Bendigo & Adelaide Bank Limited v Wilkin [2018] QDC 16

DISTRICT COURT OF QUEENSLAND CITATION: Bendigo & Adelaide Bank Limited v Wilkin & Anor [2018] QDC 16 PARTIES: BENDIGO & ADELAIDE BANK LIMITED (ACN 068 049 178) (Plaintiff) v DEANNE RENA WILKIN (First Defendant) AND ROBERT MAX WILKIN (Second Defendant) FILE NO/S: 125/18 DIVISION: Civil PROCEEDING: Application on the papers, without oral hearing ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 22 February 2018 DELIVERED AT: Brisbane JUDGE: Porter QC DCJ ORDER: 1. The application be dismissed. 2. There be no order as to costs. CATCHWORDS: PROCEDURE — CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SERVICE – IN LIEU OF PERSONAL SERVICE: SUBSTITUTED AND INFORMAL SERVICE – where there is an application for substituted service – where the applicant elected to have the matter heard on the papers – where the affidavit is sworn on information and belief – where the evidence in inadmissible on that basis – whether there is a discretion to act on the evidence in any event – whether that discretion should be exercised on the application. Legislation Evidence Act 1977 (Qld) ss 92, 129A Uniform Civil Procedure Rules 1999 (Qld) rr 116, 119, 371, 430, 489 Cases Attorney-General (Qld) v Watego [2003] QSC 367 -- 1 of 10 -- 2 Attorney-General (Qld) v Watego [2003] QCA 512 Burragubba v Minister for Natural Resources and Mines (No. 2) [2017] QSC 265 Deputy Commissioner of Taxation v Ahern (No. 2) [1988] 2 Qd R 158 Hanson Construction Materials P/L v Davey & Anor [2010] QCA 246 Savings & Investment Bank Ltd v Gasco Investments (Netherlands) B.V. & Others (1984) 1 WLR 271 Secure Funding Pty Ltd v Spaans [2017] QDC 281 Ure v Robertson [2017] QCA 20 SOLICITORS: Results Legal for the plaintiff [1] This is an application for substituted service in which the applicant elected to have the matter heard on the papers under Rule 489 Uniform Civil Procedure Rules 1999 (Qld). For reasons I will outline, the evidence relied upon is largely irrelevant or inadmissible and, if I have a discretion to act on it nonetheless, I decline to do so. Accordingly, the application is dismissed with no order as to costs. [2] By way of background, the plaintiff (the Bank) seeks by its claim and statement of claim recovery of possession of certain mortgaged real property and judgment for a sum owing under the loan agreement secured by the mortgage. It appears that the mortgaged property is the residence of the defendant mortgagees. The proceedings have not been served. The plaintiff seeks orders for substituted service under Rule 116 Uniform Civil Procedure Rules 1999 (Qld) (UCPR). It relies on an affidavit sworn by a paralegal employed by the firm acting for the Bank. Nothing in these reasons is intended to be a personal criticism of the deponent. [3] The application relies on two categories of evidence sworn to by the deponent. [4] The first is evidence of the agreement contained in the mortgage and loan agreement in relation to the method of service of, inter alia, originating process. I do not understand how the applicant relies on this evidence to sustain its application for substituted service. The outline provides no assistance in this regard. [5] This evidence appears to be irrelevant. The outline refers to it in the context of Rule 119, which permits service under a contract. This application is for an order for substituted service under Rule 116. The two sections give rise to quite distinct considerations. Substituted service requires personal service to be shown to be impractical and for an alternative to be put forward which is likely to bring the proceedings to the defendant’s attention. Neither consideration arises under Rule 119. The issues which arise under that rule are, first, whether there is an agreement which provide for service of the particular proceeding on the particular defendant and second, -- 2 of 10 -- 3 whether service is performed properly in accordance with the agreement properly construed.1 [6] Neither of the issues arising under Rule 119 arise on this application. I observe, however, that I cannot see any evidence from the deponent whereby she identifies expressly the “residential or business address last known to” the Bank. It might be guessed that it is the address of the residence where service was attempted, but this should not be left to guesswork. The submissions of the Bank at paragraph 6 do assert that the service address is the defendants’ last known residential address but the footnote to that paragraph refers to paragraph 15 of the deponent’s affidavit. That paragraph of the deponent’s affidavit does not assert that fact. [7] The second category of evidence relied upon is evidence of matters seen and heard by a service agent (or possibly agents: the evidence does not disclose the names of the person or persons acting as agent). The deponent exhibits emails stating that the agent had attended at the home of the defendants on a number of occasions and had been unable to serve them and been told certain things by neighbours and a person at the home about the whereabouts of the defendants. The emails also state that the agent has called mobile numbers of both defendants and describe the result of each call. [8] The things seen and done by the agent (or agents) on each occasion are adduced in evidence of the deponent. That affidavit is evidently intended to be sworn on “information and belief”. The key paragraphs are paragraphs 11 to 15 which provide: 11. Exhibited at pages 43 to 45 of KCU-1 is a true copy of the report received from Sharmans dated 7 December 2017. I refer to the report and not that it states the first defendant contacted Sharmans on 6 December 2017 and confirmed that her residential address is the Wynnum West Address. She advised that she was overseas for several months and would not provide her return date. 12. On or about 17 January 2018, instructions were provided to Sharmans to attempt personal service of the claim and statement of claim on the first defendant and second defendant at Wynnum West Address and the following contact numbers were provided, 0408 703 014 (First Defendant’s Mobile Number) and 0476 790 421 (Second Defendant’s Mobile Number). 13. Exhibited at pages 46 to 51 of KCU-1 is a true copy of the report received from Sharmans dated 12 February 2018. I refer to the report and note that it states as follows: (a) The Wynnum West Address is a two storey dwelling that is secured by gate; (b) Sharmans attended the Wynnum West Address on four occasions and on each occasion the first defendant and second defendant were unavailable to accept service of the claim and statement of claim; (c) On 11 February 2018, Sharmans spoke with a teenage male occupant of the property who advised that his parents were overseas. He advised that he was unsure of their return date and believed that they would be overseas for a few more months; (d) On 1 February 2018, Sharmans attempted to contact the second defendant and found the Second Defendant’s Mobile Number to be disconnected; and 1 See for example Secure Funding Pty Ltd v Spaans [2017] QDC 281 where Rafter DCJ found that the contract in that case did not, on its proper construction, authorise service by post. -- 3 of 10 -- 4 (e) On 1 February 2018 and 4 February 2018, Sharmans attempted to contact the first defendant on the First Defendant’s Mobile Number which appeared to divert to a device overseas. 14. The plaintiff has therefore identified the following contact information for the first defendant and the second defendant. 15. On the basis above, I verily believe: (a) all reasonable attempts at personal service have been exhausted; and (b) in all reasonable probability, the claim and statement of claim will come to the attention of the first defendant and second defendant by: (i) sending a copy of the claim and statement of claim to the first and second defendant by pre-paid, ordinary post to 2105 Wynnum Road, Wynnum West, Queensland; (ii) sending a copy of the claim and statement of claim to the first defendant by email to [email protected]; (iii) sending a copy of the claim and statement of claim to the second defendant by email to [email protected] (iv) sending an SMS text message informing the first defendant of the order made herein to the mobile number of the first defendant being 0408 703 014. [9] The reference to information and belief invokes Rule 430(2) UCPR. Rule 430 relevantly provides: (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. [10] As was explained by Thomas JA2 in Deputy Commissioner of Taxation v Ahern (No. 2) [1988] 2 Qd R 158, (which dealt with O 41 r. 3 of the Supreme Court Rules): 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 (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 (Savings and Investment Bank 2 With whom Ryan and de Jersey JJ agreed. -- 4 of 10 -- 5 Ltd v. Gasco Investments (Netherlands) B.V. (supra) at 282G and 385F [sic] respectively).3 [11] Although Rule 430(2) is formulated in slightly different terms to O. 41 r 3 (and such changes can affect the applicability of cases decision on the old rules in some instances4), the requirements for evidence given on information and belief identified in Ahern have been applied to affidavits which rely on Rule 430(2) and other rules and statutory provisions using the same language.5 [12] Further, as can be seen from the passage from Ahern referred to above, the 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.6 [13] Almost all of the evidence adduced in the affidavit in relation to the activities of the agent (or agents) fails to meet the one or more of the requirements of the rule. [14] First, while the deponent identifies the source of information contained in paragraphs 11 and 13 of the affidavit, the deponent does not depose to her belief that each of the facts stated therein are true. For example, paragraph 13 simply say “I refer to the report and note that it states as follows…”. True it is that in paragraph 15, the deponent states that “on the basis of the above” (presumably the evidence referred to in paragraphs 11 and 13) she believes that all reasonable attempts at personal service have been exhausted. The problem with this paragraph is that it is a conclusory statement (and not strictly a matter for the deponent at all). It does not state her belief in the truth of facts stated in paragraphs 11 and 13. [15] Second, the source of information identified in paragraphs 11 and 13 is in each case a person identified as a Process Serving Manager (Alex Tallon) or a Process Serving Co- ordinator (Ms Haritonoff). It is plain from the emails exhibited to the affidavit that neither Tallon nor Haritonoff was the person who did, saw and heard the things described in the emails. Neither Tallon nor Haritonoff could give original evidence of the matters relied upon. Accordingly, they could not be the source for admissible hearsay under Rule 430(2). In short, the deponent’s evidence is hearsay on hearsay. The point is explained in a passage from Savings & Investment Bank Ltd v Gasco Investments (Netherlands) B.V. & Others (1984) 1 WLR 271 at 282 referred to with approval in Ahern as follows: Neither counsel has been able to cite any authority which elucidates the scope of what is or is not permitted by Ord. 41, r. 5(2). It is obvious from the sub-rule itself that it operates as an exception from the primary rule of evidence stated expressly in Ord. 41, r. 5(1), that a person may only give evidence as to facts, which he is able of his own knowledge to prove. Rule 5(2), by its including statements of information or belief, plainly allows the adduction of hearsay. It also allows a statement of belief, that is to say, an opinion; but in its context that belief must be that of the deponent, 3 Deputy Commissioner of Taxation v Ahern (No. 2) [1988] 2 Qd R 158 at 163.5-.30 4 See the effect of the change in the language of the rule relating to the kind of proceeding in which evidence on information and belief is permitted in Gallagher v Boyland [2013] 1 Qd R 204 at 212 per Fraser JA. 5 A-G Qld v Watego [2003] QCA 512 at [8] dealing with s. 7 Dangerous Prisoners Act 2003 in the same terms relevantly as Rule 430(2); Hanson Construction Materials P/L v Davey & Anor [2010] QCA 246 at [32] dealing with Rule 295(2) which is also relevantly in the same terms. 6 See Bond J in Burragubba v Minister for Natural Resources and Mines (No. 2) [2017] QSC 265 at [17]. -- 5 of 10 -- 6 and such statements will have no probative value unless the sources and grounds of the information and belief are revealed. To my mind the purpose of rule 5(2) is to enable a deponent to put before the court in interlocutory proceedings, frequently in circumstances of great urgency, facts which he is not able of his own knowledge to prove but which, the deponent is informed and believes, can be proved by means which the deponent identifies by specifying the sources and grounds of his information and belief. What the sub-rule allows the deponent to state that he has obtained from another must, in my judgment, be limited to what is admissible as evidence. Take, for example, a case where there are unsuccessful without prejudice discussions to settle an action, in the course of which a statement is made by a party which is highly relevant to an issue in interlocutory proceedings. I apprehend that the court would strike out from an affidavit made by another party who heard the statement any reference to such statement having been made, as it would not be admissible as evidence and so would be irrelevant. So too, in my judgment, a statement in an affidavit referring to other forms of inadmissible evidence should be treated as irrelevant. That would include statements of opinion not being within any recognised exception to the general principle to which I have referred. [Underlining added] [16] Third, Tallon and Haritonoff’s evidence fails to properly identify the source of the hearsay statements which they rely upon. They refer to “our agent” but do not identify who that agent might be, or even whether it was the same agent in each case. One of the reasons why sources of information must be disclosed is to permit the investigation and testing of such evidence. Muir JA summarised the position in A-G v Watego [2003] QSC 367 in the following terms (footnotes omitted):7 [26] 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. [27] To allow evidence of the nature of that contained in Dr Kar’s report, to use the words of Thomas J in Deputy Commission of Taxation v Ahern, “would virtually permit trial by assertion in circumstances where no real check was available upon facile or erroneous assertion”. [17] A fortiori where the reference is (indirectly) to an unidentified source or sources. While Tallon or Haritonoff might be able to identify the source (if indeed they know or keep a record thereof), the deponent does not know who they are and could not identify them if challenged. Peter Gibson J referred specifically to this issue in Savings & Investment Bank Ltd v Gasco Investments in the following terms at 283: Thus if the deponent was informed of a fact by A, whom the deponent knows not to have first-hand knowledge of the fact but who had obtained the information from B, I cannot believe that it is sufficient for the deponent to identify A as the source of the information. That, to my mind, would largely defeat the requirement that the sources and grounds should be stated and would make it only too easy to introduce prejudicial material without revealing the original sources of hearsay information by the expedient of procuring as the deponent a person who receives information 7 In a passage not challenged in the appeal decision. -- 6 of 10 -- 7 second-hand. By having to reveal such original source and not merely the immediate source, the deponent affords a proper opportunity to another party to challenge and counter such evidence, as well as enabling the court to assess the weight to be attributed to such evidence. [18] That is not to say that it is never possible to give evidence on information and belief which identifies a source other than by name. Each case will depend on its own circumstances. However, in my view, it is inadequate identification of the ultimate source in the circumstances of this case. [19] Fourth, the inadmissibility of the source information is exacerbated by the consideration that some of the facts relied upon sourced to the unidentified agent or agents are facts which assume the truth of statements made by third parties: neighbours and a person located at the house: i.e. the assertion by the young man at the premises who said that his parents were in America. His evidence could not be the subject of evidence on information and belief other than from the person to whom the evidence was given: i.e. the agent. [20] Fifth, paragraph 15(b) also contains an assertion that the deponent believes that the claim will come to the defendants’ attention if four identified steps are taken. She does not identify which facts in the body of the affidavit sustain those four beliefs. It is not possible to do so in respect of the allegation that the claim will probably come to the defendants’ attention if sent to their email addresses. So far as I can see there is nothing in the affidavit or exhibits which tends to provide a source for that belief, admissible or otherwise. [21] Sixth, the formulaic recital of the source of the deponent’s knowledge in paragraphs 5 and 6 do not address any of these grounds of inadmissibility. [22] In my view none of the evidence in paragraphs 11, 13 and 15 is admissible under Rule 430(2) UPCR. [23] Substituted service applications are often made in circumstances where the plaintiff’s claim appears (at least to the plaintiff) to be being evaded by the defendant. A plaintiff might consider (whether justifiably or not) that in those circumstances, the Court should act on evidence which might not technically be admissible under Rule 430(2). Two issues arise in that regard: whether the Court has a discretion to admit the evidence even if technically inadmissible under Rule 430(2) and whether that discretion should be exercised in this case. [24] The first question might be thought to engage Rule 371 which provides: (1) A failure to comply with these rules is an irregularity and does not render a proceeding, a document, step taken or order made in a proceeding, a nullity. (2) Subject to rules 372 and 373, if there has been a failure to comply with these rules, the court may— (a) set aside all or part of the proceeding; or (b) set aside a step taken in the proceeding or order made in the proceeding; or (c) declare a document or step taken to be ineffectual; or (d) declare a document or step taken to be effectual; or -- 7 of 10 -- 8 (e) make another order that could be made under these rules (including an order dealing with the proceeding generally as the court considers appropriate); or (f) make such other order dealing with the proceeding generally as the court considers appropriate. [25] The relationship between this rule and the rule permitting evidence on information and belief was considered by Thomas JA in Ahern in the context of the old rules. His Honour concluded that the equivalent of Rule 371 (O.93 r. 17) did not permit the Court to admit evidence which was outside the scope of the enabling rule permitting evidence on information and belief. His Honour reasoned as follows8: The question then arises whether non-compliance with O.41 r.3 may be treated as an irregularity under O.93 r.17. Smith J. thought that non-compliance with the Victorian O.38 r.3 might be so treated under the corresponding Victorian Rules (O.70 rr.1 and 2) in Atherton’s case but with great respect I venture to doubt the correctness of that view. The laws of evidence form a special part of our body of law. They are usually classified as “adjective law” laying down the means by which facts may be proved in a court of law. The rules were largely developed as part of the common law since the 17th century. In the ordinary case which involves substantive rights, failure to apply those laws is an error which will result in an appeal being allowed if the error may have affected the result. Although the rules themselves (such as the hearsay rule) are riddled with exceptions, and although there are exceptional discretionary areas such as the exclusion by a judge in a criminal trial of admissible evidence on the ground that its slight weight is outweighed by serious prejudice likely to result against the accused, there is no general discretionary power in a judge or court to change the rules on grounds of convenience or perceptions of justice. Opinions vary as to the extent of a judge’s power to exclude evidence on a discretionary basis such as public policy or in the regulation of cross-examination, although even here, as Lord Simon observed in D. v. National Society for the Prevention of Cruelty to Children [1978] A.C. 171, 239, that “if it comes to the forensic crunch … it must be law, not discretion that is in command”. However, it is not in doubt that a judge has no general inclusionary discretion to admit legally inadmissible evidence. (Myers v. Director of Public Prosecutions [1965] A.C. 1001, 1024; Cross on Evidence (2nd Aust. Ed. paras 1.62 and 1.63; Wigmore on Evidence (Tillers Revision) para. 16.) The right to use affidavits based on information and belief may be regarded as the formulation with statutory force of a recognised exception to the usual rule. A practice (both at common law and in equity) had developed of permitting the use of such affidavits in interlocutory matters before the introduction of the forerunners to the present rule of court. Thus Poole J. in Re John O’Brien ex parte Allchurch [1923] S.A.S.R. 411, 420, observed: “It appears to me, therefore, that in Chancery also affidavits of information and belief were admissible upon interlocutory applications, and that the Chancery Order merely regulated their use. Similarly, the rule under the Supreme Court Act to which I have referred does not confer a right to use affidavits of information and belief which was previously non-existent, but regulated in the practice.” If an affidavit does not comply with the rule, it is not right to say that a further power exists in the court to excuse the non-compliance and to admit evidence which it would not on any direct application of the law be permitted to receive. I do not think that 8 At 163.40-164.30. -- 8 of 10 -- 9 non-compliance with the enabling rule (O.41 r.3) creates a power to widen the ambit of the exception. It follows that the powers under O.93 r.17 are not an appropriate way of increasing the powers of the court to rely upon hearsay evidence. [26] There are slight differences between Rule 371 and O. 93 r. 17. These differences are relatively minor but can lead to different conclusions on construction from those reached by Court construing the equivalent rule in the Supreme Court Rules.9 It seems to me, however, that Thomas JA’s analysis would apply equally to the current rules. [27] Further, there are other rules and statutes (not extant at the time of Ahern) which are relevant to the question of whether the Court may permit the admission of evidence which is inadmissible under Rule 430(2). Rule 5(2) UCPR is one possibility. Another is section 129A Evidence Act (which replaced Rule 394 UCPR) which provides: (1) This section applies in a proceeding that is not a criminal proceeding if either— (a) the fact in issue is any of the following— (i) the proof of handwriting; (ii) the proof of documents; (iii) the proof of the identity of parties; (iv) the proof of authority; or (b) a court considers— (i) a fact in issue is not seriously in dispute; or (ii) strict proof of a fact in issue might cause unnecessary or unreasonable expense, delay or inconvenience in a proceeding. (2) The court may order that evidence of the fact may be given at the trial, or any other stage of the proceeding, in any way the court directs. (3) Without limiting subsection (2), the court may order that evidence of a fact be given by— (a) a statement on oath of information and belief; or (b) the production of documents or entries in records; or (c) the production of copies of documents or copies of entries in records. (4) The court may at any time vary or revoke an order made under this section. [28] Bearing in mind that the issue was not the subject of submissions10, I do not intend to express a final view as to whether any of these provisions (or perhaps others which I have not canvassed) authorise a Court to act on evidence which is inadmissible under Rule 430(2). However, adopting the words of Thomas JA, “even if such a power existed, the circumstances of the present case would not be appropriate for its exercise”. I take that view for the following reasons. [29] First, the application is brought ex parte. While this particular form of application might not attract the duty of full and frank disclosure (as to which I express no view), it remains the case that the application is brought in the circumstance where the other party is not present. That circumstance calls for care by the Court and solicitors for the applicant to ensure that the matter is conducted fairly to the absent party. Further, in the absence of the other party, it is not possible to conclude that inadmissible evidence is not seriously in dispute. 9 For example, see Ure v Robertson [2017] QCA 20. 10 I have not overlooked s. 92(1) Evidence Act, though it does not seem to me that either limbs of that section could avail the applicant in this case. -- 9 of 10 -- 10 [30] Second, the effect of the practices evident in this matter is that the forensic discipline imposed on agents which arises from either swearing up to matters personally or being identified properly as a source of facts deposed to, is lost. Issues of service are frequently contentious. They need to be attended to with care and precision. I mean no disrespect to the persons involved in this case, but it seems to me that the consequence of evidence of events involved in service attempts being given in this anonymous and distant manner will be to court the risk of carelessness and imprecision in reports from service agents. [31] Third, the lack of identification of the agent or agents in question makes it difficult for the evidence to be tested by the defendants. [32] Fourth, I do not consider that evidence in admissible form would cause unnecessary or unreasonable expense, delay or inconvenience. It is common for evidence on substituted service applications to be given in proper form. It is an ordinary part of the civil litigation process. [33] In the circumstances, I dismiss the application for substituted service with no order as to costs. -- 10 of 10 --