SGR Pastoral Pty Ltd v Christensen

In this case, her Honour examined the question of whether an application to set aside a statutory demand was validly served by email and within 21 days, in accordance with the requirements of s 459G of the Corporations Act 2001 (Cth). Her Honour concluded that as there was no requirement for personal service, service by email was permissible and service was effected when the email was received and not when it was opened.

Bowskill J

13 September 2019

An unresolved key issue, preliminary to the resolution of the dispute, was whether the court had jurisdiction, and whether the application and supporting affidavit to set aside the statutory demand had been served within the mandatory 21 days. Her Honour noted the following:

1.  The statutory demand was sent via post to the address of the applicant’s registered office on 12 July 2019; [4]

2. It was received some five days later on 17 July 2019 and the application was out of time; [5], [6]

3. Given the above, the 21 days in which an application to set aside the statutory demand had to be made (s 459G) expired on 7 August 2019; [9]

4. The hardcopies of the application and supporting affidavit were served at the respondents’ solicitors address out of time on 9 August 2019; [11]

5. Notwithstanding, sealed copies were served via email on 7 August 2019 to two email addresses belonging to the respondents’ solicitor. [12].

The quandary was that whilst that email was received at approximately 1:21 pm:

1. It was not seen by the Managing Clerk of the firm until “around 2:15 pm”; and

2. It was not read until “sometime after 4:00 pm” at which point he was no longer at the office and was working from home. [13].

Accordingly, the primary issues requiring resolution were:

1. Whether service under s 459G can properly be effected by email;

2. If so, what time service was effected;

3. If it was not until after 4:00 pm, when the Managing Clerk actually read the email, whether service is taken to be effected the next day.

4. If service was not effected until the Managing Clerk actually read the email, whether the documents were properly served at the nominated place for service, in circumstances where the Managing Clerk was offsite when he perused the email. [14].

Section 459G(3) of the Corporations Act 2001 (Cth) prescribes that:

“An application [to set aside a statutory demand] is made in accordance with this section only if, within those 21 days:

(a)  an affidavit supporting the application is filed with the Court; and

(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.”

In a methodical judgment, her Honour observed that the weight of authority supports the notion that, where a creditor nominates an address for service in the statutory demand, it is permissible to serve an application and supporting affidavit under s 459G at that address, and personal service is unnecessary; and further that the means by which the documents come to arrive at that address is of no consequence. [36].

She clarified that in the particular case of service by email, what is requisite “is that the electronic copy of the application and supporting affidavit was received, in a complete and legible form, at the address for service, within the prescribed time. That is, that the email was sent to an email address that belongs to the nominated agent for service (here, the solicitors, Australian Property Lawyers); that the email attaching the documents to be served actually arrived at the email address; and that the email and attached documents were capable of being opened and read (even if they were not opened and read until later)”. [37].

In taking that approach, her Honour endorsed the analysis in Newsnet Pty Ltd v Patching (2011) 81 NSWLR 104, where White J reasoned that documents served by email reach the place for service at the time of receipt, as distinct from when an email is actually opened or read. [30]. That in itself brings about evidentiary issues relating to when an email has actually “arrived at” the email address – issues tidily resolved in this matter in view of the Managing Clerk’s evidence regarding when the email was both received by his employer firm and seen by him. As such, her Honour was comfortable concluding that the documents were served by no later than 2:15 pm, when he saw the email. Since the email and attachments actually arrived at the email address of the place for service [42] and were thereafter dealt with by a person with authority to deal with the matter on behalf of the person to be served, it followed that constituted effective service. [58].

Her Honour took the view that the above was not altered by the fact that the email was unread until after 4:00 pm.

Lastly, her Honour deemed the specific location of the Managing Clerk at the time when he read the email as irrelevant to the question of whether the documents were in fact served at the nominated address for service, pithily noting: “Given the strictness of the regime according to which an application to set aside a statutory demand may be made, in my view it would be absurd  to conclude that the recipient can avoid a finding of effective service in circumstances where the email was actually received, and they saw the email when they were in the office (the place of service), but did not open and read it until they had left the office”. [48].

Given the above, her Honour was satisfied the application had been properly served within time. [49].

A de Jersey