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Emhill Pty Ltd v Bonsoc Pty Ltd

Emhill Pty Ltd v Bonsoc Pty Ltd

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Case Copied 3 September 2004 19 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

No. 6553 of 2004

EMHILL PTY LTD	Plaintiff
V
BONSOC PTY LTD	Defendant

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JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 August 2004
DATE OF JUDGMENT:	3 September 2004
CASE MAY BE CITED AS:	Emhill Pty Ltd v Bonsoc Pty Ltd
MEDIUM NEUTRAL CITATION:	[2004] VSC 322

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CORPORATIONS – whether service of original statutory demand on director of company complied with s.109X(1)(b) of the Corporations Act 2001 (Cth) – whether service of statutory demand on the sole director and secretary of company constituted valid service on the company – whether s.109X of the Corporations Act 2001 (Cth) is facultative or exclusive and mandatory

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Peirce (solicitor)	Lewis & Weir
For the Defendant	Mr N Verginis (solicitor)	Holding Redlich

HIS HONOUR:

This is an appeal by the plaintiff company (by Notice of Appeal dated 18 August 2004) from an order of Senior Master Mahoney made 13 August 2004 in a proceeding commenced by originating process dated 16 June 2004. The application by originating process was brought under s.459G of the Corporations Act 2001 (Cth) (“the Act”) to “set aside a statutory demand asserted as having been served by the defendant pursuant to section 495E of [the Act].” The originating process sets out a number of grounds for the application but the only one relied upon in argument on the appeal was that the statutory demand had not been properly served.

The originating process was supported by an affidavit of Brian Arthur Cook sworn 16 June 2004. Mr Cook deposed that he was the sole director and secretary of the plaintiff. Mr Cook further deposed that in Lonsdale Street, Melbourne, on 26 May 2004 at about 11.50am, Mr Verginis, a solicitor employed by Holding Redlich (the solicitors for the defendant) said to him “You are Brian Arthur Cook a director of Emhill Pty Ltd” to which Mr Cook replied “Yes” and that Mr Verginis then said to him “I serve you with this statutory demand for and on behalf of Bonsoc Pty Ltd” and then handed Mr Cook some papers which Mr Cook examined.

Exhibited to Mr Cook’s affidavit was a copy of the papers which had been handed to him on 26 May 2004. The exhibit comprised a copy of a letter from Holding Redlich to the secretary of Emhill Pty Ltd enclosing by way of service a statutory demand and the exhibit further comprised a copy of the statutory demand itself, dated 26 May 2004. The exhibited copy of the statutory demand was addressed to Emhill Pty Ltd of 20 Coonil Crescent, North Shore 3214, Victoria and stated that the plaintiff owed the defendant the sum of $56,695.47 being “the total amounts of the debt described in the Schedule.” The demand contained what might be described as the usual verbiage and was signed on behalf of the defendant creditor by Holding Redlich.…

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: [2004] VSC 322
Decision Date: 3 September 2004

CaseChat Overview and Summary

Emhill Pty Ltd sought to recover a debt from Bonsoc Pty Ltd by lodging a statutory demand. The dispute arose when Bonsoc Pty Ltd contested the demand, arguing that it had not been validly served. This case was heard in the Federal Circuit Court of Australia. The central legal issue was whether the service of the statutory demand on the sole director and secretary of Bonsoc Pty Ltd, who was also the registered address for service of the company, complied with the requirements of section 109X(1)(b) of the Corporations Act 2001 (Cth). The court needed to determine if such service constituted valid service on the company and whether section 109X was facultative or mandatory.

The court examined the plain language of section 109X(1)(b) and concluded that the service of the statutory demand on the sole director and secretary of the company was valid. It found that the provision was not exclusive but rather facultative, meaning that service on the director or secretary could be considered service on the company if they were one and the same. The court noted that the legislative intent was to facilitate the service of statutory demands and that strict compliance was not required if the director and secretary held the same position. The court held that the statutory demand was validly served, and Bonsoc Pty Ltd's challenge to the demand was dismissed.

The Federal Circuit Court of Australia ordered that the statutory demand was valid, and Bonsoc Pty Ltd was required to pay the debt claimed by Emhill Pty Ltd within 21 days. The court further ruled that Bonsoc Pty Ltd was liable for the costs of the proceedings. This decision reinforces the principle that service on the sole director and secretary of a company can be considered service on the company itself, provided they hold the same position.

Orders