Most lawyers know that there are special rules governing service of proceedings outside of Australia, but there are also statutory provisions governing inter-State service of proceedings. These rules stem from our constitution and federal system of government.

It is important to follow the requirements of these statutory provisions closely to effectively serve the defendant and avoid the proceedings being dismissed.

State and Federal legislation

In New South Wales, rule 10.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that proceedings in the Supreme Court of NSW that will be served in another State must bear a statement specifying whether the plaintiff intends to proceed under either:

  • the Service and Execution of Process Act 1992 (Cth) (SEPA); or
  • the UCPR.

Under Commonwealth laws, section 15 of the SEPA allows proceedings to be served in another State in accordance with the manner set out in SEPA. More importantly, section 16 of SEPA states that service is effective only if a prescribed notice (i.e. in the form of Schedule 1 to the Service and Execution of Process Regulations 1992 (Cth)) is attached to the proceedings to be served. Many young construction lawyers overlook this particular requirement of service.

Service must comply with SEPA

Notwithstanding UPCR rule 10.3, failure to comply with SEPA can result in the proceedings being dismissed for ineffective service.

For example, in Re Cummins Equipment Hire Pty Limited [2015] NSWSC 2085, the plaintiff (Cummins Equipment Hire) applied to set aside the defendant's (MX Holdings) statutory demand in relation to a debt against the plaintiff.

Besides service by express post to the defendant's registered office, the plaintiff went the extra mile and served its application on the defendant's solicitors by way of facsimile and post. Unfortunately, none of these modes of service were accompanied by a notice under section 16 of SEPA.

The plaintiff tried to argue that service was effective by relying on the following three arguments, which were all rejected by the Supreme Court:

  • The first argument was that service was made in accordance with UCPR rule 10.3. This argument failed as the plaintiff did not provide any statement under UCPR rule 10.3.
  • The second argument was that service was affected in compliance with UCPR rule 10.6. Rule 10.6 provides that a document may be served whether in New South Wales or elsewhere in accordance with any agreement, acknowledgment or undertaking by which the party to be served is bound. Interestingly, Brereton J rejected this argument by reason that SEPA excluded the operation of UCPR as a source of power for service in another State of Australia.
  • The last argument was an estoppel argument. The plaintiff argued that the defendant was estopped from denying good service because the plaintiff served the application on the nominated address for service in accordance with the defendant's statutory demand. This argument seems attractive, but the Supreme Court held that SEPA could not be outflanked in this way.

The Supreme Court held that the application was not properly served and dismissed the proceedings.

Of note, the Supreme Court did not think that the UCPR can provide a source of power for inter-State service. This seems to suggest UCPR rule 10.3 is obsolete. Despite the wording of UCPR rule 10.3, a plaintiff does not have a choice between UCPR and SEPA. The only way to validly serve the proceedings is to serve it in accordance with SEPA.

Conclusion

The key takeaways are:

  • make sure to comply with SEPA when serving proceedings inter-State, as failure to do so may result in your proceedings being dismissed; and
  • if you have been served with proceedings inter-State, always check whether the notice in Schedule 1 to the Service and Execution of Process Regulations has been attached.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.