District Court New South Wales

• Medium Neutral Citation: Mothership Music Pty Ltd v Darren Ayre (trading as VIP Entertainment & Concepts Pty Ltd) and Flo Rida (also known as Tramar Dillar) [2012] NSWDC 42
• Hearing dates: 18 April 2012
• Decision date: 18 April 2012
• Jurisdiction: Civil
• Before: Gibson DCJ

Decision

(1) Grant leave to file in court an affidavit of Brent Remington Lean sworn 16 April 2012 and the affidavit of the process server, Mr Kryran O'Dwyer, sworn 16 April 2012.

(2) Note the defendants called outside Court 13D, John Maddison Tower, District Court of New South Wales, three times at 2.13pm - no response.

(3) The order made by this court on Friday 13 April 2012 be extended until the disposal of these proceedings, or further order.

(4) An order that substituted service be effected on the second defendant by:

(a) sending a copy of the Statement of Claim, Notice of Motion dated 13 April 2012, Affidavit of Stephanie Borg sworn 13 April 2012, Orders of Gibson DCJ dated 13 April 2012, together with a copy of this order, by email transmission to the recipients; and

(b) sending a message to the second defendant via the provision to do so appearing on his Facebook page (referred to in the Affidavit of Stephanie Borg sworn 17 April 2012) to the following effect:

"On Friday, 13 April 2012, Mothership Music Pty Ltd commenced proceedings against you in the District Court of New South Wales, Australia seeking damages for breach of contract in respect of your non-appearance on 22 October 2011 at the "Fat as Butter" Concert at Camp Shortland, The Foreshore Newcastle. In addition, the Court ordered that you do not diminish your assets in Australia below $80,000 and also made additional ancillary orders. These orders were renewed today together with an order that you may be served by the sending to you of this message by your Facebook page.

Full details and copies of all relevant documents can be obtained by contacting Neville & Hourn Legal (Level 4, 162 Goulburn Street, Sydney NSW 2010 [phone] Ref: Stephanie Borg or by email at [e-mail]).

If you do not file a defence to these proceedings within 28 days of service, the Court may enter judgment against you without any further notice to you."

(5) Costs of this application and those of 13 April 2012 be reserved.

(6) Matter stood over for further directions to Friday 15 June 2012 at 9:00am and direct the plaintiff to notify the defendant of the next return date in accordance with these orders.

• Catchwords: PRACTICE AND PROCEDURE - defendant leaves jurisdiction after proceedings commenced, but before service - application for substituted service on Facebook and by email
• Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 10.14
• Cases Cited: ASIC v Sweeney (No 2) [2000] NSWSC 1211; Asteron Life Limited v Franck [2009] NZHC 450; Axe Market Gardens v Craig Axe (CIV: 2008-485-2676, High Court Wellington, 16 March 2009, Gendall A J); Bellingen Shire Council v Lamir-Pike [2010] NSWLEC 195; Byrne v Howard [2010] FMCAFAM 509; Facebook, Inc. v Callverse Pty Ltd [2008] AUDND 11; Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet AG [2002] NSWSC 727; Specsavers Pty Ltd v Buyinvite Pty Ltd [2012] FCA 230; Tucker (a bankrupt), Re; Ex parte Tucker [1987] 1 WLR 928
• Texts Cited: Sydney Morning Herald, "Australian court serves documents via Facebook" (Nick Abraham, 12 December 2008)
• Category: Procedural and other rulings
• Parties: Plaintiff: Mothership Music Pty Ltd; First Defendant: Darren Ayre (trading as VIP Entertainment & Concepts Pty Ltd); Second Defendant: Flo Rida (also known as Tramar Dillar)
• Representation: Plaintiff: Mr J Sleight; Plaintiff: Neville & Hourn Legal
• File Number(s): 2012/116306
• Publication restriction: None

Judgment

1 HER HONOUR: On 13 April 2012, on that date I made orders as follows:

"(1) Pursuant to r 25.11 Uniform Civil Procedure Rules 2005 (NSW), a freezing order against the second defendant in accordance with paragraphs 1 to 17 of the Notice of Motion, upon the undertakings given to the court by the applicant as set out in Schedule A, as follows:

THE COURT ORDERS:

INTRODUCTION

1.(a) The application for this order is made returnable immediately.

(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by the delivery of copies to the respondent.

2.Subject to the next paragraph, this order has effect up to and including 18 April 2012 ('the return day'). On the return day at 2.00 pm there will be a further hearing in respect of this order before Her Honour, Judge Gibson at the District Court of New South Wales, Sydney (Court Room 13D). [3]

3.Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.In this order:

'applicant', if there is more than one applicant, includes all the applicants;

'you', where there is more than one of you, includes all of you and includes you if you are a corporation;

'third party' means a person other than you and the applicant;

'unencumbered value' means value free of mortgages, charges, liens or other encumbrances;

and

if you are ordered to do or not to do something you must do it or not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.

5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.

(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.

FREEZING OF ASSETS

6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD$80,000.00 ('the Relevant Amount').

(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.

(c) If the unencumbered value of your Australian assets is less than the Relevant Amount, and you have assets outside Australia ('ex-Australian assets'):

(i) You must not dispose of, deal with or diminish the value of any of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the Relevant Amount; and

(ii) You may dispose of, deal with or diminish the value of any of your ex-Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount.

7. For the purposes of this order,

(1) your assets include:

(a) all your assets, whether or not they are in your name and whether they are solely or co-owned;

(b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and

(c) any entitlement to payment, and any payment made, in respect of performances undertaken in the Commonwealth of Australia.

(2) the value of your assets is the value of the interest you have individually in your assets.

PROVISION OF INFORMATION

8. Subject to paragraph 9, you must:

(a) at or before the further hearing on the return day (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;

(b) within 5 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.

9.1 (a) This paragraph applies if you are a not a corporation and you wish to object that compliance with paragraph 8 may tend to incriminate you or make you liable to a civil penalty;

(b) You must, at or before the further hearing on the return day (or within such further time as the Court may allow), file a notice of motion applying to revoke the order made under paragraph 8 pursuant to section 87 of the Civil Procedure Act 2005. The notice of motion must be supported by an affidavit which identifies the grounds for making the application;

(c) If you file a notice of motion, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material which may tend to prove that you have engaged in culpable conduct; and

(d) If you file a notice of motion, the Court may give directions as to the filing and service of affidavits setting out such matters as you wish to place before the Court in support of your application.

9.2 (a) This paragraph applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object that compliance may tend to incriminate them respectively or make them respectively liable to a civil penalty;

(b) You must, at or before the further hearing on the return day (or within such further time as the Court may allow), notify the applicant in writing that all of the persons referred to in (a) wish to take such objection and identify the extent of the objection;

(c) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken; and

(d) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you wish to place before the Court in support of your application.

EXCEPTIONS TO THIS ORDER

10. This order does not prohibit you from:

(a) paying ordinary living expenses

(b) paying your reasonable legal expenses

(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and

(d) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.

11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.

12.(a) This order will cease to have effect if you:

(i) pay the sum of $80,000 into Court; or

(ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or

(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.

(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.

(c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.

COSTS

13. The costs of this application are reserved to the judge hearing the application on the return day.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENT

14.Set off by banks

This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

15.Bank withdrawals by the respondent

No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

16.Persons outside Australia

(a) Except as provided in subparagraph (b) below, the terms of this order do not affect or concern anyone outside Australia.

(b) The terms of this order will affect the following persons outside Australia:

(i) you and your directors, officers, employees and agents (except banks and financial institutions);

(ii) any person (including a bank or financial institution) who:

(A) is subject to the jurisdiction of this Court; and

(B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and

(C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience breach of the terms of this order; and

(iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person's assets.

17. Assets located outside Australia

Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant.

SCHEDULE AUNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

(1) The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

(2) As soon as practicable, the applicant will file and serve upon the respondent copies of:

(a) this order;

(b) the summons or notice of motion to be relied on at the hearing on the return day;

(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:

(i) affidavits (or draft affidavits);

(ii) exhibits capable of being copied;

(iii) any written submission; and

(iv) any other document that was provided to the Court.

(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;

(e) the originating process, or, if none was filed, any draft originating process produced to the Court.

(3) As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4) The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.

(5)If this order ceases to have effect [5] the applicant will promptly take all reasonable steps to inform in writing anyone who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.

(See ex tempore judgment)

(2) The first return date for this application is Wednesday 18 April 2012 at 2.00 pm before Judge Gibson in Court 13D.

(3) The plaintiff is to serve the second defendant with:

(a) the Notice of Motion;

(b) the affidavit of Ms Borg;

(c) the Statement of Claim; and

(d) a copy of these Orders

by 10am on Monday 16 April.

(4) Costs reserved."

2 The application before me today, in the notice of motion filed on 17 April 2012, is for the continuation and extension of those orders until the disposal of these proceedings or further order, and an order pursuant to r 10.14 Uniform Civil Procedure Rules 2005 (NSW) for substituted service to be effected on the second defendant, by transmitting a copy of this order and the previous orders to an email address identified as being the email address of the second defendant and to a Facebook page identified as the Facebook page of the second defendant.

3 The notice of motion is supported by an affidavit sworn by Ms Stephanie Borg. In it she deposes to having made a series of attempts to serve the second defendant as follows:

(a) She forwarded an email to his management office to the attention of Ms Tiffany Stanley;

(b) She forwarded an email to Mr Darren Ayre who trades as VIP Entertainment & Agency Pty Limited and is the first defendant in these proceedings; and

(c) She instructed process servers to make attempts to serve the second defendant.

4 As the affidavit of Mr O'Dwyer shows, the process servers made numerous attempts to serve Mr Flo Rida in New South Wales and Victoria over the weekend and Monday period following my orders, by attending a number of social engagements at which he was appearing but, for various reasons, the process servers were prevented from getting sufficiently near him to serve him in the time-honoured fashion of providing a copy of the relevant documents.

5 I propose to continue the orders until further order and will make a further return date in the event that the second defendant proposes to appear and be represented to challenge the orders that I made.

6 How can I make such an order if the second defendant has, since the claim was filed, left the jurisdiction? In relation to my power to make such an order I have had regard to the judgment of Young CJ in Eq in Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet AG [2002] NSWSC 727, where his Honour considered the question of whether substituted service can ever be ordered where defendants leave the jurisdiction (as I apprehend Mr Flo Rida apparently now has after the claim is filed), other than in the exceptional case where someone has deliberately left the jurisdiction to avoid service. Young CJ in Eq notes authority in England such as Tucker (a bankrupt), Re; Ex parte Tucker [1987] 1 WLR 928, and other earlier cases, suggesting such an order cannot be made, and that these decisions have been referred to in Australia, although without either disapproval or what his Honour calls "ringing endorsement."

7 His Honour states at [8]:

"[8] The English system of having different endorsements for writs to be served inside and outside the country may mean that these cases are distinguishable. Modern Australian authority tends to suggest that if one has a dispute in which Australia is the appropriate forum, then the only real problem about making sure that service is effected is that there should not be any undue trespass into the comity between this country and other foreign nations. I considered those matters in an allied situation in ASIC v Sweeney (No 2) [2000] NSWSC 1211."

8 His Honour went on to note (at [9]) that if the court were to make an order for substituted service, there was every likelihood that, on the return date, there would be representation to enable argument on this jurisdictional issue to be heard. There would therefore be no prejudice, either to the applicants on the motion or any respondent who hoped, as Young CJ in Eq put it, "to get the best of both worlds by watching what is happening, but never entering the arena" (at [9]).

9 While the factual situation was slightly different in that case, in that it would appear that the person to be served had solicitors in the jurisdiction, who had refrained from filing an address for service, the second defendant would have the same opportunity here.

10 This brings me to the form of the application for substituted service. There have been prior examples of service being effected by Facebook. According to the Sydney Morning Herald ("Australian court serves documents via Facebook" (Nick Abraham, 12 December 2008)), Master Harper, in the ACT Supreme Court, ordered that default judgment could be served on defendants by notification on Facebook, in what the Herald called "first in Australia and perhaps the world". Unfortunately, this decision is not available on LexisNexis or Austlii, so I will have to take the Herald's word for it.

11 However, in the Federal Magistrates Court (Byrne v Howard [2010] FMCAFAM 509), Brown FM made an order for substituted service via Facebook and other electronic means including email ([17] to [28]). Such an order could conceivably cover Twitter accounts as well as Facebook accounts if that was necessary. Similar evidence was put before the learned magistrate in that case to the evidence that is before me today.

12 I pause to note that the nature of Facebook has been carefully explained in a number of judgments, including Facebook, Inc. v Callverse Pty Ltd [2008] AUDND 11 at [5], where Facebook was in fact the applicant. The international reach of Facebook is such that it is a matter of notorious fact.

13 Service by email is not controversial, and I note that orders for substituted service via email were made in Specsavers Pty Ltd v Buyinvite Pty Ltd [2012] FCA 230, Bellingen Shire Council v Lamir-Pike [2010] NSWLEC 195 and Asteron Life Limited v Franck [2009] NZHC 450 (noting an example of additional service on Facebook in Axe Market Gardens v Craig Axe (CIV: 2008-485-2676, High Court Wellington, 16 March 2009, Gendall A J), at [9]).

Orders

14 Accordingly, the orders that I will make are as follows:

(1) Grant leave to file in court an affidavit of Brent Remington Lean sworn 16 April 2012 and the affidavit of the process server, Mr Kryran O'Dwyer, sworn 16 April 2012.

(2) Note the defendants called outside Court 13D, John Maddison Tower, District Court of New South Wales, three times at 2.13pm - no response.

(3) The order made by this court on Friday 13 April 2012 be extended until the disposal of these proceedings, or further order.

(4) An order that substituted service be effected on the second defendant by:

(a) sending a copy of the Statement of Claim, Notice of Motion dated 13 April 2012, Affidavit of Stephanie Borg sworn 13 April 2012, Orders of Gibson DCJ dated 13 April 2012, together with a copy of this order, by email transmission to the recipients; and

(b) sending a message to the second defendant via the provision to do so appearing on his Facebook page (referred to in the Affidavit of Stephanie Borg sworn 17 April 2012) to the following effect:

"On Friday, 13 April 2012, Mothership Music Pty Ltd commenced proceedings against you in the District Court of New South Wales, Australia seeking damages for breach of contract in respect of your non-appearance on 22 October 2011 at the "Fat as Butter" Concert at Camp Shortland, The Foreshore Newcastle. In addition, the Court ordered that you do not diminish your assets in Australia below $80,000 and also made additional ancillary orders. These orders were renewed today together with an order that you may be served by the sending to you of this message by your Facebook page.Full details and copies of all relevant documents can be obtained by contacting Neville & Hourn Legal (Level 4, 162 Goulburn Street, Sydney NSW 2010 [phone] Ref: Stephanie Borg or by email at [e-mail]).If you do not file a defence to these proceedings within 28 days of service, the Court may enter judgment against you without any further notice to you."

(5) Costs of this application and those of 13 April 2012 be reserved.

(6) Matter stood over for further directions to Friday 15 June 2012 at 9:00am and direct the plaintiff to notify the defendant of the next return date in accordance with these orders.

******

Decision last updated: 21 April 2012