Are you serving documents correctly?
The Federal Court of Australia recently upheld the decision that in certain circumstances, a statutory demand can be validly served on a temporarily unattended office.
Background
The Deputy Commissioner of Taxation (DCT) filed an originating process to wind up the company due to insolvency under the Corporations Act 2001 (Cth). The statutory demand and affidavit (Documents) were served at the company’s registered address on 20 May 2024. The office was unattended and a sign on the door read ‘IF THIS OFFICE IS UNATTENDED PLEASE CALL XXXX XXXX’. The officer serving the Documents did not call the number and proceeded to slide the Documents under the door.
The office had been permanently unattended since mid-2018, and the company did not receive the statutory demand within the required 21-day period.
Issue
The issue to be determined was whether or not the doctrine of fair notice applied in the circumstances. The company did not argue the effectiveness of the service and accepted that the Documents were served pursuant to s 109X(1)(a) of the Corporations Act 2001 (Cth). The company however submitted that the doctrine of fair notice applied to the given situation.
Findings
The doctrine of fair notice states that ‘in cases where there is knowledge that the address is “false” or “non-existent” then service will not be effective’.
The court examined the doctrine of ‘fair notice’ and considered whether the DCT knew the demand would not reach the company.
The court held that there was no want of fair notice in the circumstances for the following reasons:
The sign on the front door suggested that the office was temporarily unattended due to the use of the word ‘if’. The word did not convey or suggest that the office was permanently unattended.
The information held by the Australian Tax Office does not attribute to its officers and employees. The judge reasoned that it was the officer’s state of mind and knowledge that is relevant for the purpose of this case.
It was not ‘incumbent’ on the officer (acting reasonably) to check the address details on the Integrated Processing System to serve the Documents.
The court noted that in this circumstance the Documents were not returned and the DCT did not have knowledge that the Documents had not been received by the company.
Key Takeaway
Companies that operate with dormant offices need to consider whether the registered office is suitable for its intended use. Companies face the risk of valid service if the offices are not regularly attended or alternative arrangements are not made. Serving officers are not obligated to investigate the address that they are instructed to serve at and deadlines may be missed.
Before instructing for documents to be formally served on a company or individual, it is prudent to check the address details beyond the registered office. If an alternative address for service is located, then further investigation may be required before serving documents. It is important that documents are validly served.
For more information about how the recent decision may apply to your circumstances, please contact one of our people.
Ron Zucker 0410 590 111
Eollyn Cortes 0478 727 395
Sagang Chung 0431 435 333
Julia Zou 0426 670 202
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