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Floth Pty Ltd v Ana Marie Gabila Bulseco [2015] NSWSC 2076 (1 July 2015)

Last Updated: 11 March 2016

JUDGMENT (EX TEMPORE)

1. HIS HONOUR: On 6 February 2015 Bergin CJ in Eq, on an application made pursuant to (NSW) Uniform Civil Procedure Rules 2005, r 25.2 (order in urgent case before the commencement of proceedings), made freezing orders against the defendant Ana Marie Gabila Bulseco, a former employee of the plaintiff Floth Pty Limited, whom the plaintiff alleges – and there is plenty of evidence including admissions to support – has, in her capacity as the plaintiff's former bookkeeper, over a number of years, misappropriated from the payroll vast sums of money, apparently in excess – the evidence would suggest – of $4.5 million.
2. However, for some incomprehensible reason, rather than commencing proceedings immediately thereafter by filing a summons, the irregular course of filing a notice of motion was taken. The evidence sufficiently establishes that that notice of motion, the freezing order and supporting affidavits were served on the defendant on 7 February 2015. Following that, in a number of telephone and text communications, she made what appear to be admissions, although there was no discussion of quantum.
3. Although I was initially troubled that it was unclear that she had notice of the return date of the injunction – because the notice of motion on the file bears no return date – it appears that it was in any event subsequently communicated to her by the plaintiff's solicitors. However, proceedings were not formally commenced until a statement of claim was filed on 19 February 2015. By that time, the defendant had removed herself from Australia, probably to the Philippines, having departed Australia on a Philippines Air flight bound for Manila on 11 February 2015.
4. In those circumstances, if the view is taken that proceedings were not commenced until 19 February, she was not in the jurisdiction when proceedings were commenced, and the exception referred to in Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310 – which permits substituted service in the jurisdiction where a person has removed themselves from the jurisdiction to evade services after the commencement of proceedings – is not available.
5. It seems to me in this case that there are two matters which enable a different view to be taken. The first is that, although the notice of motion filed on 6 February 2015 should have been a summons if the proceedings were to be properly instituted, the fact that the proceedings were purportedly instituted by notice of motion instead of summons is an irregularity, and the proceedings should be taken as having been instituted by the notice of motion on 6 February 2015. In that situation, the exception in Laurie v Carroll is available, and substituted service can be ordered in the state, notwithstanding that the defendant has subsequently removed herself from the state with a view to avoiding the proceedings.
6. Alternatively, substituted service can be ordered where the proceedings fall within one of the heads of extraterritorial jurisdiction referred to in UCPR, Sch 6. In this case, the proceedings are founded on a cause of action arising in New South Wales under paragraph (a) in that Schedule; they are founded on a tort committed in New South Wales within paragraph (d) of that Schedule; and damage was occasioned or has been suffered in New South Wales within paragraph (e) of that Schedule.
7. The evidence establishes, first, that the statement of claim was personally served on the defendant's son on 19 February 2015 and, secondly, that it was sent to the defendant at an email address on 21 February 2015, to which the defendant replied by email on 23 February 2015. In those circumstances, and although personal service has not been effected, I am satisfied for the purposes of UCPR, r 10.14(3), that steps have been taken for the purpose of bringing the statement of claim to the notice of defendant, and pursuant to that rule I direct that the statement of claim be taken to have been served on the defendant on 23 February 2014.
8. The defendant has not filed a defence. In those circumstances, she is in default within the meaning of UCPR, r 16.2, and the Court is authorised in respect of a liquidated claim under UCPR, r 16.6, to give judgment for the plaintiff against the defendant for "a sum not exceeding the sum claimed" and interest up to judgment and costs [see r 16.6(1)]. In respect of a claim for unliquidated damages, the Court is authorised to give judgment for the plaintiff against the defendant for damages to be assessed and for costs [see r 16.7(1)].
9. Again, for reasons that are not entirely apparent, the statement of claim, rather than simply claiming a liquidated sum for the amount which the defendant has misappropriated, pleads numerous causes of action, including complaints of breach of fiduciary duty, breach of corporations law duties, misleading and deceptive conduct contrary to the Australian Consumer Law, and a claim for restitution, as well as for money had and received, which might have been the simplest way of proceeding.
10. By way of relief, the statement of claim claims declarations of constructive trust, equitable compensation, compensation pursuant to (CTH) Corporations Act 2001 s 1317H, damages pursuant to the Australian Consumer Law, and an order for restitution. The relief claimed does not include any claim for relief for a liquidated sum. However, paragraph 11 of the statement of claim, which contains the common money count for money had and received, particularises the claim as for $1,635,681.
11. UCPR, r 16.10, provides that whatever the plaintiff's claims for relief against the defendant in default, the Court may, on application by the plaintiff, give such judgment against the defendant as the plaintiff appears to be entitled to on his or her statement of claim. The plaintiff appears to be entitled on his or her statement of claim to judgment for $1,635,681 for money had and received, and I would be prepared to give default judgment for that sum. However, the plaintiff has adduced evidence that its claim vastly exceeds that amount and by, its present notice of motion, seeks judgment for a sum (inclusive of interest) in excess of $7 million.
12. The evidence of service of the motion seeking that sum in lieu of what is referred to in the statement of claim and of the evidence supporting it is less than satisfactory. There is some evidence of transmission of the notice of motion to the same email address as that to which I have previously referred, but only as recently as 25 June, which for service in the Philippines is hardly adequate. Moreover, the affidavit evidence proves only that a letter purporting to attach the motion and affidavits was sent, and does not strictly prove that the motion and affidavits themselves were sent even by email and even as recently as 25 June.
13. It seems to me that the plaintiff is entitled, in the alternative to judgment in the sum claimed in the statement of claim, to judgment for damages to be assessed on the various other causes of action pleaded. I have asked the plaintiff to elect between those remedies, and the plaintiff has elected for judgment for damages to be assessed.
14. The Court therefore orders that,
    • (1) Pursuant to UCPR, r 10.14, the statement of claim herein be taken to have been served on the defendant on 23 February 2015.
    • (2) Pursuant to UCPR, r 16.7, judgment be given for the plaintiff against the defendant for damages to be assessed and for costs.
    • (3) The Court further orders that the freezing orders made on 6 February 2015 as extended on 11 February 2015 be further extended to 8 February 2016 or earlier further order of the Court.

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