ASTERON LIFE LIMITED V FRANCK HC MAS CIV-2009-435-77

ASTERON LIFE LIMITED V FRANCK HC MAS CIV-2009-435-77 24 April 2009IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY CIV-2009-435-77IN THE MATTER OF of the Insolvency Act 2006 AND IN THE MATTER OF the bankruptcy of PIETER ANTON FRANCK ASTERON LIFE LIMITED Judgment Creditor On the papers Judgment: 24 April 2009JUDGMENT OF CLIFFORD J Introduction[1] Asteron Life Limited, a judgment creditor in bankruptcy proceedings, has applied without notice for an order that service of a bankruptcy notice on the judgment debtor Mr Franck may be effected by emailing that notice to Mr Franck at his person email address pafranck@gmail.com and receiving a read receipt. [2] It does so upon the grounds that prompt personal service is unlikely and on the basis of affidavit evidence from its solicitor that: a) Asteron Life Limited, the judgment creditor made several unsuccessful attempts to serve summary judgment service documents, and obtained an order for substituted service by affixing those documents to the door of an address in Masterton.b) Following service in that manner, the solicitor received a phone call from the judgment debtor's wife. The judgment debtor's wife advised that the judgment debtor was in South Africa, and provided the email address referred to. c) Prior to the entry of summary judgment the solicitor then sent an email to the judgment debtor at that email address and subsequently received a response. d) Subsequent to the entry of summary judgment and upon discovering that the address at Masterton had, since the service of the summary judgment service documents, been transferred out of the name of the judgment debtor and his wife, the solicitor contacted the judgment debtor via email advising of the entry of summary judgment, and the likely commencement of bankruptcy proceedings. The solicitor asked for an address for service. e) The judgment debtor responded to that email, but did not provide an address for service [3] Based on those contacts with Mr Franck, the solicitor stated that she believed Mr Franck was still in South Africa, that personal service on him would be difficult, if not impossible, and that he had shown prompt responses to each of the emails sent to his personal email address. She believed that if the documents were emailed to him at that email address they would come to his knowledge without delay. [4] Under s 17(3) of the Insolvency Act 2006, the Court may give permission for the service of a bankruptcy notice on a debtor outside New Zealand. Rule 6.1 of the High Court Rules provides the normal methods of service. In this situation, personal service of service on an address for service is necessary. Rule 6.4 provides for substituted service. [5] To obtain an order for substituted service it is necessary to show (1) that reasonable efforts have been made to serve the document on Mr Franck by personalservice or at an address for service, and (2) that either the document has come to Mr Franck's knowledge or it cannot be promptly service. The applicant is also required to specify how the method of substituted service would be "likely to bring the document to the notice of the person to be served". [6] I note that service by email of a bankruptcy notice was sought, but declined, in Retail Links Limited v Ogier HC NEL CIV-2008-442-192 30 June 2008. In that case, Associate Judge Christiansen expressed some concerns about the efficacy of service by email. I also note that in Re Rewiri, ex p Commissioner of Inland Revenue(2002) 16 PRNZ 415, Heath J held that applications for substituted service in bankruptcy proceedings were to be scrutinised with care because an order of adjudication operates in rem to alter the status of the debtor. [7] In Retail Links, Associate Judge Christiansen went so far as to opine that unless expressly consented to in advance by the intended recipient, the Court was unlikely to grant leave to effect service of Court documents by email alone. [8] I note, however, that Retail Links was a case decided before the new High Court Rules came into force, which provide further recognition for email service of documents. Moreover, more recent cases illustrate that substituted service by way of email is being granted. See Nielsen v Nielsen HC AK CIV 2007-404-005594 18 March 2009, for example, in which Hugh Williams J notes:[3] The bankruptcy notice was served on Mr Roderick Nielsen by substituted service on Mr Roderick Nielsen's email address. [4] On 16 August 2007 Dysart Timbers issued a creditors' petition based on the service of the bankruptcy notice on Mr Roderick Nielsen on 26 July 2007. It, too, was served by substituted service on the email address and on Mr Roderick Nielsen's counsel, Mr Swan.[9] See also Axe Market Gardens Ltd v Axe & Anor HC WN CIV-2008-485- 002676 16 March 2009 in which substituted service was permitted by way of both email and facebook. [10] In my view, it is no longer correct to say that the Court is unlikely to grant leave to effect service of Court documents by email alone.[11] Here, in terms of the careful scrutiny required and as to the three elements that need to be proved: a) Reasonable effortsIt does not seem that Asteron Life has made any direct efforts to serve the bankruptcy notice, save and to the extent that its solicitor did ask Mr Franck for an address for service, to which request she received no response. However, this is in the context of several unsuccessful attempts to serve the summary judgment service documents on Mr Franck at his last known New Zealand address, being informed by his wife that he is in South Africa and that she did not know his telephone number or address, the house subsequently being sold, Mr Franck ignoring emailed requests to provide an address for service and Mr Franck himself stating in the emails (most recently 1 April) that he is in South Africa. In these circumstances, I consider that reasonable efforts have therefore been made. b) Document has come to Mr Franck's knowledge or cannot be promptly served. It seems clear that the bankruptcy notice cannot be promptly served on Mr Franck by normal service. He is overseas. There is no known address, address for service or telephone number. He has ignored a request to provide an address for service. c) Would service by email be likely to bring the document to Mr Franck's notice?The email address has been used to contact Mr Franck in the recent past. Emails sent by the solicitor to Mr Franck at that address have been replied to on the same or next day (27 January 2009, 28 January 2009; 26 March 2009, 27 March 2009; 1 April 2009, 1 April 2009). It therefore seems very likely that he checks this email account regularly and will receive notice of the documents if served by way of that address.[12] I therefore conclude that the Court should give leave to the applicant serving the bankruptcy notice outside New Zealand and by way of the email addresspafranck@gmail.com. In the circumstances here, even acknowledging the significance of bankruptcy proceedings, I am of the view that service in the manner will be sufficient and appropriate to bring the documents to the attention of Mr Franck. [13] There will therefore be orders as sought by the Judgement Creditor."Clifford J"Solicitors: Burrowes & Company, P O Box 24515, Wellington (mrb@burrowes.co.nz)