Autumn Solar Installations Pty Ltd v Solar Magic Australia Pty Ltd

[2010] NSWSC 463

CITATION:	Autumn Solar Installations Pty Ltd v Solar Magic Australia Pty Ltd [2010] NSWSC 463
HEARING DATE(S):	13/05/10
JUDGMENT DATE :	13 May 2010
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	13 May 2010
DECISION:	Proceedings dismissed with costs.
CATCHWORDS:	CORPORATIONS - winding up - statutory demand - application for order setting aside - whether 21 day time limit exceeded - method of counting days discussed - point at which days begin and end identified
LEGISLATION CITED:	Acts Interpretation Act 1901 (Cth), s 36(1) Corporations Act 2001, ss 105, 459G
CATEGORY:	Principal judgment
CASES CITED:	Challenge Home Loans v Etienne Lawyers [2007] NSWSC 1145 David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265 Employers Mutual Indemnity (Workers Compensation) Ltd v Omni Corporation Pty Ltd [2009] NSWSC 264; (2009) 255 ALR 362 Forster v Jododex Australia Pty Limited [1972] HCA 61; (1972)127 CLR 421 Lester v Garland (1808) 15 Ves Jun 248; 33 ER 748 Prowse v McIntyre [1961] HCA 789; (1961) 111 CLR 264
PARTIES:	Autumn Solar Installations Pty Limited - Plaintiff Solar Magic Australia Pty Limited - Defendant
FILE NUMBER(S):	SC 2919/085265
COUNSEL:	Mr T J Morahan - Plaintiff Mr S A Wells - Defendant
SOLICITORS:	Hozack Clisdell Lawyers Pty Ltd - Plaintiff Law 554 - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY 13 MAY 2010

2010/085265 AUTUMN SOLAR INSTALLATIONS PTY LTD v SOLAR MAGIC AUSTRALIA PTY LTD

JUDGMENT

1 On 7 April 2010, the plaintiff filed a summons seeking an order that a statutory demand served on it by the defendant be set aside. The supporting affidavit of Mr Penfold, the plaintiff's solicitor, was filed with the summons on 7 April 2010.

2 The defendant's position is that the summons is not a valid and effective application under s 459G of the Corporations Act 2001 (Cth) for an order setting aside the statutory demand and that the court has no jurisdiction to make such an order. This is said to be so because of the time specification in s 459G(2) and s 459G(3). Section 459G is in the following terms:

“(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within 21 days after the demand is so served.

(3) An application is made in accordance with this section only if, within those 21 days:
(a) an affidavit supporting the application is filed with the Court; and
(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.

3 The plaintiff contends that all relevant steps were taken “within 21 days after” service of the demand on the plaintiff. It is, therefore, necessary to consider the competing contentions.

4 It is common ground that the statutory demand was served on the plaintiff on 16 March 2010. For s 459G(2) to be satisfied, therefore, the application embodied in the plaintiff's summons must be seen to have been “made within 21 days after” the service that that occurred on 16 March 2010. This means that all the steps mentioned in s 459G(3) must be seen to have been taken “within those 21 days”.

5 It is thus necessary to identify the end of the period of “21 days after” 16 March 2010. That process is assisted by s 105 of the Corporations Act and s 36(1) of the Acts Interpretation Act 1901 (Cth) to which it refers. I had occasion to consider those provisions in Employers Mutual Indemnity (Workers Compensation) Ltd v Omni Corporation Pty Ltd [2009] NSWSC 264; (2009) 255 ALR 362 and I need not repeat here the analysis in paragraphs [8] to [10] of that judgment. It is sufficient to say that, in calculating whether an application was made within the period of 21 days “after” 16 March 2010, one leaves out of account 16 March 2010 itself. It is, in s 105 terms “the other day” or “the day of the other act or event”.

6 No period “after” 16 March 2010 started until 16 March 2010 had itself ended. The first day of every period “after” 16 March 2010 was 17 March 2010. At the conclusion of 17 March 2010, one day of every period “after” 16 March 2010 had elapsed. In the same way, two days of every period “after” 16 March 2010 had elapsed at the end of 18 March 2010. If one continues this process of counting day by day, twenty-one days “after” 16 March 2010 are seen to have elapsed at the conclusion of 6 April 2010.

7 Mr Morahan of counsel, who appeared for the plaintiff, submitted that this is not the correct approach. On the view he espoused, the relevant period began an instant after the midnight that divided 16 March 2010 from 17 March 2010, with the result that one day did not elapse “after” 16 March 2010 until an instant after the midnight dividing 17 March 2010 from 18 March 2010 and, therefore, twenty-one days did not elapse until an instant after the midnight dividing 6 April 2010 from 7 April 2010. On that basis, it was submitted, an infinitesimally small part of 7 April 2010 was included in the period of twenty-one days referred to in s 459G(2) and s 459G(3) and the whole of the 7 April 2010 was thereby made available for the filing of a s 459G application and the taking of the other necessary steps.

8 There are two reasons why this suggested analysis must be rejected. The first is that, as Gibbs J pointed out in Forster v Jododex Australia Pty Limited [1972] HCA 61; (1972)127 CLR 421 at 426, it has been held ever since Lester v Garland (1808) 15 Ves Jun 248; 33 ER 748 that, as a general rule, the law takes no account of fractions of a day. The idea that a day is defined by or made up of a multitude of fragments of time is one that cannot be accepted unless required by some particular directive as to interpretation (for example, a directive to have regard to hours and minutes, as distinct from merely days).

9 The second and particularly powerful reason for rejecting the suggested analysis is the point made by Kitto J in Prowse v McIntyre [1961] HCA 789; (1961) 111 CLR 264, at 274:

“The beginning of a day is nothing but the end of the day before, and the end of the day is nothing but the beginning of the next; just as the eastern boundary of a piece of land is identical with the western boundary of contiguous land.”

10 Thus all beginnings of days and all ends of days fall precisely at the point of midnight, not an instant before or an instant after. As Euclid recognised in mathematics, a point has no magnitude.

11 The process of computation I have earlier outlined is the correct process. It leads to the conclusion that the relevant period of 21 days ended at the midnight dividing 6 April 2010 from 7 April 2010. It follows that the actions required by s 459G(2) and s 459G(3) to be taken “within 21 days after” 16 March 2010 had to be completed before the conclusion of 6 April 2010 at that midnight.

12 As Mr Wells of counsel pointed out in submissions for the defendant, the correctness of this approach to the computation of time is indicated by the High Court's decision in David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265. The date of service of the statutory demand in that case was 4 July 1994. A summons filed on 26 July 1994 was held not to satisfy the s 459G timing requirement. The number of elapsed days in that case was exactly the same as in this. Mr Wells pointed out that the juxtaposition of days was also exactly the same in Challenge Home Loans v Etienne Lawyers [2007] NSWSC 1145 where again the application for an order setting aside the statutory demand was held to be out of time.

13 It is true, as Mr Morahan noted, that the method of computing time and counting days was not referred to in either David Grant & Co Pty Ltd v Westpac Banking Corporation or Challenge Home Loans v Etienne Lawyers. I suggest that this is because the correctness of the methodology I have described was regarded as beyond argument.

14 In the present case, the filing of the summons and supporting affidavit occurred after 6 April 2010 and therefore after the s 459G deadline. It follows that the additional requirement regarding service within the 21 day period was also not satisfied. I say this even though an unfiled copy of the summons may have been served on 6 April 2010. When s 459G(3)(b) refers to service of “a copy of the application”, it is necessarily referring to service of a copy of the filed application. Until filing there is no application of which there can be a copy. There is only a draft application or a proposed application.

15 The threshold point taken by the defendant is well taken. The timing requirement imposed by s 459G was not met by the plaintiff. As the High Court made clear in David Grant & Co Pty Ltd v Westpac Banking Corporation (above), there is therefore no power for the court to make an order setting aside the statutory demand.

16 The proceedings are dismissed with costs.

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