Plaintiff (Applicant) v Defendant (Respondent)

1 Kornucopia Pty Ltd seeks leave to appeal orders, including a possession order for a Docklands apartment, made by the Victorian Civil and Administrative Tribunal ('VCAT') on 26 March 2019. Kornucopia was the tenant of a Collins Street, Docklands apartment under a tenancy agreement with the landlord Chunhua Li, who is the defendant.

2 The VCAT orders required Kornucopia to leave the rented premises by 26 March 2019, to pay the landlord rent owed of $11,178.54 and directed that on the termination of the tenancy agreement, the Residential Tenancies Bond Authority pay the bond to the landlord in part satisfaction of rent owed. Orders were also made to enable the obtaining of a warrant of possession.

3 Kornucopia leases many apartments and subleases or licences them to short stay subtenants or licensees.[1]

4 Kornucopia applies for leave to appeal the VCAT orders under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998. It seeks to rely on two questions of law:

1. Did the Learned Member err in making the orders, ostensibly under s 330 of the Residential Tenancies Act 1997 (Vic) in circumstances in which notice had not been given to the tenant in accordance with s 506(3)?
2. Further or alternatively, did the Learned Member err in making the orders in circumstances in which the appellant did not have proper notice of the hearing on 26 March 2019 and was thereby denied procedural fairness?

The first proposed question - service of the notice to vacate

5 On 9 January 2019, the notice to vacate was delivered to the office of BDO accountants in Collins St Melbourne, which was the premises recorded with ASIC as Kornucopia's registered office. A process server acting for the landlord handed the notice to vacate to a receptionist at BDO's office.

6 Ms L Xu, who since 19 December 2019 has been a director of Kornucopia, gave evidence that, as at the date of service, its registered office had changed to a new address, being a unit in Ingles Street, Port Melbourne; but that ASIC 's records had not updated to record that change. A letter from BDO accountants exhibited to Ms Xu's affidavit showed that ASIC were not notified of the change of address until 6 February 2019.[2]

7 Therefore, on the day the process server served the notice to vacate, Kornucopia's registered office remained the office of BDO accountants by reason of s 142(3) of the Corporations Act 2001 as a notice of change of address of a registered office only takes effect on the seventh day after the notice is lodged with ASIC.

8 Ms Xu stated in an affidavit that on 26 March 2019, the date of the VCAT hearing, she reviewed the VCAT daily list and saw two matters in which Kornucopia was a party. She authorised two persons to attend the hearings on its behalf. She stated that they informed the Tribunal Member that Kornucopia and its officers had not received any documents from the landlord.

9 The Tribunal Member decided that both the notice to vacate and the notice of hearing were properly served on Kornucopia in accordance with law and made a possession order and the other orders referred to above.

10 Kornucopia's case was that the notice to vacate was not given to a person authorised to receive it on its behalf. Parliament has differentiated between service of a notice to vacate under the Residential Tenancies Act 1997 ('the RT Act') and service of other documents. It argued that the notice was not validly served because it was served at its previous registered office and not on any of its officers.

11 Section 506 of the RT Act deals with service of documents and in subsection (3) provides for service of a notice to vacate as follows:

(3) A notice to vacate given under Part 6 must be given -

(a) by delivering it personally to the tenant, resident or site tenant; or

(b) by sending the notice by registered post addressed to the tenant, resident or site tenant at the rented premises, room, site or Part 4A site; or

(ba) by electronic communication in accordance with the Electronic Transactions (Victoria) Act 2000; or

(c) in the manner ordered by the Tribunal.

12 However, s 506(3) does not provide for a means of serving a corporation and so the provisions of s 109X of the Corporations Act 2001 are relevant. That section provides in relevant parts:

(1) For the purposes of any law, a document may be served on a company by:

(a) leaving it at, or posting it to, the company's registered office; or

(b) delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory;

...

(6) This section does not affect:

(a) any other provision of this Act, or any other provision of another law, that permits; or

(b) the power of a court to authorise;

a document to be served in a different way.

(7) This section applies to a provision of a law dealing with service whether it uses the expression 'serve' or uses any other similar expressions such as 'give' or 'send'.

13 Kornucopia argued that simply leaving the notice to vacate at BDO's office was not giving a notice to vacate as required by s 506(3) of the RT Act. Giving notice as required by s 506(3) is a higher obligation than service of a notice. Giving notice required handing the document to a person authorised to receive it, for instance a director of the company. The serious legal consequences of the notice to vacate for a tenant had to be taken into account in considering how the notice was to be given. The landlord could have sent the notice to vacate electronically to Kornucopia's email address because, under the lease, it had consented to that means of service.

14 Kornucopia submitted that giving a wide reading of s 109X would limit the concurrent operation of the RT Act. Section 5E(1) of the Corporations Act states:

The Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory.

15 The landlord's solicitor stated that he prepared a notice to vacate and conducted an ASIC current and historical organisation search of Kornucopia which showed its registered office was Collins Square Tower 4, Level 18, 727 Collins Street 3008. That was BDO's office. He also checked the requirements about service. As the tenant was a corporation, he found that s 109X of the Corporations Act provided that a document could be served by leaving it at its registered office. So, he engaged a process server who served it on the receptionist at BDO's office on 9 January 2019.

16 On 1 February 2019, as Kornucopia had not vacated the property or paid the rent as required by the notice to vacate, the landlord commenced VCAT proceedings against the company. After again conducting an ASIC search, the solicitor engaged a process server who served the VCAT application at BDO's office on 6 February 2019.

17 The solicitor attended the VCAT hearing on 26 March 2019, at which Kornucopia's representatives claimed that the documents had not been served on it or a company officer, and that its registered office was a Port Melbourne address at the relevant times. But the Port Melbourne address only became Kornucopia's registered office after the relevant date of 13 February 2019 as s 142(3) of the Corporations Act provides that a notice of change of address for a registered office takes effect on the seventh day after the notice of change of address is lodged with ASIC.

18 The landlord also argued that s 506(3) of the RT Act did not require a notice to vacate to be served on a company officer and that s 109X of the Corporations Act was satisfied by the process server leaving it with the receptionist at BDO's office on 9 January 2019.

19 The evidence before the Member established that the notice to vacate was left at Kornucopia's registered office, being the office of BDO accountants, on 9 January 2019. That constituted service of the document on Kornucopia as required by s 506(3) of the RT Act.

20 Serving or leaving a document and giving notice may not always require the same steps be taken, although the terms are often used to refer to the same process.[3] But in the case of a corporation, the giving of notice occurs by leaving, giving or delivering the document to a person able to receive such a document at the registered office. The receptionist is such a person.

21 The question of what constitutes 'leaving' a document at a company's registered office in order to satisfy the s 109X service requirements was addressed by the Supreme Court of Queensland in SV Steel Supplies Pty Ltd v Palwizat.[4] In that case, service was purportedly effected by a statutory demand being placed under the door of a company's registered office, as the office was closed. This mode of service was challenged by the corporation upon whom the document was served. Cullinane J held that service was validly effected in accordance with s 109X, and stated:

There is no requirement that service be effected for the purposes of section 109X(1)(a) during office hours or which requires any particular steps to be taken to bring it to the notice of any person in the office.

...

The legislation expressly authorises service in the way effected here and no support for the qualification of fair notice is to be found in its terms.[5]

This authority is contrary to any suggestion that s 109X imposes an obligation beyond physically leaving a document for service at a registered office in a secure and noticeable place. This decision has been followed in subsequent cases.[6]

22 A corporation can decide the location of its registered office, but it must also bear the consequences of that decision. It requires the conclusion that delivery of the notice to vacate to BDO's receptionist satisfied the requirements of s 109X of the Corporations Act.

23 I do not consider that s 109X of the Corporations Act limits the concurrent operation of s 506(3) of the RT Act. Rather it provides means of personally serving a document on a corporation.

24 In my opinion, the notice to vacate was left at, and delivered to, Kornucopia's registered office on 9 January 2019, and thereby the service of the notice to vacate as required by s 506(3) of the RT Act was given.

Second proposed question of law - denial of procedural fairness

25 Kornucopia's second proposed ground of appeal alleged that it was denied the opportunity to address the question of whether there was rent in arrears and was therefore denied natural justice and procedural fairness. The Member should have been aware, when Kornucopia's representatives said that it had not received the documents, that they would have been unable to respond to the landlord's allegation that it was 14 days in arrears of rent. The Member should have adjourned the hearing to enable Kornucopia to prepare a response to that allegation.

26 The landlord's solicitor, who presented its case in this Court and who had also represented the landlord at the Tribunal hearing, informed me that Kornucopia's representative requested that the matter be stood down for 30 minutes so that instructions could be obtained. There is no evidence that the representative then sought any longer adjournment so that he could address the question of unpaid rent. VCAT was of course bound by the principles of natural justice and to act fairly[7], but it did not have to advise a party how to conduct its case. The evidence suggests that Kornucopia had some familiarity with VCAT procedures.

27 Kornucopia has not established that the Tribunal denied it natural justice or failed to accord it procedural fairness in its conduct of the hearing on 26 March 2019.

29 Leave to appeal is refused. The proceeding is dismissed.

[1] Transcript of Proceedings, Kornucopia v Li (Supreme Court of Victoria, 29 May 2019) 58 ('T').

[2] Exhibit LX-2, Affidavit of Ms Lulu Xu affirmed 7 May 2019.

[3] See, e.g., Interpretation of Legislation Act 1984 s 49.

[4] [2007] QSC 24.

[6] Nutri-Care Limited [2009] SASC 72, [8]-[10] (Burley J); Career Training on Line Pty Ltd v B E S Training Solutions Pty Ltd; v Buckland [2010] NSWSC 460, [28]-[29] (Barrett J).

[7] Victorian Civil and Administrative Tribunal Act 1998 ss 97, 98.