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.
S459G provides as follows:

(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.

Jagot J considered firstly whether service was effected by delivery of an unsealed copy of the application and affidavit.

Jagot J reviewed the long line of authority concerning the requirement to serve a sealed copy of the application and affidavit within the 21 day time limit (at [32] to [38]). Jagot J concluded at [40] to [44] that a filed copy of the application and affidavit must be served, as this is clear on a reading of S459G. Jagot J also noted that the purpose of this service requirement is to inform the recipient that proceedings have been commenced and also to inform the recipient of the return date. Jagot J's review of authorities is useful and informative, and an extract is set out below:

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).

Jagot J then considered whether service was effected by the email addressed to the agent and CC'd to the defendant.

Jagot J considered that personal service means that the document which is intended to be served actually comes to the attention of the intended recipient. Jagot J considered that this means that personal service can be effected informally (e.g. by email) provided the document is brought to the attention of the recipient. I have reproduced below the discussion concerning informal service between [46] and [51]:

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.

Opensoft is a useful authority for two reasons. Firstly, it illustrates how strict the Courts are in requiring compliance with s459G. A party must ensure that the time limit is complied with and that the documents served are sealed and note the proceeding number and the return date. If any of this is not done then it is likely that the Court will not entertain an application to set aside a demand.

Secondly, Jagot J in Opensoft noted the purpose of personal service and that in order for a document to be personally served, there must be evidence that it came to the attention of the intended recipient. This means that informal service is acceptable, provided there is evidence that the intended recipient actually received the document in readable form.