Elan Copra Trading Pty Ltd v JK International Pty Ltd
[2005] SASC 501
•23 December 2005
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
ELAN COPRA TRADING PTY LTD v J K INTERNATIONAL PTY LTD
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Perry and The Honourable Justice White)
23 December 2005
CORPORATIONS - PRACTICE AND PROCEDURE - SERVICE
Interstate service of process on company - Application to set aside statutory demand under s 459G Corporations Act 2001 (Cth) - Where statutory demand failed to specify address for service in state where demand served - Where application served by facsimile upon solicitors of respondent company - Whether method of service of application constituted effective service - Consideration of requirements for valid service - Whether service to be in accordance with the Service and Execution of Process Act 1992 (Cth) - Whether parties can agree to waive statutory requirements for service.
Held: Appeal dismissed - Service of application not effected - Jurisdiction of Court not invoked.
Corporations Act 2001 (Cth) s 459C, s 459E, s 459G, s 459J, s 109X; Corporations Regulations 2001 (Cth) reg 1.0.04, reg 100.03; Service and Execution of Process Act 1992 (Cth) s 9, s 10, s 11, s 15, s 16; Service and Execution of Process Regulations 1993 (Cth) reg 4(1)(a); Acts Interpretation Act 1901 (Cth) s 36; Supreme Court Rules 1987 (SA) r 18.03, r 21, referred to.
Commonwealth v Verwayen (1990) 170 CLR 394, applied.
Players Pty Ltd v Interior Projects & Others (1996) 20 ACSR 189, discussed.
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648; Scandon Pty Ltd v Dome Supplies Pty Ltd (1995) 17 ACSR 662; Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26; Dominion Capital Pty Ltd v Pico Holdings Inc (2001) 4 VR 195; Re Marlan Financial Services Pty Ltd (2001) 158 FLR 256; Australian Law Reform Commission Report No 40 ., considered.
ELAN COPRA TRADING PTY LTD v J K INTERNATIONAL PTY LTD
[2005] SASC 501Full Court: Doyle CJ, Perry and White JJ
DOYLE CJ: I agree with the orders proposed by White J. I agree with his reasons. There is nothing that I wish to add.
PERRY J. I agree with the orders proposed by White J and with his reasons
WHITE J:
Introduction
By s 459C of the Corporations Act 2001, a company (“the debtor”) is presumed to be insolvent for the purposes of the winding-up provisions in Part 5.4 of that Act if the company fails, within the specified time, to comply with a statutory demand served on it pursuant to s 459E. The debtor can apply to a court, pursuant to s 459G(1) of the Act, for an order setting aside a statutory demand served on it. Any such application “may only be made within 21 days after the demand is so served”.[1]
[1] Corporations Act 2001(Cth) s 459G(2).
Section 459G(3) provides for the way in which any such application may be made. It provides:
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.
In David Grant & Co Pty Ltd v Westpac Banking Corporation[2] (“David Grant”), it was held that both the filing and service of the application and supporting affidavit within the 21 day period specified in s 459G(2) is an essential condition of the exercise by a court of the jurisdiction vested by s 459G(1) to set aside the statutory demand. There is no power to extend the 21 day period. If both the filing and service of the application and supporting affidavit does not occur within the 21 day period, the court may not exercise the jurisdiction to set aside the demand.
[2] (1995) 184 CLR 265.
The question on this appeal from a decision of a Master is whether the method of service of the application and affidavit relied upon by the appellant was effective service so as to invoke the jurisdiction of the court.
Background Circumstances
The appellant, who is the debtor, is a company registered in the State of South Australia. The respondent, who is the creditor, is a company registered in Queensland. Its registered office is at 49 Suscatand Street, Rocklea, Queensland.
In September 2004, the appellant and respondent entered into an agreement for the sale and purchase of 2,000 tonnes of copra. The circumstances of the delivery of, and payment for, that copra have given rise to a dispute. It is not necessary for the disposition of the appeal to recount the details of the dispute. It is sufficient to note that from 11 March 2005 the communications between the parties were between their respective solicitors: Mellor Olsson in Adelaide for the appellant, and Ebsworth & Ebsworth in Sydney for the respondent.
Under cover of a letter dated 6 April 2005, Ebsworth & Ebsworth served on the appellant a statutory demand for payment of an amount claimed by the respondent to be due to it. In addition, an affidavit of a director of the respondent, a Mr Mohan, was also served. Mr Fleming, a director of the appellant, initially deposed to the appellant having been served with the statutory demand at its registered office in Adelaide on 6 April 2005, but this was corrected by a later affidavit. The Master accepted that the statutory demand had been served on 11 April 2005. Subject to the operation of s 36 of the Acts Interpretation Act 1901 (Cth), to which reference will be made later, the prescribed period of 21 days therefore expired on 2 May 2005.
The letter from Ebsworth & Ebsworth dated 6 April 2005 referred to a statutory demand dated 23 March 2005 and to an affirmation from Mr Mohan, dated 23 March 2004, whereas the demand and affidavit served on the appellant were dated 1 April 2005 and 4 April 2005 respectively. It was not suggested that anything turned on those discrepancies. There was, however, one respect in which the statutory demand did not comply with the formal requirements for such a demand. Reference will be made to this below.
An application for the setting aside of the statutory demand, and a supporting affidavit, were filed in this Court on 26 April 2005. Having filed the application and supporting affidavit, the appellant did not take immediate steps to serve them. Instead, by letter sent to Ebsworth & Ebsworth by facsimile transmission on 26 April 2005 the appellant’s solicitors set out in some detail the appellant’s instructions with respect to the respondent’s claim and concluded with the following:
In the circumstances, my client is of the view that your client’s statutory demand is readily capable of being set aside pursuant to the matters raised above. Further, my client has not been afforded an opportunity to negotiate a settlement in this matter. Consequently, my client has been left with no choice but to apply to the Court in order to set aside your client’s statutory demand.
Please let me know if you have instructions to accept service of those proceedings.
Not having had a response to their letter, the appellant’s solicitor telephoned Ms Lay at Ebsworth & Ebsworth on 29 April 2005 and enquired whether that firm had instructions to accept service of the application. He was told that Ebsworth & Ebsworth did not have those instructions, but would seek them. Shortly after that conversation (but still on 29 April 2005) the appellant’s solicitors sent, by facsimile transmission, a further letter to Ebsworth & Ebsworth at their Sydney office, the substantive parts of which were:
I refer to my letter to you of the 26th inst., and our telephone conference of the 29th inst.
I enclose as a matter of courtesy my client’s Originating Process and Affidavit in support of my client’s application to set aside your client’s statutory demand. I will serve your client at its registered office if I do not hear from you by close of business today.
Please note the hearing date listed for 10.15 am on Friday 20 May 2005 in the Supreme Court of South Australia. (Emphasis in the original.)
That letter was sent by facsimile transmission to the facsimile number specified in the statutory demand. The application and supporting affidavit accompanied the letter. By letter sent by facsimile transmission later on 29 April 2005, Ebsworth & Ebsworth responded to the letter from Mellor Olsson. Receipt of the application and supporting affidavit was acknowledged. The letter continued:
We have brought your client’s application to our client’s attention, and expect to obtain instructions to accept service in the near future.
The letter then set out the respondent’s instructions with respect to the debt asserted by it.
On the topic of instructions to accept service it appears that both the appellant’s solicitors and the respondent’s solicitors overlooked the content of cl 6 of the statutory demand (set out below). The existence of instructions to accept service was implicit in that clause.
Despite the statement in the second paragraph of the letter from Mellor Olsson dated 29 April 2005, no attempts were made to serve the respondent at its registered office. There was no further communication between the parties until 3 May 2005 when Ms Lay from Ebsworth & Ebsworth informed Mellor Olsson by telephone that that firm had now received instructions to accept service of the proceedings. It does not seem that anything further was then done to effect service of the application and affidavit on the respondent whether at its registered office or on Ebsworth & Ebsworth. The period of 21 days after 11 April 2005 had then expired. Ebsworth & Ebsworth pointed out the requirement for service within 21 days in a letter facsimiled to Mellor Olsson on 4 May 2005. Thereafter the solicitors’ communications concerned the question of whether there had been effective service within the prescribed period of 21 days.
The Content of the Statutory Demand
Section 459E(2) of the Corporations Act contains stipulations as to the form and content of a statutory demand. Section 459E(2)(e) provides that the demand “must be in the prescribed form (if any)”. A form has been prescribed.[3] By reg 1.0.04 of the Corporations Regulations 2001 the creditor was required to complete the prescribed form in accordance with the directions and instructions specified in the form. Clause 6 of the prescribed form is as follows:
6.The address of the creditor for service of copies of any application and affidavit is (insert the address for service of the documents in the State or Territory in which the demand is served on the company, being, if solicitors are acting for the creditor, the address of the solicitors).
[3] Corporations Regulations 2001 reg 100.03, Sch 1 and Form 509H.
The evident purpose of this clause of the prescribed form is to facilitate the service of any application under s 459G upon the creditor. That purpose was discussed by Lander J in Players Pty Ltd v Interior Projects & Others:
It is readily apparent why the form would provide for an address for service of any application and affidavit, that is because of the onerous requirements of s 459G and so as to make it entirely clear to any party who wish to make an application under that section upon whom and where the document under s 459G ought to be served. As notices under s 459E would often cross state boundaries, and may indeed originate from outside the country, it seems to me to be appropriate that the schedule requires an address for service within the state or territory in which the demand is being made so as to allow for some ease of service on the part of the party to whom the s 459E notice was directed.
It seems to me that the regulations therefore contemplate that the party to whom the s 459E notice is directed will, if that party makes an application under s 459G, serve that application at the address nominated in the Form 509H notice and not be required to serve the creditor either at the creditor’s own address or at the registered office of the creditor if the creditor is a company. … It is clear enough to me that the intention is to facilitate the service of an application under s 459G, not to impede service or make service of such an application more difficult.[4]
[4] (1996) 20 ACSR 189 at 192-3.
The statutory demand served on the appellant did not, as required by cl 6 of the prescribed form, specify an address in South Australia for service on the respondent. Nor did cl 6 specify the address of the registered office of the respondent in Queensland. Instead, cl 6, nominating the address of Ebsworth & Ebsworth, provided as follows:
The address of the Creditor for service of copies of any application and affidavit is:
JK International Pty Ltd
Care of Ebsworth & Ebsworth
Attention: Ms Danella Wilmshurst/Ms Amy Lay
GPO Box 713
SYDNEY NSW 2000(DX 103 SYDNEY)
Tel: (02) 9234 2366
Fax: (02) 9235 3606It cannot be concluded that this departure from the terms of the prescribed form made the demand served ineffective as a statutory demand for the purposes of the Corporations Act. Such a conclusion is precluded by the definition of “statutory demand” in s 9 of the Corporations Act:
Statutory demand means:
(a) a document that is, or purports to be, a demand served under section 459E; or
(b) such a document as varied by an order under subsection 459H(4).
The document served on the appellant was, at the least, a document purporting to be a demand served under s 459E. Section 459J is also relevant in this context because it provides relevantly that a statutory demand is not to be set aside merely because of a defect.[5] However, if the defect causes substantial injustice, the statutory demand may be set aside on that ground.[6] Thus, in most cases, the existence of a defect will not make a statutory demand ineffective, and can be a ground for the setting aside of the statutory demand only in limited circumstances, and then only on an application made within the prescribed 21 day period.
[5] Corporations Act 2001 (Cth), s 459J(2).
[6] Corporations Act 2001 (Cth), s 459J(1)(a).
The Decision of the Master
Having referred to the scheme contained in ss 459E and 459G to which reference has already been made, the Master accepted that the exercise of the Court’s jurisdiction turned on whether there had been effective service, within 21 days of the application and affidavit.
As no address for service within South Australia had been nominated in the statutory demand and as the registered office of the respondent was in Queensland, the Master held that service of the application had to be effected in accordance with the Service and Execution of Process Act 1992 (Cth) (“SEPA”). In so concluding, the Master followed the decisions in Re Marlan Financial Services Pty Ltd[7] and Dominion Capital Pty Ltd v Pico Holdings Inc.[8] The Master held that service in accordance with SEPA had not been effected and accordingly, that the jurisdiction of the court pursuant to s 459G had not been invoked.
[7] (2001) 158 FLR 256; (1999) 33 ACSR 259;
[8] (2001) 4 VR 195.
The Parties’ Contentions
The appellant accepted that, at least in one respect, it had not effected service in the manner required by SEPA.[9] Its contention was that that did not matter and that its facsimile transmission of the application and supporting affidavit to Ebsworth & Ebsworth on 29 April 2005 should have been regarded as effective service for the purposes of s 459G. In support of that contention, the appellant made three principal submissions:
(a)Service of the s 459G application in the circumstances of this case did not have to be in accordance with the provisions of SEPA. Neither the Corporations Act or SEPA precluded, in the circumstances of this case, service in a manner agreed upon by the parties. The particular circumstances upon which the appellant relied were the failure of the respondent to nominate in the statutory demand an address for service within South Australia, and the inclusion of the address of its solicitors in Sydney.
(b)The application and supporting affidavit had, within the 21 day period, and in a manner contemplated by cl 6 of the statutory demand, been sent to the respondent’s solicitors, and further, that there was evidence that both had come to the attention of the respondent within the 21 day period. It was immaterial that the accompanying letter referred to them being provided “as a matter of courtesy”.
(c)In the alternative, the respondent should be held to have elected to accept service in the manner specified in cl 6 of the statutory demand, or to have waived any entitlement to rely upon service being effected in accordance with the provisions of either the Corporations Act or SEPA. The waiver was said to arise from the statement of Ebsworth & Ebsworth on 3 May 2005 that they had instructions to accept service of the proceedings.
[9] The failure to serve the notice required by SEPA s 16 – see below.
The respondent’s submission was that leaving aside the circumstance of an order for substituted service and the circumstance of submission by a defendant to the jurisdiction of the court, service in accordance with the provisions of SEPA was the only means by which this Court could exercise jurisdiction over an interstate defendant.
The Statutory Requirements for Effective Service
The word “served” in s 459G(3) is not used with any special or technical meaning.[10] Two statutory provisions are relevant to the means by which the s 459G application could be served on the appellant. Section 109X of the Corporations Act provides generally for a means of service of documents on a corporation. Section 109X(1) provides:
[10] Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648 at 658 per Beaumont J.
For the purposes of any law, a document may be served on a company by:
(a) leaving it at, or posting it to, the company’s registered office; or
(b)delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory; or
(c)if a liquidator of the company has been appointed – leaving it at, or posting it to, the address of the liquidator’s office in the most recent notice of that address lodged with ASIC; or
(d)if an administrator of the company has been appointed – leaving it at, or posting it to, the address of the administrator in the most recent notice of that address lodged with ASIC.
Section 109X(1) applies to service of any document, whether it be court process or otherwise. However, s 109X was not applicable in the present case because of s 109X(3) which provides:
Subsections (1) and (2) do not apply to a process, order or document that may be served under section 9 of the Service and Execution of Process Act 1992.[11]
[11] See also SEPA s 9(9) which provides:
Subsections 109X(1) and (2) and s 601CX of the Corporations Act 2001 do not apply to a process, order or document that may be served under this Act.
SEPA is concerned generally with the service of process throughout the Commonwealth of Australia. Section 15(1) of SEPA provides that an initiating process issued in the court of one State or Territory may be served in another State or Territory. Section 15 then goes on to provide that service on a company or on a registered body “must be” effected in accordance with s 9 and that service on any other body corporate “must be” effected in accordance with s 10. With respect to service on a company, s 9(1) and s 9(2) provide:
(1)Service of a process, order or document under this Act on a company is to be effected by leaving it at, or sending it by post to, the company’s registered office:
(2)Without limiting the operation of subsection (1), a process, order or document may be served on a company by delivering a copy of it personally to a director of the company who resides in Australia.
In respect of a registered body, s 9(5) provides that service is to be effected by leaving it at, or by sending it by post to, the body’s registered office but if the registered body is a registered foreign company, service may be effected at the address of the local agent of the foreign company. Section 10 provides for service at a larger range of places in respect of a body corporate which is not a company or a registered body. Service on such an entity may be effected at its head office, registered office, principal place of business or at any place permitted by the law of the State in which the process is to be served.
By s 16 of SEPA, service is effective only if copies of such notices as are prescribed are attached to the process served. The Form 1 in Sch 1 to the Service and Execution of Process Regulations 1993 is the form prescribed for the purposes of s 16.[12]
[12] Service and Execution of Process Regulations 1993 (Cth), reg 4(1)(a).
The provisions of SEPA are the only provisions prescribed by statute or by rule of court permitting service of initiating process issued out of this Court on a defendant in another State or Territory. The rule of this Court which formerly provided for service out of this State but within the Commonwealth of Australia was repealed in 1996.[13] Even if that rule had not been repealed, it is unlikely that it could have been relied upon in this case as SEPA s 4(4) provides that, subject to the provisions of SEPA itself, SEPA is to apply to the exclusion of a law of a State with respect to service of process in another State.
[13] See the former Supreme Court Rule 18.03.
There is an argument that the provisions with respect to proof of service in SEPA s 11(4) may enlarge the places at which service may be effected so as to include an address for service of the company, whether that place be the registered office of the company or not. Section 11(4) provides:
Service of a process, order or document under this Act by post on a company, a registered body or any other body corporate is taken to have been proved only if the following are proved:
(a)it was sent by pre-paid post to an address for service on the company, registered body or other body corporate under section 9 or 10;
(ab)it was addressed to the company, registered body or other body corporate, or, if the address for service is the office of a solicitor, to that solicitor;
(b)the day on which it was posted.
The argument is that s 11(4) contemplates that service may be effected on a company at an address for service and, in particular, at the office of a solicitor. I doubt that that argument is sound. In my opinion, s 11(4) is to be construed by reading it distributively, ie, as applying where appropriate to the means of service provided for in ss 9 and 10 for service on companies, registered bodies and body corporates other than companies. As already noted, SEPA has prescribed a larger number of places at which a body corporate which is not a company may be served than it has in the case of either companies or registered bodies. Further, many companies have their registered office at the office of a firm of solicitors. Section 11(4)(ab) provides that that in that case, the document must be addressed to the solicitor, rather than to the company itself. Further, it seems to me to be unlikely that having specified in ss 9 and 15 the means by which initiating process is to be served on a company that SEPA would then, by a side wind in a proof of service provision, enlarge that means. However, it is unnecessary to express a final view about s 11(4) as, even if it does permit service on a company at an address for service at a solicitor’s office (which is not also its registered office) my opinion is that the appellant is still unable to prove effective service in this case.
There are at least three respects in which the delivery of the application on 29 April 2005 in this case was not effective service in accordance with the requirements of SEPA.
1.The delivery of documents was to the office of Ebsworth & Ebsworth and not to the registered office of the respondent as required by SEPA s 9;
2.The delivery was by way of facsimile transmission, whereas ss 9 and 15(3) require service of an initiating process on a company to be effected by –
(i)leaving it at the company’s registered office (s 9(1));
(ii)sending it by post to the registered office (s 9(1));
or
(iii)delivering a copy personally to a director who is resident in Australia (s 9(2)).[14]
3.The documents sent by facsimile transmission to Ebsworth & Ebsworth did not include the notice prescribed by s 16.[15]
[14] Cf Scandon Pty Ltd v Dome Supplies Pty Ltd (1995) 17 ACSR 662.
[15] Re Marlan Financial Services Pty Ltd (2001) 158 FLR 256 at 261; (1999) 33 ACSR 259 at [13]; Highfield Woods Pty Ltd v Bayview Crane Hire Pty Ltd (1996) 130 FLR 238.
Hence, the appellant sought to rely on what it said was an agreement for service or, in the alternative, a waiver or election by the respondent. Each of these is discussed below.
SEPA and Agreements Concerning Service
The appellant contended that it was open to the parties to agree on a manner of service otherwise than in accordance with the provisions of SEPA, and submitted that that is what had occurred in this case. In many instances, litigants may reach agreements with respect to service without a court being called upon to consider the efficacy of those agreements. Where the defendant acts in accordance with the agreement and enters an appearance or address for service,[16] it usually is taken to have submitted to the jurisdiction of the court, so that the question does not arise.
[16] Supreme Court Rules 1987, r 21.
The agreement alleged by the appellant was said to arise from its acceptance of an “offer” by the respondent that service could be effected on it at Ebsworth & Ebsworth in Sydney. That “offer” was said to be found in cl 6 of the statutory demand, and had been accepted, in the appellant’s submission, by the facsimile transmission of the application and supporting affidavit to Ebsworth & Ebsworth on 29 April 2005. There are a number of difficulties, in my opinion, in construing a concluded agreement, in conventional contract terms, from those circumstances. In the first place, it is difficult objectively to construe cl 6 as being in the nature of an offer. It is more natural to construe it as a statement of an address for service, in purported compliance with the requirements of the prescribed form. It is even more difficult to construe the facsimile transmission from Mellor Olsson on 29 April 2005 as an “acceptance” of that “offer”. The letter of 29 April 2005 did not purport to be an acceptance. On the contrary, it was said that the application and affidavit (it could have been copies only) were being provided “as a matter of courtesy” and, far from purporting to accept the “offer”, the appellant’s solicitors said that service would be effected at the respondent’s registered office if Ebsworth & Ebsworth did not confirm that they had instructions to accept service. Furthermore, even if there was an agreement with respect to service at the Sydney office of Ebsworth & Ebsworth, it is far from clear that any term could be implied to the effect that compliance with s 16 of SEPA with respect to that service was not required. For these reasons, I am not prepared to conclude that there was any agreement of any kind between the parties with respect to service. All that the statutory demand did was to nominate the office of Ebsworth & Ebsworth as an address for service. That conclusion makes it unnecessary to consider the further question of whether service in accordance with an agreement could be regarded as effective, having regard to the provisions of SEPA, ie, whether the effect of SEPA is to deprive such an agreement of any efficacy, at least where the jurisdiction of the court over the subject matter is contingent upon an application having been issued within the prescribed time.
Waiver and Election
The appellant submitted that the statement of Ebsworth & Ebsworth on 3 May 2005 that they had instructions to accept service of the proceedings should be construed as a waiver by the respondent of any requirement for it to be served at its registered office and in accordance with the provisions of SEPA. The submission was that it then became unnecessary for the appellant to do anything further to effect service as it was entitled to rely on the facsimile transmission of the documents to Ebsworth & Ebsworth on 29 April 2005. An alternative submission, based on the same circumstance, and relying on the doctrine of election, was also made.
The submission of the appellant assumed implicitly that, as at 3 May 2005, it was still open to the appellant to serve the respondent in accordance with the SEPA provisions and within the requisite 21 day period. The appellant did not submit that it could rely on the statement of Ebsworth & Ebsworth on 3 May 2005 as constituting a waiver if, as at that date, the 21 day period had expired. A waiver in that circumstance would have to be a waiver of a different kind from that asserted by the appellant. If the time for effective service had expired, any waiver by the respondent would have to be a waiver of its right to defend the s 459G application on the ground that the jurisdiction of the court under s 459G had not been invoked. The availability of a waiver of that kind (absent actual submission to the jurisdiction of the court) is doubtful. It is not open to the parties to waive a statutory condition necessary for the exercise of a court’s jurisdiction.[17]
[17] Commonwealth v Verwayen (1990) 170 CLR 394 at 404 per Mason CJ, at 425 per Brennan J; Highfield Woods Pty Ltd v Bayview Crane Hire Pty Ltd (1996) 130 FLR 238.
Although 3 May 2005 was the 22nd day after 11 April 2005, the appellant contended that it was still open to it, on that day, to make effective service on the respondent at the office of Ebsworth & Ebsworth in Sydney. The appellant pointed to the agreed fact that the 21st day (Monday 2 May 2005) was a public holiday in Queensland. The effect of s 36(2) of the Acts Interpretation Act 1901 (Cth) was, it was submitted, that the appellant then had until 3 May 2005 in which to serve the respondent whether service was being effected in Queensland or New South Wales. Section 36(2) provides:
Where the last day of any period prescribed or allowed by an Act for the doing of anything falls on a Saturday, on a Sunday or on a day which is a public holiday or a bank holiday in the place in which the thing is to be or may be done, the thing may be done on the first day following which is not a Saturday, a Sunday or a public holiday or bank holiday in that place.
The appellant’s submission in this respect cannot be accepted. The effect of s 36(2) is, relevantly, to allow an extra day or days for service where the last day on which service may be effected is a Saturday, Sunday, public holiday or bank holiday in the place where the service is to be effected. It is a safeguard against a person being impeded from carrying out a required act within time by reason of the last day for the doing of that act being a day when premises may not be open to business. There is no reason to construe s 36(2) as permitting an extra day or days in one place where that impediment does not exist merely because in another place the impediment would or may have existed. Such a construction may produce results which are quite uncertain depending upon the extent of the places at which the act could be carried out. In my opinion, s 36(2) should be construed as though the last clause read “the thing may be done in that place on the first day following which is not a Saturday, a Sunday or public holiday or bank holiday in that place”.
Accordingly, in my opinion, at the time the waiver of the requirement to serve the application in accordance with SEPA is said to have occurred, it was no longer open to the appellant to serve the application so as to invoke the jurisdiction of the court. The time in which service could be effected had expired. Even if there had been a purported waiver, it would have been ineffective.
It is doubtful in any event that the requirements of SEPA with respect to service are capable of being waived. SEPA represents an enactment, substantially, of the recommendations contained in the ALRC Report No 40 “Service and Execution of Process”. The ALRC Report did recommend that the requirement for service of a notice (to which effect is given in s 16) should be capable of being waived[18]. However, SEPA does not contain any provision permitting waiver by the parties of its requirements. This makes it difficult to construe SEPA as impliedly authorising the waiver of its requirements with respect to service or, at least, the requirement for service of a s 16 notice. Whether or not a waiver accompanied by detrimental reliance may give rise to an estoppel is not, as will be seen shortly, something which needs to be considered in this case.
[18] Australian Law Reform Commission Report No 40 [205].
There are other difficulties in the way of regarding the 3 May 2005 statement as a waiver.
Although in some circumstances a waiver may be found in the deliberate act of a defendant not to rely upon a defence available to it, such a waiver is not to be inferred merely because of the failure of the defendant to raise it on the very first occasion in correspondence when it could have been raised.[19] Such a deliberate act is found when, at the time for the exercise of the right, the party abstains from exercising it.[20] It cannot be said that as at 3 May 2005 the respondent was required to exercise any right. All that Ebsworth & Ebsworth were doing by the statement on 3 May 2005 was responding to the inquiry about their ability to accept service. Their intimation that they did have instructions to that effect cannot reasonably be construed as the communication of a deliberate decision to abandon a “defence” otherwise available to the respondent.
[19] Commonwealth v Verwayen (1990) 170 CLR 394 at 473 per Toohey J.
[20] Commonwealth v Verwayen (1990) 170 CLR 394 at 427 per Brennan J.
The appellant is unable to establish any detrimental reliance by it on the statement of Ebsworth & Ebsworth on 3 May 2005. By that date, it was too late to effect service of the application within the requisite 21 day period. There is, in any event, no evidence that, in determining the place, manner or time at which the application should be served on the respondent, any regard at all was had by the appellant or its solicitors on 3 May 2005 to the statement of Ebsworth & Ebsworth.
Finally, even it were possible otherwise to construe the statement of 3 May 2005 as a waiver of the need to serve the respondent at its registered office, it could not reasonably be construed as, in addition, a waiver of the need to comply with the provisions of SEPA with respect to such service. In the circumstances of this case, the statement that the application may be served at one place did not carry with it an implication that the statutory requirements for service at that place need not be observed.
In my opinion, the submissions based on waiver should be rejected. For similar reasons the alternative submission based on election should also be rejected. As at 3 May 2005, it could not be said that Ebsworth & Ebsworth were, on behalf of the respondent, making a choice between inconsistent rights.[21]
[21] Commonwealth v Verwayen (1990) 170 CLR 394 at 421 per Brennan J, at 451-53 per Dawson J; Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26.
Inhibiting Order
The Master declined to accede to an alternative submission from the appellant that, in the event of an adverse finding on the issue of service, he should make an inhibiting order of the kind considered in Re Marlan Financial Services Pty Ltd[22] and in Dominion Capital Pty Ltd v Pico Holdings Inc.[23] Although the Notice of Appeal complained that the Master had been in error in refusing to make an inhibiting order, no submission in support of that ground was made to the court. In those circumstances, it is inappropriate to consider whether, in the circumstances of this case, an inhibiting order was appropriate.
[22] (2001) 158 FLR 256; (1999) 33 ACSR 259.
[23] (2001) 4 VR 195.
In some cases, in addition to the application pursuant to s 459G, the debtor company also seeks an injunction restraining the creditor company from instituting an application for its winding up.[24] No such application was made in this case.
[24] Cf Players Pty Ltd v Interior Projects (1996) 20 ACSR 189.
Summary
For the reasons which I have given above, I would dismiss the appeal. I do not regard this decision as producing a result which is satisfactory. This is a case in which despite the deficiencies in the method of service adopted, the application and supporting affidavit were received by the respondent’s solicitors within the prescribed 21 day period and furthermore, were brought to the attention of the respondent itself within that same period. There is no suggestion that the absence of the notice prescribed by s 16 of SEPA prejudiced the respondent in any way. Furthermore, the respondent was itself non-compliant with the obligation to nominate an address for service in this State.
I would make the following orders:
1. The appeal be dismissed.
2.The matter be remitted to the Master for consideration of the continuance of the stay of orders made by him on 5 September 2005 and 14 September 2005 respectively.
I would hear the parties as to costs.
34
12
1