Sunshine Phone Systems (in liq) v Martens and Martens
[2021] QDC 36
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- Sunshine Phone Systems (in liq) v Martens and Martens[2021] QDC 36
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Sunshine Phone Systems (in liq) v Martens and Martens[2021] QDC 36
Sunshine Phone Systems (in liq) v Martens and Martens[2021] QDC 36
DISTRICT COURT OF QUEENSLAND
CITATION: | Sunshine Phone Systems (in liq) and Anor v Martens and Martens [2021] QDC 36 |
PARTIES: | SUNSHINE PHONE SYSTEMS PTY LTD (IN LIQUIDATION) (first plaintiff) PAUL ERIC NOGUERA AS LIQUIDATOR OF SUNSHINE PHONE SYSTEMS PTY PTD (IN LIQUIDATION) (second plaintiff) v HEATHER MARGARET MARTENS (first defendant) WILLIAM WALKER MARTENS (second defendant) |
FILE NO/S: | D32/2020 |
DIVISION: | Civil |
PROCEEDING: | Application |
DELIVERED ON: | 05 March 2021 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | Decided without oral hearing |
JUDGE: | Cash QC DCJ |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SERVICE – IN LIEU OF PERSONAL SERVICE: SUBSTITUTED AND INFORMAL SERVICE – where claim and statement of claim not personally served – where suspicion defendants have changed address – where information based upon ‘skip trace’ report – affidavit – hearsay Uniform Civil Procedure Rules 1999 (Qld), r 116, r 430, 489 A-G v Watego [2003] QSC 367, [26] Bendigo & Adelaide Bank Limited v Wilkin & Anor [2018] QDC 16 Deputy Commissioner of Taxation v Ahern (No. 2) [1988] 2 Qd R 158, 163 |
COUNSEL: | No appearance. Decided without oral hearing. |
SOLICITORS: | FC Lawyers for the plaintiffs No appearance for the defendants |
- [1]On 4 December 2020 the plaintiffs filed a claim and statement of claim seeking monies due and owing. The claim against the first defendant is in the amount of $126,099.70 and in relation to the second defendant it is $130,574.71. The plaintiffs allege that the first defendant was and is a director of the first plaintiff and that she and the second defendant were and are shareholders of the first plaintiff. The amounts claimed are said to represent amounts loaned by the first plaintiff to the defendants and not repaid. The second plaintiff is the liquidator of the first plaintiff. The claim and statement of claim have not been served upon the defendants. The plaintiffs seek an order pursuant to rule 116 of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) for substituted service and pursuant to rule 489 that the application be decided without an oral hearing. The proposed methods of service are threefold. First, to email the documents to an address associated with the second defendant. Secondly, to leave copies with a person the plaintiffs say is the son of the defendants. Thirdly, to send electronic copies using the messenger service associated with the Facebook social media platform to accounts the plaintiffs say have been used by the defendants.
- [2]It must immediately be observed that the request for the application to be decided without an oral hearing is defective. While a draft order accompanied the application there was no written submission in support of the application, as is required by rule 490(1)(b). Whether that means the application is incompetent and should be dismissed for that reason alone, or whether it merely means it is not appropriate to decide the matter without an oral hearing[1] need not be decided. That is because the application faces other, insurmountable difficulties. To appreciate the difficulties, it is convenient to start with what is required to secure an order for substituted service.
- [3]Rule 116 provides:
116 SUBSTITUTED SERVICE
- (1)If, for any reason, it is impracticable to serve a document in a way required under this chapter, the court may make an order substituting another way of serving the document.
- (2)The court may, in the order, specify the steps to be taken, instead of service, for bringing the document to the attention of the person to be served.
- (3)The court may, in the order, specify that the document is to be taken to have been served on the happening of a specified event or at the end of a specified time.
- (4)The court may make an order under this rule even though the person to be served is not in Queensland or was not in Queensland when the proceeding started.
- [4]To secure substituted service, the plaintiff must show personal service is impractical and that the proposed method of service is likely to bring the proceedings to the attention of the second defendant. Personal service is impractical where it cannot be achieved with reasonable effort by the plaintiff. I assume it was to prove these matters that the plaintiff filed an affidavit of Jacobus Francois Malan sworn on 22 January 2021 (court document 4). In this affidavit Mr Malan deposes:
- I am a Solicitor employed by FC Lawyers, the solicitors for the Plaintiff (sic). I have the day to day conduct of this matter subject to the supervision of my employers. I am authorised to affirm this affidavit on the Plaintiff’s behalf.
- Between 2 July 2020 and 13 October 2020, FC Lawyers, solicitors for the Plaintiffs, exchanged email correspondence with the Second Defendant to address the matter subject of these proceedings …
- The Second Defendant ceased responding to FC Lawyers following an offer by the Plaintiffs for the repayment of the debt, the subject of the Claim.
…
- The Defendants’ last known address has been provided in the Claim … (‘Buderim address’).
- The Defendants no longer reside at the Buderim address.
- On 18 December 2020, by way of email, I instructed Sharmans Process Servings (‘Sharmans’) to perform a skip trace to locate the Defendant (sic) for the purposes of personal service of the Claim and Statement of Claim …
- On 19 January 2021, Sharmans provided a ‘People (Skip) Tracing Report’ (‘the report’), which suggests that the Defendants:
- may be residing on a boat, sailing to different areas with no fixed address;
- are retired; and
- have a son, Robert William Martens.
- Despite Sharman’s investigations, they were unable to locate an appropriate address for service of the Defendants.
- I believe the First Defendant and the Second Defendant are married or otherwise related.
- I believe the Second Defendant still has access to their email address …
…
- ALL THE FACTS and circumstances above deposed to are within my own knowledge save as such as are deposed to from information only and my means and knowledge and sourced (sic) of information on the face of this my affidavit.
- [5]Paragraph 13 of the affidavit is presumably intended to invoke rule 430 of the UCPR. I will return to the significance of rule 430 shortly. Exhibited to the affidavit is the report of Sharmans. It is signed by a Rob Silec who is described as the ‘Manager / Locations & Investigations’. The body of the report is, however, written in first person plural, with several references to ‘we’ and ‘our’. For instance, it is said that ‘as part of our investigations we have canvassed a range of open source and industry specific databases’,[2] and ‘[w]e identified the below Facebook account for Heather’. There is nothing in the report from which the identity of the person who made a particular enquiry might be determined.
- [6]Returning to rule 430, it provides:
430 CONTENTS OF AFFIDAVIT
- (1)Except if these rules provide otherwise, an affidavit must be confined to the evidence the person making it could give if giving evidence orally.
- (2)However, an affidavit for use in an application because of default or otherwise for relief, other than final relief, may contain statements based on information and belief if the person making it states the sources of the information and the grounds for the belief.
- [7]Rule 430(2) of the UCPR permits an affidavit for use in an application of this kind to contain statements based on information and belief ‘if the person making it states the sources of the information and the grounds for the belief’. As was stated by Muir J in A-G v Watego [2003] QSC 367:[3]
The requirements of subsection (2) are not met by a broad reference to unspecified documents and classes of documents. The object of the requirement to disclose the deponent’s sources is to provide identification of those sources sufficient to enable the party against whom the evidence is adduced to investigate, assess and, where appropriate, challenge the evidence.
- [8]In A-G v Watego, Muir J cited part of the judgment of Thomas J in Deputy Commissioner of Taxation v Ahern (No. 2) [1988] 2 Qd R 158. Thomas J (with whom Ryan and De Jersey JJ agreed) stated at 163:
There are some cases in which a witness states a certain fact “to the best of my knowledge and belief” indicating thereby a concession of some uncertainty or an inability to be positive and precise. Such evidence is however admissible on the same footing as evidence confidently given, and it carries with it its own reservation on the question of weight 10 (Wigmore on Evidence (Chadbourn Revision) paras 726–729). This is of course an entirely different situation from that in which a witness gives hearsay evidence or information derived from a source not within his own knowledge.
“If the context or circumstances show that the reference to ‘belief’ means that the witness is speaking from conjecture, from deduction, or from information regarding what was perceived by others, then the evidence will ordinarily be rejected.” (per Smith J. in Atherton v. Jackson’s Corio Meat Packing Pty Limited [1967] V.R. 850, 852).
Those words accurately describe the main part of Mr Cowper’s evidence in the present case. Such evidence could be received only if properly receivable under O.41 r. 3. This involves two requirements – first that the source material itself be admissible, and second that the source be identified …
- [9]Ahern concerned the old Rules of the Supreme Court which were expressed a little differently to rule 430, but as Porter QC DCJ noted in Bendigo & Adelaide Bank Limited v Wilkin & Anor [2018] QDC 16, the approach in Ahern was applied to rule 430 in Watego. Porter QC DCJ also identified in Bendigo & Adelaide Bank some of the problems that can arise in circumstances where there is reliance in affidavits upon sources of information other than the deponent’s direct knowledge. In particular, Porter QC DCJ observed: [4]
[T]he reference to ‘belief’ in the rule requires the deponent to depose to a belief that the fact identified is true as well as identifying an admissible source of evidence for that belief.
- [10]I agree with his Honour’s observations generally and specifically with the observation that, even if there is a discretion to admit evidence that does not comply with rule 430(2), it would usually be inappropriate to do so on an ex-parte application decided on the papers. As well, it is to be noted that rule 430(2) authorises hearsay, but it does not authorise hearsay upon hearsay.[5]
- [11]With this in mind, it is necessary to consider the capacity of the affidavit of Mr Malan to prove the required matters under rule 116.
- [12]In paragraph [6] Mr Malan deposes to a belief that the defendants no longer reside at the Buderim address. No source for this belief is identified. If the source is the report of Sharmans there is the difficulty that it is not known who discovered this fact and what they did to discover it. All that is known is that Mr Silec wrote a report in which he stated, ‘Property searches found that the subjects sold the last known address in Buderim in December 2019’. This difficulty might perhaps be overcome by the appropriate person exhibiting the results of these searches, but on the present evidence the court cannot act on the belief expressed by Mr Malan.
- [13]Similar difficulties arise in relation to paragraph [8] in which Mr Malan paraphrases parts of the Sharmans report. Mr Malan does not depose that the matters at [8] (a) to (c) are facts he believes to be true. Assuming this is to be inferred, the admissible source of evidence for these beliefs have not been identified. It is not sufficient to refer to the report signed by Mr Silec as that report does not identify who detected the facts that are asserted. Unless Mr Silec could give direct evidence of these matters, rule 430(2) does not permit Mr Malan to cite him as the source of information for the beliefs Mr Malan might be thought to hold.
- [14]The fact asserted at [8] (a) raises another question. It is presumably based upon the statement in the report that the first defendant has a particular Facebook account. Information gathered from that account seemingly indicates the defendants live on a boat. Assuming the account is one associated with the first defendant (something that, I guess, might be established with reference to photographs) the report suggests there are identified places to which the defendants have sailed. There is no mention of whether these places are on the Sunshine Coast, in Queensland or elsewhere. This raises a question of whether further enquiry should be undertaken before it could be said to be impractical to personally serve the defendants.
- [15]The belief expressed in paragraph [10] that the defendants are ‘married or otherwise related’ is, I assume, based upon their sharing the same surname. Perhaps that is a reasonable inference. Perhaps such an inference is relevant to a consideration of whether a mode of service that brings the proceedings to the attention of one defendant would also bring them to the attention of the other. In the absence of a written submission, I am left to guess about this.
- [16]In paragraph [11] Mr Malan deposes that he believes the second defendant still has access to the email address used to exchange emails with FC Lawyers between April and October 2020. Maybe this is because it is reasonable to infer that an address in use as recently as October 2020 can still be accessed by the second defendant. If so, this would be relevant to the prospect of the proposed method of service bringing the proceedings to the attention of at least the second defendant. Ultimately, this need not be considered as the evidence is otherwise insufficient to establish that personal service is impractical.
- [17]At least paragraphs [6] and [8] of Mr Malan’s affidavit are not admissible. Even if they were, I would take some persuading that the plaintiffs have shown it is impractical to personally serve the defendants. Certainly, in the absence of paragraphs [6] and [8] I am not persuaded.
- [18]Applications for substituted service of claims and statements of claim should not be treated lightly. One reason for this is the significant consequences that might result from a successful application. Once there has been service, substituted or otherwise, there is the possibility of default or summary judgment. If, in fact, the proceedings have not been brought to the attention of the defendants there is the potential for injustice. As well, such applications are inevitably brought ex-parte. There is no one to contradict or challenge the assertions of the applicant. Extra care should be taken by the applicant and the Court to avoid unfairness to an absent party.
- [19]I am not satisfied the plaintiffs have established the necessary matters pursuant to rule 116. For the above reasons I dismiss the application. There will be no order as to costs.
Footnotes
[1]Cf. UCPR, rule 491.
[2]What these databases may be is left to the imagination.
[3]At [26] (footnote omitted). I note his Honour was dealing with different, but for present purposes identical, legislation.
[4]Bendigo & Adelaide Bank at [12] citing Burragubba v Minister for Natural Resources and Mines (No. 2) [2017] QSC 265, [17].
[5]Ibid at [17] citing Savings & Investment Bank Ltd v Gasco Investments (Netherlands) B.V. & Others (1984) 1 WLR 271, 282.