You’ve Got Mail: When is Service Actually Good Service?

Service on a company by post has its ups and downs. While it may be a quick and easy means of effecting service of legal documents on a company, the current uncertainty and delays surrounding mail often leads to problems down the track.

To effect service on a company, a document must be posted to the company’s registered address. Under Section 109X(1)(a) of the Corporations Act 201 (Cth)(CA):

     (1)  For the purposes of any law, a document may be served on a company by:

       (a)  leaving it at, or posting it to, the company’s registered office; […]

What exactly is meant by post? Section 29 of the Acts Interpretation Act 1901 (Cth) (‘AIA’) helpfully provides the following:

• Where an Act authorises or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

• This section does not affect the operation of Section 160of the Evidence Act 1995.

In Victoria,  Section 160 of the Evidence Act 2008 (Vic) further provides clarification:

Postal articles

• It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the seventh working day after having been posted [emphasis added].

Will it Bounce Back?

The above is best understood in the context of service of a creditor’s statutory demand for payment (CSD). The Court has assisted practitioners in the leading case of, In the Matter of Kornucopia Pty Ltd (No 1) [2019] VSC 756 (Kornucopia) in which Sifris J referred to and adopted the principles outlined in his earlier ruling in RE AXF Group [2019] VSC 671 [42] in order to establish when service has been properly effected and when that presumption has been rebutted:

“The Company bears the onus of establishing ‘proof to the contrary’ pursuant to s 29(1) of the AIA Act [RE AXF Group above]. 

It does so by proving non-delivery of the statutory demand to the premises of the company’s registered office, or delivery to some address other than the registered office.

If the company successfully proves alternative delivery or non-delivery, the presumption does not apply, and proof of non-delivery is effective as proof of non-service

[That is, unless the plaintiff can then establish service on the company by alternative means without relying on the presumption, such as through effective informal service by email or some other means] [see footnote 23].

However, if there is no evidence of actual delivery or non-delivery, then the presumption will apply and the item will be deemed to be delivered in the ordinary course of post [see also Formosa House Pty Ltd v Chang [2010] VSC 474 [11] [emphasis added].

In a case recently before me where a demand had been sent to a registered office by post, Re AXF Group [[2019] VSC 671], the only piece of evidence tending to suggest whether or where a statutory demand had been delivered was the absence of a notice from Australia Post indicating that the statutory demand had been returned to the plaintiff marked ‘undelivered’, ‘returned to sender’, or ‘not at this address’.”

In other words, proof of service is post, not receipt. An article is presumed to be served at the registered address unless evidence to the contrary (such as a return to sender notification from Australia Post) has been received. The Court confirmed this in AXF Group:

‘the absence of a notice from Australia Post marking the Demands as undeliverable is a significant indication as to whether or not delivery had occurred.’ Re AXF Group, [[2019] VSC 671 [84]] [emphasis added] [See respective discussions in von Risefer v Mainfreight International Pty Ltd [2009] VSCA 179; cf.  CGU Workers’ Compensation [(1999) [1999] VSC 227; 151 FLR 270.

Sifris J added:

“it is incumbent on the company to adduce proof of non‑delivery. If there is only proof that the statutory demands have not been received by the Company, the presumption is not displaced and service has been effective according to s 29(1) [of the AIA]. [Kornucopia].

The practical steps to establish service by post under Section 29 (1) were outlined by Hetyey As J in the matter of Re Slodyczka & Farren Pty Ltd [2022] VSC 19 based on a two limbed test being the ‘deemed service limb’ and the ‘presumed time of service limb’:

The effect of the first limb of s 29(1) is that service of the statutory demand is deemed to be effected by the act of posting a statutory demand and accompanying affidavit by prepaid mail to a company’s registered office if the address on the envelope was the company’s registered office at the time when the letter was posted.

To establish service, and therefore enliven the presumption under s 29(1) of the [AIA], an applicant for a winding up order must prove the following matters either by way of direct evidence or by inference:

(a) the envelope bore the correct name and address;

(b) the envelope enclosed the relevant document to be served;

(c) the correct cost of postage was used to send the envelope; and

(d) the envelope was placed in the post.

In order to negate the statutory presumption of service, a defendant company must adduce admissible evidence to establish non-delivery of the demand.

In light of the above, it is important that Affidavits of Service of CSDs make reference to the above information, and adequate records and copies of the envelope and enclosed documents are always maintained.

A further distinction is mail returned as “refused” as opposed to “return to sender.” In the matter of Fodare, the evidence presented at the hearing indicated that the documents had actually reached the registered office, but were apparently “refused” and sent back. The Court Held that as the documents had come to the attention of the Company, this nevertheless constituted proper service on the company (see Dennis v Fodare Pty Ltd [2007] NSWSC 180).

Further, in Kornucopia, Sifris J went on to add: “it is a question of fact in each case whether the circumstances indicate that there has been non-delivery at the relevant place (as distinct from an unwillingness to receive the documents at the place where they were delivered or a failure for the documents to be brought to the attention of a particular person despite being delivered to that place) [(2019) [2019] FCA 988; 137 ACSR 411, 426 [56].

Requirement to Maintain Registered Address

It is a requirement under the Corporations Act 2001 for a company to maintain a registered office and notify ASIC of any changes within 28 days (see section 142, CA).

However, if it comes to the attention that service at the registered address is unlikely to come to the company’s attention, this may displace any presumption. In Mangravati, a process server acting for a Creditor was aware that the registered address of the Company was now a vacant block. The Court held in cases where there is knowledge that the address where the notice was served is “false” or “non-existent”, then service will not be effective (see Mangraviti Pty Ltd, Joe v Lumley Finance Ltd [2010] NSWSC 61, with qualifications).

For anyone that has conducted a search of ASIC recently, you may have come across a warning from ASIC on the extract itself indicating the address may no longer be valid. Often in the extract above the registered address, ASIC will insert a line that INFORMATION RECEIVED ADDRESS MAY BE INVALID DD/MM/YYYY or simply, ASIC MAIL RETURNED DD/MM/YYYY.

Given the above authorities, practitioners should carefully consider alternative modes of service to avoid the issues outlined above. Under Section 109X(1)(b) of the CA, personal service on the Directors is considered valid service on the Company.

Written by Bradley Littlejohn Senior Associate