Low v Maye [2015] FCCA 3485 (24 December 2015)

Last Updated: 11 January 2016

FEDERAL CIRCUIT COURT OF AUSTRALIA

LOW v MAYE

[2015] FCCA 3485

Catchwords: BANKRUPTCY – Application for orders in relation to costs and administration of bankruptcy and distribution of dividends – interim application for substituted service on bankrupt. PRACTICE AND PROCEDURE – Substituted service.

Legislation: Bankruptcy Act 1966 (Cth), ss.77C, 146 Federal Circuit Court Rules 2001 (Cth), r.6.15(b)

Deputy Commissioner of Taxation v Barnes [2008] FMCA 7; (2008) 70 ATR 776 Ginnane v Diners Club Ltd [1993] FCA 167; (1993) 42 FCR 90; (1993) 120 ALR 375 Klages (WA) Pty Ltd v Walker [2008] FMCA 348

Applicant:

JENNIFER ELIZABETH LOW AS TRUSTEE OF THE BANKRUPT ESTATE OF LINFIELD MICHAEL SEAN MAYE

Respondent:

LINFIELD MICHAEL SEAN MAYE

File Number:

PEG 199 of 2015

Judgment of:

Judge Lucev

Hearing date:

22 December 2015

Date of Last Submission:

22 December 2015

Delivered at:

Perth

Delivered on:

24 December 2015

REPRESENTATION

Counsel for the Applicant:

Mr F Carles

Solicitors for the Applicant:

Carles Solicitors

For the Respondent:

No appearance

ORDERS

(1) Personal service of the Applicant’s Application for Orders under s.146 of the Bankruptcy Act 1966 (Cth) (“the s.146 Application”) on the Respondent be dispensed with.
(2) Service of the following documents (“the Documents”):

1. the s.146 Application;
2. Affidavit of Jennifer Elizabeth Low sworn 8 May 2015 in support of the above s.146 Application; and

100. sealed copy of the Order for Substituted Service,

on LINFIELD MICHAEL SEAN MAYE (the Respondent) may be effected by posting on the same day by ordinary post addressed to:

(i) Mr L. M. S. Maye, PO Box 620 Claremont, Western Australia 6910; and
(ii) Mr L. M. S. Maye, PO Box 8079 Perth BC WA 6849.
(3) The following SMS message be sent to mobile telephone number 0406 129 135 by 4.00 pm on the same day as the posting above:

“L. M. S. Maye, an application under section 146 of the Bankruptcy Act has been filed in the Federal Circuit Court by your bankruptcy trustee J. E. Low and adjourned to 10 March 2016 at 2.15pm for hearing. Please contact J. E. Low’s solicitor on tel [phone] for copies of court documents”.

(4) Service in accordance with this order shall be deemed good and sufficient service of the s.146 Application upon the Respondent.
(5) The Documents shall be deemed to be served on the Respondent on the next business day following the date on which the matters in paragraphs 2 and 3 above occur.
(6) Costs of this application for substituted service be reserved.
(7) The matter be adjourned to 10 March 2016 at 2.15pm for hearing of the s.146 Application.

FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH

PEG 199 of 2015

JENNIFER ELIZABETH LOW AS TRUSTEE OF THE BANKRUPT ESTATE OF LINFIELD MICHAEL SEAN MAYE

Applicant

And

LINFIELD MICHAEL SEAN MAYE

Respondent

REASONS FOR JUDGMENT

Substantive application

1. The substantive application in these proceedings seeks orders against the respondent bankrupt under s.146 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) as follows:
   1. in relation to the costs, charges and expenses of the administration of the bankruptcy and a distribution of dividends amongst creditors who have proved their debts in the bankrupt estate;
   2. for the payment of interest to any creditors entitled to interest in particular circumstances; and
   100. precluding the respondent bankrupt from being entitled to any surplus funds after payment of dividends to creditors, and interest, until he has lodged his Statement of Affairs in the required form, together with the costs of the application.

Interim application for substituted service

2. Service has proved difficult in relation to the substantive application. Consequently, on 17 December 2015 the applicant trustee made an interim application for substituted service of the application for orders under s.146 of the Bankruptcy Act.
3. Essentially, the applicant trustee proposes substituted service by way of:
   1. post to postal addresses provided for the respondent bankrupt by the Department of Human Services and the Department of Transport (WA) as follows:
      1. PO Box 620, Claremont WA 6910; and
      2. PO Box 8079, Perth BC WA 6849; and
   2. an SMS message sent to mobile telephone number 0406 129 135.

The test for substituted service

4. The test for substituted service in the present circumstances is that outlined by the Federal Magistrates Court of Australia in Klages (WA) Pty Ltd v Walker [2008] FMCA 348 at [19]- [22] per Lucev FM where it was observed as follows (footnotes omitted):
   • 19. Rules 6.14, and especially 6.15, of the Federal Magistrates Court Rules 2001 (Cth) are relevant. Rule 6.15 provides as follows:
   • “When making an order for dispensing with service or for substituted service, the Court may have regard to:
   • (a) whether reasonable steps have been taken to attempt to serve the document; and
   • (aa) whether it is likely that the steps that have been taken have brought the existence and nature of the document to the attention of the person to be served; and
   • (b) whether the person to be served could become aware of the existence and nature of the document by means of advertising or another means of communication that is reasonably available; and
   • (c) the likely cost to the party serving the document, the means of that party and the nature of the proceedings; and
   • (d) any other relevant matter.”
   • 20. The Court notes that rule 6.15 sets out some matters that the Court may have regard to, in its discretion, in determining whether to order substituted service.
   • 21. Section 309(2) of the Bankruptcy Act provides that where a document is to be served on a person:
   • The Court may, in a particular case, order that it be given or served in a manner specified by the Court, whether or not any other manner of giving or serving the notice or other document is prescribed.
   • 22. It would therefore appear to be a matter of discretion as to whether the Court utilises the provisions of rules 6.14 and 6.15 of the Federal Magistrates Court Rules or section 309(2) of the Bankruptcy Act to prescribe the means of service on a person, including service outside of the jurisdiction, assuming that the relevant provisions of each can otherwise be complied with. Under s.309(2) of the Bankruptcy Act, the discretion conferred is unfettered, but not to be exercised lightly. The Court must be satisfied that:
   • a. abnormal difficulty exists in effecting personal service of the creditor’s petition on the Respondent; and
   • b. there is a reasonable probability that the Respondent will be informed of the petition as a result of the form of service identified.

The evidence

5. The applicant trustee relies upon the affidavits of:
   1. Cheryl Lorraine Harrison sworn on 6 August 2015 (“Harrison’s August 2015 Affidavit”); and her further affidavit sworn on 16 December 2015 (“Harrison’s December 2015 Affidavit”); and
   2. Philip Michael Davie sworn 17 December 2015 (“Davie’s Affidavit”).
6. The evidence in Harrison’s August 2015 and December 2015 Affidavits and Davie’s Affidavit establishes that:
   1. extensive efforts have been made to effect personal service of the s.146 application on the respondent bankrupt between 13 May 2015 and 23 June 2015, including the following:
      1. reviewing the current White Pages telephone directory for Western Australia, and ascertaining residential listings for the surname “Maye”;
      2. reviewing an earlier White Pages telephone directory and ascertaining business addresses in Western Australia for a firm of accountants called “Maye & Associates”;
      3. searching the records of the Australian Electoral Commission for listings for persons with the surname “Maye” resident in Western Australia;
      4. visiting a number of residences over a period of approximately one month in May and June 2015 and making enquiries of a number of persons at those residences with respect to their knowledge of the whereabouts of the respondent bankrupt;
      5. telephoning a mobile telephone number – 0406 129 135 – provided to Harrison by the respondent bankrupt’s brother;
      6. undertaking a search of the New South Wales White Pages telephone directory as a consequence of being told by the respondent bankrupt’s son that another of the respondent bankrupt’s sons resided in Sydney at an address unknown to the first son;
      7. undertaking a search of the Western Australian Electoral Commission records; and
      8. endeavouring to serve documents at an address in Newcastle Street, Perth which address was not an address which actually existed;
   2. the applicant trustee applied to the Official Receiver for notices under s.77C of the Bankruptcy Act (“Section 77C Notices”) to be issued to two Government departments in an attempt to obtain a current address for the respondent bankrupt. Section 77C Notices issued on 9 November 2015 by the Official Receiver resulted in the Department of Transport (WA) and the Department of Human Services (which administers Centrelink) providing residential and postal addresses for the respondent bankrupt to the Official Receiver;
   100. the residential address for the respondent bankrupt which was provided by the Department of Human Services was found not to exist;
   4. the residential address for the respondent bankrupt which was provided by the Department of Transport (WA) was previously found to not be the current address for the respondent;
   5. the respondent bankrupt’s brother advised that the respondent bankrupt is likely to be in receipt of Centrelink payments. The postal address provided by the Department of Human Services to the Official Receiver, being PO Box 620, Claremont 6910, is very similar to the postal address which was provided to the process server by the respondent bankrupt’s brother, namely PO Box 620 Perth 6910;
   6. the Department of Transport (WA) provided the Official Receiver with the postal address of PO Box 8079, Perth BC WA 6849; and
   7. the respondent bankrupt’s brother has provided a mobile telephone number for the respondent bankrupt, being 0406 129 135.

Consideration

7. The Court can take judicial notice of the fact that the postcode 6910 is not a Perth postcode, but is a postcode for Claremont. The postal address held by the Department of Human Services for the respondent, being PO Box 620, Claremont 6910, is therefore likely to be correct.
8. The Court is satisfied that reasonable steps have been taken by the applicant trustee to ascertain the respondent bankrupt’s whereabouts for the purposes of serving the substantive application on the respondent bankrupt. Telephone book and Electoral Roll searches have been conducted, various addresses for persons with the surname “Maye” have been ascertained, and the process server has undertaken enquiries in relation to those persons, and has ascertained the whereabouts of the respondent bankrupt’s ex-wife, brother, daughter and sons from whom certain information was able to be obtained. Further, appropriate government departments have been approached and addresses ascertained for a person answering the name of the respondent bankrupt. Given that the Department of Human Services is responsible for Centrelink payments and the Department of Transport (WA) is responsible for the provision of drivers’ licences, the Court is prepared to infer that the addresses obtained from those government departments are likely to be addresses used by the respondent bankrupt. Unfortunately, they are post office box addresses, and a post office box address cannot be personally served. Absent a person standing watch over the post office box, for a possibly inordinate length of time, the revelation of the post office box addresses does not facilitate personal service. Likewise, the obtaining of a mobile telephone number for the respondent bankrupt does not facilitate personal service. There is sufficient evidence concerning the obtaining of the post office box addresses for the Court to be able to infer that service by post on the respondent bankrupt at those post office box addresses would be likely to inform the respondent bankrupt of these proceedings: see Ginnane v Diners Club Ltd [1993] FCA 167; (1993) 42 FCR 90; (1993) 120 ALR 375 and the cases referred to therein. There is also sufficient evidence concerning the conduct of the person answering the mobile telephone number (0406 129 135) when rung by Harrison to infer that that person might be the respondent bankrupt seeking to avoid detection of his whereabouts. The Court considers it highly likely that that is the mobile telephone number of the respondent bankrupt given that that number was obtained from the respondent bankrupt’s brother by Harrison.
9. There is sufficient information concerning the likelihood that the respondent bankrupt is the user of the post office box addresses and the mobile telephone number referred to above, to warrant the conclusion that those modes of communication are being used by the respondent bankrupt, and that service upon them is likely to draw the respondent bankrupt’s attention to the documents to be served: Deputy Commissioner of Taxation v Barnes [2008] FMCA 7; (2008) 70 ATR 776 at [74]- [75] per Lucev FM.
10. The Court is satisfied that abnormal difficulty exists in effecting service upon the respondent bankrupt, particularly so in circumstances where his whereabouts have been unable to be ascertained despite diligent efforts by the applicant trustee, and where the only apparent means of possible service which might be able to draw the relevant documents to the attention of the respondent bankrupt would be service upon the post office box addresses and the mobile telephone number, by way of SMS text message.
11. The Court raised with Counsel for the applicant trustee the possibility of publishing advertisements in newspapers published nationally and throughout the State of Western Australia for the purposes of endeavouring to bring the existence of the documents to the attention of the respondent bankrupt. The applicant trustee, through Counsel, indicated a preparedness to publish such advertisements. The Court has, however, since considered the efficacy of such advertisements. The Court adds that the likely cost of such an advertisement, particularly one of sufficient prominence to possibly bring it to the attention of the respondent bankrupt, either directly or indirectly, would be such as to outweigh its likely efficacy. There is no evidence to suggest that such advertisements would be seen by the respondent bankrupt, or, necessarily, brought to his attention. Given the notoriously diminished circulation of print media in recent times the Court is not satisfied that for this reason, and the other reasons set out immediately above, that the respondent bankrupt could become aware of the existence and nature of the documents sought to be served by means of such advertising: Federal Circuit Court Rules 2001 (Cth), r.6.15(b). The Court will therefore not impose an additional requirement to publish an advertisement in any print media by way of a form of substituted service.

Conclusions and orders

12. The Court has concluded that orders should be made in the terms sought at orders 1 to 6 of the interim application for substituted service, with a minor correction to reflect the correct area code for the telephone number of the applicant trustee’s solicitors. For the purposes of orders 3 the matter is adjourned to 10 March 2016 at 2.15pm. In addition to the orders sought there will be a further order that the matter be adjourned to 10 March 2016 at 2.15pm for hearing.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Lucev

Associate:

Date: 24 December 2015