Supreme Court New South Wales Medium Neutral Citation: Hammond v Gerard Malouf & Partners [2012] NSWSC 664 Hearing dates: 19, 23 March 2012 Decision date: 19 June 2012 Jurisdiction: Civil Before: Hislop J Decision: 1. The judgment herein dated 20 July 2011 and the assessment dated 22 February 2012 are set aside. 2. The time for service of the statement of claim, the amended statement of claim and the further amended statement of claim is extended to 4.00 pm on 17 July 2012. 3. The second plaintiff is to serve the statement of claim, the amended statement of claim and the further amended statement of claim on the second defendant by 4.00pm on 17 July 2012. 4. The second defendant is to file and serve his defence before 4.00pm on 31 July 2012. 5. The proceedings are stood over for mention before the Registrar on 7 August 2012. 6. The costs of and associated with the notice of motion are costs in the proceedings. Catchwords: Common law - professional negligence - barrister - service of originating process under UCPR 10.9 - service not valid. Legislation Cited: Uniform Civil Procedure Rules 2005 Civil Procedure Act 2005 Cases Cited: Hoskins v Van Den-Braak (1998) 43 NSWLR 290 Howship Holdings Pty Limited v Leslie (1996) 41 NSWLR 542 Cohen v McWilliam (1995) 38 NSWLR 476 Category: Interlocutory applications Parties: Tracie Hammond (Second Plaintiff) Mark Thompson (Second Defendant) Representation: P. Hammond - by leave (Second Plaintiff) E. Chrysostomou (Second Defendant) File Number(s): 2010/265523 Judgment Introduction 1On 9 October 2008 the second plaintiff, Tracie Hammond, sustained personal injuries when she slipped on a chip in a shopping centre carpark. She brought proceedings to recover damages for her injuries from the owner/occupier of the shopping centre. Those proceedings were settled at an informal settlement conference. At the time of settlement the second plaintiff was represented by the solicitors and barrister who are, respectively, the first and second defendants in the current proceedings. 2Subsequent to the settlement, the second plaintiff received notification from Centrelink that an amount of $5135.35 was repayable to it in relation to the subject injury. No allowance had been made for this deduction in the calculation of the settlement sum. 3On 10 August 2010 the second plaintiff and her husband, the first plaintiff, filed a statement of claim against the first and second defendants. The statement of claim was drafted by the plaintiffs and claimed damages for various causes of action including professional negligence on the part of the first and second defendants. The statement of claim included a claim for the $5135.35 sought by Centrelink. It was alleged the second defendant was negligent, in essence, for failing to advise the second plaintiff that Centrelink would deduct money from any settlement amount agreed in the injury proceedings. 4On 6 September 2010 an amended statement of claim was filed. 5On 6 December 2010 the statement of claim in respect of the first plaintiff was dismissed by Adams J. 6On 6 (or 7) April 2011 a further amended statement of claim was filed. 7On 20 July 2011 Registrar Bradford gave judgment for the second plaintiff against the second defendant for damages to be assessed. There was no appearance for the second defendant. The second defendant had not received notice of this application. 8On 22 February 2012 Davies J held the second plaintiff was entitled to judgment for $5135.35. There was no appearance for the second defendant. He had not received notice of this application. 9On 22 February 2012 the claim by the second plaintiff against the first defendant was settled. Terms were filed in court. 10On 9 March 2012 the second defendant filed a notice of motion seeking orders that: "1. The default judgment obtained by the second plaintiff against the second defendant on 6 June 2011(sic 20 July 2011) be set aside pursuant to UCPR 36.15 or UCPR 36.16. 2. The second plaintiff's claim herein be struck out. 3. The second defendant's costs be paid by the second plaintiff." 11Uniform Civil Procedure Rule ("UCPR") 36.15(1) provides, inter alia, that a judgment of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered irregularly. 12UCPR 36.16(2) provides, inter alia, that the court may set aside a judgment after it has been entered if (a) it is a default judgment (other than a default judgment given in open court) or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order. 13The second plaintiff opposed the making of the orders sought in the notice of motion. The second defendant's affidavit 14The second defendant's affidavit sworn on 9 March 2012 in support of his application was read. In that affidavit the second defendant deposed that he was told something by a colleague on 27 September 2011 that caused him to write to the second plaintiff inquiring if she had obtained default judgment against him and requesting her to withdraw it. On 10 October 2011 the first plaintiff responded on behalf of the second plaintiff confirming that default judgment had been obtained. The second defendant deposed that he had not previously received notice of the default judgment and no notice of application for default judgment had been received by him. The second defendant deposed to correspondence between him and the first plaintiff until 2 March 2012 when an examination order was served upon him. He also deposed that he sought access to the court file, which he gained after some administrative delay. He deposed that on no occasion had he been personally served with a valid statement of claim in this matter. He did not, in his affidavit, say that the originating process had not been received by him following the alleged service by the second plaintiff. His counsel made no concession in this regard. The second defendant deposed: "24. Further, I say that: a) I acted as counsel for the second plaintiff in respect of a damages claim against Westfield Limited in respect of an incident I was instructed had occurred on 8 October 2008, b) I was on no occasion instructed by the second plaintiff that she had been a recipient of a Centrelink benefit following this incident, c) I was on no occasion instructed by the second plaintiff as to circumstances which could have given rise to an entitlement by her to receive a Centrelink payment in respect of or following the incident, d) I was on 4 February 2010 specifically instructed by the second plaintiff that following the incident she was caused to be off work for a period of two or three weeks, and was thereafter back at work, e) I was on 4 February 2010 specifically instructed by the second plaintiff that as at 4 February 2010 she was working longer hours than she used to prior to the incident and was not suffering any earning loss." 15The second plaintiff did not require the second defendant for cross examination upon his affidavit. The issues 16The second defendant submitted the statement of claim, whether in its original, amended or further amended form, had not been personally served, in consequence of which the judgment must be set aside. Alternatively, the judgment was given in the absence of the second defendant and should be set aside in the exercise of the court's discretion. The second defendant did not submit that the second plaintiff had been required to give notice to him of the application for default judgment - see UCPR 16.3(1A). 17The second plaintiff submitted that the service was validly effected pursuant to UCPR 10.9. If the service did not comply with the rules, it should be inferred that the original statement of claim, the amended statement of claim and the further amended statement of claim had each come to the attention of the second defendant. The judgment should not be set aside. The rules 18The following rules are relevant as to the question of service: (a) (Subject to the rules, the Practice Notes and any other rules of court), a person may commence proceedings in the court by filing a statement of claim or summons (UCPR 6.2(1)); (b) (Except by leave of the court), a party may not take any step in proceedings unless the party has filed a statement of claim or summons or has entered an appearance (UCPR 6.1(1)); (c) Originating process must be served on each defendant (UCPR 6.2(3)); (d) Originating process is defined in s 3 of the Civil Procedure Act 2005 as "means the process by which proceedings are commenced..." Originating process thus includes a statement of claim; (e) (Unless the court orders otherwise), a party that files a document must as soon as practicable serve copies of the document on each other active party (UCPR 10.1); (f) Any document required or permitted to be served on a person in any proceedings may be personally served, but need not be personally served unless the rules so require or the court so orders (UCPR 10.20(1)); (g) (Except as otherwise provided by these rules), any originating process must be personally served (UCPR 10.20(2)); (h) Personal service of a document on a person is effected by leaving a copy of the document with the person [served] (UCPR 10.21(1)); 19UCPR 10.9 provides "(1) This rule applies to any proceedings against a person in respect of anything done or omitted to be done by the person in the course of, or in relation to, a business carried on under an unregistered business name. (2) For the purposes of any such proceedings, any document may be served on the defendant, whether sued in his or her own name or under the unregistered business name: (a) by leaving it with a person who is apparently engaged in the business, and apparently of or above the age of 16 years, at any place at which business is carried on under that name, or (b) by sending it by post, addressed to the defendant, to any place at which business is carried on under that name, whether or not the place concerned is within New South Wales. (3) For the purposes of any such proceedings: (a) service of a document in accordance with subrule (2) is taken to constitute personal service, and (b) the place at which the document is left, or to which the document is sent by post, is taken to be the place of service of the document, and (c) in the case of a document sent by post, the document is taken to have been served at the end of 7 days after the day on which it was sent. (4) This rule does not limit any other law with respect to the service of documents." Determination 20The original statement of claim was purportedly served on the second defendant pursuant to UCPR 10.9(2)(a) on 17 August 2010. 21The amended statement of claim was purportedly served on the second defendant pursuant to UCPR 10.9(2)(a) on 6 September 2010. 22In her affidavit affirmed on 28 June 2011 the second plaintiff deposed: "The further amended statement of claim was served on the second defendant personally, pursuant to r 10.9(2)(b) and 3(a)(c) of the Uniform Civil Procedure Rules 2005 on 16 April 2011." 23 The second plaintiff deposed in her affidavit affirmed on 6 July 2011 that - "3 On 16 April 2011, I served Mark Thompson with a sealed copy of the further Amended Statement of Claim which was filed on 8 April 2011. 4 I served the document by posting it to the second defendant on 8 April 2011 at Owen Dixon Chambers, Level 14, 179 Elizabeth Street, Sydney being a place where the second defendant carries on business under his own name, which is an unregistered business name." 24UCPR 10.9 only has application to "proceedings against a person in respect of anything done or omitted to be done by the person in the course of, or in relation to, a business carried on under an unregistered business name". 25It was common ground that at all material times the second defendant carried on his profession as a barrister in chambers at 179 Elizabeth Street, Sydney, that he practised his profession under his own name and that the proceedings against him were in respect of things done or omitted to be done by him in the course of, or in relation to, his practice as a barrister. 26The dictionary to the UCPR provides - "unregistered business name" means a business name that is not registered under the Business Names Act 2002 or Part 3 of the Partnership Act 1892. "business name" means a name, style, title or designation under which a business is conducted (not being the name or names of the persons by whom the business is conducted) and includes such a name, style, title or designation whether or not it is registered under the Business Names Act 2002 or under Part 3 of the Partnership Act 1892. 27In my opinion it follows from the definition of business name that UCPR 10.9 does not apply where a business is conducted in the name of the person by whom it is conducted. The second defendant carried on his profession as a barrister in his own name. UCPR 10.9 was not applicable. The originating process was not properly served upon the second defendant. 28The second defendant submitted that as there had been no valid service of the originating process, the judgment must be set aside. He relied on the decision of the New South Wales Court of Appeal in Hoskins v Van Den-Braak (1998) 43 NSWLR 290. There the court held (at 293): "...since neither the appellant nor anyone acting on his behalf was served with the claim on which judgment was given against him, prima facie, the proceedings, and the judgment against him are nullities...The appellant was entitled ex debito justitiae [ie, not as a matter of discretion, or subject to terms] to have the judgment set aside unconditionally." 29The second plaintiff submitted that if the service was defective that constituted an irregularity under s 63 of the Civil Procedure Act 2005 and the court had a discretion under UCPR 36.15 to refuse to set aside the judgment. Similarly, the court had a discretion as to whether to set aside the judgment in respect of the application under UCPR 36.16. 30The second plaintiff submitted the court should not exercise any discretion to set aside the judgment essentially as: (a) it should be inferred that documents delivered or posted to the second defendant's chambers would have been received by him; (b) Exhibit A (which was admitted subject to relevance) contained relevant evidence that the second defendant was aware that legal proceedings had been instituted against him; (c) "the ordinary meaning of 'service' is personal service, and personal service merely means that the document in question must come to the notice of the person for whom it is intended. The means by which that person obtains the document are usually immaterial" - Howship Holdings Pty Limited v Leslie (1996) 41 NSWLR 542 at 544. However, Howship was concerned with facultative provisions for service under the Corporations Act 2001 and not the UCPR which mandate personal service of the originating process in the manner prescribed; (d) there had been lengthy delay by the second defendant; (e) the second defendant had no bona fide defence. 31The exercise of a discretion to set aside the judgment depends upon whether the interests of justice require that the second defendant should be permitted to contest the second plaintiff's claim. 32In my opinion, the judgment should be set aside in the exercise of the Court's discretion for the following reasons: (a) the primary consideration in the exercise of the discretion is whether the second defendant has an arguable case; (b) in my opinion, the second defendant and the second plaintiff each have an arguable case. The determination of which case will prevail will ultimately depend upon a close consideration of all of the relevant evidence and surrounding facts; (c) in these circumstances, delay, though a factor is not determinative - Cohen v McWilliam (1995) 38 NSWLR 476; (d) the possibility the second defendant received the originating process and did not act on it is relevant though of little weight as the exercise of the discretion under the UCPR 31.16 commonly arises in cases where the statement of claim has been validly served but the defendant has not acted appropriately in response to it. 33In my opinion, the appropriate course in all the circumstances is to have the matter determined on the merits unless the parties can resolve it between themselves. Accordingly, whether it be a matter of discretion or a matter of entitlement ex debito justitiae, the judgment, in my opinion, should be set aside and the second defendant let in to defend. 34I make the following orders: 1. The judgment herein dated 20 July 2011 and the assessment dated 22 February 2012 are set aside. 2. The time for service of the statement of claim, the amended statement of claim and the further amended statement of claim is extended to 4.00 pm 17 July 2012. 3. The second plaintiff is to serve the statement of claim, the amended statement of claim and the further amended statement of claim on the second defendant by 4.00pm on 17 July 2012. 4. The second defendant is to file and serve his defence before 4.00 pm on 31 July 2012. 5. The proceedings are stood over for mention before the Registrar on 7 August 2012. 6. The costs of and associated with the notice of motion are costs in the proceedings. ********** 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: 20 June 2012