Moving with the times – service of bankruptcy notices by email
- Published 07.09.2022
The Bankruptcy Amendment (Service of Documents) Regulations 2022 was introduced to clarify that certain documents under the Bankruptcy Act 1966 (Cth) (the Act), such as bankruptcy notices, can be served on a person by email without the consent of the recipient to do so.
Prior to April 2021, rule 16.01 of the Bankruptcy Regulations 1996 (Cth) provided that documents under the Act could be served by methods such as document exchange, post, personal delivery, courier and ‘electronic transmission’.1 While it remained open to creditors to obtain specific orders from the Court as to alternative means of service from the Court, there was no direct rule providing for service of bankruptcy notices by email.
The Bankruptcy Regulations 2021 (Cth) came into effect on 1 April 2021, replacing the Bankruptcy Regulations 1996 (Cth). Regulation 102 provides that service of documents can be effected by a document exchange facility (if both parties use the facility) or by courier. There was no reference made to electronic transmission. As a result, it remained uncertain as to whether email was permitted in respect of bankruptcy notices.
Regulation 102 contained a note to refer to s28 of the Acts Interpretation Act 1901. This section cryptically provides 'Note: The Electronic Transactions Act 1999 deals with giving information in writing by means of an electronic communication'. Pursuant to s9(5) of the Electronic Transactions Act 1999, giving information is defined as including ‘sending or serving a notification’.
So what does this all mean?
The case of Pegios Superannuation Fund v Arambasic (2022)2 considered a bankruptcy notice that was sent by email. Even though the judgment debtor admitted he received the email containing the bankruptcy notice, the Court decided that the notice was not served correctly because the judgment debtor did not consent to receiving email correspondence from the judgment creditor .
This decision and the legislation concerning service of bankruptcy notices had attracted criticism for lack of clarity. The provision leaves the public having to sieve through various sections of legislation to understand what is permitted or not. To further this, debate also ensued surrounding the legislative requirement that electronic service required the consent of the recipient.
Following the above decision, the Bankruptcy Amendment (Service of Documents) Regulations 2022 came into effect and amended regulation 102 of the Bankruptcy Regulation 2021 by explicitly allowing the ‘giving of information’ by electronic communication and made it clear that parties do not need to seek consent of the other person to serve a document by electronic communication.3