Bolivar Rd Pty Ltd v Stefren Pty Ltd - [2011] SASC 93

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BOLIVAR RD PTY LTD v STEFREN PTY LTD
[2011] SASC 93
Reasons of Judge Lunn a Master of the Supreme Court
3 June 2011
CORPORATIONS
Application to set aside statutory demand - copy of originating process to set it aside which was served on defendant on last day omitted the action number, the date of filing and the signature of the Registrar - held s 459G(3)(b) of Corporations Act not satisfied and application incompetent.

BOLIVAR RD PTY LTD v STEFREN PTY LTD
[2011] SASC 93
JUDGE LUNN:
Reasons on whether plaintiff has validly instituted proceedings to set aside a statutory demand which was served on 9 March 2011

On 30 March 2011 the plaintiff instituted this action against the defendant under s 459G of the Corporations Act 2001 (“the Act”) seeking to have the demand set aside. Later on that day the plaintiff’s solicitors purported to serve a copy of the originating process for this action on the defendant’s solicitors. The preliminary issue is whether the copy of the originating process which was then served satisfied the requirements of s 459G(3)(b) of the Act.
The relevant facts are as follows. When the plaintiff’s solicitors sought to issue the originating process at the Court registry they were given back by the Registry a copy of the originating process, a copy of which they served on the defendant’s solicitors later that afternoon. The document which was handed back by the Registry contained a hand-written endorsement in part B of the date and time of the first hearing and stating that it would be before me. The document did not have on it the action number and the date of filing stated in part D and it was not signed by the Registrar in the appropriate place in part D. The document did not bear the Court seal, but did have a received in the “Higher Courts Registry” stamp imprinted on it. At some unknown time a copy of the originating process document, which is FDN 1 on the Court file, had placed on it the date of filing, a signature on behalf of the Registrar, the action number and the seal of the Court on the front page. Hence the document which was served was not a complete copy of the originating process as it now appears on the Court file.
No copy of the complete originating process has apparently ever been served on the defendant. The issue for my determination is whether the incomplete copy of the originating process which was served was sufficient to satisfy s 459G(3)(b). It was not disputed that, if s 459G(3)(b) had not been duly satisfied, the application must be dismissed.
Counsel for the plaintiff submitted that in a letter of 6 May 2011 the solicitors for the defendant had admitted that a copy of the originating process had been validly served. The relevant parts of that letter are as follows:
We enclose a copy of the document referred to in paragraph 5.1 of the affidavit of Mr Elson dated 29 April 2011. We can make the original of that document available for your inspection at our office at a suitable time.
A copy of the document was not exhibited to the affidavit because of practice direction 3.1.4 of the Supreme Court Practice Directions 2006, which states:
‘A document which is already on the Court file or part of the Court record in an action, or in another action which will be before the Judge or Master at the time as the first action, is not to be exhibited to an affidavit.’
Would you please provide us with a ‘copy of the Originating Process filed on behalf of the Plaintiff dated 29 March 2011’ which was referred to in your letter of 5 May 2011.
The document referred to in paragraph 5.1 was the copy of the originating process which was served on 30 March 2011. I do not accept that this letter is an admission. There is no evidence that the defendant’s solicitors on 6 May 2011 knew that the action number, the filing date, the Registrar’s signature and the Court seal did appear on the originating process on the Court file. The reference to Practice Direction 3.1.4 infers that they believed that the document with which they had been served was a complete copy of what appeared on the Court file as the originating process. If they had known that there were differences, the Practice Direction would not have applied. In these circumstances there is no implied admission that there had been valid service of the incomplete originating process.
I published reasons on a similar, but not identical, matter of Bache Business & Printing Services Pty Ltd v SA Hub Productions Pty Ltd.[1] The relevant authorities for the determination of this matter are those set out in those reasons. The submissions in this matter have not caused me to change the views which I expressed in those reasons.
[1] 1 December 2009, [2009] SASC 369
The relevant parts of those reasons are:
[3] S 459G of the Act provides:
(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.
[4]Rules 2.2(1) and 2.3 of the Corporations Rules 2003 (South Australia), which apply in this action, provide:
2.2(1)….. a person must make an application required or permitted by the Corporations Act to be made to the Court:
(a)….. by filing an originating process …..
2.2(3) An originating process must:
(a) be in accordance with Form 2; and …..
2.3 On receiving an originating process ….., the Registrar:
(a)must fix a time, date and place for hearing and endorse those details on the originating process or interlocutory process; and
(b)may seal a sufficient number of copies for service and proof of service.
[5]In brief, what occurred here was that just after 4 pm on 23 September 2009, which was the 21^st and last day for the purposes of s 459G(3), Stephen Beach, the solicitor for the plaintiff, attended at the Court Registry seeking to issue the originating process in this action and to file the supporting affidavit. The originating process was in Form 2 of the Rules, but required the insertion of the name of the judicial officer who was to hear the application, the date and time at which it was to be heard, the date of its filing and the signature of the Registrar. The requisite fee was paid. The name of the judicial officer before whom the application was to be heard, the date and time for the hearing, the date of filing and the signature of the Registrar were not placed on the originating process. A “Court Received” stamp, bearing the date of 23 September, was placed on a copy of the originating process which was returned to the plaintiff’s solicitor. Immediately after leaving the Court Registry he went to the offices of the defendant’s solicitors, which was the address for service of the defendant given in the statutory demand, and served copies of the originating process and the supporting affidavit. The copy of the originating process given to the defendant’s solicitors did not contain the name of the judicial officer before whom the application was to be heard, the time and date of the hearing, the date of filing or the signature of the Registrar. No copy of the originating process bearing a Seal of the Court was given or shown to the defendant’s solicitors on 23 September 2009.
[6]I am deciding the preliminary issue in favour of the defendant on the limited ground that s 459(G)(3)(b) was not satisfied by the documents which were served on the defendant on 23 September 2009. I need not go into the issue raised by the defendant’s counsel about whether the originating process was filed on 23 September or whether that only occurred on a subsequent date when the name of the judicial officer to hear the application and the time and the date of the hearing were inserted into the original of the originating process. …
[7]The authorities are clear cut that a failure to serve a copy of the originating process giving notice of the time and place of the hearing of the application, let alone any other significant omissions from the Form 2, within the 21 day period is fatal to the application to set aside the statutory demand succeeding. These authorities are conveniently summarised, and endorsed, by Chesterman J in Cooloola Dairys Pty Ltd v National Foods Milk Ltd (2004) 184 FLR 86, where he said:
On 14 July 2004 the applicant filed and served its application. The copy of the application actually served was defective in a number of respects. The application number did not appear on the document. The space for the insertion of the date on which the application would be heard by the court was left blank. The seal of the court had not been affixed to the document which did not bear the Registrar’s signature. …..
….. The first service was of an incomplete copy of the application. A number of cases have established that an application deficient in the same particulars as was the applicant’s is not a copy for the purposes of s 459G(3)(b), which provides that an application is made within 21 days only if a copy of the application and of the supporting affidavit are served on the creditor.
The Full Court of the Supreme Court of Western Australia in Robowash Pty ltd v Robowash Finance Pty Ltd (2000) 158 FLR 338 emphasised the need for strict compliance with the provisions of s 459G(3) in a case in which the debtor’s supporting affidavit served on the creditor omitted four pages of the annexures to the affidavit. The Court dismissed the application for non-compliance with the subsection. …..More to the immediate point is the decision of Santow J in Benonys Pty Ltd v Fetrona Pty Ltd (1999) NSWSC 1181, in which the applicant served a copy of the application which omitted the return date. His Honour thought that the document served was not a copy of the application at [6]:
For how can the party who is served have received proper notice of the proceedings for which attendance is required within the twenty-one days when that party is not told of the important fact of the return date ….. until after the twenty-one days.
Chelring Pty Ltd v Coombs [2000] WASC 60 was a case with facts identical to the present. A copy of the application.
….. did not have the action number on the ….. document and, perhaps most significantly, did not have the date and time on which the application would be heard. The service copy of the document did not bear a mark denoting the seal of the Supreme Court.
At [2]:
Master Sanderson followed Benonyx. He said at [9]:
It may then be the case that if the copy served does not contain the seal of the ….. Court or ….. does not contain the action number, such omissions may be excused. But a copy of the application must, I think, ….. require the important information to be included on the served document. In particular, that must mean that the return date of the application and the date upon which the application was filed should be included. Without these two ….. pieces of information a respondent is put at a disadvantage. In the one case, it needs to know the date of filing to ensure that the procedure for setting aside a statutory demand has been followed. In the other the respondent needs to know when it should appear in court to answer the application.
The facts in LJAW Enterprises Pty Ltd v RJK Enterprises Pty Ltd [2004] QSC 134 are also relevantly identical. A copy of an application to set aside a statutory demand, which omitted the court’s seal, the return date and the action number, was served on the respondent. Holmes J followed Benonyx, Chelring, Universal Trade Exchange and Robowash to conclude that “the documents served failed to reflect the original application in a matter of substance: it did not contain the return date for the application.” At [9]. Her Honour pointed out, as had other judges, that the requirement that the copy served reflect the original may cause hardship. Indeed in some of the cases the deficiency was not the fault of the applicant, although in this case it was. The cases have also pointed out that the requirements of s 459G are inflexible, depriving the court of a discretion to overlook any defects in service.
…..
As with other line of authorities I should follow these cases unless convinced that they are wrong. I do not think they are. The opinion they express is a justifiable exposition of s 459G. The copy of the application which the section requires to be served must show that an application has been filed and when the respondent is required to attend and answer it. It will not perform these functions if it is not sealed and does not show the action number allocated by the court. The inclusion of the return date is obviously necessary.
The authorities establish that the copy of the application served on the respondent must be such as to show that it is a replication of the application which has been filed in the court. To do that it must show the action number given it by the court and it must show the return date for the hearing of the application. It must, also, I think, show the seal of the court to indicate that there are curial proceedings on foot. The document in question did not exhibit those attributes. It was not therefore a copy of the application. The result is that the terms of s459G(3) were not complied with and the application must be dismissed with costs.
[8]Counsel for the plaintiff argued that the plaintiff had done all it could on 23 September 2009 to comply with Rules 2.2 and 2.3 and it should not be defeated because of the defaults of the Registrar. Even assuming for this purpose that it was the fault of the Registrar which prevented the plaintiff from complying with s 459G(3)(b), on which I make no finding, it is contrary to the authorities mentioned that this would excuse in the law the plaintiff’s non-compliance with s 459G(3)(b). I am obliged to follow the authorities on the point.
[9]Accordingly, this action is barred by s 459G(2) of the Act and must be dismissed.
Counsel for the plaintiff sought to distinguish Cooloola Dairies Pty Ltd v National Foods Milk Ltd, and the cases referred to in that judgment, on the ground they were decided solely on the basis that they omitted the date, time and place of the first hearing on the copy of the originating process which was served. In my view the decisions did not turn solely on that point, but on the collective omissions from the proper form of the originating process in the particular case.
Here I base my decision upon the combined effect of the document which was served not containing the action number, the filing date in part D and the signature of the Registrar. I accept that it is likely that some minor inconsequential omission to replicate every part of the originating process in the document served would not mean that s 459G(3)(b) had not been satisfied and the de minimus principle[2] could be applied. Precisely where omissions from the form cease to be de minimus, and mean that s 459G(3)(b) has not been satisfied, is unclear. However, in the circumstances of this matter I am satisfied that a combination of the omissions of the action number, the filing date in part D and the signature of the Registrar are not de minimus omissions and on the authority of Cooloola Dairies Pty Ltd v National Food Milk Ltd, and the cases cited in it, mean that a copy of the application has not been served on the defendant within the requisite 21 day period as required by s 459G(3)(b).
[2] Stripton Anderson & Co v Weil Bros Co [1912] 1 KB 574; Williams v R (1978) 140 CLR 591 at 602; Clarke v Bradlaugh (1882) 8 QBD 63.
I do not accept the plaintiff’s submission that the document received stamp on the front page of the document served was a sufficient indication that it had been filed on 30 March 2011. It is a stamp of the Higher Courts Registry, and not necessarily of the Supreme Court. By 6R 50(1)(a), which applies by virtue of R1.3(2) of the Corporation Rules 2003 (South Australia), the originating process was not filed until it was accepted for filing by an officer of the Court at the Court Registry. The operation of 6R 53 requires that there may need to be some interval between the document being handed over at the Registry counter and it being accepted for filing. The proof of the acceptance of the filing is the signature of the Registrar or his officer, but this does not appear on this document. While the received stamp is evidence when the document was handed over at the Registry counter, it is not proof that it was then accepted for filing.
I have reached my conclusion without reference to the document served not bearing a copy of the seal of the Court. Whether a form of originating process signed by the Registrar or his officer is properly issued if it does not also bear the seal of the Court is not clear-cut. Form 2 to the Corporations Rules does not expressly require the affixation of the seal. 6R 51 about sealed copies of originating process being issued for service does not seem to make it mandatory. In view of my other conclusions it is not necessary for me to pursue whether the absence of the seal, if alone, or combined with other omissions, would mean that s 459G(3)(b) has not been satisfied.
Counsel for the plaintiff submitted in the alternative that, if I was constrained by the authorities referred to in Bache Business & Printing Services Pty Ltd v SA Hub Productions Pty Ltd, to find that s 459G(3)(b) had not been satisfied, I should hold that those authorities were incorrectly decided and should refuse to follow them. He then presented submissions of a different interpretation of s 459G which, if correct, would be contrary to those earlier authorities. It is not my function as a Master of this Court to find that a consistent line of previous authorities[3] on the interpretation of National legislation by Justices of other State Courts was incorrect[4]
[3] This line of authority is referred to with approval in the standard texts of Assaf Statutory Demands Law and Practice at 4.15 and McPherson’s Law of Company Liquidation at pp 3-3083-3085.
[4] Counsel referred to my having recently in Smart World Enterprises Pty Ltd & Ors v Gerblich & Anor (No. 5) SCCIV-09-1819 declined to follow an interpretation of the Corporations Act accepted by Master Macready in New South Wales. However that was a decision of a judicial officer at a similar level to my own and not of ones at a higher level.
Accordingly, I find that the plaintiff had not satisfied s 459G(3)(b) in seeking to set aside the statutory demand. Hence its application to set aside the demand is incompetent and must be dismissed. The order will be made on the next hearing.