Opensoft Australia Pty Limited v Miller Street Pty Limited [2011] FCA 653 - service under s459G and 109X

The matter of Opensoft Australia Pty Limited v Miller Street Pty Limited [2011] FCA 653 (Opensoft) was an application involving a jurisdictional question before Jagot J in the Federal Court of Australia. Jagot J was asked to determine if service of an application was in accordance with s459G of the Corporations Act 2001 (Cth), which is a provision which allows a company to apply to set aside a creditor's statutory demand that has been served upon it.

By way of summary, on the last day for service of an application to set aside a demand served on it, the plaintiff company did the following (in chronological order):

• At around 4pm attempted to file the application and affidavit at the Federal Court Registry, which was closed.
• At around 4.05pm served, at the address for service in the demand (being the address of the business of the agent of the defendant) unsealed copies of the application and affidavit by attending at that address and hand delivering them.
• Filed, by way of e-lodgment with the Federal Court, the application and affidavit and obtained a sealed copy of this at around 5.20pm that day.
• Emailed the sealed copies to the email address of the agent listed in the address for service in the demand and CC'd the defendant. The email addresses were not set out in the demand and the plaintiff company obtained these from other sources.

The defendant gave evidence that the email was received by the agent that day, but the defendant never received the email which was alleged to have been CC'd to it. The Court found that service was not effected pursuant to s459G and the Court therefore could not hear the application.

I have included a case summary and discussion below.

Service by email

Recently a lot of my briefs have included documents which are served (by way of ordinary service) by or on my instructors by way of email. The Supreme Court (General Civil Procedure) Rules 2005 (the VSC Rules) do not prescribe email as a recognised mode of ordinary service

Ordinary service under the VSC Rules is effected as follows (see Rule 6.07):

(a) by leaving the document at the proper address of the person to be served on any day on which the Prothonotary's office is open;

(b) by posting the document to the person to be served at the person's proper address;

(c) where provision is made by or under any Act for service of a document on a corporation, by serving the document in accordance with that provision;

(d) where the solicitor for a party has facilities for the reception of documents in an exchange box in a document exchange, by leaving the document in that exchange box or in another exchange box for transmission to that exchange box; or

(e) where the solicitor for a party has facilities for the reception by telephone transmission of a facsimile of a document, by telephone transmission of the document in accordance with paragraph (2.1).

So how is service by email acceptable when it is not prescribed?

Service in the Magistrates' Court - 'place of residence'

One of the peculiarities of the Magistrates' Court General Civil Procedure Rules 2010 which remains unchanged after this year's substantial amendment is Rule 6.03(1)(b) (previously Rule 5.03(1)(b)), which permits service in the following circumstance:

by delivering a copy of the document to the place of residence of the person to be served to a person apparently above the age of 16 years who resides at that place but when the place of residence is a hotel, boarding house or similar establishment, to some person apparently above that age who is apparently in charge of the establishment or engaged in the office of the establishment...

As the learned author notes in Williams Civil Procedure (at [MC 5.03.0]), this mode of service is peculiar to the Magistrates' Court of Victoria and service in this way would not be valid in the Supreme or County Courts of Victoria unless authorised by an order for substituted service.

Of course, the main problem with this provision is what happens when a person disputes that service occurred at his or her place of residence. For instance, if a defendant is interstate for some time and process is served on a person living at the defendant's home address, does this amount to effective service? What is a person's 'place of residence' for the purpose of Rule 6.03(1)(b)?

Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186

In the matter of Anton Fabrications (NSW) Pty Ltd - Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186 (Anton Fabrications) was an hearing for the winding up of a company. The main issue was whether the creditor properly served a creditor's statutory demand (the demand).

In Anton Fabrications, a creditor served a demand on a company in respect of a loan for $500,000 said to be made by the creditor to the company. A process server purportedly served the demand in a sealed envelope addressed to the company by leaving it in the letterbox situated inside the boundaries of a residential property which was nominated as the company's registered office.

The time of service on companies - s109X and 'deemed' service

When a company owes a debt which is over $2,000, the creditor has the option of serving on the company a statutory demand for payment of that debt (demand) or suing the company for the debt. If the company fails apply to the Court to set aside the demand (because it disputes the debt) or pay the demand within 21 days of service of the demand, then the creditor may apply to wind up that company under the Corporations Act 2001 (Cth).

Similarly, when a company is sued in Court by a creditor for a debt, the company usually has a fixed time period from service of the process in which to file an appearance or a defence in response to the originating process (process) served upon it (e.g. 10 days to file an appearance, 21 days to file a defence). If the company does not take action within the specified time, then the creditor can obtain judgment by applying to the Court.

So what is the position when a creditor believes that a demand or process was delivered a day or more earlier than the company says it was actually received? What if a director comes back from leave three weeks after the demand or process was actually delivered to the registered office? What happens when a company has moved its registered office and receives the demand or process much later than when it was posted because of a diversion to another address or a PO Box? In this situation, the company may think it has a certain time from receipt of the demand or process to respond, but the actual time to respond may be much less than that.