whether it was "practicable" to serve by one of the prescribed methods: (at 390). The expression "not practicable" is in my view essentially identical in meaning to the term "impractical". In order to establish impracticality some attempt, at least, should be made to effect service in accordance with the Rules or evidence should be led that it is so obviously futile as not to warrant an attempt at service. In this case, there is no evidence of obvious futility nor has any attempt been made to serve in accordance with the Rules. 9. In O'Neil v Acott [1988] NTSC 68; (1988), 59 NTR 1, the Full Court of the Supreme Court of the Northern Territory considered the words "impracticable to serve". Asche CJ with whom Nader and Rice JJ concurred, referred to the remarks of Mason J in Foxe v Brown [1984] HCA 69; (1984) 58 ALR 542, where his Honour said: "Furthermore, the question is not whether reasonable effort has been shown by the defendant over a particular period but whether at the date on which the application for substituted service is made, the plaintiff, using reasonable effort, is unable to serve the defendant personally." 10 In the Ricegrowers case, Tamberlin J was not persuaded by an absence of evidence referrable to a means of service via the diplomatic service, that it was not practicable to effect service. In this instance, there is an inference open from the reference to the need for the process server to use an intercom that there is some form of wall, or at least gating, or no ready means of communication other than by intercom with the occupants of the premises identified by Mrs Spottiswood at her oral examination. There is evidence before me as well that communication via the email address has, in the past, resulted in response from Mrs Spottiswood in respect of some particular requirement related to bankruptcy proceedings. 11 The evidence does disclose that the process server has already attempted personal service and met with the particular response which I have related. Having regard to what has occurred to date in relation to the originating application, and also the service events related to the oral examination, there is an inference open that Mrs Spottiswood is, to use an old expression, "keeping house" or in any event avoiding personal service. 12 It does seem to me that it is not practicable to effect service on Mrs Spottiswood of the originating application, which includes an application for summary judgment, by the means ordinarily required by the Rules. 13 I am not persuaded, though, that the documents concerned, ie the originating application and supporting affidavits, have been drawn to her attention by the informal means thus far employed. There has not been any response by her personally or on her behalf by a legal practitioner. It may well be that the documents have come to her attention. It is just that I do not have evidence which is persuasive that they have indeed been brought to her attention. 14 That being so, the case is one, in my opinion, not for a deeming of service but rather for the making of a substituted service order. As to this, and recalling that same English practice to which Tamberlin J made reference in the Ricegrowers case, it may be said of the practice in the High Court of Justice for England and Wales, under the now former O 65 r 4 of the Rules of the Supreme Court, that a practice had developed there in respect of the requirement of what would suffice in ordinary cases for the obtaining of an order for substituted service. This is set out in Scott v.-C, Adams, Bassett Cross et al, The Supreme Court Practice (The White Book) (Sweet and Maxwell, 1999) Vol 1 at pp 1291-1292, para 65/4/9: Proceedings in Ordinary Cases - The following proceedings will be some guide to practitioners for obtaining an order: 1. Two calls should be made. 2. The calls should be made at the defendant's residence, permanent or temporary, if known: otherwise, or if the claim relates to the defendant's business, at his business address. If the defendant has left the address given on the writ, this should be stated in the affidavit. If a copy of the document to be served is left, it must be in a sealed envelope addressed to the defendant. 3. The calls should be made on weekdays and at reasonable hours. 4. Each call should be on a separate day. 5. The second call should be made by appointment by letter sent to the defendant by ordinary prepaid letter post, giving not less than two clear days' notice, enclosing a copy of the document to be served, and offering an opportunity of making a different appointment. 6. On keeping the appointment the process server should inquire whether the defendant had received the letter of appointment with the copy document, and if it is stated that the defendant is away, inquiry should be made whether or not letters are being or have been forwarded to an address within the jurisdiction; the object is to show that the defendant has received communications sent to him. 7. The affidavit in support of the application should deal with all the forgoing requirements and should further state whether the letter of appointment has been returned or not, and any answer received should be exhibited. A copy of the document to be served should accompany the affidavit. The affidavit should also show whether the defendant is within the jurisdiction or whether he is believed to be so. 15 Whilst there is much to commend the English practice in terms of providing a foundation under r 10.24 of the Rules, it is not an invariable requirement of the Rules that this type of evidence should be placed before the Court. Rather, what is required is evidence which engages the criteria set out in r 10.24. That, necessarily, may vary according to the circumstances of a particular case. 16 In this instance, the trustees have demonstrated in terms of r 10.24 that it is not practicable to serve Mrs Spottiswood personally. They have also demonstrated on the material to hand, having regard to the experience in respect of the summons for examination, a likelihood that, if the material in this case is left at the address 5 McMillan Court, Southport, together with an order providing for substituted service, it is likely that it will come to Mrs Spottiswood's attention. 17 That being so, what I propose in the circumstances of this case in respect of substituted service is to use a modified form of that which was once regarded as a basis for obtaining substituted service in the Royal Courts of Justice as a basis upon which if the nominated steps are taken, service will be taken to have occurred. The events which I specify in terms of r 10.24(c)(i) are these: 1. Service of the originating application, the affidavit of Daniel Gregory Arthur Davey filed on 23 August 2011, such application, if any, as the trustees may be advised in respect of judgment in default and any further affidavits in support of either the originating application or the application for judgment in default will be taken to be served on the respondent, Suzanne Lesley Spottiswood on the happening of the last of the following events: (a) The sending by pre-paid post in an envelope addressed to the respondent at 5 McMillan Court, Southport of those documents together with this order, together with a letter from the trustees' solicitors appointing a date and time on which the trustees or their agent will attend at that address for the purpose of serving those documents on the respondent and also offering the respondent the opportunity to nominate by email to a specified email address an alternative weekday time between the hours of 9 am and 5 pm, not later than Monday 26 September 2011 at which time service might be effected on her of the documents. (b) An attendance by the trustees or their agent at 5 McMillan Court, Southport on the date and time nominated in the letter or such alternative date and time, if any, as the respondent may nominate in accordance with this order and the leaving of the documents at that address in the event that the respondent is not able there and then to be located by the trustees or their agent. 18 The applicant is to file an affidavit deposing to the occurrence of the events nominated in the previous order as soon as possible after the happening of those events. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 20 September 2011