Fletchers' Freighters Pty Ltd (in Liquidation) v Fresh Express Australia Pty Ltd - [2011] SASC 45

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
FLETCHERS' FREIGHTERS PTY LTD (IN LIQUIDATION) v FRESH EXPRESS AUSTRALIA PTY LTD
[2011] SASC 45
Reasons of Judge Burley a Master of the Supreme Court
1 April 2011
CORPORATIONS
Application to wind up company on ground of insolvency - deemed insolvency - non-compliance with statutory demand - whether effective service of statutory demand and originating process - ASIC record of registered office incorrect - documents sent by post to non-existent address - documents not sent by post to the registered office of the company - failure to establish non-compliance with statutory demand - application dismissed.
Corporations Act 2001 (Cth) s 142; Acts Interpretation Act 1901 (Cth) s 29, referred to.
Dwyer & Anor v Canon Australia Pty Ltd & Ors [2007] SASC 100, applied.
Fancourt and Anor v Mercantile Credits Limited (1983) 154 CLR 87, considered.

FLETCHERS' FREIGHTERS PTY LTD (IN LIQUIDATION) v FRESH EXPRESS AUSTRALIA PTY LTD
[2011] SASC 45
JUDGE BURLEY:

This is an application for a winding up order on the ground of insolvency, made pursuant to the provisions of Part 5.4 of the Corporations Act 2001(Cth) (“the Act”).
In certain circumstances insolvency is to be presumed. Section 459C(2) of the Act provides that the Court must presume that the company is insolvent if, within the relevant period, it has failed to comply with a statutory demand. The plaintiff relies on that section.
The plaintiff relied upon affidavits of Mr A Marshall sworn on 25 November 2010 (FDN2), 29 November 2010 (FDN4), 5 January 2011 (FDN7), 31 January 2011 (FDN14) and 10 February 2011 (FDN17). Reliance was also placed on the affidavits of B S L Tanner sworn on 28 January 2011 (FDN13) and 10 March 2011 (FDN22).
The defendant relied upon the affidavits of Mr A Musumeci sworn on 23 December 2010 (FDN12) and 8 March 2011 (FDN24). The defendant also relied upon the affidavit of Mr F David sworn on 25 February 2011 (FDN21).
The plaintiff asserts that on 20 October 2010 a statutory demand was posted by ordinary pre-paid post to the registered office of the defendant (and thereby served) and that no application was made within the prescribed period, or at all, to have the statutory demand varied or set aside. As a result, by originating process filed on 25 November 2010, the plaintiff has sought an order that the company be wound up.
The plaintiff asserts that the originating process was served by post at the registered office of the company, although the plaintiff acknowledges that the service was not effected in compliance with s 465A(b) of the Act. That provision requires that the plaintiff must serve a copy of the application within 14 days after the application is made. It is common ground that the originating process, if it was served, was not served within the 14 day period. The defendant relies upon that lack of compliance with s 465A(b) as one of the grounds of opposition to the making of the winding up order.
In response, the plaintiff has applied, by interlocutory process issued on 5 January 2011, for an order dispensing with compliance with the provisions of s 465A(b). The plaintiff relies upon s 467A of the Act, which is as follows:
467AAn application under Part 5.4 or 5.4A must not be dismissed merely because of one or more of the following:
(a)in any case—a defect or irregularity in connection with the application;
(b)[immaterial]
unless the Court is satisfied that a substantial injustice has been caused that cannot otherwise be remedied (for example, by an adjournment or an order for costs).
In my opinion, the interlocutory application for dispensation with the requirements of s 465A(b) of the Act is probably not necessary. It is apparent from the argument presented in support of the application that the plaintiff contends that the acknowledged defect or irregularity in connection with the application, namely the failure to serve within the relevant 14 day period, is not such that substantial injustice has been caused that cannot otherwise be remedied.
I think it is appropriate to deal with this point before I proceed further. An initial attempt at service was made in November 2010 prior to the expiration of the 14 day period, but the plaintiff acknowledges that that attempted service was defective because, at the time of purported service, the plaintiff failed to provide a notice as required under the provisions of the Service and Execution of Process Act 1901. That Act applied because the originating process was issued in this Court, but the defendant was required to be served in New South Wales. There was a subsequent attempt at service on 22 December 2010. Even though the attempted service was made well after the expiration of the 14 day period, there was no evidence that any substantial injustice (or any injustice) had been caused to the company. Consequently, if I come to the conclusion that the only defect in relation to service of the originating process on the defendant consisted of the failure to comply with the provisions of s 465A(b), that defect by itself does not constitute a basis for a dismissal of the windup up application. The matter does not end there, because it was also contended by the defendant that irrespective of compliance with s 465A(b) of the Act, the originating process was not effectively served at the registered office of the defendant in any event.
The plaintiff does not dispute that if it is to succeed on the application for the winding up order, it must establish that the statutory demand was effectively served on the defendant and that the originating process was effectively served on the defendant.
The plaintiff relies upon service by post at the registered office of the defendant company, both in relation to the statutory demand and the originating process. It is common ground that at all material times the ASIC records disclosed the registered office of the defendant as “Stand 546 `A’ Shed Sydney Markets New South Wales 2129”. Both the statutory demand and the originating process were directed to the defendant at that address. It is common ground that there was no “Stand 546” in ‘A’ Shed in the Sydney Markets.
It is apparent from the notice of Change to Company Details given by the defendant to ASIC[1] that the registered office is stated to be “Stand 5 & 6 ‘A’ Shed Sydney Markets NSW 2129” and that the change of address was operative as from 3 May 2007.
[1] See Exhibit AM20 to the affidavit of Mr Marshall sworn 31 January 2011 (FDN14).
It is common ground that the ASIC record of the registered office refers to “Stand 546”. This is not surprising because, when the actual form is read, the handwriting designating the stand number could easily be taken as the figures “546” as opposed to Stand 5&6. This presumably explains why the mistake was made when ASIC recorded the registered office as Stand 546.
My attention was also directed to the first page of the notice to ASIC. At about the middle of the page a telephone number (in handwriting) contains the figure “4”. That handwritten figure 4 is nothing like the crude ampersand that occurs between the figures 5 and 6 on the second page of the document. I have no doubt that the company, when it gave notice of change to ASIC on the document dated 3 May 2007 intended to inform ASIC that its registered office thereafter was “Stand 5 & 6 ‘A’ Shed Sydney Markets NSW 2129”.
It is clear that the registered office of the company is as notified and not as recorded by ASIC.[2]
[2] See s 142 of the Act.
It is against this background that the points raised for determination must be considered. Those points are: first, whether or not the statutory demand was effectively served; and second, whether or not the originating process was effectively served. If I find that the statutory demand was not effectively served, that is a complete defence to the winding up application, because the plaintiff is not able to prove non-compliance with the statutory demand. In that event, it is not necessary to determine whether or not the proceedings themselves have been effectively served. However, if I come to the conclusion that the statutory demand was effectively served, I must next consider whether the originating process was also effectively served.
The reality of the matter is that if I find that the statutory demand was not effectively served, it must also follow that the originating process was not effectively served because the same method of service was used in each case.
Thus, the question to be decided is whether the statutory demand or originating process has been posted to the registered office of the company. It is not in dispute that in the case of both the statutory demand and the originating process, each document was sent by pre-paid post to the company whose address was shown as Stand 546 A Shed Sydney Markets New South Wales. As I have stated before, it was not in dispute that there is no stand numbered 546 in the Sydney Markets. Mr Thomas, counsel for the plaintiff, argued that it was sufficient if it is established by the plaintiff that the statutory demand and the originating process respectively reached the actual registered office of the defendant, namely Stands 5 & 6 Shed A Sydney Markets New South Wales. According to the affidavit evidence of Mr Andrew Musumeci, the sole director of the defendant company, the statutory demand and the originating process were not delivered by Australia Post (or by anyone else) either to him or to the company’s address at Stand 5 & 6.
In his affidavit sworn on 23 December 2010, he said (at paragraph 6) that he was informed by his brother that an application had been made to the South Australian Supreme Court to wind up the defendant. As a result of that advice he then purchased the Daily Telegraph which contained an advertisement referring to the winding up application. He then said (at paragraph 9):
9The defendant has not received either the Statutory Demand or the Originating Process and that could be because of the error in the registered office address on the company search. If I had not been informed by my brother of the newspaper advertisement in respect of the winding up application, the defendant would not have been aware of the application to wind up the defendant.
Mr Thomas contended that I should infer from the circumstances that, contrary to what was said by Mr Musumeci in his affidavit, the defendant did receive both the statutory demand and the originating process at its registered office, despite the fact that each of the documents was directed to a non-existent address. He referred to affidavit evidence to the effect that the documents were not returned unclaimed and to the effect that in previous litigation between the defendant and other parties, documentation had been sent to Stand 546 and had nonetheless come to the attention of Mr Musumeci. When I asked Mr Thomas during the course of argument whether he was asking me to disbelieve the affidavit evidence of Mr Musumeci, he accepted that in the absence of Mr Musumeci being called for cross-examination so that such matters could be put to him, it was not open to me to reject his evidence. I consider that that concession was properly made.
Even if it were possible to draw such an inference without the relevant assertions being put to Mr Musumeci in cross-examination, I would not in any event draw such an inference. The evidence of past conduct of the company, when met with a demand and proceedings directed to the company at Stand 5 & 6 (although addressed to Stand 546), is that the company reacted to that documentation. In this case, it did not react by applying to set aside or to vary the statutory demand. It only filed an address for service in these proceedings after it had obtained copies of the same through its solicitor, Mr David. Looked at in that light, the evidence tends to confirm non-receipt.
During the course of argument, both counsel put submissions relating to the effect of s 29(1) of the Acts Interpretation Act 1901 (Cth) which is as follows:
29 Meaning of service by post
(1) Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
It is not necessary to traverse the various authorities referred to by counsel. If the sub-section is to apply, the address must be an actual address and, in the circumstances of this case, the address must be the registered office of the company.[3] Decisions such as Fancourt and Anor v Mercantile Credits Limited[4] do not assist the plaintiff because in that case, an actual postal address (being that of the appellants) was under consideration.
[3] See Dwyer & Anor v Canon Australia Pty Ltd & Ors [2007] SASC 100 at [16].
[4] (1983) 154 CLR 87.
Given the combination of the plaintiff’s evidence that the documents were sent by pre-paid post to a (non-existent) address that was not the registered office of the defendant, and the evidence of the sole director of the defendant (which I accept) that such documentation was not received at the registered office, I find that neither the statutory demand nor the originating process were effectively served at the registered office of the defendant. That means that the plaintiff has failed to prove that the defendant has failed to comply with a statutory demand, because a failure to comply can only arise where the statutory demand is effectively served.[5] That means that the summons must be dismissed.
[5] CGU Workers’ Compensation (Victoria) Ltd v Carousel Bar Pty Ltd (1999) 151 FLR 270.
My orders are:
1Originating process dismissed.
2Liberty to apply on the question of costs.