New South Wales Supreme Court CITATION : Commonwealth Bank of Australia v Munro and Anor [2010] NSWSC 1066 HEARING DATE(S) : 16 September 2010 JUDGMENT DATE : 17 September 2010 JUDGMENT OF : Schmidt J DECISION : 1. Order under Rule 10.14(3) that the statement of claim be taken to have been served on the first defendant on 25 April 2009, that being 7 days after the claim was served on the occupiers at the Oyster Bay property. 2. The plaintiff is to bear the second defendant's costs of the motion. CATCHWORDS : PROCEDURE - Supreme Court procedure - New South Wales - notice of motion - orders sought pursuant to Part 10.14 of the Uniform Procedure Rules 2005 - substituted and informal service - unsuccessful attempts to locate first defendant - first defendant had admitted receipt of statement of claim - order made under Rule 10.14(3) of the Uniform Procedure Rules - costs - plaintiff to bear the second defendant's costs of the motion Australian Securities and Investments Commission Act 2001 Civil Procedure Act 2005 LEGISLATION CITED : Contracts Review Act 1980 Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 CATEGORY : Procedural and other rulings Commonwealth Bank of Australia - Plaintiff PARTIES : Terance Ronald Munro - First Defendant Loretta Laura Buccollero - Second Defendant FILE NUMBER(S) : SC 2009/293782 COUNSEL : Mr S Aspinall - Plaintiff Ms SK Hill - Second Defendant SOLICITORS : Henry Davis York - Plaintiff Clamenz Corporate Lawyers - Second Defendant - 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION SCHMIDT J FRIDAY, 17 SEPTEMBER 2010 2009/293782 COMMONWEALTH BANK OF AUSTRALIA v MUNRO AND ANOR JUDGMENT 1 HER HONOUR: By motion filed in September 2010, the plaintiff seeks orders pursuant to Part 10.14 of the Uniform Civil Procedure Rules 2005, that the statement of claim be taken to have been served on the first defendant, or in the alternative, that the statement of claim be valid for service up to and including 8 October 2010. The orders were neither consented to nor opposed by the second defendant. 2 The proceedings were commenced in April 2009 by statement of claim in which the plaintiff sought possession of land at Oyster Bay and Miranda, as well as an order that the first defendant pay it $951,709.49 and a further order that the defendants pay it $472,545.39. The first defendant was the registered proprietor of the Oyster Bay property and the defendants the registered proprietors of the Miranda property. The plaintiff held registered mortgages over both properties and had entered a credit contract with the first defendant and a second credit contract with the two defendants. It alleged default under both contracts. 3 There has been no defence filed by the first defendant. The second defendant has filed both a defence and a cross claim. The second defendant claims that she was on a disability pension, suffering from a mental illness, when her signature was procured on the loan documentation and mortgage, by the first defendant and another, acting as the plaintiff's agents. She was a volunteer who had not given informed consent to the transaction and had not benefited from the loan. Unconscionability under the Contracts Review Act 1980 is claimed, and other claims are advanced under the Trade Practices Act 1974 (Cth) and the Australian Securities and Investments Commission Act 2001 4 The motion was supported by affidavits of Ms Killara Maher, the plaintiff's solicitor, Ms Christine Karthikeyan, the plaintiff's Manager for Collections, affidavits of Terrence Brightman, process server and Kris Sabatino, process server, as well as by various documents . 5 Ms Maher deposed that in August 2010 it had come to attention that there was no record of the statement of claim having been personally served on the first defendant. It had been served on the occupiers of the Miranda and Oyster Bay properties in April 2009. The first defendant was personally served with the plaintiff's defence to the cross claim in October 2009, after the second defendant had filed and served her defence and cross claim. 6 It was believed that the first defendant had admitted receipt of the statement of claim between July and December 2009, in the course of communications received from ALIS Lawyers & Immigration Services, trading as ALIS Lawyers, who had been instructed by the first defendant, as well as in communications from the first defendant himself, between August and November 2009. There had been recent unsuccessful attempts to locate the first defendant, which were continuing. 7 Ms Karthikeyan deposed to communication received from ALIS Lawyers in relation to a proposed sale of the Oyster Bay property and another property not the subject of these proceedings. The Oyster Bay sale proceeded on the basis that the net proceeds were paid to the plaintiff. The plaintiff had also proposed surrendering another property to the plaintiff. 8 Email communication in evidence from the first defendant raised the plaintiff's claim in relation to the Oyster Bay and Miranda properties and his wish to sell the properties. There has been no communication received from the first defendant since December 2009. 9 As to prejudice the plaintiff submitted that there would be none flowing to the defendants from the grant of the orders sought, but that if not granted, the plaintiff would be required to commence fresh proceedings. 10 Part 10 of the Rules requires service of documents on all active parties to proceedings, as soon as practicable, unless the Court otherwise orders. Various means of service are provided under Rule 10.5. Service by agreement is provided in Rule 10.6, including by way of informal agreement. Rule 10.14 permits the Court to order that service otherwise than in accordance with the Rules be taken as service on a date specified in the order. Such an order confirming service already given, requires the Court to be satisfied that appropriate notice of the proceedings has been given. 11 In this case, the first defendant has never defended the proceedings or entered an appearance, but nor has he ever disputed the alleged defaults or what the plaintiff claims under the mortgages and has taken steps to satisfy what is owing. After the statement of claim was served on occupiers of the property, communication was received from the first defendant's solicitor; the first defendant signed an acknowledgement of debt; took steps to sell the Oyster Bay property, to reduce the debt and made enquiries of the plaintiff as to the sale of the Miranda property, but advised the plaintiff in writing that he had been advised by his lawyers that was not possible, because of the second defendant's defence and cross claim. The first defendant was served personally with the plaintiff's defence of the second defendant's cross claim, at the same address where the statement of claim had been served on occupiers on 18 April 2009. He subsequently spoke to the plaintiff's lawyers about that cross claim and was advised to contact his lawyers for advice. 12 I am satisfied in the circumstances that it may be fairly concluded that the first defendant has had notice of the proceedings since April 2009 and has acted in response to that notice, notwithstanding that he has never entered an appearance or sought to defend the plaintiff's claim. 13 The plaintiff is not presently able to locate the first defendant. Requiring it to take further steps to locate him, in order to effect personal service of the statement of claim to which he has already responded by the steps which I have described, would not accord with the overriding purpose of the Civil Procedure Act 2005, which is concerned with the just, quick and cheap resolution of the real issues in the proceedings (s 56). The costs involved in further pursuit of personal service would appear to be unnecessarily incurred, potentially at the expense of the defendants. 14 The plaintiff also sought leave to file a further motion, returnable at the hearing, in respect of the claims to be pressed against the first defendant. There was no opposition to that course and I granted the leave sought. 15 The parties were disagreed as to costs. The second defendant sought an order as to her costs of the motion, which the plaintiff opposed, on the basis that they had been unnecessarily incurred, given the approach taken to the application and its offer to mention the matter on her behalf. 16 I am satisfied that the second defendant's costs must be born by the plaintiff. I accept that they were incurred as the result of the plaintiff's oversight and the necessity to approach the Court for relief, in relatively close proximity to the hearing, at a time when the second defendant's appearance was necessary, given the alternative orders sought and their potential impact on the hearing. Order 17 In the circumstances here before the Court, I am satisfied that justice demands an order under Rule 10.14(3) that the statement of claim be taken to have been served on the first defendant on 25 April 2009, that being 7 days after the claim was served on the occupiers at the Oyster Bay property. I order accordingly. The plaintiff is to bear the second defendant's costs of the motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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