Thinking | 27 April 2022

Electronic service of bankruptcy notices – through the looking glass

Key takeaways

The Bankruptcy Amendment (Service of Documents) Regulations 2022 came into effect on 6 April 2022. The regulations are intended to clarify that certain documents under the Bankruptcy Act 1966 (Cth), including a bankruptcy notice, can be given, sent, or served electronically without obtaining the prior consent of the recipient to receive the document electronically.

Brief background

Between 16 December 1996 and 31 March 2021, regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) governed the way that bankruptcy notices could be served. It encompassed various means, including personal delivery, posting, courier or document exchange or ‘electronic mail’.

On 1 April 2021, the Bankruptcy Regulations 2021 (Cth) replaced the Bankruptcy Regulations 1996 (Cth). Section 102 of the Bankruptcy Regulations 2021 (Cth) deals with service of documents and provides that service of documents under the Bankruptcy Act 1966 (Cth) may be effected by courier or by a document exchange facility if the recipient uses one. Section 102 makes no reference to service by other means.

There is, however, a note to section 102 which reads, ‘See also section 28A of the Acts Interpretation Act 1901.’ Section 28A of the Acts Interpretation Act 1901 sets out the manner in which documents can be served on a person, which includes personal delivery and sending by pre-paid post to the person’s residence or place of business. Section 28A also notes, ‘The Electronic Transactions Act 1999 deals with giving information in writing by means of an electronic communication’.

Clarity?

Apparently, the note to section 102 was supposed to make it clear that:

  • service of bankruptcy notices can be effected by all 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.

However, in our view it was not clear, and – unnecessarily – required readers to trawl through various sections of other legislation to understand the position.

It was also unsatisfactory that electronic service required the consent of the recipient. In the recent decision of Pegios v Arambasic,[1] service of a bankruptcy notice via email was held to be not properly effected because the recipient had not consented to service by email. The court held this could not be cured under section 305 of the Bankruptcy Act 1966 (Cth).

The Bankruptcy Amendment (Service of Documents) Regulations 2022 amends section 102 to directly reference the Electronic Transactions Act 1999 (Cth) and to provide that prior consent of the recipient is not required for electronic service. While this has clarified the position, it would have been much easier if section 102 was amended to reflect the former regulation 16.01, which clearly set out the ways in which a document can be served.

This article was written with the assistance of Georgia Clancy, Law Graduate.


[1] [2022] FedCFamC2G 17.

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