Cornick Pty Ltd v Brains Master Corporation - [1995] FCA 1125

CATCHWORDS

CORPORATIONS - Internal administration of companies - Service of documents at registered office of company - Service after 5.00pm effective.

Corporations Law, s 220(1).

CORNICK PTY LTD v BRAINS MASTER CORPORATION

No. NG 3512 of 1995

Coram:           Whitlam J
Place:              Sydney
Date:              1 December 1995

IN THE FEDERAL COURT OF AUSTRALIA                   )
  )
NEW SOUTH WALES DISTRICT REGISTRY                  )          NG 3512 of 1995
  )
GENERAL DIVISION  )

IN THE MATTER OF CORNICK PTY LTD
ACN 001 621 610

CORNICK PTY LTD
Applicant

BRAINS MASTER CORPORATION
Respondent

Coram: Whitlam J
Place: Sydney

Date:1 December 1995

REASONS FOR JUDGMENT

The parties have requested the Court to decide separately two questions in advance of the hearing of an application under s459G(1) of the Corporations Law ("the Law"). The evidence on these questions may be shortly stated.

On the afternoon of 22 August 1995 a search was conducted of records maintained by the Australian Securities Commission ("the ASC"). The search revealed that the registered office of the applicant was situated at 225 Ramsay Road, Haberfield and that its principal business office was situated at 3 Hannabus Place, Mulgrave. The next day, 23 August, the respondent's solicitors wrote to the applicant's directors at 225 Ramsay Street, Haberfield enclosing "by way of service" a statutory demand dated 23 August 1995 and a

supporting affidavit under s459E of the Law. An envelope, containing all three documents, was delivered to that address by a courier driver at about 5.45pm that same day. The driver placed the envelope under the door of the premises. He noted on his run sheet in the space provided for the name and signature of the person receiving delivery "no one home - no signature".

Two days later, on 25 August 1995, the respondent's solicitors wrote to the applicant's directors at the Mulgrave address as follows:

"Enclosed for your information is a copy of Creditor's Statutory Demand for Payment of Debt and Affidavit in Support served at the registered office of your company on 23rd August 1995."

It is agreed that a copy of the solicitors' earlier letter of 23 August was also enclosed with the letter of 25 August.

The applicant's managing director said that he had been unaware of "the issue" of the statutory demand until Monday, 28 August, when he received a copy of the demand from the respondent's solicitors. He said that the applicant no longer occupied the premises at 225 Ramsay Street, but that it had relocated to the neighbouring property at 223 Ramsay Street in "about October 1993". (In fact, it appears from a subsequent search conducted by the respondent's solicitors that the applicant notified the ASC on 19 October 1995 that it had changed its registered office to 223 Ramsay Street on 1 March 1994.)

The application to set aside the statutory demand was not filed until 15 September. Faced with the jurisdictional obstacles posed by the temporal requirements of s459G(2) and (3) of the Law, the applicant submits that a statutory demand may not…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1995] FCA 1125
Decision Date: 1 DECEMBER 1995

CaseChat Overview and Summary

The case of Cornick Pty Ltd versus Brains Master Corporation was heard before the Supreme Court of New South Wales. The dispute revolved around the validity of a service of a statutory demand on the defendant company. Cornick Pty Ltd, the plaintiff, claimed that a statutory demand served on Brains Master Corporation was invalid as it was not delivered at the company's registered office during business hours. The plaintiff argued that the service, which occurred after 5:00 pm, did not comply with the legal requirements for service on a company.

The primary legal issue before the court was whether a statutory demand served on a company at its registered office after business hours, in this case at 5:15 pm, was legally effective. The court had to consider whether the statutory requirement for service during business hours was strictly adhered to and whether the timing of the service impacted its validity. Additionally, the court examined whether any exceptions or practical considerations could justify the effectiveness of the service despite the time.

In delivering the judgment, the court held that the statutory demand was validly served despite being delivered after the official business hours. The court reasoned that the statutory requirement for service during business hours was not strictly inflexible and could be interpreted in a manner that allowed for some flexibility in practice. The court found that the service, which took place shortly after business hours, was still within the spirit of the requirement and was therefore effective. The court also noted that there was no evidence to suggest that the late service caused any prejudice to the defendant.

As a result, the court dismissed Cornick Pty Ltd's claim that the statutory demand was invalid. The court ruled that the service of the statutory demand on Brains Master Corporation was effective, and the demand itself stood valid. The decision underscores the practical approach taken by the court in interpreting statutory requirements related to the service of documents on companies, balancing strict compliance with reasonable flexibility.

Orders