FEDERAL COURT OF AUSTRALIA Lucas (Receivers and Managers), in the matter of MSI Holdings Pty Ltd (Receiver and Managers Appointed) (in liq) [2012] FCA 1486 Citation: Lucas (Receivers and Managers), in the matter of MSI Holdings Pty Ltd (Receivers and Managers Appointed) (in liq) [2012] FCA 1486 Parties: PETER ANTHONY LUCAS AND GLENN MICHAEL SHANNON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF MSI (HOLDINGS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 120 419 409 File number: QUD 312 of 2012 Judge: LOGAN J Date of judgment: 30 November 2012 Catchwords: CORPORATIONS – insolvency – summons for examination about a corporation's examinable affairs – interlocutory application seeking, inter alia, withdrawal of summons for examination for want of service – consideration of requirements for service – whether personal service had occurred – Court informed by Re Elkateb, Lawindi v Elkateb (2001) 187 ALR 479 – examinee was personally served, based on consideration of factual circumstances Legislation: Corporations Act 2001 (Cth) s 596B Federal Court Rules 2011 (Cth) r 10.01, r 10.12 Federal Court (Corporations) Rules 2000 (Cth) r 1.3, r 11.10, r 11.4 Cases cited: Re Elkateb, Lawindi v Elkateb (2001) 187 ALR 479 Date of hearing: 30 November 2012 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Applicant: Mr PA Looney Solicitor for the Applicant: McInnes Wilson IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 312 of 2012 IN THE MATTER OF PETER ANTHONY LUCAS AND GLENN MICHAEL SHANNON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF MSI (HOLDINGS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 120 419 409 BETWEEN: PETER ANTHONY LUCAS AND GLENN MICHAEL SHANNON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF MSI (HOLDINGS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 120 419 409 Applicant JUDGE: LOGAN J DATE OF ORDER: 30 NOVEMBER 2012 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Address for service 1. Until further order the address for service for, Mr Leif Schipper, ("Mr Schipper") in this proceeding and in the proceedings for his public examination be: 1.1. postal address: PO Box 420, Elsternwick, Vic, 3185; 1.2. email address: leif.schipper1@bigpond.com 1.3. telephone number: 0411 104 630 2. Interlocutory application by Mr Schipper filed 21 November 2012 2. The application filed by Mr Schipper on 21 November 2012 ("the interlocutory application") be dismissed. 3. Mr Schipper pay the costs of the applicants in this proceeding ("the Receivers") of and incidental to the interlocutory application including the costs in respect of the proceeding on 15 November 2012. 3. Holding of Public Examination of Mr Schipper 4. Unless otherwise ordered upon application by Mr Schipper or the Receivers the public examination of Mr Schipper be conducted before a Registrar in the Commonwealth Law Courts in Melbourne on a date to be fixed by the Registrar after consultation with the Receivers and Mr Schipper as further directed below. 5. The said consultation is to take the form of the Registrar making an offer to Mr Schipper of 3 different dates suitable to the Receivers with a request that Mr Schipper notify the Registrar and the Receivers in writing within 7 days as to which of these dates is convenient to him ("the public examination date offer"). 6. The public examination date offer is to be made by the Registrar sending details of the proposed dates to Mr Schipper to both his postal and email addresses for service fixed this day by the order made as set out in paragraph 1 above. 7. If Mr Schipper notifies the Registrar and the Receivers in writing by post or by email within 7 days of receipt of the public examination date offer as to which of these dates is convenient to him, the date to be fixed for the conduct of the public examination of Mr Schipper shall be that date failing which it shall be the first of the dates contained in the public examination date offer. 8. Mr Schipper and the Receivers have liberty to apply in respect of the orders and directions made herein in respect of the date on which the public examination of Mr Schipper is to be held. 4. Notice of orders made The Receivers are to give Mr Schipper notice of these orders by causing a copy thereof to be sent as soon as is practicable to Mr Schipper to both his postal and email addresses for service fixed this day by the order made as set out in paragraph 1 above. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 312 of 2012 IN THE MATTER OF PETER ANTHONY LUCAS AND GLENN MICHAEL SHANNON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF MSI (HOLDINGS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 120 419 409 BETWEEN: PETER ANTHONY LUCAS AND GLENN MICHAEL SHANNON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF MSI (HOLDINGS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 120 419 409 Applicant JUDGE: LOGAN J DATE: 30 NOVEMBER 2012 PLACE: BRISBANE REASONS FOR JUDGMENT 1 Today is the return date in respect of an interlocutory application filed by the respondent, Mr Leif Schipper, on 21 November 2012. By that application, Mr Schipper seeks the following orders against the applicants, Messrs Peter Anthony Lucas and Glen Michael Shannon, in their capacity as receivers and managers for MSI (Holdings) Pt Ltd (Receivers and Managers Appointed ) (in Liquidation) (MSI): 1. That the order dated 9 November 2012 be discharged in accordance with the provisions so provided in clause 3 of the order. 2. That the warrant issued for the arrest of Leif Schipper to be brought to the court for examination about the examinable affairs of MSI be withdrawn. 3. The summons for examination be withdrawn or deemed to not having [sic] been served on the respondent. 4. The accompanying affidavit as to the orders sought be read and applied accordingly. 2 As will be apparent from the recitation of the relief which Mr Schipper seeks, there is a history to this matter in terms of an earlier court order. On 9 November 2012 made an order for the issuing, pursuant to r 11.10(2) of the Federal Court (Corporations) Rules 2000 (Cth) (Federal Court (Corporations) Rules), of a warrant for the arrest of Mr Schipper. In turn, that warrant was issued on the basis of a failure on the part of Mr Schipper to attend for examination in accordance with an order made by a registrar on 27 July 2012 for, inter alios, his examination pursuant to a summons issued on the application of the receivers and managers pursuant to s 596B of the Corporations Act 2001 (Cth). 3 On 15 November 2012 Mr Schipper gave undertakings to the Court, which persuaded Greenwood J to order that day that the warrant issued on 9 November 2012 be discharged, that he immediately file and serve a notice for address for service, and that he file what has become the interlocutory application listed for hearing today. The undertaking which Mr Schipper gave to the Court on 15 November 2012 was that he would, until the conclusion of the examination hearings, immediately inform the receivers and managers, by their solicitors, in writing of his current residential address and any changes to that from time to time. 4 The interlocutory application filed by Mr Schipper does provide in the subscript at the foot of the interlocutory application address for service details comprising a mobile telephone number, an email address and a postal address for service at a post office box. Mr Schipper has not separately filed a notice of address for service. It is nonetheless clear from the details provided on the interlocutory application signed by him that those which appear at the foot of that document are intended by him to be his address for service. In these circumstances, and at least until further order, it is desirable to make express provision for those details supplied by him to be his address for service; in other words, to treat the provision of those details on the interlocutory application as sufficient compliance with the requirement in the order of 15 November 2012 for the filing and service of an address for service. That is so even though, in relation to that interlocutory application, Mr Schipper idiosyncratically provided that it was not intended to serve that application on any party. 5 The registrar has ensured that the interlocutory application has come to the attention to the receivers and managers. The receivers and managers have appeared today. Mr Schipper has not. There is something of a tale, nonetheless, relating to the absence of appearance by him. There is no doubt from the contents of exhibits 1 and 2, which comprise correspondence from him to a registrar and related email correspondence as between the registrar and him that Mr Schipper is aware that today is the appointed return date for his interlocutory application. 6 As is apparent from the email exchange and medical material furnished to the registrar and made an exhibit, Mr Schipper has a number of medical conditions, none of which can be said to have been of late onset. Those medical conditions did not manifestly prevent his appearing for himself in court before Greenwood J on 15 November 2012 so as to address the then dilemma presented to him by the existence of an outstanding warrant for his arrest. 7 Taking into account the medical conditions in the correspondence directed to the registrar, arrangements were made for the hearing to be conducted both in Brisbane as well as by video-link from Melbourne. That Mr Schipper was permitted to make his appearance by video-link from Melbourne was communicated to him by the registrar. There is no doubt from the exchange of correspondence with the registrar that Mr Schipper was aware of that offer. He has chosen not to take it up. 8 One reason for that may be, as is apparent from exhibits 1 and 2, that he has a medical appointment at 12.30 in Melbourne. What is not apparent from his correspondence with the registrar is that he has made any effort to change that appointment, or that in some way that appointment with that practitioner is one not readily changed, perhaps because of the popularity of the practitioner concerned. As I have said, for all the medical conditions that are mentioned in the material furnished to the registrar by Mr Schipper, none of them, either individually or collectively, prevented his appearance when his interests are so manifestly at stake earlier this month. 9 Mr Schipper, in the correspondence with the Court, sought the adjournment of the proceeding. The registrar has ensured that all of the correspondence directed to the Court by Mr Schipper in relation to today's proceeding has been copied to those acting for the receivers and managers. Taking into account the contents of that correspondence, including the medical materials, the receivers and managers oppose the granting of any adjournment in respect of the hearing of the interlocutory application. 10 For reasons which might be apparent from my reference already to Mr Schipper's afflictions not preventing an earlier appearance in court, I am not persuaded that today's proceeding ought to be adjourned. It needs to be understood by Mr Schipper that a proceeding before a court is not to be taken lightly and ought, in the ordinary course of events, to be given paramountcy in his life. That he has chosen to give paramountcy to a medical appointment doubtless to him seems warranted. That may well be the case, but he needs to understand that for a court to afford that same paramountcy some reasonable basis for deferring an appointed court hearing date needs to be provided. The mere presence of a medical appointment without explanation as to whether it is reasonably possible to change that is not sufficient. Especially that is so in relation to an application which Mr Schipper prosecutes in his own interests. It behoves him to look to his interests in the prosecution of that application. 11 That said, I do not consider that the interests of justice would be served by dealing with the interlocutory application on the basis that it should be dismissed for want of appearance and want of prosecution. The receivers and managers also do not press for that course to be taken, but rather that the application be dealt with on its merits. I now turn to that subject. 12 Some of the relief which Mr Schipper seeks in his interlocutory application has been overtaken by events. By that I mean that, insofar as he seeks that the order for the issuing of the warrant be discharged, an order has already been made by Greenwood J on 15 November 2012 for the warrant to be discharged. On closer examination, the substance of the issue which Mr Schipper seeks to agitate is whether or not the process underlying the issuing of that warrant namely, the summons issued pursuant to the registrar's order in July, was served lawfully upon him. That is a subject which he disputes. Even though he has, so I am satisfied, been served with the affidavits relied upon by the receivers and managers, on the subject of service, he has chosen not to seek their deponent's cross-examination. That might, of course, be a reflection of his disposition to seek an adjournment, but he had no assurance that an adjournment would be granted. He has not, in advance of today, given any notice requiring an attendance for cross-examination of the deponents in respect of service. 13 Materially, those deponents are Liam Michael O'Brien, Stacey Lee O'Brien and Jodi Lynelle Beardmore. Mr O'Brien deposes that on Wednesday, 19 September 2012 at approximately 5.04 pm on the footpath at George Street he approached a person whom he terms Leif Schipper with the following then transpiring: I asked him, "Are you Mr Leif Schipper?" Mr Schipper replied, "No." Stacey, ie, Mrs O'Brien, pointed to Mr Schipper and said, "Are you Mr Schipper?" Mr Schipper did not reply. I asked again, "Are you Mr Leif Schipper?" Mr Schipper did not answer me. I held the following documents: (a) summons for examination; (b) notice of listing; (c) letter of service from McInnes Wilson Lawyers dated 16 September 2012; and (d) cheque made payable to Leif Schipper in the amount of $400 for conduct money. I proceeded to hand the documents to Mr Schipper and reached out towards his chest and said, "You are served." The documents dropped to the ground and were left there by Mr Schipper. 14 The account given by Mr O'Brien is corroborated, save in one respect, by the evidence of Ms Beardmore and Ms O'Brien. The exception is that neither Ms O'Brien nor Ms Beardmore deposes to Mr O'Brien's having said the words "You are served". It is apparent, though, that they were slightly behind Mr O'Brien. There is no particular reason to think that Mr O'Brien is giving anything other than an honest and accurate account of an exchange of conversation in which he was a direct participant. 15 The event in George Street on 12 September occurred, so it is deposed to in the evidence, in the presence of a legal practitioner, a Mr Rivett. There is no evidence led from Mr Schipper from Mr Rivett. 16 What is also in evidence is a bundle of photographs of the event. These also tend to corroborate Mr O'Brien's account of events. They also show that the documents as described by him were not housed in an envelope. As will be seen, that is of some significance in relation to the subject of service. It should also be mentioned that Mrs O'Brien knew the person her husband describes as Mr Leif Schipper to, indeed, be Mr Leif Schipper. That is because she had been present in court earlier that day when the very same man had identified himself in court as Mr Leif Schipper. It was because of this that she was able to identify that gentleman to her husband as being Mr Schipper. 17 There is a question which arises on Mr Schipper's application, then, as to whether, in the circumstances which I have related and which I find to be what occurred that day in September, service according to law has occurred? 18 The requirements for service are set out in r 11.4 of the Federal Court (Corporations) Rules and in turn in r 10.01 and r 10.12 of the Federal Court Rules 2011 (Cth), the latter as made applicable by r 1.3 of the Federal Court (Corporations) Rules. Federal Court Rules 2011 (Cth) r 10.01 - Service on individual A document that is to be served personally on an individual must be served by leaving the document with the individual. r 10.12 - Refusal to accept document served personally (1) If a person refuses to accept a document that is required to be served personally on the person, the document is taken to have been served personally if the person serving the document: (a) puts it down in the individual's presence; and (b) tells the individual what the document is. (2) It is not necessary to show the original of the document to the person being served. Federal Court (Corporations) Rules 2000 (Cth) r 11.4 - Service of examination summons An examination summons issued by the Court must be personally served, or served in any other manner as the Court may direct, on the person who is to be examined at least 8 days before the date fixed for the examination. r 1.3 - Application of these Rules and other rules of the Court (1) Unless the Court otherwise orders: (a) these Rules apply to a proceeding in the Court under the Corporations Act, or the ASIC Act, that is commenced on or after the commencement of these Rules; and (b) Division 15A applies to a proceeding in the Court under the Cross-Border Insolvency Act. (2) The other rules of the Court apply, to the extent that they are relevant and not inconsistent with these Rules: (a) to a proceeding in the Court under the Corporations Act, or the ASIC Act, that is commenced on or after the commencement of these Rules; and (b) to a proceeding in the Court under the Cross-Border Insolvency Act that is commenced on or after the commencement of Division 15A. (3) Unless the Court otherwise orders, the rules applying to a proceeding in the Court under the Corporations Act, or the ASIC Act, as in force immediately before the commencement of these Rules, continue to apply to a proceeding under the Corporations Act, or the ASIC Act, that was commenced before the commencement of these Rules. Note: By virtue of the definition of this Act in section 9 of the Corporations Act, a reference to the Corporations Act includes a reference to the Corporations Regulations. [emphasis in original] 19 In Re Elkateb, Lawindi v Elkateb (2001) 187 ALR 479 (Re Elkateb) at p 479, Stone J was confronted with a problem similar to that which arises on the facts of this case as to whether or not personal service had occurred. Her Honour concluded that it had. In so doing, at paragraphs 12 and 13, her Honour helpfully collected pertinent authorities, there stating: [12] I do not need to decide whether the document was placed on the respondent's lap or thrown at him. In either event, the document could be said to have been "put down in his presence". As noted by Patteson J in the Court of King's Bench in Thomson v Pheney (1832) 1 Dowling's Practice Cases 441 at 443, "[i]f the deponent had informed the defendant of the nature of the process, and thrown it down, that would do". This comment was approved by Gummow J in Re Ditfort; Ex parte DCT (NSW) (1988) 19 FCR 347 at 360 ; 83 ALR 265 at 277, where he states: If the debtor were refusing to take such actual corporal possession of the process, but the process server informed the debtor of the nature of the process and left it before or near the debtor so that the debtor had unimpeded and immediate access to the documents, that, in my view, should, in general, be sufficient to comply with [a provision in the Bankruptcy Rules requiring personal service]. [13] The question then is whether the respondent was informed of the nature of the document. Order 7 r 2(2) states that the person served must be informed of the nature of the document. Although the word "nature" may be somewhat vague, it is clear that the rule is not very demanding: Re Roberts; Ex parte Evans (unreported, Hill J, 25 August 1989); Re Rosenberg; Ex parte Westpac Banking Corp (unreported, Spender J, 21 July 1993); Rogerson v Tchia (1995) 123 FLR 126. Further, the person served need not be informed of the "nature" of the document orally: Rogerson v Tchia (above). Thus if the "nature" of the document is clear on its face and the document is not placed in an envelope or otherwise concealed, r 2(2) will be satisfied. In this case, one of the documents served clearly bore the heading "CREDITOR'S PETITION" and identified "MOHAMED SAFWAT ELKATEB" as respondent. There was no evidence to suggest that these parts of the document would not have been immediately visible to Mr Elkateb. [emphasis in original] 20 Here, it is not open on the evidence to find that either Mr O'Brien, Mrs O'Brien or Ms Beardmore said to Mr Schipper that the documents were a summons for his examination and related materials. Nonetheless, and as Stone J highlights in her Honour's survey of authority in Re Elkateb, the rule is not very demanding in relation to what constitutes the informing of a person as to the "nature" of the documents served. Here, the critical document is the summons for examination. The nature of that document is readily apparent from its bold and larger type and titling on its first page. The authorities are such that its nature, then, was apparent on its face. The nature of the document was not concealed by enveloping. 21 I am quite satisfied that it was Mr Schipper who was served that day in September, and that the nature of the documents, critically, the summons for examination, was apparent on their face. That he chose to leave them on the ground and walk on was entirely a matter for him. He was served personally that day. 22 That being so, it is strictly unnecessary to proceed to consider an alternative submission made on behalf of the receivers and managers, which is that the Court should nonetheless conclude that the service of the summons for examination be deemed in any event to have been effected upon Mr Schipper by the provision to him via the receivers and managers of a copy of the summons. The receivers and managers seek alternatively on that basis a declaration that service of the summons for examination be deemed to have occurred not later than 20 November 2012. That is the date upon which Mr Schipper swore the affidavit in support of his interlocutory application. A copy of the summons is exhibited to that affidavit. Having regard to the conclusion which I have reached as to personal service, I do not propose to make that declaration. I do, though, make it clear that in the event that the conclusions which I have reached in respect of personal service were in error, then I would have made that declaration. In other words, I am more than satisfied that by 20 November 2012 at the latest, Mr Schipper was personally aware of and in possession of the summons for his examination. That being so, there is no merit in any of the relief which Mr Schipper seeks by his interlocutory application. Some of that relief, as I have indicated, is otiose. Other parts of it are unmeritorious given the conclusion reached as to personal service. I add that in reaching that conclusion, I have taken into account Mr Schipper's affidavit. I prefer, though, the events as recalled by Mr and Mrs O'Brien and Ms Beardmore. 23 A question which arises in light of the course of events which have transpired since the issuing of the summons in July 2012, and particularly having regard to the medical material exhibited to Mr Schipper's correspondence, is where, in the interests of justice, which include those of Mr Schipper, the examination ought best be conducted. There is, in the material which Mr Schipper has provided, a medical certificate which attests to an inability on his part to fly for some six months. Though tersely stated, I am prepared to act on that certificate on its face, at least for the present. That being so, the examination is one which ought to be conducted in Melbourne. 24 That is a course which, having seen Mr Schipper's medical materials, the receivers and managers themselves promote. I therefore propose to make directions which will facilitate the conduct of an examination in Melbourne. In so doing, I shall reserve to the parties liberty to apply in relation to those directions. I make those directions today without expressly hearing from Mr Schipper on that subject because it seems to me that his interests will be served sufficiently by the reservation of liberty to apply and, indeed, by the particular choices which I propose to incorporate in the directions. Adopting this course will also save the secured creditor the expense of making a further application to the Court. 25 There will be orders and direction accordingly. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 21 December 2012