Scenic Rim Regional Council v Cutbush
[2024] FCA 1135
•24 September 2024
FEDERAL COURT OF AUSTRALIA
Scenic Rim Regional Council v Cutbush [2024] FCA 1135
File number(s): QUD 262 of 2024 Judgment of: MEAGHER J Date of judgment: 24 September 2024 Catchwords: BANKRUPTCY – application for substituted service of creditor’s petition – whether abnormal difficulties exist – whether alternative means of service have a reasonable probability of informing the respondent – where there have been various unsuccessful attempts at personal service – where property is secured – application for substituted service granted – application for declaratory relief as to the validity of the bankruptcy notice deferred until after service has been effected Legislation: Bankruptcy Act 1966 (Cth) s 309(2) Cases cited: Ginnane v Diners Club Ltd (1993) 120 ALR 375 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 24 Date of hearing: 24 September 2024 Counsel for the Applicant: Mr SJ Tan Solicitor for the Applicant: King & Company Solicitors ORDERS
QUD 262 of 2024 BETWEEN: SCENIC RIM REGIONAL COUNCIL
Applicant
AND: PAUL CUTBUSH
Respondent
ORDER MADE BY:
MEAGHER J
DATE OF ORDER:
24 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.Personal service of the Creditor’s Petition be dispensed with.
2.The Creditor’s Petition, the affidavit verifying the Creditor’s Petition, the affidavit of service of the bankruptcy notice, the copy of the consent of a registered trustee, the affidavit of Antoni Bergman filed on 28 August 2024, the affidavits of Ethan Nicholas John Brian Edwards filed on 28 August 2024 and 20 September 2024, the interlocutory application filed on 4 September 2024, the outline of submissions filed on 28 August 2024, the outline of submissions provided to the Court on 24 September 2024 and a sealed copy of this order (collectively, the Documents) be served on the Respondent by:
a.Leaving the Documents in the letter box at 25-29 Durrant Court, Tamborine QLD 4270; and
b.Sending the Documents via email to [email protected] and [email protected].
3.Service of the Documents be deemed to be effected on 11 October 2024 upon the condition that the two events referred to in order 2 occur by 8 October 2024.
4.Paragraph 1 of the interlocutory application filed on 4 September 2024 be adjourned to a date to be fixed.
5.The Applicant file the outline of submissions provided to the Court on 24 September 2024 by 4:00pm AEST on 25 September 2024.
6.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)MEAGHER J
INTRODUCTION
Before the Court is an ex parte interlocutory application brought by the applicant seeking orders for substituted service of the Creditor’s Petition and supporting documentation on the respondent, as well as declaratory relief with respect to the validity of the bankruptcy notice.
Specifically, the applicant seeks the following orders allowing for substituted service on the respondent:
1.That personal service of the Creditor’s Petition, the affidavit verifying the Creditor’s Petition, the affidavit of service of the bankruptcy notice, the copy of the consent of a registered trustee and the order for substituted service (collectively, the Documents) be dispensed with.
2.That pursuant to section 309(2) of the Bankruptcy Act 1966 (Cth), the Documents be served on the Respondent by:
a.Leaving the Documents in the letter box at 25-29 Durrant Court, Tamborine QLD 4270; and
b.Sending the Documents via email to [email protected] and [email protected].
3.Service of the Documents be deemed to have been effective after the expiration of three days from the happening of the events at order 2.
4.The Respondent pay the Applicant’s costs
The applicant read the interlocutory application filed on 4 September 2024, the creditor’s petition filed on 21 May 2024, the affidavit of Mr Antoni Bergman filed on 28 August 2024 and three affidavits of Mr Ethan Nicholas John Brian Edwards filed on 21 May 2024, 28 August 2024 and 20 September 2024.
For the following reasons, the substituted service application is allowed. The application with respect to the validity of the bankruptcy notice is adjourned to a date to be fixed, to allow the applicant to serve the relevant documents on the respondent.
BACKGROUND
The proceeding is commenced by a Creditor’s Petition filed on 21 May 2024, by which the applicant contends that the respondent owes the applicant an amount of $113,527.38, arising from two Money Orders of the District Court of Queensland.
The act of bankruptcy relied upon is the respondent’s failure to comply on or before 21 November 2023 with the bankruptcy notice served on him on 31 October 2023, or to satisfy the Court that he had a counter-claim, set-off or cross demand equal to or more than the sum claimed in the bankruptcy notice, being a counter-claim, set-off or cross demand that he could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained.
It is necessary to set out the background as it relates to the attempted service of the Creditor’s Petition and supporting documentation.
As is deposed to in Mr Edwards’ affidavits filed on 21 May 2024 and 28 August 2024, the applicant’s solicitor searched the electoral roll, and found that the address was recorded as being 25 Durrant Court, Tamborine, Queensland 4270. Mr Edwards also deposes that the applicant’s solicitors act on behalf of the applicant in other proceedings brought by the respondent and, with respect to the Queensland Court of Appeal proceeding 7955/20, the respondent’s address for service is recorded as 25-29 Durrant Court, Tamborine Queensland, 4270. It is for those reasons that Mr Edwards believes that the respondent’s last known address is 25-29 Durrant Court, Tamborine Queensland 4270. This address will hereafter be referred to as the Relevant Address.
Mr Bergman, a Licenced Process Server, deposes in his affidavit filed on 28 August 2024 that he attended the Relevant Address on 6 June 2024. He deposes that the gate at the front of the property was locked and that there was no other means by which to enter the property. He deposes that he attempted to gain the attention of the occupants of the house by using the intercom at the front gate, as well as by calling out loudly. He did not receive any response. Further, he deposes that he tried to contact the respondent through both mobile and landline telephone numbers which had been provided to him, but the calls went unanswered, and he was unable to leave a message. He deposes that he also left a calling card with his contact details, requesting a call, in the letterbox of the Relevant Address.
Mr Bergman deposes to making two further attempts to effect personal service on the respondent, on 8 June 2024 and 8 July 2024, respectively. Mr Bergman’s affidavit sets out that, similar to the circumstances which prevailed on 6 June 2024, he was unable to attract the attention of the occupants of the house, nor was there a response to his telephone calls. On both occasions, Mr Bergman also left calling cards in the letterbox. Mr Bergman further deposes that on 8 June 2024, he saw a silver SUV parked in front of the house with all of the doors open but did not see any persons. On 8 June 2024, Mr Bergman also left an additional card in the gate.
Mr Bergman deposes that he has not received any communication from the respondent in response to the various calling cards.
In his affidavit filed on 28 August 2024, Mr Edwards deposes that, due to the firm’s involvement in another proceeding involving the respondent, namely a proceeding in the Queensland Court of Appeal (7955/20), he is aware of two email addresses used or referred to in correspondence pertaining to that proceeding. Exhibited to the affidavit are emails showing that the first email address, [email protected], was used on 16 February 2024 and 1 August 2024, while the second email address, [email protected] was referred to on 16 February 2024.
LEGISLATIVE FRAMEWORK
Section 309(2) of the Bankruptcy Act 1966 (Cth) provides:
(2)Where a notice or other document is required by this Act to be served on or given to a person, the Court may, in a particular case, order that it be given or served in a manner specified by the Court, whether or not any other manner of giving or serving the notice or other document is prescribed.
As referred to by the applicant, the Full Court in Ginnane v Diners Club Ltd (1993) 120 ALR 375 stated the following with respect to s 309(2) of the Act (at 378):
The discretion conferred by s 309(2) is unfettered but the authorities show that in relation to a creditor’s petition, the discretion is not to be exercised lightly. Normally, before exercising the discretion in relation to a petition, the court must be satisfied that abnormal difficulties exist in effecting personal service of the petition on the debtor and that there is a reasonable probability that the debtor will be informed of the petition as a result of the form of service identified. With respect to the second principle, Gibbs J said in Re Mendonca; Ex parte FCT (1969) 15 FLR 256 at 261:
It is a fundamental rule that a method of substituted service will not be allowed which will not in all reasonable probability be effective to bring knowledge of the proceedings to the debtor: Re Stewart; Ex parte Barrett (1967) 10 FLR 99.
With respect to the relationship between the two limbs of the relevant test, the Full Court in Ginnane stated at 381:
Although as a matter of methodology, it is useful to consider these two limbs separately, it must be remembered that the discretion conferred by s 309(2) of the Bankruptcy Act is unfettered. The two limbs are not separate and distinct compartments. Together, they form a composite basis for the exercise of a discretion. Normally, the evidence must show some need for substituted service and the basis by which the substituted form of service will, in all probability, be effective to bring the petition to the knowledge of the debtor. In some cases, the evidence may establish almost a certainty that the form of substituted service will have the effect of bringing the petition to the knowledge of the debtor.
CONSIDERATION
The applicant referred to the following matters as constituting “abnormal difficulties” in respect of which the Court should exercise its discretion to grant substituted service:
(1)The respondent’s property is secured by a fence and a gate;
(2)The intercom system at the respondent’s property allows the respondent to screen visitors;
(3)The nature of the respondent’s secured property makes it difficult to raise the respondent’s attention, noting that Mr Bergman called out loudly in all three attempts at service; and
(4)The respondent did not respond to any of the calling cards left by Mr Bergman.
The applicant submitted that the proposed alternative means of service, namely by leaving the documents in the letter box at the Relevant Address and emailing the documents to the two email addresses, has a reasonable probability of informing the respondent of the creditor’s petition. To that end, the applicant submitted that it is reasonable to conclude that the Relevant Address is the one at which the respondent resides. The applicant also submitted that as to the slight difference between the address recorded on the electoral roll and the Relevant Address, the property is a large block located in a regional area and the letterbox records the number 25. While there is no evidence before the Court as to this, I am satisfied that it is clear that the address on the electoral roll and the relevant address are at the same location.
The applicant contended that the two email addresses to which it refers, and by which it proposes to also serve the documents, have recently been used by the respondent in other legal proceedings, and therefore would provide the requisite probability of informing the respondent of the creditor’s petition.
I am satisfied that abnormal circumstances exist which warrant the making of a substituted service order. As contended by the applicant, the secure nature of the respondent’s property, particularly in relation to the intercom system, may mean that the respondent can screen visitors. Given that the applicant has attempted to serve the respondent at the Relevant Address on several occasions and has attempted to garner his attention by various means, all of which have been unsuccessful, I accept that substituted service is appropriate.
I am also satisfied that there is a reasonable probability that the respondent will be informed of the creditor’s petition and supporting documentation as a result of the proposed alternative means of service. In circumstances where it appears that emails have been sent from one of the proposed email addresses in relation to other legal proceedings, one of which emails includes the second email address, I consider that there is a reasonable probability that the respondent will be informed of the documents through this method, if not otherwise informed through receiving the documents placed in the letterbox at the Relevant Address. I consider that it is acceptable that the applicant serve the respondent at the Relevant Address in circumstances where that is the respondent’s address for service in the Queensland Court of Appeal proceedings, and where the letterbox of the property bears the number 25.
Validity of the Bankruptcy Notice
The application with respect to the validity of the bankruptcy notice arises in circumstances where the address identified on the bankruptcy notice is a PO Box.
By email correspondence sent by the Court on 12 September 2024, the applicant was informed that it would be required to address the Court on the ex parte nature of the application insofar as it relates to the validity of the bankruptcy notice.
While the applicant’s written submissions dealt with the question of the validity of the bankruptcy notice, at the hearing counsel for the applicant acknowledged that it is an issue which ought to be determined after the respondent has been served. I consider that to be the appropriate course.
CONCLUSION
In these circumstances, I am satisfied that it is appropriate to make orders with respect to substituted service. The application with respect to the validity of the bankruptcy notice ought to be adjourned until after the respondent has been served. Costs ought to be reserved.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Meagher. Associate:
Dated: 24 September 2024
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