A recent Federal Court judgment has tested the validity of service of bankruptcy notices via email.
On 1 April 2021 the Bankruptcy Amendment (Service of Documents) Regulations 2022 was introduced (Regulations).
The purpose of the Regulations was to ‘clarify’ that documents under the Bankruptcy Act 1966 (Cth), such as bankruptcy notices, could be served on a person via email.
Previously, it was possible to serve a bankruptcy notice via email but it was not specifically provided for in the earlier Bankruptcy Regulations 1996 (Cth) and a creditor was required to obtain the consent of the recipient beforehand.
The uncertainty as to the power to serve a bankruptcy notice via email eventually boiled over in Pegios in his own capacity and as trustee for the Pegios Superannuation Fund v Arambasic [2022] FedCFamC2G 17 (Arambasic), wherein Judge Humphreys held that a bankruptcy notice (which was sent by email to the recipient, Maria Arambasic, and was actually acknowledged by her to have been received by that email) was not properly served, because the Court was not satisfied that Ms Arambasic had ever consented to receiving the bankruptcy notice via email.
Following the decision in Arambasic, the Regulations came into effect, with a revised regulation 102, which provides for ‘the giving of information’ by electronic communication. For enhanced clarity, regulation 102 also provides notes as follows:
‘See also section 28A of the Acts Interpretation Act 1901’
‘The Electronic Transactions Act 1999 deals with giving information in writing by means of an electronic communication.’
The intention of the accompanying note was to make it clear that:
- service of bankruptcy notices can be affected by the means set out in section 28A of the Acts Interpretation Act 1901; and
- section 9 of the Electronic Transactions Act 1999 applied to service of documents under the Bankruptcy Act 1966 (Cth), which allows electronic service where the recipient consents to electronic service.
Though still not as clear as intended, the effect of Note 2, to regulation 102 is that consent of the recipient is not required when serving a document via email.
As at the time of writing, there have been no reported decisions considering the newly implemented ability to serve a bankruptcy notice under regulation 102 of the Regulation, however the writer anticipates a decision being handed down in the future that addresses:
- whether the time for compliance with a bankruptcy notice ought to be extended if the recipient received the bankruptcy notice via email while overseas;
- how the Court will deal with emails that ‘bounce-back’ or are otherwise undeliverable.
This article was written by Jonathan Kramersh, Partner and Chris Melberzs, Associate
