FEDERAL COURT OF AUSTRALIA Gardner v MLM Property Constructions Pty Ltd [2020] FCA 855 File number: TAD 17 of 2020 Judge: KERR J Date of judgment: 17 June 2020 Catchwords: PRACTICE AND PROCEDURE – application for substituted service pursuant to r 10.24 of the Federal Court Rules 2011 (Cth) – party aware of proceeding but resisting service – application granted Legislation: Federal Court Rules 2011 (Cth) rr 10.23, 10.24 Cases cited: Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124 Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 Date of hearing: Determined on the papers Date of last submissions: 16 June 2020 Registry: Tasmania Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 20 Counsel for the Applicants: Mr T Barrett Solicitor for the Applicants: Tierney Law Solicitor for the First and Second Respondents: Mr C Groves of Dobson Mitchell Allport Counsel for the Fourth Respondent: Mr C Gunson SC Solicitor for the Fourth Respondent: Fitzgerald and Browne Lawyers Solicitor for the Fifth Respondent: Ms A Hay of Barry. Nilsson. Lawyers ORDERS TAD 17 of 2020 BETWEEN: SONIA JANE GARDNER First Applicant KEVIN GEOFFREY JAMES HALEY Second Applicant AND: MLM PROPERTY CONSTRUCTIONS PTY LTD First Respondent CRAIG RANDALL KNIGHT Second Respondent STUART NOEL CARNES (and others named in the Schedule) Third Respondent JUDGE: KERR J DATE OF ORDER: 17 June 2020 THE COURT ORDERS THAT: 1. Pursuant to r 10.24 of the Federal Court Rules 2011 (Cth), the documents listed below are taken to have been served on the Third Respondent on the expiry of four business days after copies have been sent by ordinary post addressed to the Third Respondent at both the addresses identified at paragraph [7] and paragraph [9] of the affidavit of Mr Buckley filed in these proceedings on 16 June 2020, and the Third Respondent being advised of their dispatch to those addresses by one of voice, voice message, or text on the mobile phone number used to speak with him as referred to in annexure JAVB3 to Mr Buckley's affidavit, whichever is later: (a) the originating application; (b) the statement of claim; (c) any amended statement of claim which has been filed by the time of service; (d) the Applicant's genuine steps statement; (e) a copy of the orders made on 27 May 2020; (f) a copy of the orders for substituted service; and (g) a copy of these reasons. 2. The Applicants have liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KERR J: 1 The Applicants have made an application for orders dispensing with personal service as against the Third Respondent to these proceedings. 2 The case concerns allegations that each of the First to Fourth Respondents were responsible for substantial losses occasioned to the Applicants by reason of the faulty construction of a proposed private residence. The Applicants claim that the house needs to be pulled down and rebuilt. The contract for the construction of that house was entered into by agreement between the Applicants and the First Respondent on 9 August 2016. Federal jurisdiction is engaged based on alleged breaches of duty by the First Respondent pursuant to the Australian Consumer Law. 3 The Applicants' statement of claim filed on 22 April 2020 alleges that the Third Respondent was a director of the First Respondent from 27 February 2006 to 30 April 2016, and is and was at all material times duly licensed as "Builder: General Construction - Low Rise". At paragraph [49] the Applicants allege, in the alternative to a claim that the faulty "works" had been undertaken by the First Respondent, that they were undertaken by the Third Respondent. 4 All of the respondent parties save for the Third Respondent have since been served, and have provided addresses for service. 5 When the matter came before me on 20 May 2020 for a first case management hearing, the lawyer acting for the Applicants advised the Court that attempts to serve the Third Respondent had not been successful and that there were indications that the Third Respondent might be seeking to avoid that outcome. 6 I made orders, inter-alia, that any application for substituted service on the Third Respondent would be dealt with on the papers. 7 On 15 June 2020, the Applicants applied for interlocutory orders to that end. Their application was accompanied by an affidavit of their legal practitioner, Mr Buckley, sworn the same day. 8 On the basis of that affidavit and its attachments I am satisfied that the Third Respondent no longer resides at the place he was living when he was earlier served by the Applicants with a certificate relevant to these proceedings. 9 I am satisfied that he has a holiday place at the address identified at paragraph [7] of Mr Buckley's affidavit, but does not regularly reside there. 10 I am satisfied that Mr Buckley has reasonable grounds to believe that the Applicant is known to the occupier of, and frequently visits, a property at the address identified at paragraph [9] of Mr Buckley's affidavit. 11 I am satisfied on the basis of what is asserted in Annexure JAVB3 to Mr Buckley's affidavit that an agent acting on behalf of the Applicants made arrangements with the Third Respondent to effect service at that address on the evening of 25 May 2020, but that when he attended for that purpose no one was home and no one answered. 12 Annexure JAVB3 is as follows: Jamahl called regarding Mr Carnes. Jamahl said that he had made contact with Mr Carnes on Friday/Saturday night. Jamahl left a message on the mobile number we had provided. Mr Carnes called Jamahl back and asked what he wanted. Jamahl said that he needed to give him the claim documents etc. Mr Carnes said he didn't want it. He told Jamahl to give it to the company - he had had nothing to do with the company for 3 years. He told Jamahl to keep the claim (heavily edited). Mr Carnes asked Jamahl what would happen if he didn't take the claim. Jamahl said that he would let the firm know that service was refused and that we would probably subpoena him. Mr Carnes hung up. Then Mr Carnes called Jamahl back and said that he did want the claim and wanted to see it. He was concerned about what it said. Mr Carnes said that he would be at [the address referred to at [10] above] on Monday night. Jamahl attended the address at 6:30/7:00pm Monday night. Mr Carnes was not in attendance. Nobody was home - nobody answered. Do you have further instructions? 13 Rule 10.24 of the Federal Court Rules 2011 (Cth) is as follows: Substituted service If it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order: (a) substituting another method of service; or (b) specifying that, instead of being served, certain steps be taken to bring the document to the attention of the person; or (c) specifying that the document is taken to have been served: (i) on the happening of a specified event; or (ii) at the end of a specified time. Note Without notice is defined in the Dictionary. 14 Pursuant to r 10.24, the Court may make an order for substituted service on a person if it is "not practicable" for the relevant document(s) to be served personally. 15 The Applicants might equally be entitled to an order for deemed service pursuant to r 10.23, the relevant documents having been so brought to the Third Respondent's attention. However, no order is sought in that regard. Nevertheless, that the Third Respondent was made aware of this proceeding and has avoided being served bears on the issue of whether the Court can accept that personal service is in the circumstances "not practicable". 16 In Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124 (Humane Society), Allsop J (as the Chief Justice then was) at [14] expressed a tentative view that the language in O 7 r 9 (the forerunner to r 10.24) was wide enough to cover circumstances where service as envisaged by the rules was "not sensible or realistic, even if it is possible or feasible". In Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 at [9], Flick J expressed the view that in using the phrase "not practicable", r 10.24 did not impose a more constrained standard than its predecessor. He accordingly concurred with the tentative view expressed by Allsop J in Humane Society. I adopt those views. 17 In my view, orders should be made pursuant to r 10.24. 18 I will order that the documents listed below will be taken to be served on the Third Respondent on the expiry of whichever is the later of (a) four business days after copies have been sent by ordinary post addressed to the Third Respondent at both the addresses identified in paragraph [7] and paragraph [9] of Mr Buckley's affidavit and (b) the Third Respondent being advised of their dispatch to those addresses by one of voice, voice message, or text on the mobile phone number used to speak with him, as referred to in annexure JAVB3 to Mr Buckley's affidavit. 19 The documents which are to be taken to be so served are: (a) the originating application; (b) the statement of claim; (c) any amended statement of claim which has been filed by the time of service; (d) the Applicant's genuine steps statement; (e) a copy of the orders made on 27 May 2020; (f) a copy of the orders for substituted service; and (g) a copy of these reasons. 20 I am satisfied that undertaking those steps will sufficiently bring the documents to the Third Respondent's attention, as to entitle the Court to proceed on the basis that he has been formally served. If any difficulties attend those steps, the Applicants have liberty to apply. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr. Associate: Dated: 17 June 2020 SCHEDULE OF PARTIES TAD 17 of 2020 Respondents Fourth Respondent: SHANE LAWRENCE PRITCHARD Fifth Respondent: CHRISTOPHER POTTER