Retail Links Limited v Ogier HC Nel CIV 2008 442 192

[2008] NZHC 2388

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2008 442 192

IN THE MATTER OF     the Insolvency Act 2006

ANDIN THE MATTER OF  the bankruptcy of MICHAEL DAVID OGIER

BETWEEN  RETAIL LINKS LIMITED Applicant/Judgment Creditor

ANDMICHAEL DAVID OGIER Respondent/Judgment Debtor

Judgment:      30 June 2008

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

[1]      The judgment creditor (Retail Links) wishes to serve its bankruptcy notice on the judgment creditor (Mr Ogier).  Retail Links has a judgment against Mr Ogier, and is owed the amount of $37,426.64.

[2]      Mr Ogier now  apparently resides  in  the  United  States  of  America.    His current address details are unknown, but he been contacted in the past via an email

address at [email protected] (the email address).

[3]      Two issues are raised by Retail Links’ application for substituted service:

(a)      Whether the bankruptcy notice  can  be served  outside  New

Zealand; and

(b)      Whether service by email ought to be authorised.

RETAIL LINKS LIMITED V MICHAEL DAVID OGIER HC NEL CIV 2008 442 192  30 June 2008

The evidence

[4]      Judgment was obtained by Retail Links against Mr Ogier on 2 November

2007.   The judgment was sealed on 20 December 2007.   Earlier, Retail Links’ solicitor was advised by the liquidators of companies of which Mr Ogier was a director that Mr Ogier was residing in the United States.  They provided the solicitor with the email address.

[5]      An  application  for  substituted  service  to  the  Nelson  District  Court  was granted on the basis that all the documents in question could be left with Mr Ogier’s New  Zealand  solicitor.    As  well,  the  order  for  substituted  service  directed  the sending of an email transmission of an electronic copy of the documents to the email address.

[6]      On 1 October 2007 Mr Ogier telephoned Retail Links and acknowledged receipt of the summary judgment proceedings.

[7]      After judgment was obtained Retail Links sent an email to the email address advising Mr Ogier of the judgment.  I infer no response was received to that email.

[8]      On 22 February 2008 Mr Ogier’s solicitors wrote to Retail Links’ solicitor advising Mr Ogier was currently residing “somewhere in the United States of America”.  Mr Ogier’s solicitor advised he was unable to contact Mr Ogier as he was unaware of Mr Ogier’s email address.

[9]      Mr Ogier is a New Zealand citizen.

Whether a bankruptcy notice can issue when a judgment debtor resides outside of New Zealand

[10]     The short answer to this is yes.   By s 17(3) of the Insolvency Act 2006 a debtor must be served with a bankruptcy notice in New Zealand unless the Court gave permission for service of the notice on the debtor outside of New Zealand.

[11]     Section 17, which refers to time limits for compliance for the bankruptcy notice, imposes a time limit of 10 working days after service if a debtor is served in New Zealand.   If a debtor is served outside of New Zealand, then the time for compliance is such that the Court directs.

[12]     It follows that the relevant provisions of s 17 contemplate the service of bankruptcy notices being permitted outside of New Zealand provided leave of the Court has been obtained.

Substituted service of bankruptcy notices outside of New Zealand

[13]     High Court Rule 211 permits the substituted service of documents “if it appears to the Court that reasonable efforts have been made to effect service of any document”.   The words “any document” would include a bankruptcy notice. However, bankruptcy proceedings are not those which are permitted to be served outside of New Zealand without leave of the Court (rr 219 and 220).

[14]     Leave can be granted to permit service of a bankruptcy notice outside of New

Zealand.

Whether leave should be granted to permit service by way of Mr Ogier’s email address

[15]     In my judgment, leave should not be granted to permit service in the manner requested.

[16]     Service by email, without more, is not permitted by the High Court Rules. Nor  does  there  appear  to  be  any authority which  suggests  that  service  may be complete upon the simple despatch of an email.

[17]     I  assume  Mr  Ogier’s  former  New  Zealand  solicitor  is  now  without instructions.  Therefore, Retail Links’ request to effect service by email essentially

amounts to ‘cold-calling’ Mr Ogier.  There are a host of practical reasons to reject such a practice.

[18]     Although senders may utilise “delivery” and “read” receipts that all email software provides for, it is a far from secure system to ensure receipt by the proper recipient.  Email systems can be set up not to return any receipts at all.

[19]     Also, there is a need to be wary where a person, or their lawyer, has expressly indicated a willingness to accept service by email, e.g., if the email is sent while the person and/or the lawyer is away on business, or on holiday.

[20]     The  fact  is  that  service  by  email  does  not  provide  the  usual  safeguards available in law offices where, during absences or during vacations, the office staff can deal with, process and inform the lawyer of the need for urgent attention.  Also, and usually, operators of email protect access to the inbox by use of a password.  It would be unsurprising if the office staff members could not access the inbox in the absence of the lawyer.

[21]    Technological advances are continuing to develop means of speedy and effective delivery.  To the extent they can assist with the service of Court documents, those developments ought to be embraced.  However, the practical difficulties need to be acknowledged.  The objective is to achieve a high degree of certainty in the outcome, i.e., of prompt service.

[22]     In the United Kingdom and in the United States of America a framework has been provided which seems to suggest that service can only be complete where there has  been  prior  consent  understanding  between  the  parties:  refer  Part  6  Civil Procedure Rules (UK), and in particular paragraphs 3.1 and 3.2.

[23]     The United States position is illustrated in the Court of Appeal’s decision Rio Properties 284 F.3d 1007. That case explained the policy surrounding service by email. Although service by email was authorised in that case, it was in circumstances far different from that advanced in this case.

[24]     Unless expressly consented to in advance by the intended recipient, the Court is unlikely to grant leave to effect service of Court documents by email alone.

Judgment

[25]     Leave is refused to permit service of the bankruptcy notice outside of New

Zealand by delivery to Mr Ogier’s email address.

Solicitors
Hunter Ralfe, Nelson for Applicant