Supreme Court New South Wales Medium Neutral Citation: Capral Limited v DNV AS [2024] NSWSC 96 Hearing dates: 2 February 2024 Date of orders: 14 February 2024 Decision date: 14 February 2024 Jurisdiction: Equity - Commercial List Before: Nixon J Decision: (1) Order that the Summons and Commercial List Statement be taken to have been served on the Defendant on 27 October 2023. (2) Otherwise, dismiss the notice of motion filed on 17 November 2023. (3) Order that the costs of the notice of motion filed on 17 November 2023 be the Plaintiff's costs in the cause. (4) Stand the matter over for directions on 23 February 2024. Catchwords: CIVIL PROCEDURE — Defendant outside Australia — Hague Convention — Originating process – Order for substituted service made – Whether to discharge substituted service order under UCPR r 11.6 or r 12.11 – Whether originating process could not be practicably served in the manner required by law, within meaning of UCPR r 10.14(1) – Whether Court should make an order under UCPR r 10.14(3) confirming service or under UCPR r 2.1 dispensing with the requirements of the rules relating to service where the Defendant was aware of the proceedings – Orders made confirming service Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 59, 61 Federal Court Rules O 7, r 9 (repealed) Federal Court Rules 2011 (Cth) r 10.23, 10.48, 10.49 Uniform Civil Procedure Rules 2005 (NSW), rr 2.1, 10.14, 11.4, 11.6, 11.8AC, 11A, 11A.2, 11A.3 12.11, 42.1; Sch 6 Cases Cited: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 Alstom Ltd v Sirakas [2010] NSWSC 669 Australian Securities and Investments Commission v Sweeney (No 2) [2001] NSWSC 477 Heenan (Receiver), in the matter of Ruby Apartments Pty Ltd (in liq) v Ralan Paradise No. 1 Pty Ltd (in liq) [2020] FCA 1878 Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124 Independent Liquor & Gaming Authority v Melco Resorts & Entertainment Ltd [2022] NSWSC 294 Park v Tschannen (2016) 341 ALR 452 Re Sunnya Pty Ltd [2023] NSWSC 1104 Ricegrowers Co-operative Ltd v ABC Containerline NV (1996) 138 ALR 480 Texts Cited: Nil Category: Procedural rulings Parties: Capral Limited (Plaintiff) DNV AS (Defendant) Representation: Counsel: Mr J Hewitt SC with Mr H Fielder (Plaintiff) Mr T O'Brien with Mr H Rogers (Defendant) Solicitors: K&L Gates (Plaintiff) Clyde & Co (Defendant) File Number(s): 2023/327368 Publication restriction: Nil Judgment 1. By a Notice of Motion filed on 17 November 2023, the Defendant, DNV AS (DNV), seeks: 1. an order, pursuant to rule 12.11(1)(d) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), discharging orders for substituted service that were made by this Court on 27 October 2023; or 2. an order, pursuant to rule 11.6 or rule 12.11(1)(b) of the UCPR, to set aside the service of the Summons and Commercial List Statement. Background 1. The Plaintiff, Capral Limited (Capral), is a company listed on the Australian Stock Exchange. Its business includes the importation and supply of aluminium plate to customers within Australia, for use in the construction of marine vessels. 2. DNV provides certification services for manufacturers and materials in connection with the construction of marine vessels. It is incorporated under Norwegian law and its principal place of business is in Oslo, Norway. It is not registered under the Corporations Act 2001 (Cth) as a foreign company in Australia. It does not maintain any offices in Australia and does not employ any staff or maintain local agents in Australia. 3. The dispute in these proceedings concerns DNV's certification of aluminium plate which was supplied to Capral by a certain Chinese manufacturer. Capral alleges that this certification was false and misleading because the plate did not comply with DNV's rules for classification. Those rules set standards for, relevantly, the manufacture, inspection, testing and certification of materials and plate used for the construction of marine vessels. The damages sought by Capral relate principally to the resolution of customer claims against Capral in an amount of around $2.5m, the costs of replacement material, and legal costs and disbursements. 4. DNV and Capral first engaged in correspondence about this matter at the end of 2020, following DNV's suspension of its certification of the relevant Chinese manufacturer on 4 November 2020. 5. In 2021, proceedings were commenced in the Supreme Court of Western Australia against Capral by one of its customers, seeking to recover loss and damage allegedly suffered as a result of Capral's supply of aluminium plate from the manufacturer in question (the WA Proceedings). Capral filed a third party notice against DNV in the WA Proceedings on 11 June 2021, alleging misleading conduct and seeking contribution, indemnity or damages from DNV. 6. DNV retained solicitors in Australia, Clyde & Co, to act for them in relation to their dispute with Capral. Mr Ernest van Buuren is the partner of the firm with carriage of the matter. Since 2021, Capral's solicitors, K&L Gates, have exchanged correspondence with Mr van Buuren of Clyde & Co in relation to the issues which are the subject of the current proceeding in this Court. 7. The WA Proceedings were resolved without any determination of the issues raised by Capral's third party notice. 8. On 26 May 2023, K&L Gates sent a letter of demand to Clyde & Co. A follow-up letter was sent on 6 June 2023, requesting confirmation as to whether Clyde & Co continued to act for DNV. 9. On 7 June 2023, Mr van Buuren sent an email to K&L Gates, stating: "We still act for DNV but will have to reactiv[at]e our matter to see if we have all the documents referred to in your letter." Mr van Buuren asked K&L Gates, in the meantime, for various documents, as well as particulars of the claims made by certain customers of Capral and particulars of the basis for settlement by Capral of such claims. 10. Following this, K&L Gates and Clyde & Co engaged in "without prejudice" correspondence regarding Capral's claim against DNV. 11. On 16 October 2023, Capral filed the Summons and Commercial List in these proceedings. The Summons was given a return date of 27 October 2023. 12. On 20 October 2023, K&L Gates wrote to Clyde & Co, referring to prior correspondence between the solicitors regarding the dispute between Capral and DNV, and asking: "please confirm whether or not you will accept service on behalf of DNV". 13. On the same day, Mr van Buuren responded by email with the following request: "Would you send us a copy of the proceedings you are asking us to accept service, so that we may obtain instructions." 1. Less than an hour afterwards, K&L Gates sent Mr van Buuren a copy of the sealed Summons and Commercial List Statement, returnable on 27 October 2023, and reiterated their request that Mr van Buuren obtain his client's instructions and indicate whether he would accept service. 2. On 23 October 2023, Mr van Buuren sent an email indicating that: "At this stage we don't have instructions to accept service of the proceedings." In the same communication, Mr van Buuren stated: "With reference to your letter of 16 October, as before, our client still offers to explore settlement discussions with Capral on a without prejudice basis. However, your client must disclose all relevant documents as would be required under ordinary discovery obligations. It is not acceptable to otherwise limit disclosure of documents." 1. It is apparent from this communication that, while "at this stage" not having instructions from DNV to accept service in respect of these proceedings, Mr van Buuren did have instructions from DNV to engage with Capral's solicitors in relation to the dispute that is the subject matter of these proceedings. 2. On 24 October 2023, K&L Gates sought confirmation from Clyde & Co by the following day as to "whether you have, or expect to receive, instructions to accept service". K&L Gates continued: "If we do not hear from you within the time prescribed, or in the event that you do not receive instructions to accept service, we will inform the Court on 27 October that our client will commence the necessary process and incur the significant cost of serving DNV in Norway." 1. On 25 October 2023, Mr van Buuren gave a response in similar terms to those he had previously given, stating: "At this stage, we still don't have any instructions to accept service." 2. On 27 October 2023, there was a directions hearing before Ball ACJ in Eq. Counsel for Capral indicated that he was not expecting an appearance for the Plaintiff, and continued: "The defendant is a company registered in Norway. I am told it takes approximately four to five months to serve the originating process under the Hague Convention. There is an issue in this in that there are solicitors in this jurisdiction, Clyde & Co, who have stated to my solicitors that they act for the defendant, DNV. I have got correspondence but essentially Clyde & Co have been communicating with my solicitors about the dispute between these parties, even as early as this week. The summons and the Commercial List Statement were served on Clyde & Co but Clyde & Co say they don't have instructions to accept service." 1. His Honour indicated that, in those circumstances, he considered it appropriate to make an order for substituted service. 2. Accordingly, on 27 October 2023, the Court made the following orders: (1) Order that the Summons filed on 16 October 2023 and Commercial List Statement filed on 16 October 2023, along with a copy of these orders, are to be served on the Defendant by email to Ernest van Buuren of Clyde & Co at the address 'Ernest.van.Buuren@clydeco.com' by no later than 5.00pm on 30 October 2023. (2) Pursuant to rule 10.14 of the Uniform Civil Procedure Rules 2005 (NSW), order that service in accordance with Order 1 constitutes effective service on the Defendant. (3) List the matter for directions on 10 November 2023. 1. Later on 27 October 2023, Capral sent an email to Mr van Buuren, attaching a letter which enclosed "by way of service" the Summons and Commercial List Statement, "in accordance with orders made by his Honour Justice Ball today" (which were also enclosed). 2. On 31 October 2023, Clyde & Co wrote to K&L Gates, stating: "Our instructions have not changed. We are not instructed to accept service on behalf of DNV AS in relation to the current NSW Supreme Court proceedings." 3. On 7 November 2023, Clyde & Co informed K&L Gates that DNV "will contest the Orders allowing for substituted service, and hence the jurisdiction of the Court", and that it would be making a conditional appearance for this purpose. Rules relating to service 1. UCPR r 11.4 provides as follows: 11.4 Cases for service of originating process (1) Originating process may be served outside of Australia without leave in the circumstances referred to in Schedule 6. (2) This rule extends to originating process to be served outside Australia in accordance with the Hague Convention. 1. On 10 November 2023, there was a directions hearing in this matter, at which counsel for DNV foreshadowed the current application and confirmed that DNV accepted that the proceeding came within Schedule 6 to the UCPR. It follows that DNV accepts that the Summons and Commercial List were able to be served outside of Australia without leave, pursuant to UCPR r 11.4. 2. UCPR r 11.8AC provides as follows: 11.8AC Mode of service A document to be served outside Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected. 1. Part 11A of the UCPR deals with service of documents under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (the Hague Convention). Rule 11A.2 provides that the provisions of Part 11A prevail to the extent of any inconsistency between those provisions and any other provisions of the UCPR. Rule 11A.3 provides as follows: 11A.3 Application of Division (1) Subject to subrule (2), this Division applies to service in a Convention country of a local judicial document. (2) This Division does not apply if service of the document is effected, without application of any compulsion, by an Australian diplomatic or consular agent mentioned in Article 8 of the Hague Convention. 1. There was evidence before me that: 1. Norway ratified the Hague Convention on 2 August 1969 and it forms part of Norwegian law by way of the Norwegian Foreign Service Act LOV-1965-11-15 (Konvensjon om forkynnelse i utlandet av rettslige og utenrettslige dokumenter på sivil- og handelsrettens område); 2. Norway has made relevant reservations and declarations to Articles 8, 10 and 15 of the Hague Convention; 3. as a matter of Norwegian law, including by reason of Norway's reservations and declarations to those articles of the Hague Convention, service of foreign court proceedings must comply with the service methods provided under the Hague Convention through the Central Authority, as provided under the Norwegian Courts of Justice Act LOV-1915-08-13-5 §46 and the Norwegian Foreign Service Act LOV-1965-11-15; and 4. Norway's Central Authority is the Norwegian Civil Affairs Authorities (Sivilrettsforvaltningen), which bears responsibility for effecting service. 1. Capral led evidence regarding the time and cost that would be involved in taking the necessary steps in order to serve DNV in Norway under the Hague Convention. Those steps are as follows: 1. first, Capral must engage an accredited translator to translate the Summons and Commercial List statement from English to Norwegian, at a cost of approximately $2,000 plus GST; 2. secondly, Capral must complete a "Request for Service Abroad of Judicial or Extra Judicial Documents" form which attaches the translated documents and a "Summary of the Document to be Served" before applying to the Registrar of this Court to complete the certificate within that form. There was no estimate before me as to how long this certification process would take; and 3. thirdly, the documents must then be forwarded to the Central Authority in Norway (the Norwegian Civil Affairs Authorities), where they will be processed and then forwarded to the appropriate court in Norway to effect service. There was evidence that it would take approximately three to five months from the date on which the court documents are received by the Norwegian Civil Affairs Authorities in order for service to be effected on DNV in Norway. 1. There was no evidence that Capral had undertaken or attempted to undertake any of those steps required in order to effect service on DNV in Norway under the Hague Convention. As set out above, K&L Gates had indicated on 24 October 2023 that Capral intended to take such steps. However, as matters transpired, orders for substituted service were made on 27 October 2023, and the Summons and Commercial List Statement were sent to Mr van Buuren of Clyde & Co by email on that day, in compliance with those orders. 2. In written submissions in support of its motion, DNV accepted that orders can be made for substituted service on a defendant located outside of the jurisdiction, provided that they are persons on whom service could be effected under the UCPR, including because the proceedings come within Schedule 6, referring to Australian Securities and Investments Commission v Sweeney (No 2) [2001] NSWSC 477 (ASIC v Sweeney (No 2)) at [70], [74]. As noted above, DNV also conceded that there is no dispute that these proceedings come within Schedule 6. 3. The orders for substituted service made by this Court on 27 October 2023 were made pursuant to UCPR r 10.14. The dispute before me centred on whether the conditions for the exercise of the power under r 10.14 had been met and whether, as a matter of discretion, the power should have been exercised so as to order substituted service in the circumstances of this case. 4. UCPR r 10.14 provides as follows: 10.14 Substituted and informal service generally (1) If a document that is required or permitted to be served on a person in connection with any proceedings— (a) cannot practicably be served on the person, or (b) cannot practicably be served on the person in the manner provided by law, the court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person concerned. (2) An order under this rule may direct that the document be taken to have been served on the person concerned on the happening of a specified event or on the expiry of a specified time. (3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order. (3A) An application for an order under this rule must be supported by an affidavit by the applicant that includes— (a) a statement as to the applicant's knowledge of the whereabouts of the person to be served, and (b) a statement as to any communications that have occurred between the applicant and the person to be served since the cause of action in the proceedings arose (including any communications by telephone, fax or electronic mail). (4) Service in accordance with this rule is taken to constitute personal service. 1. DNV sought to discharge those orders and to set aside service, pursuant to r 11.6, r 12.11(1)(b) or r 12.11(1)(d). 2. Rule 11.6 provides as follows: 11.6 Court's discretion whether to assume jurisdiction (1) On application by a person on whom an originating process has been served outside of Australia, the court may dismiss or stay the proceeding or set aside service of the originating process. (2) Without limiting subrule (1), the court may make an order under this rule if satisfied— (a) that service of the originating process is not authorised by these rules, or (b) that the court is an inappropriate forum for the trial of the proceeding, or (c) that the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending the claim. 1. DNV did not argue that any of the grounds set out in paragraphs 11.6(2)(a) to (c) was established. Instead, DNV relied on the broad power in r 11.6(1), which is expressly not limited by the specific grounds in sub-rule (2). 2. Rule 12.11(1) relevantly provides as follows: 12.11 Setting aside originating process etc (cf SCR Part 11, rule 8) (1) In any proceedings, the court may make any of the following orders on the application of a defendant— … (b) an order setting aside the service of the originating process on the defendant, … (d) an order discharging— (i) any order giving leave to serve the originating process outside New South Wales, or (ii) any order confirming service of the originating process outside New South Wales, … 1. An application under r 12.11 is heard by a single judge, not by way of an appeal from the original order for substituted service: Alstom Ltd v Sirakas [2010] NSWSC 669 at [34] per Palmer J. The grounds upon which an order for substituted service may be set aside under r 12.11(1)(b) (or (d)) are not defined and the power to make such an order is discretionary, although the discretion is to be exercised in accordance with established principle: ibid, at [35]. 2. DNV made two main submissions in support of its application. 3. First, DNV argued that the power to order substituted service under r 10.14(1) depends upon the relevant party being unable "practicably" to serve the document in the manner provided by law and that this was not established on the evidence. That is, DNV submitted that a necessary condition for the power under r 10.14(1) to arise had not been satisfied. 4. Secondly, DNV contended that, as a matter of discretion, the orders for substituted service should not have been made, and should now be set aside. DNV submitted that "exceptional circumstances" are required before the rules relating to service abroad will be dispensed with or avoided, and that the power to order substituted service cannot be used as a means of side-stepping the limitations that ordinarily apply to service outside Australia, including the requirements of the Hague Convention. 5. In response, Capral submitted that the conditions for the exercise of the power under r 10.14(1) were met and, further and in any event, it was open to the Court either as at 27 October 2023 or as at the present date, to exercise the power under r 10.14(3) to confirm that service has been taken by the steps taken to date. 6. Capral also referred to the Court's broad power under UCPR r 2.1, which provides as follows: 2.1 Directions and orders (cf SCR Part 26, rule 1) The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient (whether or not inconsistent with these rules or any other rules of court) for the just, quick and cheap disposal of the proceedings. Note— See also the guiding principles in relation to the conduct of court proceedings (set out in Division 1 of Part 6 of the Civil Procedure Act 2005) and the general powers of the court to give directions (set out in Division 2 of that Part). 1. As Capral pointed out, s 56 of the Civil Procedure Act 2005 (NSW) (the Act) requires the Court to seek to give effect to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings, when the Court is exercising any power under the UCPR (including the powers in rr 2.1, 10.14, 11.6 and 12.11) or when interpreting any such rule. 2. The other provisions of Part 6 of the Civil Procedure Act also bear upon the exercise of the powers under the UCPR. Of particular relevance for the present application are ss 59 and 61(1), which provide as follows: 59 Elimination of delay (cf Western Australia Supreme Court Rules, Order 1, rule 4A) In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial. … 61 Directions as to practice and procedure generally (cf SCR Part 23, rule 4; Act No 9 1973, section 68A) (1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings. 1. Capral submitted that those provisions of the Act supported the making of the orders for substituted service on 27 October 2023, or alternatively provided a basis for the Court to refuse to exercise its discretion (under r 11.6 or r 12.11) to set aside such orders and service, and instead to exercise its discretion either to confirm service (under r 10.14(3)) or to dispense with the requirements of the rules relating to service (under r 2.1). CONSIDERATIOn Conditions for exercise of power 1. The power under r 10.14(1) arises where a document permitted to be served on a person in connection with any proceedings: 1. "cannot practicably be served on the person"; or 2. "cannot practicably be served on the person in the manner provided by law". 1. DNV made the following submissions regarding the circumstances in which those requirements would be satisfied: "Service in the manner provided by law need not be 'impossible' but it must be more than merely 'inconvenient.' That service in the manner provided by law would be more costly, or cause a degree of delay, does not mean that service in that manner cannot practicably occur. It is not necessary that steps be taken to serve the document in the manner provided by law before an application for substituted service is made. However, proof of 'realistic attempts to effect service' is an 'obvious' means of establishing that service in the manner provided by law cannot practicably occur, and ordinarily 'some attempt, at least, should be made.'" 1. DNV pointed out that Capral has not made any attempt at service under the Convention. DNV submitted, and I accept, that if such an attempt were made, it would likely be successful. 2. In Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124, Allsop J considered Order 7 rule 9 of the Federal Court Rules, which at that time provided for orders for substituted service to be made where "for any reason it is impractical to serve a document in the manner set out in the Rules" (emphasis added). His Honour observed (at [8]) that, depending on context, "impractical" can have a different meaning to "impracticable". His Honour referred to various dictionary definitions and books on usage, a number of which referred to "practicable" as meaning "feasible" (at [9]-[10]), while "practical" may have a wider meaning of "useful" or "sensible" or "realistic" (at [9], [12]). 3. However, as noted in the version of New Fowler's Modern English Usage that was quoted in Humane Society International v Kyodo (at [9]), the difference between the two adjectives as a matter of usage is not clearly demarcated: "impractical is tending to encroach on the territory of impracticable, and it is not easy to see how they can be permanently kept apart". In Ricegrowers Co-operative Ltd v ABC Containerline NV (1996) 138 ALR 480 at 482, Tamberlin J expressed the view that "not practicable" (being the term used in the relevant English Rule) was "essentially identical" in meaning to "impractical" in Order 7 rule 9. Because his Honour was of that view, he considered that it was necessary to show futility or inability to serve in order for the power to order substituted service to be enlivened (which Allsop J doubted in Humane Society International v Kyodo at [14]). More recently, in Heenan (Receiver), in the matter of Ruby Apartments Pty Ltd (in liq) v Ralan Paradise No. 1 Pty Ltd (in liq) [2020] FCA 1878, Reeves J considered rules 10.23 and 10.48 of the Federal Court Rules 2011 (Cth), each of which provides a power to order substituted service in circumstances where "it is not practicable to serve a document" in accordance with, respectively, the Federal Court Rules or with the Hague Convention or the law of another country. His Honour held that it was not necessary to show that service would be impossible or futile to establish that it would not be practicable, and that it would be sufficient that an attempt at service would not be "sensible" or "realistic" (at [16]-[17]). 4. An enquiry as to whether something "can be done" is one that usually permits a binary answer: is it possible or not? An enquiry as to whether something "can practicably be done" introduces an element of judgment: is it a realistic or sensible course of action? In considering that issue, it is necessary to consider the effort (and in particular, the time and cost) required to perform the task, the object to be achieved and the particular factual context. 5. DNV noted that the costs of service via Norway's Central Authority were not significant in the context of a commercial claim for an amount in excess of $3.2m. DNV referred to evidence that service would take some three to five months (from the time that the documents were received by the Central Authority), but contended that there was no evidence of any particular urgency associated with service, particularly given that these proceedings involve a monetary claim arising from a transaction in 2020. 6. While it is true that Capral has not identified any urgency, on its part, for the proceedings to be resolved, that does not mean that time is not a significant factor in assessing practicability. 7. As Allsop J observed in Humane Society International v Kyodo (at [13]), the meaning of a provision in the rules of the Court "is not to be gained only by consulting dictionaries and books on usage": "Context and purpose are important" (at [13]). 8. When considering the context and purpose of r 10.14, it is necessary to have regard to the case management principles set out in Part 6 of the Act. 9. Having regard to s 56 of the Act, it is difficult to see that the Court would be able to conclude that it was "practicable" to effect service by a particular means, if such a course of action would frustrate or impede the just, quick and cheap resolution of real issues in the proceedings. 10. Likewise, having regard to s 59 of the Act, it is difficult to see that the Court would be able to conclude that it was "practicable" to effect service by a particular means, if service by that means would significantly increase the lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial. 11. In addition, an important part of the context in which practicability falls to be assessed is that the present proceedings involve commercial litigation between corporations engaged in international commerce and trade, which is being conducted in a List where proceedings are case managed with the aim of ensuring a speedy resolution of the real issues between the parties (SC Eq 3, paragraph 21). 12. Cases concerning the requirement of practicability which were decided before the Act was passed, or otherwise within a different regime, provide limited guidance on the assessment of practicability in the context of litigation being conducted in the Commercial List of this Court, pursuant to the case management principles set out in Part 6 of the Act. In that context, there is always an imperative to ensure that the time and costs expended in the proceeding do not exceed what is necessary for the just resolution of the real issues in the proceedings. That concern may be enlivened particularly where steps are proposed to be taken which would involve time and cost that are disproportionate to the object to be achieved, or which would be largely duplicative of other steps already taken by the parties. 13. In Independent Liquor & Gaming Authority v Melco Resorts & Entertainment Ltd [2022] NSWSC 294 (ILGA v Melco Resorts) at [22], Ball J considered the object of the rules relating to service, and made the following observations: "the rules relating to the service of court documents and originating processes, in particular, are primarily directed at ensuring that a defendant is on notice of the plaintiff's claims and is given a reasonable opportunity to defend them". As his Honour noted, a similar object is specified in the Hague Convention. The National Interest Analysis which was prepared prior to Australia's accession to the Hague Convention (upon which DNV relied) states that the "purpose of the Convention is to make the process for serving documents abroad as quick and simple as possible, while ensuring that the person on whom the documents are to be served has sufficient notice to enable him or her to defend the proceedings". 14. In the context of litigation in this Court, pursuant to the case management principles referred to above, I consider that there is much to be said for the view that it is "not practicable" to require service to be effected by a means that would lead to months of delay in the resolution of the real issues in the proceeding, in circumstances where the defendant is already on notice of the plaintiff's claim. 15. However, I do not need to resolve this issue. That is because, irrespective of whether or not the conditions for the power under r 10.14(1) were met, the conditions for the power under r 10.14(3) were satisfied as at 27 October 2023. 16. The power under r 10.14(3) is available "[i]f steps have been taken, otherwise than under an order under [r 10.14], for the purpose of bringing the document to the notice of the person concerned". Such steps were taken on 20 October 2023, and again on 27 October 2023, when the Summons and Commercial List were emailed to Clyde & Co, who had been for several years acting, and continued to act, for DNV in relation to the particular dispute that is the subject matter of the current proceedings. There is no dispute that these steps were taken "for the purpose of bringing", and did in fact bring, "the document to the notice of" DNV. 17. DNV argued that, whether or not the power under r 10.14(3) was available on 27 October 2023, the orders made on that date were made under r 10.14(1). DNV pointed out that Order 1 provided for the documents to be emailed to Clyde & Co by 30 October 2023, and Order 2 was to the effect that compliance with Order 1 (which had not yet occurred) would constitute effective service. DNV submitted that Order 2 did not refer to any steps which had already been taken prior to the date of the orders (such as the emailing of the documents to Clyde & Co one week earlier), did not confirm any such prior steps as constituting service, and therefore did not involve any exercise of power under r 10.14(3). 18. In response, Capral pointed out that Order 1 required the Summons and Commercial List to be sent via the means specified "by 30 October 2023", and submitted that the sending of the documents by those means on 20 October 2023, prior to the making of that Order on 27 October 2023, was capable of constituting compliance with the Order. Accordingly, Order 2 could be read as an exercise of power under either or both of r 10.14(1) and 10.14(3). 19. It is not necessary to resolve any debate about the interpretation of the orders of 27 October 2023. That is because, whether or not the Court in fact exercised the power under r 10.14(3) on 27 October 2023, the Court is able to exercise that power now. DNV did not take any point that, because Capral had not filed its own notice of motion seeking the exercise of the power under r 10.14(3) or r 2.1, it was not open to the Court to exercise either power if it was determined appropriate to do so on the hearing of this motion: see ILGA v Melco Resorts at [36]. 20. The real issue that arises for determination on this motion is not whether the orders of 27 October 2023 were in fact made under r 10.14(3) or r 10.14(1), or whether the conditions for the exercise of the power under r 10.14(1) had been met as at 27 October 2023, but instead whether the Court should now exercise its discretion under rr 11.6 and 12.11 to discharge those orders and set aside the service effected pursuant to them, or should instead exercise its discretion under r 10.14(3) to confirm that service has been effected by the steps taken to date or its discretion under r 2.1 otherwise to dispense with the requirements of the rules relating to service. Exercise of discretion 1. DNV made a number of submissions in support of its contention that the Court should exercise its discretion to discharge the substituted service orders and set aside service. 2. First, DNV submitted that the discretion must be exercised according to principle, and applicable principles include that "exceptional circumstances" are required before the rules relating to service abroad will be dispensed with or avoided, citing ILGA v Melco Resorts. 3. In ILGA v Melco Resorts at [23], Ball J noted that although in the past strict compliance with the rules relating to the service of court documents has sometimes been regarded as a desirable end in itself, that is no longer the case, referring to rule 10.14(3). His Honour also referred to the powers under r 2.1 and under s 61 of the Act, which have been set out above, and noted that those powers must be exercised to achieve the objectives stated in s 56 of the Act. 4. Having made those observations, and having formed the view that there was no reason not to make an order under r 10.14(3), his Honour continued (at [34]): "even before adoption of the case management principles set out in s 56 and the other provisions of the Civil Procedure Act, the Court was prepared in exceptional circumstances not to require strict compliance with the rules relating to service abroad. Exceptional circumstances exist in this case because the steps taken by ILGA were more likely to bring the relevant documents to the attention of Melco than strict compliance with the rules; and those steps were, in fact, successful." 1. As this passage indicates, his Honour was of the view that, even before the present regime came into effect, "strict compliance" with the rules relating to service was not required when "exceptional circumstances" were established. Read in context, his Honour did not suggest, and it would be inconsistent with his Honour's reasoning to conclude, that the Court should only exercise its powers under r 10.14(3) where "exceptional circumstances" exist. 2. Later in the judgment (at [53]), Ball J expressed the view that the Court should only dispense with the requirements of UCPR r 11.8AC "in exceptional circumstances". Rule 11.8AC provides that: "A document to be served outside Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected". There was a question in that case whether the service which had been effected on certain individuals in Hong Kong (which did not involve personal service) was service in accordance with the laws of Hong Kong. 3. Further, in the circumstances of that case, Ball J was of the view the power to dispense with the requirements of r 11.8AC should be exercised, having regard to the case management principles set out in the Act and the circumstances of that case. His Honour said (at [55]): "it would be quite contrary to the principles stated in s 56 of the Civil Procedure Act for this Court to insist on strict service in accordance with UCPR r 11.8AC when it is plain that Mr Ho and Mr Winkler are on notice of the proceedings and the Court is in a position to give directions about the further conduct of the proceedings to ensure that they are given a reasonable opportunity to be heard. Insistence on service strictly in accordance with the UCPR would only be productive of delay and wasted costs." 1. It follows that there is no requirement for exceptional circumstances before the power under r 10.14(3) can be exercised. Instead, that power, like all other powers in the UCPR, is to be exercised so as to seek to give effect to the overriding purpose and in accordance with the case management principles specified in the Act. 2. Secondly, DNV submitted that the power to order substituted service cannot be used as "a means of conveniently side-stepping the limitations that ordinarily apply to service outside Australia", including the Convention (quoting the decision of Williams J in Re Sunnya Pty Ltd [2023] NSWSC 1104 at [74]). This was part of a broader submission that principles of comity must be taken into account in the exercise of the discretion. In that regard, DNV placed particular reliance on certain observations in Edelman J in Park v Tschannen (2016) 341 ALR 452 at [16]. 3. In Re Sunnya Pty Ltd, the originating process had been sent by email to a company in China (GNT). When Williams J referred to the "limitations that ordinarily apply to service outside Australia" (at [74]), her Honour appears principally to have had in mind the requirements of r 11.8AC (referred to at [70]). Her Honour noted (at [74]) that the plaintiffs did not adduce any evidence that service could not practicably be effected on GNT in accordance with r 11.8AC (and in particular, in accordance with the law of China) and did not adduce any evidence of exceptional circumstances that might warrant an order dispensing with the requirements of r 11.8AC (referring to ILGA v Melco). 4. It is in that context that her Honour observed (at [74]) that: "Orders for substituted service of court process outside Australia should only be made in circumstances where service cannot practicably be affected in accordance with the relevant rules or legislation". In apparently referring to the terms of r 10.14(1), her Honour was not purporting to express any view about the interpretation and application of r 10.14(3). Instead, her Honour's focus was on the interplay between r 10.14 and r 11.8AC, and the issue whether a form of substituted service which was effected in China should be ordered in circumstances where it had not been shown that this form of substituted service was in accordance with the laws of China, or that service could not practicably be effected in China in accordance with the laws of China. 5. In the passage of Edelman J's decision in Park v Tschannen upon which DNV relied, his Honour was commenting upon rule 10.49 of the Federal Court Rules 2011, which provided at that time as follows: 10.49 Substituted service If service was not successful on a person in a foreign country, in accordance with a convention, the Hague Convention or the law of a foreign country, 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. 1. In respect of that rule, his Honour made the following observations (at [16]): "One reason why r 10.49 requires that steps have been taken to attempt service is principles of international comity. It would not be consistent with comity for an agreed regime to provide for a form of service outside the jurisdiction if the laws of that jurisdiction permitted a party immediately to substitute an alternative form of service. As Dixon CJ, Williams and Webb JJ remarked, if the position were otherwise, 'the strict conditions regulating and limiting service out of the jurisdiction upon defendants abroad would be ineffective; for they could be avoided by obtaining an order for substituted service within the jurisdiction': Laurie v Carroll [1958] HCA 4 ; (1958) 98 CLR 310, 325. Another reason is the importance of personal service and the need for some reason to exist before orders are made for departure from it. As the High Court observed at 323 in Laurie, service was historically closely associated with jurisdiction and it had been assumed that the foundation of jurisdiction was physical power. That historical foundation is one of the reasons for the importance of personal service. The other is its foundations in natural justice." 1. In this passage, Edelman J was explaining why r 10.49 of the Federal Court Rules took the form that it did. That is a separate question from how the rules relating to service in the UCPR should be interpreted and applied. In any case, the regime under the UCPR is not one that "permit[s] a party immediately to substitute an alternative form of service" (to use the language of Edelman J). Instead, the regime gives the power to order substituted service to the Court, and the Court, when exercising that power, is required to take into account the considerations specified in the Act and may also take into account other relevant considerations, such as comity. 2. DNV made the following submission regarding the importance of considerations of comity in this case: "Not lightly would this Court authorise service of process on a Norwegian company with no presence in Australia in a manner inconsistent with Norwegian law, both because of considerations of comity and to avoid any risk that this Court's judgment will be unable effectually to be enforced in Norway." 1. There was no evidence of the latter "risk". DNV did not lead any evidence of the requirements for the enforcement of judgments in Norway. 2. Further, DNV did not lead any evidence that substituted service which is effected in Sydney, pursuant to orders of this Court, by emailing documents to a solicitor located in Sydney who has been retained to act for a Norwegian company in respect of a dispute with an Australian company, would infringe any law of Norway. DNV referred to and relied on Norwegian Courts of Justice Act LOV-1915-08-13-5 §46, and provided a translation of this provision. However, it appears to relate to a different subject matter, namely, "rogatory letters". It provides as follows: "Rogatory letters from foreign courts or other foreign authorities shall only be complied with when they are sent through the appropriate Norwegian government ministry, unless determined otherwise by the King or follows from an agreement with the foreign state concerned. The request shall be sent to the location's district court, unless otherwise has been determined or follows from the nature of the action. When considerations of appropriateness indicate that a number of courts are competent, the ministry shall decide the court though which the action should take place. The court itself shall consider whether it has authority to perform the action. The court's decision may be appealed by the government ministry concerned. If the court finds that the request should have been submitted to another court or authority, it may forward the request to that court or authority. The procedure shall be carried out in accordance with Norwegian law. Notification of the parties shall not be necessary, unless such notification has been expressly demanded. If a special form or procedure is expressly requested, the request shall be complied with insofar as is possible, provided that it is not prohibited under Norwegian law. The King may issue more detailed regulations concerning letters rogatory from foreign authorities. That which is laid down above shall not apply to enforcements of foreign interlocutory orders or preliminary injunctions to ensure such enforcement. It shall also not apply to the extradition of persons who have been sentenced or are being prosecuted abroad, or to the use of coercive measures in accordance with the Criminal Procedure Act. In accordance with the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice, Protocol 5 Article 25, the EFTA Court may submit a request for the hearing of evidence directly to the court that is responsible for hearing the evidence." 1. In Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, Gaudron, McHugh, Gummow and Hayne JJ emphasised the need "to pay close attention to the terms" of the particular rules regarding service that were in issue (being, in that case, the predecessor Rules of this Court). Their Honours noted that those Rules differed from rules that apply in other jurisdictions, commenting: "Learning that has been developed in connection with those other rules cannot automatically be applied to the Rules which govern the proceedings which are the subject of the present appeals". Their Honours noted (at [42]) that considerations "of comity, and consequent restraint, have informed many of the reported decisions about service out of the jurisdiction", but agreed with comments of the Court of Appeal in that case that "contemporary developments in communications and transport make the degree of 'inconvenience and annoyance' to which a foreign defendant would be put, if brought into the courts of this jurisdiction, 'of a qualitatively different order to that which existed in 1885'" (footnotes omitted). Their Honours continued (at [43]): "The considerations of comity and restraint, to which reference has so often been made in cases concerning service out of the jurisdiction, will often be of greatest relevance in considering questions of forum non conveniens. The starting point for the present inquiry, however, must be the terms of the Rules, not any general considerations of the kind just mentioned." 1. The need to focus on the terms of the rules was also emphasised by Austin J in ASIC v Sweeney (No 2), upon which DNV relied. 2. DNV placed particular importance on the following observations of his Honour at [24]: "Given the general approach of the courts to the interpretation of rules concerning service abroad, it is unlikely that the drafters of the Supreme Court Rules would have intended, by a general rule concerning substituted service appearing in a Part headed 'Service – General', to have provided a means for a plaintiff to sidestep the limitations and protections which would apply if he sought to effect personal service abroad." 1. However, immediately after those observations, his Honour said as follows (at [25]): "On the other hand, the Court should not allow these general considerations to deflect it from the task of giving a fair and rational construction to particular provisions in the Rules. If, on their proper construction, and in light of the authorities, the Rules permit the order for substituted service that has been made in this case, general considerations should not influence the Court to reach any different conclusion." 1. The focus must always be the terms of the rules of the UCPR which must be, pursuant to s 56 of the Act, interpreted so as to seek to give effect to the overriding purpose of the Act. 2. DNV argued that if r 10.14 were construed "as allowing substituted service in cases in the Commercial List whenever any d[el]ay of around three months was shown, … that would effectively mean that any defendant in the Commercial List in a Hague Convention country would not have to be served in accordance with Australia's international agreement. This Court would always just order substituted service. That just cannot be right." 3. Capral did not contend for, and I would not accept, any such general proposition. The exercise of the discretion must be tied to the circumstances of the specific case, and must seek to give effect to the overriding purpose of the Act having regard to those specific circumstances. Here, the relevant circumstances include the following matters. 4. DNV has retained solicitors in Sydney to act for it in relation to the particular dispute which is the subject matter of these proceedings. Those solicitors have been acting for DNV for several years, and have engaged in communications with Capral's solicitors in relation to substance of the dispute, including seeking particulars and documents relating to the dispute, and engaging in without prejudice communications. At the same time as DNV's solicitors indicated that they did not (yet) have instructions to accept service in these proceedings, they offered to engage in without prejudice negotiations in relation to the dispute on their client's behalf. Having regard to those matters, the Summons and Commercial List statement were likely immediately brought to the attention of DNV upon their being served upon DNV's solicitors on 27 October 2023 (and DNV did not contend otherwise). Further, the most effective way to bring the documents to DNV's notice was the method adopted, which was instantaneous, rather than via the Norwegian Central Authority. 5. As noted above, the rules relating to service are primarily directed at ensuring that a defendant is on notice of the plaintiff's claims and is given a reasonable opportunity to defend them. DNV has been on notice of Capral's claims since October 2023, and this Court is in a position to give directions about the further conduct of the proceedings to ensure that DNV is given a reasonable opportunity to be heard. Insistence upon service upon DNV in Norway via the Central Authority would lead to a delay of months, until the latter part of 2024, without advancing either DNV's knowledge of the matters in issue in these proceedings or its opportunity to defend them. 6. While considerations of comity may be important in a particular case, the specific matters raised by DNV, which have been addressed above, are of limited significance. In any case, I must have regard to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings, and am conscious of the need to implement the practice and procedure of the court "with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial" (ss 56, 59 of the Act). 7. I consider that it would be contrary to the principles stated in ss 56 and 59 of the Act for this Court to set aside the service that was effected in accordance with this Court's orders on 27 October 2023, and which brought the Summons and Commercial List to DNV's attention at that time, and to require Capral to take steps to serve the same documents upon DNV in Norway. Such a course would only be productive of wasted costs and significant delay. 8. Having regard to those provisions of the Act, the terms of r 10.14, and the factual circumstances I have outlined, I have determined that I should exercise the power under r 10.14(3) to confirm that the Summons and Commercial List Statement be taken to have been served on DNV on 27 October 2023. Orders and Costs 1. UCPR r 42.1 provides that: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 1. In the present case, Capral has been successful on DNV's motion. If Capral is successful in the proceedings, then it should recover its costs of the motion. However, if it is unsuccessful in the proceedings, then it would seem unreasonable for DNV to be liable for costs in resisting a claim that ultimately fails. The costs of the motion should be Capral's costs in the cause. 2. Accordingly, the Court: 1. Orders that the Summons and Commercial List Statement be taken to have been served on the Defendant on 27 October 2023. 2. Otherwise, dismisses the notice of motion filed on 17 November 2023. 3. Orders that the costs of the notice of motion filed on 17 November 2023 be the Plaintiff's costs in the cause. 4. Stands the matter over for directions on 23 February 2024. ********** Amendments 14 February 2024 - Counsel details corrected DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 February 2024