An appeal has been lodged in response to the Supreme Court of Western Australia’s decision in Bass Metals Ltd v Liongold Corp Ltd [2013] WASC 168, where the Court considered the relationship between express terms contained in a contract, Service and Execution of Process Act 1992 (Cth) (SEPA) and Rules of the Supreme Court of Western Australia 1971 (WA) (Rules) to determine the ability of parties to agree requirements for the service of documents commencing proceedings.

Background

Liongold Corp Ltd (Liongold) is a company incorporated in accordance with the laws of Bermuda, with no business (or address) in Australia. Liongold and Bass Metals Ltd (Bass Metals) entered into a share sale agreement in July 2012, whereby Bass Metals would sell all of the shares in a separate company to Liongold (Agreement).

In September 2012, Matthew Gill was appointed chief operations officer of Liongold, with Liongold paying Castlemaine Goldfields Pty Ltd (Castlemaine) for his services. This position did not give him authority to enter into transaction on Liongold’s behalf. At the time, Mr Gill was also the managing director of Castlemaine, which has an office located in Victoria.

Bass Metals alleges that Liongold repudiated the Agreement and as a result, terminated the Agreement. The Agreement provided that it was governed by the laws of Western Australia and that the parties submit to the non-exclusive jurisdiction of the courts of Western Australia. Additionally, the Agreement stated that Liongold appoints an Australian law firm as its agent to receive service of documents and that it would undertake to use reasonable endeavours to maintain the appointment for 24 months.

Commencement of proceedings

Bass Metals commenced proceedings in October 2012 and delivered a copy of the writ of summons (endorsed with a statement of claim) and SEPA notice to:

  • the offices of Castlemaine in Victoria;
  • the offices of the law firm specified in the Agreement; and
  • Mr Gill.

Application to set aside service and the Court’s decision

Liongold entered a conditional appearance and filed an application for orders setting aside the service of the writ. Liongold submitted that SEPA does not provide for service by way of agreement and that it applies to the exclusion of the Rules with respect to service in another State.

Sanderson M dismissed Liongold’s application1, concluding that:

  • it is open to parties to agree to a regime for service different to those provided for in the Rules (provided the Rules do not expressly prohibit such service);
  • the relevant provisions of the Agreement complied with O 9 r 3 of the Rules;
  • compliance with the terms of the Agreement (which trigger the provision contained in O 9 r 3 of the Rules) was all that was required for there to be deemed service; and
  • it was immaterial that the lawyers specified in the Agreement informed the solicitors for Bass Metals that they did not have instructions to receive service.

Key aspects of decision and the appeal

The judgment and appeal will impact those who have already entered into agreements, or are negotiating agreements which contain provisions addressing the service of documents used to commence proceedings. Such provisions often provide a party with alternative means to effect service without necessarily having to comply with process set out in the relevant court rules. The failure to achieve effective service presents a challenge to those seeking progress their claim with minimal delay. The judgment and appeal also have the ability to impact those nominating agents for service, particularly where the agent advises that they do not have instructions for service.

A full copy of the decision can be viewed here. The matter is currently on appeal.