FEDERAL COURT OF AUSTRALIA
Sheraz Pty Ltd v Rumsley [2019] FCA 493
File number: WAD 77 of 2019 Judge: BANKS-SMITH J Date of judgment: 9 April 2019 Catchwords: CORPORATIONS - winding up - statutory demand - service of application to set aside statutory demand under s 459G(3)(b) of the Corporations Act 2001 (Cth) - where application and supporting affidavit electronically filed within time - where copies of application and supporting affidavit served via email on last day for service - where statutory demand did not list email as an address for service - where no evidence of consent to service by email - where email not opened and application not seen by respondent until outside 21 day period Legislation: Corporations Act 2001 (Cth) ss 459E, 459G
Corporations Regulations 2001 (Cth) Schedule 2
Legal Profession Act 2008 (WA) s 12
Cases cited: 2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd [2010] WASC 22
Austar Finance Group Pty Ltd v Campbell [2007] NSWSC 1493; (2007) 215 FLR 464
Beralt Pty Ltd v Joe Battaglia Plastering Pty Ltd [1999] QSC 202
Carter v Australian Securities & Investments Commission [2018] FCA 1064
David Grant & Co Pty Ltd v Westpac Banking Corp [1995] HCA 43; (1995) 184 CLR 265
Deliver Western Australia Pty Ltd v Truckworld(WA) Pty Ltd [2014] WASC 411
Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542
Jin Xie Investment & Trade (Australia) Pty Ltd v ISC Property Pty Ltd [2006] NSWSC 7
Opensoft Australia Pty Ltd v Miller Street Pty Ltd [2011] FCA 653
Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 239 FLR 339
Date of hearing: 9 April 2019 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 37 Counsel for the Applicant: Mr P Lafferty Solicitor for the Applicant: Armeli & Molony Lawyers Counsel for the Respondent: The Respondent appeared in person ORDERS
WAD 77 of 2019 BETWEEN: SHERAZ PTY LTD (ACN 009 134 016)
Applicant
AND: ALAN PHILLIP RUMSLEY
Respondent
JUDGE:
BANKS-SMITH J
DATE OF ORDER:
9 APRIL 2019
THE COURT ORDERS THAT:
1.The originating process filed 7 February 2019 seeking to set aside a creditor's statutory demand be dismissed.
2.The applicant pay the respondent's costs as assessed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BANKS-SMITH J:
Introduction
On 7 February 2019 the plaintiff (Sheraz) filed an application and supporting affidavit seeking orders to set aside a statutory demand served by the defendant, Alan Rumsley. The application is brought under s 459G of the Corporations Act 2001 (Cth) (Act) and asserts there is a genuine dispute with respect to the debt referred to in the statutory demand. Somewhat prematurely, Sheraz also…
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- AGLC
- Sheraz Pty Ltd v Rumsley [2019] FCA 493
- Case
- [2019] FCA 493
- Decision Date
CaseChat Overview and Summary
The court held that neither method of service was effective. The statutory demand specified a physical address for service, and there was no provision for email service of any application. There was no evidence that the email came to the actual attention of Rumsley within the 21 day period. The court held that it was not the place of TW Agency, or Mr Daoud as its principal, to accept service by means other than those specified in the statutory demand itself. The court held that the situation might have been different if Rumsley himself had received an email at the address for service specified in the statutory demand, opened the email, and read the attachments. However, that is not what occurred.
The court held that the applicant's submissions that the service was effective could not be accepted. The question of service under section 459G was not 'unduly technical' or 'non-essential', but went to the very question of the Court's jurisdiction to entertain the application. The court held that there was a risk in purporting to serve such an application by email late in the day on the last day for service, and in circumstances where email was not the given address for service and the movements of the email recipient, and so the prospects that the recipient will check emails, were unknown.
The court ordered that the originating process filed 7 February 2019 seeking to set aside a creditor's statutory demand be dismissed. The court also ordered that the applicant pay the respondent's costs as assessed or agreed.
Orders
Orders of the court
1. The originating process filed 7 February 2019 seeking to set aside a creditor's statutory demand be dismissed.
2. The applicant pay the respondent's costs as assessed or agreed.
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
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Jagot J held that neither method of service was effective. Her Honour held:[54]As noted above, the statutory demand specified that the address of the creditor for service of copies of any application and affidavit was TW Agency, 251 Elizabeth St, Sydney, New South Wales 2000. The creditor did not specify any electronic address for service. Furthermore, this is not a case in which Mr Tayles as director of the creditor received himself an email attaching copies of the documents as filed. Indeed, on the evidence available, Mr Tayles has never received copies of the documents as filed. As the defendant submitted, in the context of this statutory scheme, it is not the place of TW Agency or Mr Daoud as its principal to accept service by means other than those specified in the statutory demand itself. Even if TW Agency were authorised to do so, I do not see how the dealings between Mr Daoud and Mr Price could be seen to constitute any form of acceptance of service by email for the purposes of s 459G(3)(b) of the Corporations Act.[55]The situation might have been different if Mr Tayles himself had received an email at the address for service specified in the statutory demand, opened the email, and read the attachments - thereby having brought to his actual attention the application and supporting affidavit as filed. However, that is not what occurred. Despite the efforts to which Mr Price went on 11 May 2011, I cannot see how what was done constituted compliance with s 459G(3)(b). I do not consider that anything in the relationship between the Corporations Act and the Federal Court (Corporations) Rules can lead to a different conclusion.Consideration Sheraz, through written submissions signed by Mr Clifford, asserts that:8.There is no dispute the section 459G application and supporting affidavit were served electronically and electronically received into the Respondent's computer by email within the statutory time limit. That is 4.58pm and 5pm on 14 February 2019.9.In a time of electronic filing and service, this is the equivalent of service by post or hand-delivery notwithstanding the recipient does not open the envelope or read the document.10.Speed and efficiency in the sense of minimal delay and expense are essential to a just resolution of proceedings.11.Unduly technical and costly disputes about non-essential issues are clearly to be avoided in favour of focusing upon facilitating a just, quick and cheap resolution of the real issues in proceedings. Here, whether the statutory demand is valid and/or an abuse of process.(footnotes omitted) That submission cannot be accepted. Mr Clifford in essence asserts that the body of law as to the 21 day rule and service should be disregarded. The question of service under s 459G is neither 'unduly technical' nor 'non‑essential', but goes to the very question of the Court's jurisdiction to entertain the application. In this case the address for service that was provided by Mr Rumsley was a physical address. There was no provision in the statutory demand for email service of any application. Further, there is no evidence that the email came to the actual attention of Mr Rumsley within the 21 day period. There is no evidence that the email sent by Ms Kiel was opened at the physical address until 25 February 2019. There is no evidence of any other agreement or consent on the part of Mr Rumsley to service by email. There is clearly a risk in purporting to serve such an application by email late in the day on the last day for service, and in circumstances where email is not the given address for service and the movements of the email recipient, and so the prospects that the recipient will check emails, are unknown.