Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Bagg v Angus Carnegie Gordon as liquidator of Salfa Pty Limited (in liq) [2014] NSWCA 420
• Hearing dates: 28 November 2014
• Decision date: 08 December 2014
• Before: Ward JA; Sackville AJA

Decision

1. Extend the time for the filing and service by Mr Bagg of a summons for leave to appeal until 2 October 2014.

2. Dismiss the summons.

3. Extend the time for Mr Bagg to file and serve a notice of appeal against the judgment of Brereton J given on 31 October 2014 until 19 December 2014.

4. Order Mr Bagg to pay the costs of the Liquidator of the summons seeking leave to appeal, including Mr Bagg's application to extend the time for service of the summons.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: APPEAL - application for leave to appeal from an interlocutory judgment granting leave to proceed against a defendant outside New South Wales - where applicant contends he has not submitted to jurisdiction - where applicant has challenged the merits of the plaintiff's claim - where final orders have been made in substantive proceeding - no prejudice to applicant in refusing leave
• Legislation Cited: Civil Procedure Act 2005 (NSW) s 63; Corporations Act 2001 (Cth) ss 588E, 588G, 588M; Uniform Civil Procedure Rules 2005 (NSW) rr 10.14, 11.3, 11.4, 11.6, 12.11, 51.2, 51.5, 51.10, 51.16; Rules of Court (South Africa) r 4(1)(a)
• Cases Cited: Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; 21 WAR 79; Building Insurers' Guarantee Corporation v Eddie [2008] NSWSC 195; In the matter of Salfa Pty Ltd (in liq) (Supreme Court (NSW), Lindsay J, 10 July 2014, unrep); In the matter of Salfa Pty Ltd (in liq) [2014] NSWSC 1493; Jamal v State of New South Wales [2014] NSWCA 199; Laurie v Carroll [1958] HCA 4; 98 CLR 310; WFM Motors Pty Ltd v Maydwell (Supreme Court (NSW), Bryson J, 23 April 1993, unrep)
• Category: Principal judgment
• Parties: Andrew Bagg (Applicant); Angus Carnegie as liquidator of Salfa Pty Ltd (in liq) (Respondent)
• Representation: Counsel: FG Kalyk (Applicant); S Golledge (Respondent); Solicitors: Fortis Law Group (Applicant); Colin Biggers & Paisley Lawyers (Respondent)
• File Number(s): 2014/285667
• Publication restriction: None

Decision under appeal

• Jurisdiction: 9111
• Date of Decision: 2014-07-10 00:00:00
• Before: Lindsay J
• File Number(s): 2011/166361

Judgment

1 THE COURT: By summons filed 29 September 2014, the applicant (Mr Bagg) seeks leave to appeal, and an extension of time for the filing and service of the summons seeking leave to appeal, from an interlocutory decision of Lindsay J, sitting in the Corporations List of the Equity Division: In the matter of Salfa Pty Ltd (in liq) (Supreme Court (NSW), Lindsay J, 10 July 2014, unrep). One of the issues before the primary Judge was whether Mr Bagg, formerly a resident of Australia but now resident in South Africa, had been validly served outside the jurisdiction with the initiating process.

2 Mr Bagg, by profession a solicitor, is a former director of Salfa Pty Ltd (Salfa), which was incorporated and carried on business in Australia, but is now in liquidation. The respondent to the present application for leave to appeal is Mr Gordon, the liquidator of Salfa (Liquidator). The Liquidator opposes both the application for an extension of time and the application for leave to appeal.

3 Salfa was a single purpose entity incorporated to undertake a residential development on land at Queenscliff. Mr Bagg was one of three directors of Salfa when, according to the Liquidator, it incurred the debts that have been the subject of the proceedings between the Liquidator and Mr Bagg. One of the debts is due to Southern Cross Constructions (NSW) Pty Ltd, the builder engaged to undertake the project (SCC Debt). The other is due to the Australian Taxation Office in respect of GST and interest incurred on the sale of lots in the development (ATO Debt).

The Proceedings

4 In May 2011, the Liquidator brought proceedings in the Equity Division against the two former directors of Salfa other than Mr Bagg. Those proceedings have now been resolved.

5 On 27 March 2012, the Liquidator filed a "Further Amended Originating Process" joining Mr Bagg as a defendant to the proceedings. The Liquidator sought orders against Mr Bagg that he had contravened s 588G of the Corporations Act 2001 (Cth) (Act), in that:

(a) he failed to prevent Salfa from incurring debts at a time when it was presumed to be insolvent pursuant to s 588E of the Act, being the period between 29 September 2004 and the date Salfa was placed in liquidation (10 June 2008); and

(b) in the alternative, he failed to prevent Salfa incurring debts at a time when it was insolvent, being the same period between 29 September 2004 and 10 June 2008.

The Liquidator also sought an order pursuant to s 588M of the Act that Mr Bagg pay an amount equal to the loss said to be sustained by creditors, namely $2,687,500. This sum constituted the total of the SCC Debt and the ATO Debt.

6 It appears that the Liquidator experienced difficulties in serving Mr Bagg. According to the submissions filed on Mr Bagg's behalf on the leave application, it was not until 1 October 2013 that the initiating process was purportedly served, by leaving a copy with a receptionist at the offices of the law firm in South Africa where Mr Bagg worked.

The Motions Before Lindsay J

7 Mr Bagg did not enter an appearance in the proceedings. In February 2014, the Liquidator filed a motion seeking leave to proceed pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 11.4. The Liquidator subsequently amended the motion to include claims for relief under s 63 of the Civil Procedure Act 2005 (NSW) (CP Act) in respect of any irregularity of service of the initiating process and an order under UCPR r 10.14(3) confirming service. This relief was apparently sought in answer to (or in anticipation of) Mr Bagg's contention that he had not been served in accordance with South African law and thus had not been validly served outside Australia in conformity with UCPR r 11.6.

8 The provisions of the UCPR relevant to the Liquidator's motion are as follows:

"10.14(3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.

11.3(1) If originating process is intended to be served on a defendant outside Australia, a notice to that effect must be included in the originating process.

11.4(1) If originating process is served on a defendant outside Australia, and the defendant does not enter an appearance, the plaintiff may not proceed against the defendant except by leave of the Supreme Court.

(2) A motion for leave under subrule (1) may be made without serving notice of motion on the defendant.

11.6 A document to be served outside Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected."

9 Mr Bagg also filed a motion. He sought orders pursuant to UCPR r 12.11 declaring that he had not been validly served with the initiating process and, setting aside any service which had occurred. He also sought orders striking out parts of the Points of Claim filed by the Liquidator.

10 UCPR r 12.11 provides as follows:

"(1) In any proceedings, the court may make any of the following orders on the application of a defendant:

(a) an order setting aside the originating process,

(b) an order setting aside the service of the originating process on the defendant,

(c) an order declaring that the originating process has not been duly served on the defendant,

(d) an order discharging:

(i) any order giving leave to serve the originating process outside New South Wales, or

(ii) any order confirming service of the originating process outside New South Wales,

...

(h) an order declining to exercise jurisdiction in the proceedings,

(i) an order granting such other relief as the court thinks appropriate.

(2) Such an order may not be made unless notice of motion to apply for the order is filed by the defendant within the time limited for the defendant to enter an appearance in the proceedings.

(3) Notice of motion under subrule (2):

(a) may be filed without entering an appearance,

...

(4) The making of an application for an order under subrule (1) does not constitute submission to the jurisdiction of the court."

11 Lindsay J heard both motions together on 12 June 2014. Mr Bagg's counsel, Mr Kalyk, made submissions not only in support of Mr Bagg's motions, but in opposition to the relief sought by the Liquidator. Mr Kalyk also submitted that the Liquidator's pleadings were defective. At the conclusion of the hearing, Lindsay J directed the parties to file and serve supplementary written submissions, which each party did. The matter came before Lindsay J again on 10 July 2014 and at the conclusion of a short hearing, Lindsay J made the following comment:

"I will deliver some short reasons which are not intended to be definitive but to just provide a background."

12 His Honour then delivered a brief ex tempore judgment, in which he made the following orders:

"(1) Order that the [Liquidator] be granted leave to proceed against [Mr Bagg].

(2) Order that [Mr Bagg] be taken to have been served with originating process on 1 October 2013.

(3) Order that the [Liquidator] be granted leave to amend his points of claim in accordance with the draft ... 'Second Further Amended Points of Claim'...

...

(5) Order that [Mr Bagg] file and serve any points of defence he proposes to file in response to the [Liquidator's] pleading no later than 14 August 2014.

...

(8) Order that [Mr Bagg's] amended notice of motion be dismissed".

13 In his judgment, Lindsay J said (at [7]) that he was satisfied that service on Mr Bagg had been effective or, to the extent that it might arguably not have been effective, was at most affected by an irregularity. His Honour noted that the proceedings concerned events in Australia and thus there was no doubt that the Court had jurisdiction over the dispute between the parties, subject to appropriate service of process. His Honour also had no doubt that the proceedings had for a considerable time been brought to the personal attention of Mr Bagg.

14 The primary Judge recorded (at [8]) that the Liquidator had acknowledged the criticism by Mr Bagg's counsel of the pleadings. To meet the criticism, the Liquidator had provided a fresh draft pleading. Mr Bagg's counsel had indicated that his objections to the pleading had been adequately addressed.

15 The solicitor for Mr Bagg apparently understood the comments made by Lindsay J at the conclusion of the hearing to mean that his Honour proposed to publish further reasons in due course. It is not entirely clear why that view was taken, given that Lindsay J proceeded to deliver an ex tempore judgment and to make orders after the hearing on 10 July 2014. In any event, it was not until 31 August 2014 that Mr Bagg (not his solicitor) requested his Honour to provide reasons for judgment. In his communication to the Court, Mr Bagg stated that he no longer had legal representation in the proceedings. On the following day, Mr Bagg received a certified copy of the judgment delivered by Lindsay J on 10 July 2014. The certified copy stated that the document was a true copy of the reasons for judgment delivered on 10 July 2014.

The Proceedings Before Brereton J

16 Following the decision of Lindsay J, the Liquidator forwarded the Amended Points of Claim to a number of Mr Bagg's addresses in South Africa. Mr Bagg did not comply with the direction made by Lindsay J to file a defence and his solicitors informed the Liquidator's solicitors that they no longer had instructions to act in the matter.

17 On 8 September 2014, the Liquidator filed a motion for summary judgment against Mr Bagg. The motion requested that the matter be listed for a hearing to assess the quantum of the Liquidator's claim.

18 On 16 September 2014, the Liquidator's solicitors advised Mr Bagg that the matter would next be in Court on 22 September 2014. On that day, Mr Kalyk of counsel appeared for Mr Bagg before Brereton J. Mr Kalyk informed his Honour that Mr Bagg intended to file an application for leave to appeal within the next few weeks and invited his Honour to adjourn the application for summary judgment in the meantime. Mr Kalyk indicated that Mr Bagg did not otherwise intend to participate in the proceedings, lest he be regarded as having submitted to the jurisdiction of the Court.

19 Brereton J declined to adjourn the proceedings. In a judgment delivered on 31 October 2014 (In the matter of Salfa Pty Ltd (in liq) [2014] NSWSC 1493), his Honour explained (at [7]) his reasons for declining the adjournment application:

"I declined to adjourn the hearing of the interlocutory process, as time for instituting an appeal from the orders of Lindsay J made on 10 June 2014 [sic, July] had long since expired, and [Mr Bagg] had not only failed to file a defence in compliance with his Honour's directions, but his solicitors had indicated that they held no further instructions to act. Eventually, on 29 September 2014, Mr Bagg filed in the Court of Appeal an application for leave to appeal from Lindsay J's orders ... I am content to accept that it demonstrates arguable grounds of appeal, but that does not affect the basis on which I considered that the hearing should proceed on 22 September. If Lindsay J's order granting leave to proceed ultimately be overturned (consequent upon an extension of time, leave to appeal and an appeal), then any judgment I give pursuant to the present application will fall with it. But given the approach [Mr Bagg] has adopted, and his failure either to file a defence or to apply within time (or even prior to the hearing of the motion) for leave to appeal, he ought not be entitled to yet a further opportunity to file a defence if Lindsay J's order stands. By not appearing in the proceedings, or filing a defence - long before Lindsay J allowed him a further opportunity to do - he elected to contest jurisdiction and not the merits. He has at all times been astute to avoid any step that might be taken as submitting to the jurisdiction. That is a perfectly permissible course for him to take, but not one that entitles him to a further opportunity to file a defence."

20 In his judgment, Brereton J observed (at [11]) that the orders made by Lindsay J concluded the question of service of initiating process on Mr Bagg. His Honour was satisfied that the Liquidator's Amended Points of Claim had come to Mr Bagg's attention.

21 Brereton J stated his conclusions as follows:

"[28] On the current state of the evidence, I am satisfied that the company was insolvent, and that there were reasonable grounds to expect that it was insolvent, when the ATO debt was incurred from early 2007 onwards, but not when the SCC debt was incurred in September 2004. Similarly, I am satisfied that Mr Bagg contravened s 588G [of the Act] in respect of the ATO debt, but not the SCC debt. [The Liquidator] is entitled to recover the amount of the ATO's loss or damage in relation to the ATO debt because of the insolvency, but in the absence of evidence as to what if any dividend has been or is likely otherwise to be paid, I am unable to be satisfied what, if any loss has been suffered.

[29] I will publish these reasons, dismiss the notice of motion for default judgment, and adjourn the originating process to a later date to permit the [Liquidator] if so advised to adduce further evidence."

22 On 14 November 2014, after the Liquidator filed further affidavit evidence, Brereton J gave judgment in favour of the Liquidator against Mr Bagg in the sum of $887,338.79.

Draft Notice of Appeal

23 Mr Bagg's summons for leave to appeal and for an extension of time for the filing of the summons was accompanied by a draft notice of appeal. Bearing in mind that Mr Bagg has been extremely anxious not to do anything that might involve submission to the jurisdiction, it is somewhat curious that the grounds identified in the draft notice of appeal are not confined to a challenge to the validity of service of the initiating process. On the contrary, the grounds appear to go to the merits of the Liquidator's claim.

24 As amended in the course of the hearing of the leave application, the draft notice of appeal asserts that Lindsay J should have determined that:

"(a) [Mr Bagg] had not been served as required by UCPR r 11.6.

(b) It was not appropriate in the exercise of his Honour's discretion to make an order under UCPR r 10.14(3) directing that the initiating process be taken to have been served on Mr Bagg.

(c) ...

(d) The [ATO] Debt was not incurred as alleged, and no loss was suffered by reason of the "incurring" of that debt. Accordingly, the ATO Debt could not support the [Liquidator's] claim under s 588M of the Act.

(e) [Salfa] did not fail to keep financial records (defined by s 9 of the Act) as required by s 286(1) of the Act, such that it was not deemed to be insolvent pursuant to s 588E(4) of the Act.

(f) At the time it was alleged that Salfa incurred the [ATO] Debt ... Salfa was not insolvent."

25 In the alternative, the draft notice of appeal asserts that Lindsay J ought not to have been satisfied that the Liquidator had a reasonably maintainable case against Mr Bagg such as to justify the grant of leave to proceed on the whole of that claim or any part of it.

26 The draft notice of appeal seeks orders setting aside the orders made by Lindsay J. In lieu thereof, Mr Bagg seeks orders pursuant to UCPR r 12.11:

• declaring that the initiating process was not validly served on him; or
• alternatively, an order that any service of the initiating process be set aside.

27 It is apparent that the draft notice of appeal was prepared before Brereton J made orders in favour of the Liquidator. Mr Kalyk, who again appeared for Mr Bagg on the leave application, did not file or hand up an amended draft notice of appeal addressing the need to set aside the orders made by Brereton J.

Mr Bagg's Submissions

28 Mr Bagg submits that leave to appeal should be granted because he has a strongly arguable case that service of the initiating process was not effected in accordance with the law of South Africa (and therefore not in accordance with UCPR r 11.6). According to Mr Kalyk, under South African law (Rules of Court (South Africa) r 4(1)(a)), if documents are not served personally, they can be served relevantly:

(1) by leaving them at the person's place of residence or business with a person apparently in charge of the premises; or

(2) delivering them at the person's place of employment to another person apparently in authority over the person to be served.

Mr Kalyk contends this did not occur in the present case, as the documents were simply left with a receptionist at Mr Bagg's place of work. The receptionist could not be said to be in charge of the premises and certainly was not in a position of authority over Mr Bagg.

29 Mr Bagg also submits that Lindsay J erred in making an order pursuant to UCPR r 10.14(3). Mr Kalyk contends that the order should not have been made because the evidence did not establish either that the Liquidator could not ascertain Mr Bagg's residential address or that it was not practicable to serve Mr Bagg in the manner prescribed by South African law. Mr Kalyk also submits that a direction cannot be made under UCPR r 10.14(3) if the effect is to permit service in a manner contrary to the requirements of UCPR r 11.6. He says that a contrary construction of r 10.14(3) would be inconsistent with the principles expressed in Laurie v Carroll [1958] HCA 4; 98 CLR 310.

30 The draft notice of appeal goes beyond challenging Lindsay J's findings as to the sufficiency of service. The draft notice of appeal includes a challenge to his Honour's grant of leave to the Liquidator to proceed against Mr Bagg, such leave being required since Mr Bagg had not entered an appearance. Mr Bagg's written submissions on the application for leave to appeal contend that Lindsay J erred in concluding that the Liquidator had a reasonably arguable case in respect of both the SCC Debt and the ATO Debt. Since the written submissions were filed, Brereton J has rejected the Liquidator's case in respect of the SCC Debt, but has upheld the Liquidator's claim in respect of the ATO Debt. The appellant filed supplementary written submission on 26 November 2014 dealing further with the merits of the Liquidator's claim in respect of the ATO Debt.

Reasoning

31 Mr Bagg's written submissions do not address a rather obvious difficulty, notwithstanding that it is squarely raised in the Liquidator's written submissions. The difficulty is that Mr Bagg wishes to pursue an application for leave to appeal against an interlocutory decision of Lindsay J when Brereton J has made final orders in the proceedings. Mr Bagg is entitled, subject to compliance with time limits, to appeal as of right from the decision of Brereton J. In such an appeal, Mr Bagg can raise any grounds that might justify setting aside the orders made by Brereton J, including grounds that go to the jurisdiction of the Court.

32 Mr Golledge, who appeared for the Liquidator, contends that in these circumstances there is no injustice in refusing Mr Bagg leave to appeal, since he can pursue all grounds upon which he wishes to rely in an appeal as of right. Mr Golledge also submits that it is unsatisfactory for Mr Bagg to be permitted to pursue an interlocutory appeal on the ground that the Liquidator has no reasonable basis for his claim, when Brereton J has already made final orders on the basis that the Liquidator has proved his case (in respect of the ATO Debt).

33 Mr Kalyk's answer to these submissions is that Mr Bagg will suffer prejudice if leave to appeal is not granted. Mr Kalyk seems to accept that Mr Bagg can appeal against Brereton J's decision, without submitting to the jurisdiction of the Court, on the ground that the initiating process was not properly served outside Australia or, alternatively, on the ground that the order for deemed service pursuant to UCPR r 10.14(3) should not have been made: see Laurie v Carroll at 335 (per curiam). But, says Mr Kalyk, if the notice of appeal includes grounds other than sufficiency of service (such as a challenge to Brereton J's holding that Mr Bagg contravened s 588G of the Act), Mr Bagg will be taken to have submitted to the jurisdiction. The filing of a notice of appeal incorporating such grounds, so Mr Kalyk argues, would effectively preclude Mr Bagg from challenging the sufficiency of service, since submission to the jurisdiction overcomes any deficiency in the service of initiating process.

34 Mr Kalyk also says that Mr Bagg can pursue an interlocutory appeal against the orders made by Lindsay J granting the Liquidator leave to proceed without being taken to have submitted to the jurisdiction of the Court. According to Mr Kalyk, an interlocutory appeal on this ground is within UCPR r 12.11(1), since it amounts to an application for an order that the Court decline to exercise jurisdiction in the proceedings (r 12.11(1)(h)), or for an order granting such other relief as the Court thinks appropriate (r 12.11(1)(i)). Thus an interlocutory appeal against the order granting leave to proceed would come within r 12.11(4), which provides that an application by a defendant under r 12.11(1) does not constitute submission to the jurisdiction of the Court.

35 Mr Kalyk's submissions make no reference to UCPR r 51.5(1), which provides that, except with the leave of the Court, a party may not take any step in proceedings in the Court of Appeal without entering an appearance in the proceedings. Rule 51.5(1) does not apply to a respondent who applies for an order under r 12.11 (r 51.5(2)(a)), but it does apply to an applicant for leave to appeal who applies for an order.

36 We are prepared to accept that Mr Bagg has an arguable case that he was not served with the initiating process in South Africa in conformity with the requirements of UCPR r 11.6 or otherwise in compliance with the UCPR. We are also prepared to accept that Mr Bagg has an arguable case that r 10.14(3) does not apply to a defendant outside the jurisdiction, even though there is authority that it does: see, for example, Building Insurers' Guarantee Corporation v Eddie [2008] NSWSC 195 at [24] (Rein AJ); WFM Motors Pty Ltd v Maydwell (Supreme Court (NSW), Bryson J, 23 April 1993, unrep) at 5. Nonetheless, there are considerations which militate against the grant of leave to appeal.

37 The first is that many of the difficulties in this case flow from the delay in Mr Bagg filing a summons seeking leave to appeal from the decision of Lindsay J. His Honour delivered judgment and made orders on 10 July 2014. Mr Bagg's legal representatives were in Court when judgment was delivered and the orders made.

38 Mr Kalyk, in his written submissions, said that it was "arguable" that the date the judgment was delivered (10 July 2014) was not the "material date" for the purposes of determining the time within which the summons for leave to appeal had to be filed and served: see UCPR r 51.2. He referred to Jamal v State of New South Wales [2014] NSWCA 199, where Basten JA (McColl JA agreeing) said (at [9]) that it was arguable that where a party has a statutory entitlement to written reasons, the "material date" is the date on which the written reasons are given. However, Basten JA also said that:

"the better view is that, at least when a decision and reasons are given in the presence of the party, that day is the 'material date' under r 51.2".

39 Mr Kalyk did not develop the point further and for present purposes it should be accepted that the summons for leave to appeal should have been filed and served on Mr Bagg's behalf by 8 August 2014: UCPR r 51.10.

40 As has been explained, Mr Bagg's solicitor interpreted the comment made by Lindsay J immediately before delivering his ex tempore judgment to mean that further reasons would be delivered at a later date. However, no further enquiries were made until 22 August 2014 to verify that understanding or (apparently) to obtain a transcript of the ex tempore judgment. On 22 August 2014, over six weeks after delivery of the judgment, Mr Bagg's solicitor provided to the Liquidator's solicitor a draft of a letter she proposed to send to Lindsay J's Associate. The Liquidator's solicitor advised that day that the Liquidator would not consent to the letter being sent unless Mr Bagg filed an appearance. It took a further nine days for Mr Bagg to send his own letter to Lindsay J's Associate (see at [15] above).

41 Despite receiving a certified copy of the judgment on 1 September 2014 and despite being informed that the Liquidator's application for summary judgment would be heard on 22 September 2014, neither Mr Bagg nor his solicitor filed a summons for leave to appeal against Lindsay J's decision before the hearing. At the hearing, Brereton J (according to his Honour's judgment at [6]) was told that Mr Bagg's application for leave to appeal would be filed "within the next few weeks". In fact, the summons for leave to appeal was filed on 29 September 2014, after Mr Bagg's application for an adjournment had been refused and the hearing on the summary judgment application had taken place on 22 September 2014.

42 Had Mr Bagg or his solicitors acted in a timely fashion, it is highly likely that the Liquidator's claim would not have proceeded to a final judgment until after the application for leave to appeal (and the appeal itself, if leave was granted) had been determined. Mr Bagg would then not have been in the position of seeking to argue in an interlocutory appeal against Lindsay J's decision that the Liquidator's case was untenable, when that case, in respect of the ATO Debt, had already been accepted by Brereton J as the basis for a final judgment in favour of the Liquidator.

43 The second difficulty in Mr Bagg's path is that there is a strong argument that he has already submitted to the jurisdiction of the Court. The general principle was stated by Ipp J (Malcolm CJ agreeing) in Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; 21 WAR 79 at [38]:

"In determining whether steps taken by a party in the course of proceedings amount to a submission to jurisdiction, the question to be considered is whether the steps were necessary or useful to any action taken by the party other than in objecting to the jurisdiction. A step that is not consistent with or relevant to the challenge to the jurisdiction, will usually be a submission to that jurisdiction. The court must consider the matter objectively and, where the steps relied on are the actions of a solicitor, they must be considered in the context of all the relevant circumstances". (Citations omitted)

44 The actions by or on behalf of Mr Bagg in the present case that appear to be necessary or useful to his case, other than his objection to the jurisdiction, include:

• actively opposing the Liquidator's application for leave to proceed against him;
• filing a motion seeking orders striking out portions of the Liquidator's Points of Claim; and
• filing a summons for leave to appeal, accompanied by a draft notice of appeal incorporating grounds apparently challenging the merits of the Liquidator's claim.

45 Mr Kalyk asserts that each of these steps is within UCPR r 12.11 and thus none amounts to a submission by Mr Bagg to the jurisdiction. There is no doubt that Mr Bagg's motion, insofar as it sought a declaration that he had not been validly served and an order setting aside service, was within r 12.11(1)(b) and (c). Accordingly, to that extent, the motion did not constitute a submission by Mr Bagg to the jurisdiction of the Court: r 12.11(4). But it is difficult to see how the other actions by Mr Bagg, identified at [44] above, were within r 12.11(1).

46 Mr Bagg's active opposition to the grant of leave to the Liquidator to proceed with the litigation is said by Mr Kalyk to be within r 12.11(1)(h). But this provision only applies to an application by a defendant for an order that the court decline to exercise jurisdiction. It was the Liquidator who made the application for leave to proceed and Mr Bagg who opposed that application. If Mr Bagg's active opposition to the grant of leave to the Liquidator is not within r 12.11(1), an application for leave to appeal against the grant of leave, accompanied by a draft notice of appeal which challenges the merits of the Liquidator's case, is unlikely to be in any different position. The language of UCPR r 51.5 supports that conclusion, since r 51.5(2)(a) only exempts a respondent applying for an order under r 12.11 from the requirement to enter an appearance.

47 The filing of the motion by Mr Bagg, insofar as it sought to strike out portions of the Liquidator's pleading, clearly had utility other than to bolster an objection to the jurisdiction of the Court. Indeed, one consequence of the strike out motion was that the Liquidator amended the Points of Claim. Accordingly, the strike out motion would seem to have constituted a submission by Mr Bagg to the jurisdiction of the Court.

48 We do not think that the actions of Mr Bagg to which we have referred can be brought within UCPR r 12.11(1) as orders "granting such other relief as the court thinks appropriate" (r 12.11(1)(i)). That sub-paragraph should be read as embracing relief that is ancillary to one or other of the orders specifically mentioned in r 12.11(1)(a)-(h). It cannot be read as transforming an application that requires submission to the jurisdiction of the Court into one that does not have that effect, simply because the orders sought are appended to an application for orders that are within r 12.11(1).

49 In our view, Mr Bagg has not shown that he would suffer significant prejudice if his application for leave to appeal is dismissed. Subject to time limits, he is entitled to appeal as of right against the decision of Brereton J.

50 This judgment will be delivered shortly after the 28 day period for filing a notice of appeal has expired: UCPR r 51.16(c). It is appropriate to make an order under r 51.16(2) extending the time for Mr Bagg to file a notice of appeal against the decision of Brereton J until 19 December 2014. It will be a matter for Mr Bagg as to whether he avails himself of this extension of time.

Conclusion

51 For these reasons, we consider that:

• Mr Bagg has not demonstrated that he would suffer significant prejudice if leave to appeal was refused; and
• in any event, insofar as Mr Bagg would suffer any prejudice, it was largely as a consequence of his delay in filing and serving the summons for leave to appeal.

Orders

52 The following orders should be made:

(1) Extend the time for the filing and service by Mr Bagg of a summons for leave to appeal until 2 October 2014.

(2) Dismiss the summons.

(3) Extend the time for Mr Bagg to file and serve a notice of appeal against the judgment of Brereton J given on 31 October 2014 until 19 December 2014.

(4) Order Mr Bagg to pay the costs of the Liquidator of the summons seeking leave to appeal, including Mr Bagg's application to extend the time for service of the summons.

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Decision last updated: 08 December 2014