Deputy Commissioner of Taxation v Media Press Computer Supplies Pty Ltd

[2004] NSWSC 1271

Reported Decision: 53 ACSR 517

Supreme Court

CITATION:	Deputy Commissioner of Taxation v Media Press Computer Supplies Pty Ltd [2004] NSWSC 1271
HEARING DATE(S):	15/12/04
JUDGMENT DATE:	15 December 2004
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Young CJ in Eq
DECISION:	Order made by Registrar set aside.
CATCHWORDS:	CORPORATIONS [147]- Registered office- Non receipt or accidental non recording of notice of change- Effect. EVIDENCE [182]- Presumptions- Receipt of letters.
LEGISLATION CITED:	Corporations Act 2001 (Cth) ss 9, 121, 142, 351, 451D, 459R, 1322 Evidence Act 1995 (Cth) s 160 Supreme Court Rules Part 40 rule 9
CASES CITED:	Milankov Nominees Pty Ltd v Roycol Pty Ltd (1994) 12 ACLC 734 Re Otway Coal Company Ltd [1953] VLR 557
PARTIES :	Deputy Commissioner of Taxation (P) Media Press Computer Supplies Pty Ltd (D) Jamal Charara (Applicant) Steven Nicols (Official Liquidator)
FILE NUMBER(S):	SC 5452/03
COUNSEL:	P Rodionoff (P) J Charara (Applicant) In Person S Nicols (Official Liquidator) In Person
SOLICITORS:	ATO Legal Practice (P)

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

YOUNG CJ in EQ

Wednesday 15 December 2004

5452/03 – DEPUTY COMMISSIONER OF TAXATION v MEDIA PRESS COMPUTER SUPPLIES PTY LTD

JUDGMENT

1 YOUNG CJ in EQ: On 16 April Registrar Berecry wound up the defendant company. He did so ex parte because the defendant did not appear. The matter presently before the court is an application by a contributory that the order be set aside under Pt 40 r 9 of the Supreme Court Rules. That application was made by interlocutory process filed on 18 October this year.

2 The contributory, Mr J Charara, appeared in person. The application was opposed by the original applicant, the Deputy Commissioner of Taxation, who appeared by her counsel, Mr Rodionoff. The liquidator which the Registrar appointed, Mr Steve Nicols, appeared in person.

3 There are a number of matters which Mr Charara put as to why the winding up order should be set aside. I consider that it is only necessary to focus on one of these and that is that the statutory demand and the winding up proceedings had never been properly served on the company.

4 The evidence before the learned Registrar was that a search under s 127B of the Corporations Act of the company disclosed that its registered office was unit 27, 514 Botany Road, Alexandria. The search in evidence bears the date 24 October 2003. The evidence shows that at least on 29 October 2003 the office at that address was unoccupied, so that the process server served documents by placing them under the front door. There was obvious doubt in the minds of the solicitors for the plaintiff as to the company knowing about the winding up petition because the solicitors took steps to notify the directors in a letter addressed to Mr Charara of 12 November. The plaintiff's solicitors wrote to him at unit 29, 506 Botany Road, Alexander:

“Whilst we believe that service on the registered office ... is effective we enclose a copy of the above document served on the company on this date."

5 However, Mr Charara had not been at that address for some time. He was living at Canterbury and his family was living in Punchbowl.

6 Mr Charara has sworn an affidavit that he signed a notice of change of registered office on 2 July 2003. Ms Hamieh swore that she telephoned ASIC to find the correct form. She was told to use form 489. She filled it in, had Mr Charara sign it, and then posted it at a Post Office in Mascot. She annexed to her affidavit a photocopy of her diary for that day. Later the original diary sheet was tendered and it bears a notation:

“Posted change of address to ASIC Melbourne Vic by Rona at Australia Post.”

Rona is the lady's first name.

7 The evidence tends to suggest that one of three things happened. One, that the evidence of Mr Charara and Ms Hamieh are untruths and no document was posted, two, the document was posted and got lost in the post; or three, the document was lost in ASIC's office before it was processed, because whatever happened ASIC did not change the register and, as I say, the Deputy Commissioner relied on a search made in October 2003.

8 The first question is which of those three alternatives is established on the facts.

9 When the matter first came before me on 22 November, Mr Rodionoff was not then appearing for the plaintiff, some gentleman, who I assumed to be an in-house solicitor was, and he did not reply on that day to the affidavit evidence of postage, but eventually had the good sense to apply for an adjournment, which I granted.

10 The matter came back before me on 3 December, when, unfortunately, there was only quarter of an hour to deal with it. Mr Rodionoff said that he had not been told what the real problem was. That normally would not have made any difference because if a solicitor cannot tell a member of the Bar what the problem is, then that is just bad luck. But because of time constraints the matter was stood over to today.

11 Today there was further affidavit material from Mr Charara and Ms Hamieh and they were both cross-examined. They were extensively cross-examined, and despite this neither departed from their story, and I did not think that either was affected by the cross-examination detrimentally, and in particular Ms Hamieh established herself as a lady with definite memories of what she did at the time. She gave her evidence clearly. She was not shaken by extensive cross-examination, and her evidence accords with her note. There is a little suspicion about the note, but that was put to Ms Hamieh and she denied the suggestion, and there is no reason not to accept her evidence.

12 Accordingly, I must find as a matter of fact, on the balance of probabilities, that the form 489 was sent to the address of ASIC on 2 July 2003.

13 There is no doubt either that one can post a return to ASIC, and that the address was an appropriate address to send the form. Section 160 of the Evidence Act 1995 raises a presumption that a postal article sent by prepaid post, addressed to a person at a specified address in Australia, was received at that address on the fourth working day after it had been posted. The section only applies if evidence sufficient to raise doubt about the presumption is adduced.

14 In order to raise those doubts there was evidence from Mr Wong, a solicitor employed at the Sydney office of ASIC. He gave general evidence as to ASIC's procedures. It is difficult to prove non receipt of any document. Mr Wong's evidence would tend to suggest that if everybody was sticking to the rules and doing what they should do, had a form 489 been received, it would have been the wrong form because it dealt with a registered entity, rather than an Australian company, and would have been sent back.

15 Mr Rodionoff wanted me to infer from Mr Wong's evidence that because, as is clear, no form was sent back, or any communication from ASIC, therefore the form had never been received. That evidence however, could not be sufficient to displace s 160. There was also other unsatisfactory evidence about Mr Wong. There was evidence given that for some unexplained reason ASIC gives each document two numbers, one a bar code number, when it is first received and opened, and, secondly, a document number when it is registered. Mr Wong told us that there was a bar code register kept electronically. One would have thought that if a party was seeking to show evidence that a document had never been received by ASIC that someone would have checked the bar code register and sworn that there was no indication of the receipt of any document on the bar code register. However, there was no evidence to this effect whatsoever.

16 Furthermore, it is difficult to correlate the various entries on the computer extract, which has been annexed to Mr Wong's affidavit as at 10 December 2004, by reference to document 08743537J, if that document was filed somewhere in 2000, and Mr Wong's oral evidence did not explain this.

17 Accordingly, in my view, there is not sufficient material to displace the statutory presumption.

18 Accordingly, on the facts it is more likely than not that the document was received by ASIC somewhere about 6 July 2003. It obviously was not processed. Mr Charara says that that was not his fault; he had written to ASIC; he had given ASIC his postal address; he never heard anything from them, he must assume that everything was in order. On the other hand, Mr Rodionoff says that the document was not in fact lodged with ASIC; it was never processed on the computer records, and the Deputy Commissioner had no alternative but to proceed by serving the company at the address given in ASIC's records.

19 The Corporations Act does not really assist the resolution of the current problem, but it is necessary to trawl through it to note the provision it does make with respect to notification of a registered office and change of a registered office.

20 Section 9 defines "lodge" in a rather useless way as: "Means lodged with ASIC in this jurisdiction". It then defines "registered office" as "the body's registered office under section 142". One perhaps first goes to s 121, which says that:

“The address specified in the application for registration for the company's proposed registered office becomes the address of the company's registered office on registration”

and then goes to s 142 which says that the company must have a registered office and s 142(2) then says:

“A company must lodge notice of a change of address of its registered office with ASIC not later than 28 days after the date on which the change occurs. The notice must be in the prescribed form".

21 The present sort of problems are not new, but they have not really been adequately dealt with by the Corporations Act. In Re Otway Coal Company Ltd [1953] VLR 557 at 563 O'Brien J pointed out that the Companies Act provides for the company having a registered office, but it does not provide that once a company has given to the then equivalent of ASIC notice of its registered office it is deemed to continue to have that registered office until the register is altered. There are some provisions in the Act for ASIC to give certificates, such as s 1274C, where ASIC may certify that a person was a director or secretary of a company, but there does not appear to be anything in Pt 9.1 of the Corporations Act which deems the last notification of a registered office to ASIC to continue to be the registered office.

22 Accordingly a person who has reason to suspect that the office specified in the search obtained from ASIC's computer is no longer the registered office is unsafe in serving a document at that office. In the instant case, the evidence does show that there was that doubt.

23 Accordingly, even without resolving the matter of whether the document was received by ASIC or not, there must be doubt as to whether the statutory demand and petition for winding up were duly served.

24 However, if one has to look at the notice of change of address, then slightly different questions arise. The form was the wrong form. Form 484, as it then existed, should have been used for a company, not 489. I accept the evidence of Ms Hamieh that she was told by an officer of ASIC that 489 was the right form. It is not surprising that with forms constantly changing and with perhaps communication problems some junior officers of ASIC gave such information in good faith, but wrongly.

25 Mr Rodionoff submits that s 142(2) is mandatory, the company must lodge the notice and the notice must be in the proscribed form. Therefore, if someone uses the wrong form there has been no compliance with the section. The first problem with that argument is that if the old office has ceased to be the registered office, the change of address form makes no difference.

26 However, the other major problem is whether the words "the notice must be in the prescribed form" are mandatory. Even if they were mandatory, there might have been some estoppel against ASIC, in view of the misinformation, from alleging it was not in a prescribed form, but Mr Rodionoff said that no such estoppel would bind the Deputy Commissioner of Taxation. However, as a matter of discretion the court may dismiss a petition where one agency of the Commonwealth Government is estopped and another is not.

27 However, when one looks through the Corporations Act as a whole and sees that the drafter has used the word "must" without really much attention to whether it is mandatory or directory. It is a modern fault of many drafters who leave out "shall" and "may" and always use "must" in the mistaken belief that that somehow or other makes things certain.

28 Mr Rodionoff drew my attention to s 351 that deals with documents lodged with ASIC. Section 351(3) says, "the person's name must be printed next to the signature". Could it really seriously be argued that if a document otherwise completed in accordance with the rules does not bear a printed signature, the whole document is completely invalid. I think not.

29 There are many other uses of the word "must" throughout the Corporations Act, which tends to indicate that the word "must" should be construed in sections such as s 142(2) as "must normally". This is reinforced by the fact that s 1322 of the Corporations Act makes it clear that irregularities are not to invalidate. Accordingly, it does not seem to me that if the information is conveyed to ASIC, even if it is on the wrong form, that ASIC is entitled to ignore it and to continue to hold out to the public that something is a registered office, when it has been informed that it is not, even though on form 489 instead of form 484.

30 I am a little reluctant to be categorical about all this because I did not, with respect, receive any assistance on the proper construction of those words, or the meaning of the word "lodge", and it is always dangerous on virtually the last day of term to give an ex tempore judgment without such assistance. But doing the best I can, it seems to me that that is the proper construction of s 142(2).

31 It must follow that there must have been very real doubts as to whether the Registrar should have wound this company up.

32 Mr Rodionoff says that there is no evidence of solvency. Furthermore, the tone of his cross-examination was that Mr Charara had been leading the Deputy Commissioner a merry chase by not giving the Deputy Commissioner a proper address and evading service, and he was somehow or other in league with Ms Hamieh in some improper conspiracy, but there is no evidence to support any of those matters.

33 It follows that the order made by the Registrar on 16 April 2004 must be set aside and the matter remitted to the Registrar to consider according to law. I stand the matter over to the Registrar's list at 11 am on 1 March 2005. I order the plaintiff to pay the costs of the interlocutory proceedings.

34 Mr Rodionoff has reminded me of s 459R of the Corporations Act, which means that an application for a company to be wound up in insolvency is to be determined within six months after it was made. The application was made on 24 October 2003, so the six month period expired about 24 April 2004. Section 459R(2) allows the court to extend the period, but only if the order is made within that six months period.

35 Mr Rodionoff refers me to the decision of Lee J in the Federal Court in Milankov Nominees Pty Ltd v Roycol Pty Ltd (1994) 12 ACLC 734, in which his Honour held that s 451D of the Corporations Act, when read in conjunction with the rest of the Act, meant that whilst the company was in administration the six month period was suspended and took up again when the administration ceased.

36 Mr Rodionoff put that by analogy the same applied where the court set aside a winding up order.

37 With great respect, I do not think the analogy is correct, and unfortunately the s 459R period now having expired, as Mr Rodionoff has put, it is better merely to note that the application for winding up had been formally dismissed under s 459R(3). This does not, of course, prevent the Deputy Commissioner from commencing again, either on the previous documentation, or any new documentation she may wish to issue.

38 Accordingly, I revoke the order standing the matter over to the Registrar's list and the file will bear that notification.

**********************

Last Modified: 07/16/2007