Lee v Dentons Australia Limited

Case [2024] FCA 622

FEDERAL COURT OF AUSTRALIA

Lee v Dentons Australia Limited [2024] FCA 622  

File number: NSD 1418 of 2023
Judgment of: CHEESEMAN J
Date of judgment: 14 June 2024
Catchwords: BANKRUPTCY AND INSOLVENCY — application for a review of a Registrar’s decision — whether substituted service orders properly construed excluded the operation of reg 102 of the Bankruptcy Regulations 2021 (Cth) and s 28A of the Acts Interpretation Act 1901 (Cth) — whether there is proof to the contrary in accordance with reg 102(2) of the Bankruptcy Regulations establishing that the bankruptcy notice was not delivered — whether the application to set aside the bankruptcy notice was made within time — whether Lamb v Sherman [2023] FCAFC 85 is wrongly decided where Lamb v Sherman is binding — Held: Orders made on 19 December 2023 confirmed. Application dismissed.
Legislation:

Acts Interpretation Act 1901 (Cth) ss 2(1), 13(1), 28A(1), 46(1)(a)

Bankruptcy Act 1966 (Cth) ss 30(1), 40(1)(g), 41(6A), (7), 309(2)

Bankruptcy Regulations 1996 (Cth) reg 16.01

Bankruptcy Regulations 2021 (Cth) reg 102(1), (2)

Commonwealth Electoral Act 1918 (Cth)

Electronic Transaction Act 1999 (Cth)

Federal Court (Bankruptcy) Rules 2016 (Cth) r 2.02

Federal Court of Australia Act 1976 (Cth) ss 35A(1), (5), (6)

Federal Court Rules 2011 (Cth) rr 2.21, 2.23, 2.24, 2.25, 3.11

Legislation Act 2003 (Cth) s 13(1)(a)
Cases cited:

Abu-Amsha v Wagner [2019] FCA 900

Australian Tea Tree Oil Research Institute v Industry Research & Development Board [2002] FCA 1127; 124 FCR 316

Bechara v Bates [2021] FCAFC 34; 286 FCR 166

Bobos v Deputy Commissioner of Taxation [2019] FCA 1910

Bryant the Commonwealth Bank of Australia (1994) 217 ALR 251

Di Gregorio v Lumi Financial Pty Ltd [2022] FCA 94

GE Commercial Australasia Pty Ltd v Tinkler [2016] FCA 55; 247 FCR 257

Gill v Donald Humberstone & Co Ltd (1963) 1 WLR 929

Hacker v The Owners - Strata Plan No. 17572 [2005] FCA 1936

Harris v Caladine [1991] HCA 9; 172 CLR 84

Lamb v Sherman [2023] FCAFC 85; 298 FCR 79

Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143; 286 FCR 494

T & S Recoveries Pty Ltd v Skalkos, in the matter of Skalkos [2004] FCA 816

Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; 141 FCR 107

Van Epps v Child Support Registrar [2023] FCA 1068
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 107
Date of last submission: 25 March 2024
Date of hearing: Determined on the papers.
Counsel for the applicant: Mr E Chan
Solicitor for the applicant: GOH Lawyers
Counsel for the respondent: Mr R Harvey
Solicitor for the respondent: Dentons

 

ORDERS

NSD 1418 of 2023
BETWEEN:

SIEW YI LEE

Applicant
AND:

DENTONS AUSTRALIA LIMITED ABN 69100963308

Respondent

ORDER MADE BY:

CHEESEMAN J

DATE OF ORDER:

14 JUNE 2024

THE COURT ORDERS THAT:

1.The…

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AGLC
Lee v Dentons Australia Limited [2024] FCA 622
Case
[2024] FCA 622
Decision Date

CaseChat Overview and Summary

Dr Lee brought an application for a review of a Registrar’s decision regarding the setting aside of a bankruptcy notice issued by Dentons Australia Limited. The dispute centred on whether substituted service orders precluded the operation of reg 102 of the Bankruptcy Regulations 2021 (Cth) and s 28A of the Acts Interpretation Act 1901 (Cth), and whether there was sufficient proof to show the bankruptcy notice was not delivered. Additionally, the court had to determine whether the application to set aside the bankruptcy notice was made within the prescribed time and if the decision in Lamb v Sherman [2023] FCAFC 85 was correctly decided.

The legal issues before the court included the interpretation of the substituted service orders and their effect on the service of the bankruptcy notice under reg 102, the validity of service by express post under the relevant regulations, and the timeliness of Dr Lee’s application to set aside the notice. The court also needed to consider whether the Full Court’s decision in Lamb v Sherman, which was binding, was correctly applied. The court's analysis required a careful examination of the statutory and regulatory provisions, as well as the case law on the interpretation of service orders and the timeliness of applications.

The court found that the bankruptcy notice was served on 13 October 2023, which was earlier than the date suggested by Dr Lee. Consequently, the application to set aside the notice was not made within the required timeframe. The court was bound to follow the Full Court’s decision in Lamb v Sherman, which held that the application was untimely. The court also concluded that the substituted service orders did not exclude other means of service, including those specified in reg 102. Therefore, the application to set aside the bankruptcy notice was dismissed, and the orders made by the Registrar on 19 December 2023 were confirmed.

The court ordered that the orders made on 19 December 2023 be confirmed, the application dated 29 January 2024 be dismissed, and that Dr Lee pay Dentons' costs of the application. The decision underscored the importance of strict compliance with statutory timelines and the binding nature of higher court decisions.

Orders

Orders of the court

1. The orders made on 19 December 2023 be confirmed.

2. The application dated 29 January 2024 be dismissed.

3. The applicant pay the respondent’s costs of the application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

On 29 January 2024, Dr Lee lodged the present interlocutory application seeking a review of Registrar Birchall’s decision. I made orders timetabling the proceeding to hearing including in relation to the filing of evidence. The parties subsequently consented to the review application being heard on the papers relying on their respective written submissions. EVIDENCE Dr Lee relies upon:(1)four affidavits she has sworn on 21 November 2023, 29 January 2024, 20 February 2024, 21 February 2024 and the exhibits thereto; and(2)the affidavit of her former solicitor Kwok Tsy Fu sworn on 12 December 2023. Dr Lee also seeks leave to rely on a fifth affidavit made by her and sworn on 15 March 2024. Dr Lee requires leave because the affidavit was filed after the time provided by the orders made on 15 February 2024. The parties have addressed the content of that affidavit in their submissions and the respondent does not raise any issue of prejudice. Accordingly, Dr Lee may rely on that affidavit. On 26 March 2024, I reserved the application for judgment and ordered by consent that it be heard on the papers. On 28 March 2024, after the application was reserved, Dr Lee’s solicitor also emailed my chambers an affidavit sworn by Dr Lee on 28 March 2024. No application has been made to seek leave to reopen to rely on that affidavit. Dentons relies on two affidavits of Louise Jane Massey, solicitor and the exhibits thereto. The first was sworn on 11 December 2023 and later refiled on 21 March 2024. The second was sworn and filed on 21 March 2024. The parties were required, by 4pm, 8 March 2024 to file a statement of agreed facts and a separate list of facts in dispute which set out the party seeking to include the fact and the reason why its inclusion is disputed. There were three documents filed with the Court on 8 March 2024 comprising of: (1)a statement of agreed facts filed by Dentons and lodged at 2:38pm;(2)a statement of agreed facts filed by Dr Lee lodged at 4:06pm; and(3)a table of disputed facts filed by Dr Lee lodged at 5:12pm. Despite the duplication and confusion in the way the documents have been presented, it appears based on the written submissions which have been lodged that both Dentons and Dr Lee rely upon the statement of agreed facts and the table of disputed facts filed by Dr Lee on 8 March 2024 and I will proceed on that basis. ISSUES FOR DETERMINATION Dr Lee submits that the Bankruptcy Notice should be set aside in effect for two reasons:(1)the Substituted Service Orders properly construed excluded the operation of reg 102 of the Bankruptcy Regulations 2021 (Cth) and because the Substituted Service Orders were not complied with, service of the Bankruptcy Notice has not in fact been affected; and(2)in the alternative, if the operation of reg 102 is not excluded by the Substituted Service Orders, then service has not been effected in any event because: (a)delivery by express post did not constitute delivery by a “courier service” within the meaning of reg 102(1)(a) of the Bankruptcy Regulations; (b)s 28A(1)(a)(ii) of the Acts Interpretation Act 1901 (Cth) (AIA) which relevantly permits service on a natural person to be affected by means of pre-paid post to the address of the place of residence of the person last known to the person serving the document does not apply in the present circumstances;(c)the Pymble Address was not the address of Dr Lee’s residence or business last known to Dentons; and(d)the Australia Post tracking search in respect of the express post sent by Dentons is ambiguous and does not prove that the Bankruptcy Notice was delivered to the Pymble Address.

Decision

Reasons for decision

These submissions ultimately hinged on a finding that the Bankruptcy Notice was served on 31 October 2023, with the result that the time for compliance was 21 November 2023. I have found that the Bankruptcy Notice was served on 13 October 2023. Given my finding that the relevant date of service was 13 October 2023, it is strictly not necessary to address this issue. In addition, I note that had it been necessary to determine this issue, I would be bound to follow the Full Court’s decision in Lamb v Sherman. Applying that decision, which is directly on point and is, with respect, carefully reasoned, I would have been compelled to conclude that the application to set aside the Bankruptcy Notice was not made within time. CONCLUSION I have found that the Bankruptcy Notice was served in accordance with reg 102 of the Bankruptcy Regulations. Further, I have found that Dr Lee’s application to set aside the Bankruptcy Notice was not made before the expiration of time fixed for the compliance with the Bankruptcy Notice for the purposes of subsections 41(6A) and (7) of the Bankruptcy Act: see Van Epps v Child Support Registrar [2023] FCA 1068 at [31] to [35] (Collier J) in respect of s 41(7) and applying by analogy authorities in respect of 41(6A) including Di Gregorio v Lumi Financial Pty Ltd [2022] FCA 94 at [5] (Rofe J). It follows that this Court lacks the jurisdiction to hear the application to set aside the Bankruptcy Notice. The orders made by the Registrar on 19 December 2023 are confirmed. Dr Lee’s application seeking review of the Registrar’s decision is dismissed. I see no reason why costs should not follow the event. I will make orders accordingly.

Ratio Decidendi

Legal Principle Established

It will be necessary to refer to reg 16.01 as part of my consideration of the submissions advanced based on authorities decided by reference to that iteration of the relevant regulation.CONSIDERATIONDid the Substituted Service Orders exclude other means of service, including service in accordance with reg 102? Dr Lee submits that the Substituted Service Orders operated to exclude reg 102, arguing that such an intention may be implied from the terms of the Substituted Service Orders. Dr Lee relies on the observations of the Full Court in Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; 141 FCR 107 at [30] (Sundberg, Finkelstein & Hely JJ). Dentons submit that on the proper construction, the Substituted Service Orders do not exclude the operation of reg 102. Dentons raise an anterior point as to whether the Court has the power to preclude reliance on the modes of service available under reg 102. The first aspect of the contest between the parties on this issue is whether Skalkos is authority for the proposition that an order of the Court may exclude the operation of reg 16.01 of the Bankruptcy Regulations 1996 as it then was, and by analogy reg 102 as presently in force. The relevant text of the regulations are extracted at [50] (reg 102) and [53] (reg 16.01) above. Neither party advanced submissions which sought to relevantly distinguish Skalkos on the basis of the manner in which the relevant regulation is now expressed. The relevant passage of the Full Court’s reasons in Skalkos is as follows (at [29] to [30] (emphasis added)):29… In any event, a contrary intention for the purposes of reg 16.01(1) must appear from the Act or the Regulations, or from some other legislation. … Nor does it appear from quite accurate statements such as those in factors (a), (e) (f) and (g). It is true that provisions such as reg 16.01 contemplate the possibility of something less than actual receipt by the person to be served. But as Tindal CJ said in Bishop v Helps (1845) 2 CB 45 at 57; 135 ER 857 at 862 (a passage quoted in Fancourt at 96):“It was probably considered that the public convenience would be promoted by the present provision, and that its advantages would greatly outweigh the inconvenience which, in some few cases, might possibly arise from it.”In our view, the fact that in some cases reg 16.01 can produce harsh results, which is what the combination of the factors relied on is directed to establishing, does not constitute a contrary intention for the purposes of reg 16.01(1). Factors (d), (h) and (i) assume that it is open to a debtor to prove non‑receipt of the notice. As we have said, this assumption is ill‑founded.30 The appellant also contended that the order for substituted service itself constituted a contrary intention for the purposes of reg 16.01. Assuming the Court has power to preclude reliance on the modes of service prescribed by reg 16 (perhaps under s 309(2) of the Act), an order for substituted service will constitute a contrary intention only if it evinces an intention that it is to operate either to the exclusion of reg 16 or to the exclusion of any other mode of service. We agree with his Honour that the substituted service order is permissive in terms, prescribing a method “by which service may be effected”. It is silent about service otherwise than in accordance with its terms. The order does not constitute a contrary intention for the purposes of reg 16.01(1).