Foxe v Brown [1984] HCA 69; (1984) 59 ALJR 186; 58 ALR 542 (8 November 1984)

HIGH COURT OF AUSTRALIA

DAVID WILLIAM FOXE v. EDWARD FRANK BROWN

High Court of Australia
Mason J.(1)

CATCHWORDS

HEARING

Canberra
8:11:1984

DECISION

MASON J. This is an application by the State Government Insurance Office of Queensland ("the SGIO") for orders that an action commenced in this Court be struck out or stayed for lack of jurisdiction or alternatively that an order granting leave to the plaintiff to effect substituted service of the writ of summons and statement of claim on the manager of the SGIO be vacated. A threshold issue raised at the hearing of the application relates to the standing of the SGIO and a further application, which is conceded by Counsel for the SGIO to be necessarily preliminary, has been made for the SGIO to be joined as a defendant in the action.

2. The plaintiff, who is a resident of New South Wales, was injured on 18 February 1977 while he was travelling as a passenger in a prime mover which was registered in Queensland and was being driven by the defendant when the vehicle left the road and collided with a tree along the Bruce Highway approximately 26 kilometres south of Miriam Vale in Queensland. Relying on the Court's jurisdiction in matters "between residents of different states" under s.75(iv) of the Constitution, the plaintiff commenced an action for damages for negligence against the defendant by writ of summons and statement of claim issued out of the Sydney registry of this Court on 10 February 1983. The defendant was not served with the writ and statement of claim and no application was made by the plaintiff for the renewal of the writ within twelve months of the date of its issue. Consequently, in accordance with O.8 r.1 of the High Court Rules, the writ ceased to be in force on 10 February 1984.

3. On 6 July 1984, some four months after the writ ceased to be in force, the plaintiff filed a notice of motion seeking orders inter alia for an extension of time within which to renew the writ and statement of claim under O.60 r.6(1) and (2), renewal of the writ and statement of claim under O.8 r.1(2) and leave to effect substituted service of the writ and statement of claim on the manager of the SGIO under O.9 r.2(2). The application came before me on 11 July 1984 when I ordered that its hearing be adjourned to allow the plaintiff to file further affidavits. I further ordered that copies of the summons, affidavits and notice of the adjourned hearing be served on the SGIO.

4. At the resumption of the hearing of the application on 26 July 1984 the SGIO was represented by a solicitor who announced that he was present simply as a matter of courtesy to the Court. No appearance was entered or sought to be entered by the SGIO. On that date, on the basis of the affidavit evidence before me, I ordered that the time for renewal of the writ and statement of claim be extended from 10 February 1984 to 10 August 1984, that the writ and statement of claim be renewed until 10 August 1984 and that the plaintiff be granted leave to effect service of the writ and statement of claim on the manager of the SGIO. The formal order was taken out on 7 August 1984 and service was effected on 8 August 1984. The present application by the SGIO is made by summons dated 27 August 1984.

5. It is common ground that the SGIO is the third party insurer of the defendant under the Motor Vehicles Insurance Act 1936-1979 (Q.) ("the Act") and that as such it is the entity to which the plaintiff will ultimately look to satisfy any judgment he might obtain against the defendant. Under reg.12 of The Motor Vehicles Insurance Regulations of 1968, as amended, made under the Act, a right to proceed against the insurer is given to a person in whose favour a judgment or order is obtained against an insured person for a sum for which he is indemnified under a contract of insurance where that insured person fails within one month to satisfy the judgment or order and any related order for costs.

6. Counsel for the SGIO, in written submissions made after the close of oral argument, seeks to rely on this factor as a ground for joining the SGIO as a defendant to the action under O.16 r.7. That rule provides that where a right to relief is alleged to exist against one or more persons whether jointly, severally or in the alternative they may be joined as defendants and judgment may be given against such one or more of them as are found liable, according to their respective liabilities, without amendment. Even if the SGIO were a person against whom a right to relief could be alleged to exist within the meaning of the rule, I am unable to see its relevance. In general, a plaintiff who conceives that he has a cause of action against a defendant is entitled to pursue his remedy against that defendant alone (Dollfus Mieg et Compagnie S.A. v. Bank of England (1951) Ch 33). There is nothing in the terms of the rule or in authority to suggest that O.16 r.7 is concerned to abrogate or detract from that general entitlement.

7. For a person who is not a party to be added as a defendant against the wishes of the plaintiff, resort must be had to O.16 r.4(2). That relevantly provides:

"(2) The Court or a Justice may -

(b) either upon or without the application of a
party; and

(c) on such terms as appear to the Court or a
Justice to be just,
order that ... the names of parties, ...
whether plaintiffs or defendants, who ought
to have been joined, or whose presence before
the Court or Justice may be necessary in
order to enable the Court or Justice
effectually and completely to adjudicate upon
and settle all the questions arising, be
added."

The rule is in terms substantially similar to O.16 r.11 of the former English Rules of the Supreme Court. As was pointed out by the Privy Council in Penang Mining Co. Ltd. v. Choong Sam & Ors. (1969) 2 M.L.J. 52, at p 55, that rule has been the subject of "voluminous judicial exigesis".

8. The SGIO is clearly not a person "who ought to have been joined" as a party. As we have seen, the action was properly brought against the defendant alone. The question is whether, within the meaning of the rule, the SGIO was a person "whose presence before the Court or Justice may be necessary in order to enable the Court or Justice effectually and completely to adjudicate upon and settle all the questions arising". It is unnecessary in the circumstances of the present case to consider the competing views which have been expressed as to whether the discretion under this part of the rule is limited to persons whose legal rights will be affected by the result of the action or extends also to persons who may be affected in their commercial interests. See Amon v. Raphael Tuck & Sons Ltd. (1956) 1 QB 357; Gurtner v. Circuit (1968) 2 QB 587; Penang Mining; In re Vandervell's Trusts (1971) AC 912, at pp 930, 935-936; Bradvica v. Radulovic [1975] VicRp 42; (1975) VR 434 and In re Multi-Tech Services Pty. Ltd. (in liquidation) (1982) 30 SASR 218. It is clear that by virtue of reg.12 the SGIO may become liable to the plaintiff in the event that judgment is obtained against the defendant. Even on the narrower view, the SGIO would therefore fall within the ambit of the rule (cf. Bradvica, at p.446).

9. This is not a case like Savalglia v. Maclennan (1980) 24 SASR 314, where an application by an insurer to be joined as a defendant was refused because the questions involved in the action could be effectually and completely adjudicated upon by the insurer exercising a statutory right to conduct the action on behalf of the defendant. The right of an insurer to elect to be joined in a proceeding and to conduct the proceeding on behalf of a defendant under regs.10 and 11 of the Motor Vehicle Insurance Regulations is limited to a proceeding in a court in Queensland (see reg.10(1)). And although the contract of insurance has not been put in evidence in this case, reg.3 of the Motor Vehicles Insurance Regulations requires a contract of insurance to be in the form set forth in the Third Schedule to the Regulations which does not confer on the insurer a right to conduct the proceedings brought against the insured.

10. I would therefore order that the SGIO be joined as a defendant in the action. As the SGIO would in any event be liable under reg.12 for any judgment, including costs, which the plaintiff may obtain against the defendant in the action, where the defendant does not satisfy the judgment, I see no reason to impose any terms in relation to the joinder.

11. I should mention that I am not necessarily convinced that the SGIO has a sufficient interest to raise questions of jurisdiction and the other points (substituted service and renewal of the writ) which its counsel seeks to agitate before me. Certainly the High Court Rules make no provision for the raising of these matters by a defendant against whom no relief is sought when the matters affect the plaintiff's claim to relief against the original defendant to the action. However, I have assumed that the SGIO, by virtue of its position as insurer against whom the plaintiff may ultimately have a right to proceed, has a sufficient interest. Indeed, the purpose of allowing the SGIO to be joined as a defendant is to enable it to contest those matters which the original defendant could contest if he were represented.

12. The first substantive issue raised by counsel for the SGIO concerns the jurisdiction of this Court to entertain the plaintiff's action under s.75(iv) of the Constitution. In order to bring the action within s.75(iv), the plaintiff must prove that at the time the writ was issued the parties were residents of different States. See Dzikowski v. Mazgay (unreported judgment, 7 July 1965) and Cadet v. Stevens (unreported judgment, 21 June 1966) which are noted in 40 ALJ 361. The plaintiff's residence in New South Wales at the date of the issue of the writ, 10 February 1983, is not disputed. The argument is that the affidavit evidence adduced by the plaintiff is insufficient to show that the defendant was at that time a resident of another State, namely Queensland.

13. The evidence is that at the date of the collision the defendant resided at a private address in Heatley, a suburb of Townsville. Investigations undertaken by the plaintiff, both personally and through agents, in 1983 after the issue of the writ revealed that the defendant had left Townsville in or about 1981, apparently to escape from his creditors, and had moved to Brisbane from where he worked as a truck driver. He was employed for a time by a company in Brisbane but left that employment. In August 1983 contacts of the plaintiff in the trucking business had not seen the defendant for about six months. However, a driver's licence was issued to the defendant at Coorparoo, a suburb of Brisbane, on 17 August 1983 and the address given was 12 Glen Patrick St., Manly Vale. The plaintiff's solicitor has deposed to her belief, on grounds which are stated, that the address is fictional.

14. I do not think it necessary in order to satisfy the requirements of s.75(iv) that the defendant be shown to be resident at a particular place in Queensland but simply that he was at the relevant time a resident of that State. From the facts that the defendant was known to be living in Brisbane, probably until early 1983, and that a driver's licence was issued to him in Brisbane on 17 August 1983, and in the absence of any evidence to suggest that the defendant had any connexion with another State or Territory, the reasonable inference to be drawn is that the defendant was on the balance of probabilities a resident of Queensland on 10 February 1983.

15. The second issue relates to the order for substituted service of the writ and statement of claim. In general, for an order for substituted service to be made it must be shown: (a) that the plaintiff, using reasonable effort, is unable to effect personal service; and (b) that the method of substituted service requested is one which is likely to cause the writ to come to the knowledge of the defendant (Porter v. Freudenberg (1915) 1 KB 857). However, in a number of cases substituted service of a writ has been ordered on a third party motor vehicle insurer against whom a judgment obtained may ultimately be enforced even though there was apparently little likelihood of the writ thereby coming to the knowledge of the defendant (e.g. Kevin v. Schmeisze (1964) QWN 51 and Lawford v. Hosth (1974) 5 ALR 57). In Lawford v. Hosth Forster J. (at pp 58-59) identified the principles underlying these cases as being:

"... first, that the real defendant in motor
accident cases is the third party insurer of the
defendant (McCann v. Parsons [1954] HCA 70; (1954) 93 CLR 418;
...) and, second, that if a judgment obtained
against the defendant may ultimately be enforced
against the defendant's insurer then, provided all
proper inquiries to find the defendant have been
unsuccessful, an order for substituted service upon
the insurer may be made whether or not the policy
was entered into interstate."

I do not understand the argument of Counsel for the SGIO to contradict these principles but rather to amount to a submission that, on the evidence and having regard to the effluxion of time, it could not be said that "all proper inquiries to find the defendant" had been made.

16. I can see no basis for thinking that the standard of diligence or effort required of a plaintiff in seeking out a defendant in a case where substituted service is sought on an insurer is any greater than that which would be required where substituted service is sought by some means which would be likely to cause the writ to come to the knowledge of the defendant. That standard, however it is expressed, is one of reasonableness so as to show a practical impossibility of personal service. Furthermore, the question is not whether reasonable effort has been shown by the plaintiff over a particular period but whether at the date on which the application for substituted service is made, the plaintiff, using reasonable effort, is unable to serve the defendant personally.

17. On the affidavit evidence before me at the resumption of the hearing of the plaintiff's application inter alia for leave to effect substituted service of the writ and statement of claim, I found that the efforts of the plaintiff to locate the defendant after the issue of the writ were sufficient to show a practical impossibility of personal service on him at that time. I need not refer to the evidence in detail. It is sufficient to say that a further consideration of that evidence and of the affidavits subsequently filed by the SGIO, deposing to a lack of contact with the defendant, serve only to reinforce the earlier finding.

18. Finally, although no order related to it is specifically sought in the summons, Counsel for the SGIO raises the argument that the discretion to allow an extension of time within which to renew the writ and statement of claim and to order their renewal was improperly exercised. He points out that the limitation period under s.14(1)(b) of the Limitation Act 1969 (N.S.W.) expired during the currency of the initial twelve month period of the writ and argues that the perceived inactivity of the plaintiff in his attempts to locate and serve the defendant during that period, the delay in seeking an extension of time and the prejudice to the SGIO of the renewal of the writ militate against an exercise of the discretion in the plaintiff's favour.

19. The discretion to order renewal of a writ exists under O.8 r.1(2) where the Court or Justice is satisfied that "reasonable efforts have been made to serve the defendant, or for other good reason". The operation of O.8 r.1(2) and of O.60 r.6, which confers a discretion to enlarge the time appointed by the Rules for the doing of an act even where the application is not made until after the expiration of that time, where an application to renew a writ is made after it had ceased to be in force and after the relevant limitation period had expired was considered by Stephen J. in Van Leer Australia Pty. Ltd. v. Palace Shipping KK (1980) 34 ALR 3. In that case his Honour, after a careful review of the authorities, adopted the approach of Bray C.J. in Victa Limited v. Johnson (1975) 10 SASR 496 and Culliton C.J.S. in Simpson v. Saskatchewan Government Insurance Office (1967) 65 DLR (2d) 324 to the effect that once the writ is issued within the limitation period and so long as the Court has the discretion to renew the writ the limitation period is of no relevance. Stephen J. quoted (at p 9) the observation of Bray C.J. in Victa Ltd. v. Johnson (at pp 503-504) that:

"It is not correct to say that the defendant has
acquired an absolute right to immunity when a writ
issued within the limitation period is not served
within twelve months of its issue and the
limitation period has in the meantime expired.
What has expired is in reality not the limitation
period but the period which would have been the
limitation period if no writ had ever been issued.
What the failure to serve a writ within twelve
months gives the defendant is no more than a right
to contend that the court in the exercise of its
discretion should not renew the writ. The efficacy
of the writ does not expire absolutely at the end
of the twelve months, it only expires if and in so
far as the court sees fit not to renew it.
The rule first directs the court to inquire
whether reasonable efforts have been made to serve
the defendant. If they have, it seems to me that
the court should renew the writ. If not, the court
has to consider whether other good reasons exist
for the renewal."

20. In the circumstances of the present case I am satisfied that reasonable efforts were made to serve the defendant. The evidence discloses repeated attempts by the plaintiff and his solicitors to locate the defendant during 1983 and the early part of 1984 which I regard as appropriate having regard to the distances involved and the need for the plaintiff to apply for and to be granted legal aid. And I can see no appreciable prejudice to the SGIO or the defendant arising from the plaintiff's four month delay in applying for renewal. The question of the general prejudice to the SGIO of the action now being brought some seven years after the occurrence of the collision, although it might be relevant to a consideration of the question whether other good reasons exist for the renewal, simply does not arise.

21. It is evident that the real grievance of the SGIO is that the plaintiff, by commencing his action in New South Wales and obtaining an order for substituted service, has avoided the shorter limitation period in Queensland and the necessity to proceed against the SGIO directly under s.4A of the Motor Vehicles Insurance Act. Be that as it may, the plaintiff is entitled to conduct the action in the form and in the manner he has chosen.

22. In the result, I would refuse the orders sought in the summons.

ORDER

Order that the State Government Insurance Office of

Queensland be joined as a defendant in the action.

Summons dismissed with costs.