Official Receiver for the Bankruptcy District of WA v Amaro
[2009] FMCA 567
•23 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF WA v AMARO | [2009] FMCA 567 |
| BANKRUPTCY – Section 139ZQ Notice. PRACTICE AND PROCEDURE – Whether personal service of s.139ZQ Notice necessary – whether other means of service under reg.16.01 of Bankruptcy Regulations sufficient – whether s.139ZQ Notice originating process. PRACTICE AND PROCEDURE – Whether an order for substituted service necessary – whether service difficult or impractical – whether proposed order for substituted service provides alternative means of effecting service. |
| Bankruptcy Act 1966 (Cth), ss.139ZQ(1), (2), (4) and (8), 139ZS, 309(2) Bankruptcy Regulations1996 (Cth), reg.16.01(1) and (2) Federal Court Rules 1979 (Cth), O.7, rr.1 and 9(1) |
| Carantinos v Magafas [2009] FCA 627 CSR Ltd v Barillaro (2001) 184 ALR 308; [2001] FMCA 23 Deputy Commissioner of Taxation v Barnes (2008) 70 ATR 776; [2008] FMCA 7 Equititrust Limited v Bosiljevac [2007] FCA 323 Ginnane v Diners Club Limited (1993) 120 ALR 375 Re McLernon: Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble and Anor (1995) 58 FCR 391 Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107; (2004) 3 ABC (NS) 51; [2004] FCAFC 321 St. George Bank Limited v Hobbs [2006] FMCA 1113 University of New South Wales v Sheikholeslami [2008] FMCA 1323 |
| BC Cairns, Australian Civil Procedure (7th Edn) (Pyrmont: Lawbook Co., 2007) |
| Applicant: | OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF WESTERN AUSTRALIA |
| Respondent: | CALOGERA AMARO |
| File Number: | PEG 73 of 2009 |
| Judgment of: | Lucev FM |
| Hearing dates: | 12, 16 June 2009 |
| Date of Last Submission: | 16 June 2009 |
| Delivered at: | Perth |
| Delivered on: | 23 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms M Franz and Mr P Sheiner |
| Solicitors for the Applicant: | Gadens Lawyers |
| For the Respondent: | No appearance |
DECLARATIONS AND ORDERS
THE COURT DECLARES THAT:
Personal service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) is not required and that service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) by any of the means prescribed by regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) is sufficient.
THE COURT ORDERS THAT:
The application for substituted service be dismissed.
There be no order as to costs.
Reasons for judgment be published from Chambers at a later date.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 73 of 2009
| OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF WESTERN AUSTRALIA |
Applicant
And
| CALOGERA AMARO |
Respondent
REASONS FOR JUDGMENT
Application
This is an application for substituted service of a notice issued pursuant to s.139ZQ(1)[1] of the Bankruptcy Act 1966 (Cth).[2]
[1] “s.139ZQ Notice”.
[2] “Bankruptcy Act”.
The matter came before the Court, ex parte, on 12 June 2009, at which time the Court raised the question of whether personal service of a s.139ZQ Notice was required, and whether an order for substituted service was necessary. The matter was adjourned to 16 June 2009, at which time the Official Receiver agreed to the Court making the following declarations and orders:
THE COURT DECLARES THAT:
(1) Personal service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) is not required and that service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) by any of the means prescribed by regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) is sufficient.
THE COURT ORDERS THAT:
(2) The application for substituted service be dismissed.
(3) There be no order as to costs.
(4) Reasons for judgment be published from Chambers at a later date.
These are the reasons for judgment referred to in Order (4).
Issue
The issues are whether:
a)a s.139ZQ Notice ought to be personally served; and
b)an order for substituted service of a s.139ZQ Notice is necessary if personal service is not effected.
Facts
The facts appear from the affidavit of Mr Cameron sworn 13 May 2009.
A s.139ZQ(1) Notice was issued by the Official Receiver on 3 June 2008 addressed to: Ms Calogera Armaro,[3] 10 Glen Road, Lesmurdie WA 6076.[4] Amongst other things, it alleged that Ms Amaro’s daughter (the bankrupt) had transferred her interest in the land at the Lesmurdie Address to Ms Amaro.
[3] The Court notes that the notice and other correspondence and reports in evidence refer to the respondent’s surname as “Armaro”, but that the application refers to it as “Amaro”. There was no application to amend the name of the respondent to the application. Therefore, the Court has used “Amaro”, except where there is a direct quote and “Armaro” is used in the quote.
[4] “Lesmurdie Address”.
The s.139ZQ Notice appears to have been sent to Ms Amaro under cover of a letter to her at the above address. The letter was dated 10 June 2008.
On 16 June 2008 a solicitor, Mr David Thompson, of Irdi Legal, wrote to the Official Receiver and advised that:
a)he acted for Ms Amaro;
b)he had been handed a copy of the s.139ZQ Notice issued against Ms Amaro;
c)Ms Amaro intended to apply to revoke the s.139ZQ Notice;
d)he had no instructions as to precisely when Ms Amaro received the s.139ZQ Notice; and
e)he had only received instructions to act that day (being 16 June 2008).
Mr Thompson requested the Official Receiver to exercise his power under s.139ZQ(4) of the Bankruptcy Act to extend time for compliance with the s.139ZQ Notice.
It is open to the Court to infer from the material before it that Ms Amaro received the s.139ZQ Notice, and that she did so some time between 10 June 2008 (the date of the Official Receiver’s letter) and 16 June 2008 (the date of Mr Thompson’s letter). It is not presently possible to draw any conclusion as to whether Ms Amaro received the s.139ZQ Notice by means of personal service, or by post delivered to the Lesmurdie Address. The latter however seems more likely.
Various attempts were subsequently made to personally serve a copy of the s.139ZQ Notice on Ms Amaro at the Lesmurdie Address. One process server tried on 2, 3, 5, 6, 9 and 11 July 2008, but knocking on the door (on one occasion for ten minutes) of the house at the Lesmurdie Address got no response. A second process server tried knocking at the front door and side gate on 6, 9, 13, 18 and 22 October 2008 but again got no response. On 24 October 2008 the second process server got a response. Her report to the Official Receiver discloses:
In response to my knocking at the front door of the house a male person came to the porch from the side gate / carport. He confirmed that CALOGERA ARMARO lives there, but was at that time at Royal Perth Hospital (pacemaker checkup??). He identified himself as “FRANK”, the son of Maria Mug[l]ia and grandson of CALOGERA ARMARO. He claims not to live there and that he leaves his car parked there while he goes to work, to deter burglars.
I informed FRANK that I required to deliver documents to CALOGERA ARMARO on behalf of ITSA re: MARIA MUGLIA. He agreed that he would arrange for me to see CALOGERA ARMARO in his presence and would telephone me before 2pm the following day to arrange a time. I left my business card with him.
The second process server was not subsequently contacted by “Frank”. Subsequent attempts to elicit a response upon attendance at the Lesmurdie Address by the second process server on 2, 4, 6, 15, 16, 18, 25, 26 November 2008 and 3 and 8 December 2008 were unsuccessful.
There were signs of life at the Lesmurdie Address whilst the process servers undertook their activities. They included:
a)windows at the house were partly open, then partly but differently opened, and then one of 2 windows that had been opened was closed;
b)clothing and towels were on the clothes lines;
c)junk mail at the front door mat was removed;
d)electric power appeared to be being consumed;
e)the side gate to the house was padlocked; and
f)the second process server’s card wedged into the padlock on 2 November 2008 was gone on 4 November 2008.
It is not difficult in the circumstances to draw the conclusion that personal service on Ms Amaro is difficult. Indeed Ms Amaro has not been seen, although the actions of “Frank”, and representations of Mr Thompson, seem to indicate that Ms Amaro is available and probably resident at the Lesmurdie Address.
Orders sought
Against the above factual background the Official Receiver seeks orders that:
1.Personal service to Ms Calogera Armaro of 10 Glen Road Lesmurdie WA of the Official Receiver’s Notice Pursuant to Section 139ZQ of the Bankruptcy Act 1966 dated 3 June 2008 (“the Notice”) be dispensed with.
2.Service in accordance with this order be deemed good and sufficient service of the Notice to have been served upon Ms Calogera Armaro of 10 Glen Road Lesmurdie, WA.
3.The Notice be deemed to have been served on Ms Calogera Armaro on 8 December 2008.
Section 139ZQ of the Bankruptcy Act
Section 139ZQ(1) and (8) of the Bankruptcy Act provides as follows:
(1) If a person has received any money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3, the Official Receiver:
(a) if the Official Trustee is the trustee—on the initiative of the Official Receiver; or
(b) if a registered trustee is the trustee—on application by the trustee;
may require the person, by written notice given to the person, to pay to the trustee an amount equal to the money or the value of the property received.
(8) An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction.
The crucial words for present purposes in s.139ZQ(1) are “by written notice given to the person”.
Section 139ZS is also relevant, and reads as follows:
(1) If the Court, on application by a person to whom a notice has been given under section 139ZQ or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice.
(2) A notice that has been set aside is taken not to have been given.
The s.139ZQ Notice is therefore subject to a hearing de novo, and the Official Receiver does not exercise the judicial power of the Commonwealth in issuing a s.139ZQ Notice.[5]
Regulation 16.01 of the Bankruptcy Regulations
[5] Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble and Anor (1995) 58 FCR 391 at 403-404 per Carr J.
Regulation 16.01(1) and (2) of the Bankruptcy Regulations 1996 (Cth)[6] provides as follows:
[6] “Bankruptcy Regulations”.
16.01 Service of documents
(1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be:
(a) sent by post, or by a courier service, to the person at his or her last‑known address; or
(b) left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or
(c) left, in an envelope or similar packaging marked with the person’s name, at the last‑known address of the person; or
(d) personally delivered to the person; or
(e) sent by facsimile transmission or another mode of electronic transmission:
(i) to a facility maintained by the person for receipt of electronically transmitted documents; or
(ii) in such a manner (for example, by electronic mail) that the document should, in the ordinary course of events, be received by the person.
(2) A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person:
(a) in the case of service in accordance with paragraph (1) (a) or (b) — when the document would, in the due course of post or business practice, as the case requires, be delivered to the person’s address or document exchange facility; and
(b) in the case of service in accordance with paragraph (1) (c), (d) or (e) — when the document is left, delivered or transmitted, as the case requires.
In Skalkos v T & S Recoveries Pty Ltd[7] the Full Court of the Federal Court of Australia dealt with the application of reg.16.01 of the Bankruptcy Regulations in a case concerning service of a Bankruptcy Notice. The Full Court:
a)held that the method of service prescribed by reg.16.01 of the Bankruptcy Regulations applied to Bankruptcy Notices because they are documents required or permitted to be served under the Bankruptcy Act, and personal service of the Bankruptcy Notice was not required;[8]
b)held that reg.16.01 of the Bankruptcy Regulations can be used to effect service, even where there was a substituted service order which had not properly been complied with;[9] and
c)distinguished between a Bankruptcy Notice and a court process, the latter being an originating process, and therefore required to be personally served.[10]
[7] (2004) 141 FCR 107; (2004) 3 ABC (NS) 51; [2004] FCAFC 321 (“Skalkos”).
[8] Skalkos FCR at 117 per Sundberg, Finkelstein and Hely JJ; ABC (NS) at 61 per Sundberg, Finkelstein and Hely JJ; FACFC at para.31 per Sundberg, Finkelstein and Hely JJ. See also Carantinos v Magafas [2009] FCA 627 at paras.4-5 per Perram J (“Carantinos”).
[9] Skalkos FCR at 117 and 120 per Sundberg, Finkelstein and Hely JJ; ABC (NS) at 61 and 63-64 per Sundberg, Finkelstein and Hely JJ; FCAFC at paras.30 and 38 per Sundberg, Finkelstein and Hely JJ.
[10] Skalkos FCR at 117 per Sundberg, Finkelstein and Hely JJ; ABC (NS) at 61 per Sundberg, Finkelstein and Hely JJ; FCAFC at para.31 per Sundberg, Finkelstein and Hely JJ; see also CSR Ltd v Barillaro (2001) 184 ALR 308 at 311-312 per Raphael FM; [2001] FMCA 23 at paras.13-18 per Raphael FM (“Barillaro”); St George Bank Limited v Hobbs [2006] FMCA 1113 at para.3 per Raphael FM and University of New South Wales v Sheikholeslami [2008] FMCA 1323 at paras.10 and 43-46 per Lloyd-Jones FM (and cases there cited).
In Barillaro this Court said:
18 …. Regulation 16.01 deals with documents that are required to be served under the Regulations. One such document is a bankruptcy notice. Another is a notice of disclaimer of onerous property under Regulation 6.10. The Court has, rightly in my view, accepted that bankruptcy notices now being an administrative procedure are regulated by the Regulations and thus service of a bankruptcy notice can be effected in the manner set out in Regulation 16.01. A Bankruptcy Petition, on the other hand, is an originating process in the Federal Magistrates Court. It is not a process which is governed by the Regulations. Order 77 Rule 4 and Order 7 Rule 1 combine to require an originating bankruptcy proceeding to be served personally.[11]
[11] Barillaro ALR at 312 per Raphael FM; FMCA at para.18 per Raphael FM.
As with a Bankruptcy Notice, a s.139ZQ Notice is not originating process: it is not a document asserting a cause of action, filed in the Registry of a court in accordance with the rules of that court.[12] Because a s.139ZQ Notice is not originating process, it need not be served personally.[13]
[12] BC Cairns, Australian Civil Procedure (7th Edn) (Pyrmont: Lawbook Co., 2007) at 79.
[13] Federal Court Rules, O.7 r.1.
A s.139ZQ Notice is a “written notice” to be “given to the person”, and can therefore be served in accordance with reg.16.01 of the Bankruptcy Regulations.
Arguably, given the representations made in writing by Mr Thompson on Ms Amaro’s behalf, and, in particular, the representations as to her having “received the notice” it may be that service, either by post to, or by leaving at, Ms Amaro’s last-known address, has already been effected.[14] However, there is insufficient evidence properly before the Court to arrive at a final conclusion on that issue. In any event, because in the Court’s view, service of a s.139ZQ Notice can be effected by any of the means prescribed by reg.16.01 of the Bankruptcy Regulations, it remains open to the applicant to effect service by posting a s.139ZQ Notice to, or leaving it at, the Lesmurdie Address, if that is Ms Amaro’s last known address. A person’s last known address need not be the person’s residential address: it is sufficient if there is a degree of connection such as to allow the address to meet, to the subject knowledge of the person serving the document, that description.[15] That sufficient degree of connection exists on the facts presently before the Court in relation to the Lesmurdie Address, because:
a)Ms Amaro has an interest in the property comprising the Lesmurdie Address allegedly passed to her by the bankrupt, her daughter, Ms Muglia;
b)the s.139ZQ Notice dated 3 June 2008 was addressed to her at the Lesmurdie Address, and elicited a formal response from a solicitor acting on her behalf; and
c)“Frank”, apparently her grandson, has acknowledged that Ms Amaro lives in the house at the Lesmurdie Address.
[14] Bankruptcy Regulations, reg 16.01(1)(a) and (c).
[15] Skalkos FCR at 118-119 per Sundberg, Finkelstein and Hely JJ; ABC (NS) at 62-63 per Sundberg, Finkelstein and Hely JJ; FCAFC at paras.35-37 per Sundberg, Finkelstein and Hely JJ. See also Carantinos at para.8 per Perram J.
There is, therefore, nothing to prevent service of a s.139ZQ Notice by means other than personal service. These means may include posting it to, or leaving it at, Ms Amaro’s last known address, whether that address be the Lesmurdie Address or, if the factual position has changed, some other address.
Substituted service
The grant of an application for substituted service, under s.309(2) of the Bankruptcy Act, or O.7 r.9(1) of the Federal Court Rules, is discretionary, and not to be exercised lightly. In relation to s.309(2) of the Bankruptcy Act (but in relation to a court process) this Court has observed:
71. Under s.309(2) of the Bankruptcy Act the discretion conferred is unfettered but not to be exercised lightly. The Court must be satisfied that:
a) abnormal difficulty exists in effecting personal service of the creditors petition on the Respondents; and
b) there is a reasonable probability that the Respondents will be informed of the petition as a result of the form of service identified.[16]
[16] Deputy Commissioner of Taxation v Barnes (2008) 70 ATR 776; [2008] FMCA 7 at para.17 per Lucev FM (“Barnes”), citing Ginnane v Diners Club Limited (1993) 120 ALR 375 at 378 and 381 per Northrop, Sheppard and Einfeld JJ; Equititrust Limited v Bosiljevac [2007] FCA 323 at paras. 7-12 per Collier J; Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 at 261 per Gibbs J.
Order 7 r.9(1) of the Federal Court Rules provides:
(1) Where for any reason it is impractical to serve a document in the manner set out in the Rules, the Court may by motion in an existing proceeding made ex parte order that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person to be served.
In this case there is neither abnormal difficulty nor impracticability in effecting service on Ms Amaro. For reasons already set out service of a s.139ZQ Notice can be effected by posting it to, or leaving it at, her last known address (assuming that that has not already been done).
Further, one of the purposes of substituted service orders is to provide an alternative means of informing a person about the relevant process or notice, or bringing it to their attention.[17]
[17] Federal Court Rules, O.7 r.9(1) and Barnes at para.71(b) per Lucev FM.
In this case the proposed substituted service order is set out above.[18] Proposed order 3 does not provide for an alternative means of effecting service, but rather deems service to have been effected on 8 December 2008. Nothing was done on 8 December 2008, which would warrant the s.139ZQ Notice to have been deemed to have been served that day. The process server simply attended at the Lesmurdie Address, observed and left her card. No copy of the s.139ZQ Notice was left at the Lesmurdie Address on that day, and there is no other evidence that would indicate any reason why it should be deemed that on that day service was effected.
[18] See para.14 above.
Because:
a)Ms Amaro can be served with a s.139ZQ Notice by the means prescribed in reg.16.01 of the Bankruptcy Regulations; and
b)the proposed orders sought do not provide for an alternative means of effecting service of the s.139ZQ Notice,
the Court is not prepared to order that there be substituted service on Ms Amaro.
Conclusion
The Court has concluded that:
a)personal service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) is not required and that service of a written notice under s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) by any of the means prescribed by regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) is sufficient, and there will be a declaration to that effect; and
b)as there is no basis on which to order substituted service of the s.139ZQ Notice on Ms Amaro, the application for orders for substituted service will be dismissed.
There will be an order that there be no order as to costs.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S Gough
Date: 23 June 2009
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