Opensoft Australia Pty Limited v Miller Street Pty Limited

Federal Court of Australia|2011-06-03|Before: Mr J, Jagot J

BACKGROUND 1 This proceeding concerns an application under s 459G of the Corporations Act 2001 (Cth) (the Corporations Act) to set aside a creditor's statutory demand for payment of debt. However, a preliminary jurisdictional question has arisen as to whether the requirements of s 459G in relation to service within the prescribed time period have been satisfied. 2 I have been assisted by the written and oral submissions of the parties. These disclose that, although there is a considerable amount of affidavit evidence before me in respect of facts relevant to the jurisdictional issue, there is no real dispute about what occurred in this case. 3 In summary, it is common ground that a creditor's statutory demand for payment of debt was made by the defendant, Miller Street Pty Limited (Miller Street), on the plaintiff, Opensoft Australia Pty Limited, on or about 15 April 2011. In accordance with s 459G(2) of the Corporations Act, the last date for service of any application to set aside the statutory demand was 11 May 2011. On that day, an agent of the plaintiff's solicitors, Ms Ashley Placencio, attended the Registry of the Federal Court of Australia with the intention of filing: an originating process seeking orders to set aside the statutory demand; an affidavit in support (together the documents); and a folder of documents constituting an exhibit to that affidavit (Exhibit NGB-1). 4 According to her evidence, Ms Placencio arrived at the Registry at some time between 3.59 and 4.00 p.m. However, she found the Registry closed. Ms Placencio informed the solicitor who had instructed her to attend the Registry to that effect. 5 On learning that the Registry was closed and that the documents could not therefore be filed in the ordinary course, Christopher Price, a solicitor employed by the plaintiff's solicitors in this proceeding, caused the documents - that is, the originating process and the affidavit in support, but excluding Exhibit NGB-1 - to be filed through the Court's eLodgement facility. According to Mr Price's evidence his secretary, Ms Selena Lord, acting under his instructions, printed a copy of the Court's eLodgement record. That eLodgement record identifies the documents as the originating process and affidavit in support, and notes the lodgement date as 11 May 2011 at 4:05:36 p.m. AEST. 6 The evidence also discloses that, after 4.05 p.m., Mr Price took copies of the documents and Exhibit NGB-1, all contained in a single lever-arch folder along with a covering letter, and walked to one of two addresses for service of TW Agency at 251 Elizabeth Street, Sydney. The significance of TW Agency is that the form of creditor's statutory demand for payment of debt served by Miller Street on the plaintiff - as required by the Corporations Act, the regulations thereunder and Form 509H - contained para 6 in the following form: The address of the Creditor for service of copies of any application and affidavit is TW Agency, 251 Elizabeth Street, Sydney, NSW, 2000 OR 1323 Bourke Road Kew, Victoria, 3101. 7 It is apparent from the terms of para 5 of the statutory demand that the reference to "any application and affidavit" is a reference to an application under s 459G of the Corporations Act to set aside the statutory demand. 8 At TW Agency, Mr Price spoke to a man named Robert Daoud, who was standing at the front reception desk. Mr Price handed Mr Daoud the lever-arch folder referred to above. As the documents contained in the folder were the same documents Ms Placencio had sought to file with the Registry earlier in the day, and as filing had not occurred, the copies handed to Mr Daoud did not bear the seal of the Court, a proceeding number as allocated by the Court, or a return date for the application. In short, they were copies of the documents in an unfiled form. 9 Mr Price and Mr Daoud had a conversation in which Mr Price said to Mr Dauod, "This is an originating process for service on Miller Street Pty Limited." Mr Price also explained that the address of TW Agency was shown as the address for service of any application to set aside the statutory demand. Mr Price, insofar as relevant, notes in his evidence that during the course of the conversation with Mr Daoud he advised to the following effect: These are unsealed copies of the Originating Process and supporting Affidavit. We filed them in the Federal Court electronically just after 4 this afternoon, but we're still waiting for the court's eFiling people to email us the sealed copies. I wanted to make sure I served them before you close today, because there is a strict 21-day deadline. As soon as I receive the sealed copies from the court I'll serve them on you. 10 Mr Daoud replied, "Okay. Sure." 11 Just before the end of the conversation, Mr Price said to Mr Daoud words to this effect, "Just to be clear, I am serving the Originating Service for Miller Street; will you take it?" Mr Daoud replied to the effect, "Yes." 12 Mr Daoud then said to the receptionist, "Will you look after this and make sure they get the documents?" 13 Mr Price then asked, "What's your name?" Mr Daoud replied, "Robert Daoud." 14 Mr Price then said words to this effect, "Maybe I should get some sort of written acknowledgement you received the documents, like a receipt?" 15 Mr Daoud then caused the receptionist to hand to Mr Price a TW Agency business card, on which she wrote the name of Robert Daoud and the date 11 May 2011. Mr Price left the offices of TW Agency at about 4.45 p.m. 16 Mr Price returned to his office and, some minutes after 5.08 p.m., received on his computer screen an email from stating that the lodgement identified by transaction number 17268 had been accepted and processed and that he could access the lodgement by visiting a particular web address. Mr Price accessed the web address and printed out the documents, now marked with the Court's seal, the proceeding number, and the return date. 17 Mr Price saved these documents onto his computer at about 5.20 p.m. on 11 May 2011. He then created an email addressed to Ian Tayles, the director of Miller Street, using an email address shown in an email from Mr Tayles to Simon McCann which forms part of Exhibit NGB-1. Mr Price's email also included, in the Cc section, TW Agency's email address () as shown on the TW Agency card that Mr Price had been handed earlier. Mr Price sent this email at 5.26 p.m. on 11 May 2011. 18 The covering email to Mr Tayles (Cc: TW Agency) says: Please find attached copies of an Originating Process and affidavit of Neville Gordon Bradbury filed in the Federal Court of Australia today. Unsealed copies of these documents, together with a copy of Exhibit NGB-1 to the Affidavit of Neville Gordon Bradbury, were served on your company at the premises of TW Agency, 251 Elizabeth Street, Sydney, this afternoon. 19 Insofar as Mr Daoud is concerned, there is evidence that Mr Daoud received the email from Mr Price addressed to Mr Tayles and copied to TW Agency and that, shortly after receipt by Mr Daoud's computer, Mr Daoud opened that email, read it, and saw the documents stamped by the Federal Court attached to it. Mr Daoud also saw that the email was addressed to Mr Tayles. 20 Insofar as Mr Tayles is concerned, he was informed by TW Agency on 11 May 2011 that they had received a letter from Hicksons Lawyers enclosing (unfiled) copies of the originating process, the affidavit in support, and Exhibit NGB-1. Mr Tayles himself ultimately received these documents by express post. In his affidavit, Mr Tales notes that the originating process he received was dated 11 May 2011 and signed by the solicitors for the plaintiff, but did not bear the seal of the Court, contain a proceeding number, or include a return date or Court address. Mr Tayles did not receive the email Mr Price sent him on the afternoon of 11 May 2011, and, according to his affidavit, indicated in a subsequent telephone conversation with Mr Price that he had not used that email address for some time. As a result, Mr Tayles' evidence is that he never received sealed copies of the documents.

RELEVANT PROVISIONS 21 Section 459E of the Corporations Act enables a statutory demand to be served on a company. Section 459F(2) provides that the period for compliance with a statutory demand is either: if the company applies in accordance with s 459G for an order setting aside the demand - dates as specified in s 459F(2)(a); or otherwise 21 days after the demand is served. 22 Section 459G is in the following terms: (1) A company may apply to the Court for an order setting aside a statutory demand served on the company. (2) An application may only be made within 21 days after the demand is so served. (3) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company. 23 It is also relevant to note that s 109X of the Corporations Act provides for methods by which a document may be served on a company, although it is plain from s 109X(6) that these methods of service are not exhaustive of the ways in which service can be achieved. 24 Further, r 2.2 of the Federal Court (Corporations) Rules 2000 provides that a person must make an application required or permitted by the Corporations Act to be made to the Court, relevantly in this case, by "filing an originating process". Under r 2.3, on receiving an originating process, the Registrar must fix a time, date and place for hearing and endorse those details on the originating process, and may seal a sufficient number of copies for service and proof of service. Rule 2.7 of the Federal Court (Corporations) Rules provides that as soon as practicable after filing an originating process, and in any case at least five days before the date fixed for hearing, the plaintiff must serve a copy of the originating process and any supporting affidavit on each defendant to the proceeding. 25 The Federal Court Rules (the Rules) also make provision for eLodgement. Under O 1 r 5A(1)(e), a document that is required or permitted by the Rules to be filed or lodged may be "sent by electronic communication to a Registry in accordance with rule 5AC." Under r 5A(2)(b), however, an electronic communication may not be sent if the document (including any attachment) is more than 100 pages long. In the present case, there is no question that the documents eLodged by the plaintiff were less than 100 pages long. 26 Order 1 r 5A(7) provides that a document sent by (relevantly) electronic communication is, if accepted, taken to have been filed: (a) if the whole document is received by 4.30 p.m. on a day when the Registry is open for business - on that day; and (b) otherwise - on the next day when the Registry is open for business. 27 As noted above, there is evidence in this case that the documents forwarded by electronic communication to the Court's eLodgement filing site were accepted at 4:05:36 p.m. on 11 May 2011. 28 Under O 1 r 5AC(5)(a), if a document is required to be signed or stamped and is accepted at the Registry, the Registrar must then, for a document that under the Rules must be endorsed with a date for hearing, insert a notice of filing and hearing in accordance with a particular form. Further, O 46 r 4 provides that the stamp of the Court must be affixed to all process filed in the Court and orders entered, and to all such other documents as the Court directs. Also relevant is O 46 r 7A, which provides that a Registrar may refuse to accept a document submitted for filing (including any document that, if accepted for filing, would become an originating document), or refuse to issue a document, in the circumstances specified in that rule. 29 It appears from the operation of all these provisions that the originating process and affidavit in support in this matter were accepted for filing by a Registrar of the Court at 4.05 p.m. on 11 May 2011, and are therefore taken to have been filed on that date. 30 The issue, however, is whether the requirement of service set out in s 459G(3)(b) of the Corporations Act has been satisfied in circumstances where: - (i) the statutory demand by Miller Street specified in para 6, as required, an address for service of copies of any application and affidavit to have the demand set aside, (ii) one address so specified in New South Wales was TW Agency, 251 Elizabeth Street, Sydney, New South Wales 2000, (iii) there was delivered to TW Agency at that address copies of the originating process and affidavit in support in the form in which they were lodged for filing, but which did not bear the Court's seal, a proceeding number, or a return date, (iv) on 11 May 2011 there was, against the background of the communications between Mr Price and Mr Daoud described above and set out in their affidavits, an email sent to Mr Daoud attaching copies of the originating process and affidavit in support as filed (that is, bearing the Court seal, proceeding number and return date), and (v) Mr Daoud, on what he described as his computer, opened the attachments and saw them, and also saw that the email had been sent to an email address for Mr Tayles, but (vi) Mr Tayles did not receive that email or its attachments.

Authorities 31 As the plaintiff acknowledged, there is a long line of authority which stands for the proposition that the requirement of s 459G(3)(b) of the Corporations Act is for a copy of the application and supporting affidavit to be served as filed; or, otherwise put, that copies of the originating process and supporting affidavit as sealed by the Court, bearing a proceeding number and a return date, are required to be served by the terms of s 459G(3)(b). I was taken to a series of cases to this effect, each of which, in substance, the plaintiff said was wrongly decided for the reasons set out below. It is appropriate that I briefly record the effect of these earlier decisions. 32 In Benonyx Pty Ltd v Fetrona Pty Ltd [1999] NSWSC 1181 (Benonyx), Santow J in the Supreme Court of New South Wales dealt with a matter in which the application as served on the defendant omitted the return date. Santow J held that this was not service in accordance with s 459G(3)(b), observing (at [6]): … how can the party who is served have received proper notice of the proceedings for which attendance is required within the twenty-one days when that party is not told of the important fact of the return date of the application to set aside the statutory demand until after the twenty-one days[?] 33 In Chelring Pty Ltd v Coombs [2000] WASC 60, Master Sanderson in the Supreme Court of Western Australia dealt with a matter in which the application as served did not have the action number on the top right-hand corner of the document, did not have the date and time at which the application would be heard, and did not bear the seal of the Supreme Court. Master Sanderson held that the application had not been served in accordance with the requirements of s 459G(3)(b). 34 In LJAW Enterprises Pty Ltd v RJK Enterprises Pty Ltd [2004] QSC 134, Holmes J of the Supreme Court of Queensland dealt with a matter in which an unsealed copy of an application bearing no return date or file number was faxed on the last day for service. It was held that this was not effective service for the purposes of s 459G(3)(b). 35 In Cooloola Dairys Pty Ltd v National Foods Milk Ltd [2005] 1 Qd R 12; [2004] QSC 308, Chesterman J dealt with a matter in which the application as served did not contain an application number, the date on which the application would be heard, or the seal of the Court. Consistent with the earlier decisions, which Chesterman J reviewed, it was said (at [34]) that those decisions: … express… a justifiable exposition of s 459G. The copy of the application which the section requires to be served must show that an application has been filed and when the respondent is required to attend and answer it. It will not perform these functions if it is not sealed and does not show the action number allocated by the court. The inclusion of the return date is obviously necessary. 36 Accordingly, there was no effective service in that case. 37 In Accommodation West Pty Ltd v Innis [2009] WASC 337, the application as served did bear an action number, the date of filing and the signature of the principal Registrar. The only thing it lacked was a return date. Master Sanderson, however, reviewed the earlier authorities and (at [7]) said that: I think all of these cases indicate there must be strict compliance with the requirements of s 459G. In this case, there has not been strict compliance with the requirements of the section and the application to set aside the demand is not properly on foot. 38 Finally, the Supreme Court of Western Australia (Appeal) dealt with the same issue in Robowash Pty Ltd v Robowash Finance Pty Ltd (2000) 158 FLR 338; [2000] WASCA 409. In that case, the only deficiency in the documents as served was that four pages had been omitted from an annexure to the affidavit in support. The Court held that, as what was required to be served was a copy of the supporting affidavit (including annexures), there had not been compliance with the requirements of s 459G(3)(b).

Plaintiff's submissions 39 The plaintiff's argument in this case is that, first, these decisions do not take account (for obvious reasons) of the relationship between the Corporations Act and the Federal Court (Corporations) Rules, which contain their own provisions for service as set out above. Secondly, the plaintiff contends that the purpose underlying s 459G is satisfied on a construction which recognises that the service of an application and supporting affidavit as filed is a matter regulated by the rules of the relevant Court, whereas the service of an application and supporting affidavit whether or not as filed is regulated by s 459G(3)(b) of the Corporations Act. In this regard, the plaintiff notes that s 459G(3)(b) simply requires a copy of the application and supporting affidavit to be "served on the person who served the demand on the company". Section 459G contains no reference to (for example) a requirement that the application and supporting affidavit be in the form filed with the Court. For these reasons, the plaintiff submits that I should not follow the series of decisions which, as outlined above, clearly establishes that the requirement of s 459G(3)(b) is for service of the application and affidavit as filed with the Court.

Discussion 40 I am not persuaded by these submissions either as a matter of comity, in the sense that comity requires me to apply the same approach set out in the authorities unless I am convinced that they are plainly wrong (which I am not); as a matter of construction of the ordinary language of s 459G; or, indeed, as a matter of the purpose of the relevant provisions. 41 The requirements of s 459G are clear. Section 459G(1) enables an application to be made to a Court to set aside a statutory demand. An application is made to a Court once it has been accepted by that Court. Under s 459G(2), an application may only be made within the 21-day period specified. Section 459G(3) also specifies that an application is made in accordance with s 459G(1) only if within the same 21 days two things occur: namely, an affidavit supporting the application is filed with the Court; and a copy of the application and of the supporting affidavit are served on the person who served the demand on the company. On the ordinary meaning of these provisions, it is difficult to see how the application and supporting affidavit can be other than the application as filed and the supporting affidavit as filed. 42 As a matter of purpose, moreover, compliance with s 459G, as the authorities make clear, requires that the documents as served inform the recipient that the proceeding has in fact been commenced through acceptance by the Court of the originating process. They must also inform the recipient of what Santow J described in Benonyx as the "important fact" of the return date for the application. 43 Accordingly, I decline to depart from the authorities to which I have referred above. 44 The implication for the present case is that Mr Price's delivery of the folder of documents to TW Agency - which documents did not bear a proceeding number, the seal of the Court, or the return date of the application - did not amount to service as required by s 459G(3)(b).

Authorities 45 There remains the issue of the email Mr Price subsequently sent to Mr Tayles (who did not receive it) and to Mr Daoud (who did). The plaintiff's position is that the circumstances surrounding the sending and receipt of this email were sufficient to effect service in the sense that they brought to the actual attention of TW Agency, through its principal, Mr Daoud, the documents as sealed, complete with a proceeding number and a return date. According to the plaintiff, there is no need to determine whether there was express or implied authority on the part of TW agency for the acceptance of service by email because the authorities, taken together, disclose that the applicable test is simply whether the documents to be served have been adequately brought to the attention of the relevant recipient. According to the plaintiff, I should be satisfied that this test has been satisfied in the circumstances of this case. 46 I have been assisted by the parties again providing me with authorities identified as relevant. In Players Pty Ltd v Interior Projects Pty Ltd (1996) 133 FLR 265, Lander J observed (at 269) that the obligation under s 459G is "to serve the creditor effectively at the address for service indicated in the Form 509H notice." 47 In Woodgate v Garard Pty Ltd (2010) 239 FLR 339; [2010] NSWSC 508, Palmer J carried out a detailed analysis of the capacity for service to be effected for the purposes of s 459G and, in particular, of the decision in Howship Holdings Pty Ltd v Leslie (1996) 42 NSWLR 542. In that case, it was explained by Young J that: Section 459G itself does not deal with what is service. The ordinary meaning of "service" is personal service, and personal service merely means that the document in question must come to the notice of the person for whom it is intended. The means by which that person obtains the document are usually immaterial… If this were not so, one would get the absurd situation referred to by McInerney J in Pino v Prosser [[1967] VR 835] (at 837), that the conclusion would be one which is: "…remarkable to the point of seeming absurdity, in that the defendant who, on his own affidavit admits that he received the writ… should be held not to have been served." 48 Palmer J described this pragmatic approach (at [42]) as the "effective informal service rule", and noted that it had been applied in many subsequent decisions. His Honour then summarised the effect of those decisions at [44], and said (relevantly) that the "prescribed modes of service" - that is, the modes prescribed by s 109X of the Corporations Act and, for that matter, the equivalent provisions of the Acts Interpretation Act 1901 (Cth) -were not exclusive of other methods of service. According to Palmer J, whether good service has been effected: …depends upon whether the serving party can prove to the Court's satisfaction that the document actually came to the attention of an officer of the company who was either expressly or implicitly authorised by the company to deal directly and responsibly with the document, or documents of that nature… 49 His Honour went on to note (citations omitted) that: there is no special exception to the "effective informal service rule" in the case of service by email or facsimile - the question remains whether that mode of service actually brought the document to the attention of a responsible officer. 50 I was also referred to the decision of Austin J in Austar Finance Group Pty Ltd v Campbell (2007) 215 FLR 464; [2007] NSWSC 1493, in which his Honour dealt in detail with the electronic transmission of documents. His Honour said at [49] that, in his view: …electronic transmission, whether by facsimile or e-mail, cannot constitute service for the purposes of s 459G(3) unless either: it is shown that the documents electronically transmitted had actually been received in a readable form by the person to be served; or the case falls within one of the special exceptions permitted by rules of court. 51 Austin J then reviewed decisions relating to facsimile transmission and (at [55]) said: In my opinion the reasoning in these cases also applies to e-mail transmission, provided there is evidence the document came to the notice of the person to be served, and the document was in readable form.

Plaintiff's submissions 52 According to the plaintiff in the present case, TW Agency was noted as the address for service of any application and affidavit to set aside the creditor's statutory demand served by Miller Street. In circumstances where Mr Daoud, the principal of TW Agency, received by electronic transmission the documents as filed with the Court, opened the email attachment containing the documents, and saw that the email was also addressed to Mr Tayles, the plaintiff contends that I should find that sufficient notice was given for service to be effected. In this regard, the plaintiff also relies on a copy of a print from a website for TW Agency which sets out the same email address to which the documents were sent by Mr Price. The website also sets out a DX number, a telephone number and a facsimile address.

Discussion 53 The difficulty with the plaintiff's submissions, as the defendant has pointed out, is that s 459G(3)(b) of the Corporations Act requires a copy of the application and supporting affidavit to be "served on the person who served the demand on the company". The person who served the demand on the plaintiff in this case is the defendant, Miller Street, of which Mr Tayles is the sole director. 54 As noted above, the statutory demand specified that the address of the creditor for service of copies of any application and affidavit was TW Agency, 251 Elizabeth Street, Sydney, New South Wales 2000. The creditor did not specify any electronic address for service. Furthermore, this is not a case in which Mr Tayles as director of the creditor received himself an email attaching copies of the documents as filed. Indeed, on the evidence available, Mr Tayles has never received copies of the documents as filed. As the defendant submitted, in the context of this statutory scheme, it is not the place of TW Agency or Mr Daoud as its principal to accept service by means other than those specified in the statutory demand itself. Even if TW Agency were authorised to do so, I do not see how the dealings between Mr Daoud and Mr Price could be seen to constitute any form of acceptance of service by email for the purposes of s 459G(3)(b) of the Corporations Act. 55 The situation might have been different if Mr Tayles himself had received an email at the address for service specified in the statutory demand, opened the email, and read the attachments - thereby having brought to his actual attention the application and supporting affidavit as filed. However, that is not what occurred. Despite the efforts to which Mr Price went on 11 May 2011, I cannot see how what was done constituted compliance with s 459G(3)(b). I do not consider that anything in the relationship between the Corporations Act and the Federal Court (Corporations) Rules can lead to a different conclusion.

CONCLUSION 56 It follows that the application and supporting affidavit were not served on Miller Street as required by s 459G(3)(b) of the Corporations Act within the required 21-day period. Accordingly, I conclude that there is no valid application before the Court to set aside the statutory demand. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Corporations Act 2001(Cth)ss 109X, 459E, 459F, 459G

At a glance

Court

Decision date

Before

Source

Judgment (9 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (13)

Cited By (9)