Exportrade Corporation v Irie Blue New Zealand Ltd

• Jurisdiction: New Zealand
• Judge: White J
• Judgment Date: 19 December 2013
• Neutral Citation: [2013] NZCA 675
• Docket Number: CA784/2012
• Court: Court of Appeal
• Date: 19 December 2013

Between

Exportrade Corporation

Appellant

and

Irie Blue New Zealand Limited

First Respondent

And

Edith Shelley Rozanne Gribble Aka Rozanne Gribble

Second Respondent

And

Scott Geoffrey Gribble Aka Scott Gribble

Third Respondent

[2013] NZCA 675

Court:

Ellen France, White and Heath JJ

CA784/2012

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against granting of a stay of proceedings by the High Court (“HC”) on grounds that appellant had failed to obtain leave to serve proceedings overseas and that substituted service could not be ordered in respect of an overseas defendant — HC had previously ordered substituted service on third respondent — HC ruled this order was a nullity — proceeding had been filed in 2008 and was in respect of contractual and negligence causes of action and involved the application of laws in Florida and Barbados — whether the Court could order substituted service on a defendant not present in NZ when the proceeding was commenced — whether Barbados was the appropriate forum — whether there were special circumstances for trial in NZ (including time bars in respect of contract, length of time had been before NZ courts etc).

Counsel:

G J Thwaite for Appellant

H Fulton for Respondent

• A The appeal is allowed.

• B Order that the High Court has jurisdiction over the third respondent in respect of the appellant's proceeding in New Zealand.

• C The first and third respondents are to pay costs to the appellant for a standard appeal on a band A basis together with usual disbursements.

• D Any costs orders following the High Court judgment [2012] NZHC 2870 are set aside. Costs are to be reconsidered in that Court in light of this judgment.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by White J)

Table of Contents

	Para No
Introduction	[1]
Substituted service on Mr Gribble	[5]
High Court decision	[6]
Substituted service	[7]
Service out of New Zealand	[9]
Can the Court order substituted service on a defendant not present in New Zealand when the proceeding was commenced?	[13]
Jurisdiction in respect of Mr Gribble	[21]
The appropriate forum	[33]
Barbados the appropriate forum?	[44]
Special circumstances why trial in New Zealand?	[53]
Result	[58]
Postscript	[62]

Introduction

1 The appellant, Exportrade Corp (Exportrade), a company incorporated in Florida, appeals against the decision of Toogood J in the High Court at Auckland granting a stay of its proceeding against the respondents on the grounds that Toogood J erred in deciding that: 1

• (a) a protest by the respondents to the jurisdiction of the New Zealand High Court with regard to four of Exportrade's five pleaded causes of action remained on foot;

• (b) the failure of Exportrade to obtain leave to serve the second cause of action (breach of contract) on the second respondent, Mrs Gribble, overseas was fatal to that cause of action against her;

• (c) the High Court had no jurisdiction to order substituted service of the proceeding on the third respondent, Mr Gribble (and accordingly the Court had no jurisdiction over him in respect of Exportrade's claims); and

• (d) the Supreme Court of Barbados rather than the High Court in New Zealand was the appropriate forum for the trial of the proceeding.

2 The issues were determined by Toogood J in the context of a 2008 proceeding in New Zealand by Exportrade claiming US$288,718.50, interest and costs based originally on three causes of action, but subsequently in an amended statement of claim on five, namely: enforcement of a Florida judgment (against all respondents); breach of contract (against all respondents); acknowledgment of debt (against Mr Gribble alone); negligence for breach of the Barbados Companies Act (against Mr and Mrs Gribble); and breach of statutory duty under the Barbados Companies Act (against Mr and Mrs Gribble).

3 Exportrade's proceeding has been the subject of extensive procedural steps and unfortunate delays. 2 The relevant procedural steps and decisions of the High Court are summarised by Toogood J in his decision. 3 For present purposes, it is sufficient for us to note that:

• (a) There is no dispute that the first respondent, Irie Blue New Zealand Ltd (Irie Blue), a company incorporated and registered in New Zealand, has been properly served with the proceeding in accordance with the requirements of the Companies Act 1993. 4

• (b) A decision by Duffy J determining that the judgment obtained by Exportrade against the three respondents in Florida could not be

  enforced in New Zealand means that, in the absence of any appeal against her decision, the first cause of action is no longer relevant. 5

• (c) The issue of service of Mrs Gribble overseas without leave is presently moot as she has subsequently died and, in the absence of the appointment of any personal representative for her and her replacement as a respondent, no judgment could be obtained or enforced against her estate.

4 While both counsel made submissions about the jurisdiction of the High Court to deal with the issues in the context of two separate protests to jurisdiction, both accepted that the principal issues for determination by this Court relate to Toogood J's decisions on the invalidity of the order for substituted service on Mr Gribble (and consequent lack of jurisdiction in respect of Mr Gribble) and the appropriateness of the courts of Barbados as the forum for the trial. We therefore address these two issues.

Substituted service on Mr Gribble

5 For Exportrade, Mr Thwaite submits that Toogood J erred in relying on the decision of this Court in Von Wyl v Engeler 6 and that the substituted service on Mr Gribble was valid. For Mr Gribble, Mr Fulton supports the decision of Toogood J.

High Court decision

6 Toogood J found that, although Mr Gribble visited New Zealand from time to time, it was more likely than not that he was not in New Zealand at the time the proceeding was commenced. Toogood J relied on this Court's decision in Von Wyl v Engeler for the propositions that there was no jurisdiction for the High Court to

make an order for substituted service on a defendant who was not present in New Zealand when the proceeding was commenced and an order made in those circumstances was a nullity. 7 In light of his factual findings, the substituted service was accordingly a nullity

Substituted service

7 Substituted service is provided for in r 6.8 of the current High Court Rules 2008:

6.8 Substituted service

If reasonable efforts have been made to serve a document by a method permitted or required under these rules, and either the document has come to the knowledge of the person to be served or it cannot be promptly served, the court may—

• (a) direct—

  • (i) that instead of service, specified steps be taken that are likely to bring the document to the notice of the person to be served; and

  • (ii) that the document be treated as served on the happening of a specified event, or on the expiry of a specified time:

• (b) when steps have been taken for the purpose of bringing, or which have a tendency to bring, the document to the notice of the person on whom it is required to be served, direct that the document be treated as served on that person on a specified date:

• (c) subject to any conditions that the court thinks just to impose, dispense with service of a document on a person and give to the party by whom the document is required to be served leave to proceed as if the document had been served.

8 Under the High Court Rules 1985, r 222 provided that the ordinary rules for service in New Zealand (including r 211, which provided for substituted service) were to apply to service out of New Zealand. In the present case the order for substituted service was made on 24 September 2009 under the 2008 Rules, which came into force on 1 February 2009. 8 There is no provision equivalent to r 222 in the new Rules.

Service out of New Zealand

9 Generally speaking, substituted service within a jurisdiction cannot be made against a person outside the jurisdiction. 9 This follows from the principle that the jurisdiction of domestic courts is essentially territorial in nature. Where the legislature permits service of proceedings in overseas jurisdictions, it is an exception to the principle of territoriality. 10 In that case, where there is a power of service outside the jurisdiction, courts have ordered substituted service in appropriate cases. 11

10 Rules 6.27 and 6.28 of the High Court Rules 2008 provide for service out of the jurisdiction where:

• (a) the proceeding is one notice of which can be issued without leave in terms of r 6.27(2)(b); or

• (b) the plaintiff has obtained leave to serve the proceeding under r 6.28.

11 Rule 6.27 provides for “without leave” service of an “originating document” overseas where at least one of a number of jurisdictional gateways in r 6.27(2) is engaged:

6.27 When allowed without leave

• (1) This rule applies to a document that initiates a civil proceeding, or is a notice issued under subpart 4 of Part 4 (third, fourth and subsequent parties), which under these rules is required to be served but cannot be served in New Zealand under these rules (an originating document).

• (2) An originating document may be served out of New Zealand without leave in the following cases:

  [sub-rules (a)–(m)]

• …

12 A court may grant an application to serve proceedings out of New Zealand under r 6.28(5) where:

• (a) the claim has a real and substantial connection with New Zealand; and

• (b) there is a serious issue to be tried on the merits; and

• (c) New Zealand is the appropriate forum for the trial; and

• (d) any other relevant circumstances support an assumption of jurisdiction.

Can the Court order substituted service on a defendant not present in New Zealand when the proceeding was...