30
Sep

Can you serve a statutory demand by email?

Does email count as service?

Serving a statutory demand on a company is a critical step in the debt recovery process. Valid service triggers the 21-day statutory period within which the company must comply with the demand or apply to have it set aside.

Traditionally, statutory demands have been served by post or by leaving the demand at the company’s registered office. However, the Corporations Act 2001 (Cth) (Act) now contains technology-neutral provisions which can permit a statutory demand to be served electronically, including by email.

In short: a statutory demand may be capable of being validly served by email. However, simply emailing the demand to an address associated with the debtor company does not necessarily constitute valid service. In particular, careful consideration must be given to whether the email address used is a “nominated electronic address” for the purposes of the Act.

What does the law say?

Section 109X of the Act provides several established methods by which documents may be served on a company. These include:

  1. leaving the document at, or posting it to, the company’s registered office; and
  2. delivering a copy of the document personally to a director of the company who resides in Australia or an external Territory.

Where a document is served by post, the legislation also contains provisions relevant to determining when service is taken to have occurred.

The Act now additionally contains a technology-neutral framework for sending certain corporate and insolvency documents electronically.

Sections 110C and 110D of the Act apply to documents required or permitted to be sent under various parts of the Act, including Chapter 5, which contains the statutory demand regime.

Importantly, the legislation recognises that “sending” a document can include circumstances where the Act uses expressions such as “give” or “serve”.

Accordingly, depending upon the circumstances, a statutory demand may be capable of being validly served electronically, including by email.

What constitutes valid service by email?

One of the most important requirements for electronic service is the email address used.

Under the Act, an electronic communication must be sent to a “nominated electronic address” of the recipient.

A nominated electronic address includes:

  1. an electronic address nominated by the recipient to the sender; or
  2. where no address has expressly been nominated, an electronic address which the sender believes on reasonable grounds to be a current electronic address for the recipient to receive electronic communications.

Key point: the fact that an email address belongs to an employee, director or officer of the debtor company does not, by itself, necessarily establish that it is an appropriate address for electronic service.

The question is whether there are reasonable grounds for believing that the particular address is a current electronic address at which the company receives electronic communications.

What have the Courts said?

DOF Subsea Australia Pty Ltd v Rees [No 2] [2025] WASC 101

The importance of using an appropriate electronic address was recently considered in DOF Subsea Australia Pty Ltd v Rees [No 2] [2025] WASC 101.

In that case, a creditor sent a statutory demand by email to an executive of the debtor company and also subsequently served the demand by registered post at the company’s registered office.

The creditor argued that the statutory demand had been served when the earlier email was sent.

The Court disagreed.

Although the creditor had previously communicated with the executive by email, the Court was not satisfied that there were reasonable grounds for believing that the particular email address was a current electronic address of the debtor company for receiving electronic communications.

The Court observed that reasonable grounds may exist where, for example:

  1. the company has substantively responded to the creditor using the particular email address;
  2. the email address is identified as the company’s contact address in the contract underlying the debt;
  3. the email address appears in Court or arbitral documents relating to the dispute; or
  4. the address is that of the company’s solicitors in relation to the underlying dispute.

The Court ultimately held that the statutory demand had not been validly served by email and that service instead occurred when the demand was subsequently received by registered post at the company’s registered office.

The decision demonstrates why creditors should not assume that an email address is sufficient merely because it belongs to a director, officer or employee of the debtor company.

When is an electronically served demand received?

Where the requirements for electronic service are satisfied, s 105A of the Act is relevant to determining when the electronic communication is received.

An electronic communication is generally received when it becomes capable of being retrieved by the recipient at its nominated electronic address.

The legislation also provides that an electronic communication is presumed to be capable of retrieval when it reaches the nominated electronic address.

Actual reading of the email is not necessarily required. Valid electronic service does not necessarily depend upon the recipient actually opening or reading the email.

This can make the precise time at which an email reaches the recipient important, particularly because service of a statutory demand triggers the commencement of the 21-day statutory period.

Can a statutory demand be served using a link?

The Act also recognises methods of electronic communication which provide the recipient with sufficient information to access a document electronically.

This can potentially include providing a link through which the statutory demand can be accessed.

However, creditors adopting this method should take particular care to ensure that:

  1. the document is readily accessible;
  2. the link remains operational;
  3. any password or access requirements are provided to the recipient; and
  4. evidence is retained demonstrating when and how the link was provided.

Given the consequences of defective service, attaching the statutory demand directly to an email may generally provide a simpler evidentiary position than relying upon an external link.

How do you prove service by email?

Where a creditor intends to rely upon electronic service, evidence of both the transmission of the email and the basis upon which the email address was selected should be retained.

Relevant evidence may include:

  1. the sent email showing the date, time, recipient and attachments;
  2. delivery confirmations or other evidence demonstrating that the email reached the recipient’s server;
  3. any read receipt or acknowledgement received from the recipient;
  4. earlier correspondence from the company using the same email address;
  5. contracts, Court documents or other records identifying the email address as an address used by the company; and
  6. any response from the company acknowledging receipt of the statutory demand.

This evidence may become important if the date or validity of service is subsequently disputed.

Should you also serve the statutory demand by post?

In many cases, yes.

Although electronic service can be effective, creditors should consider serving the statutory demand by more than one method, particularly where there is any uncertainty about whether the relevant email address satisfies the statutory requirements.

For example, a creditor may email the statutory demand while also posting or delivering a copy to the company’s registered office in accordance with s 109X of the Act.

Using multiple methods can substantially reduce the practical risk associated with a later dispute about service.

Keep a record of every method of service. The earliest valid service may determine when the 21-day statutory period commenced, so creditors should retain accurate evidence of each method used and the relevant dates.

Practical steps when serving a statutory demand by email

  1. Confirm the email address – identify why there are reasonable grounds for believing that the address is a current electronic address of the company for receiving communications;
  2. Check previous correspondence – determine whether the company has previously used or substantively responded from that address in relation to the debt or dispute;
  3. Attach the demand directly – where practicable, attach the statutory demand and any accompanying affidavit directly to the email rather than relying solely upon an external link;
  4. Keep evidence of transmission – retain the original sent email, attachments and any delivery or read confirmations;
  5. Send during business hours – this can reduce unnecessary arguments about precisely when the communication was received; and
  6. Consider an additional method of service – particularly where the debt is substantial, the debtor is likely to dispute the demand or there is uncertainty about the electronic address being used.

Why does valid service matter?

Service is not merely an administrative step.

A company has 21 days after service of a statutory demand to comply with it or apply to the Court to have the demand set aside. The date of service therefore determines when that statutory period begins.

If the company does not comply with a properly served statutory demand within the statutory period, a presumption of insolvency may arise which can subsequently be relied upon in an application to wind up the company.

A dispute about service can therefore affect whether the statutory period has commenced, whether it has expired and whether the creditor can rely upon the demand in subsequent winding-up proceedings.

For that reason, creditors should avoid treating email service as simply a matter of sending the statutory demand to any known email address associated with the debtor company.

Dark Legal is here to help

The preparation and service of a statutory demand requires care. A defect in the demand, uncertainty about the debt or a failure to establish valid service can create unnecessary delay and cost and may prevent the creditor from relying upon the demand in subsequent insolvency proceedings.

Dark Legal assists creditors with preparing and serving statutory demands, determining the appropriate method of service and taking further debt recovery and insolvency action where a debtor company fails to comply.

If you are considering issuing a statutory demand, or there is uncertainty about whether a demand has been properly served, obtaining advice before the 21-day statutory period is relied upon can help avoid procedural disputes later.