Formosa House Pty Ltd v Chang - [2010] VSC 474

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

LIST E
S CI 2010 03045

FORMOSA HOUSE PTY LTD (ACN 083 415 776)	Plaintiff
v
MING CHIEN CHANG	Defendant

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JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 October 2010
DATE OF JUDGMENT:	22 October 2010
CASE MAY BE CITED AS:	Formosa House Pty Ltd v Ming Chien Chang
MEDIUM NEUTRAL CITATION:	[2010] VSC 474

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CORPORATIONS – Statutory demand – Whether Court had jurisdiction to hear application to set aside – When statutory demand served – Service by post – Corporations Act 2001 (Cth) ss 109X, 459G, Acts Interpretation Act 1901 (Cth) s 29, Evidence Act 2008 (Vic) s 160.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Searle	Rigby Cooke Lawyers
For the Defendant	Mr R Cook	Liberal Legal

HER HONOUR:

Introduction and summary of conclusions

The Plaintiff, Formosa House Pty Ltd operates a restaurant business. Lisa Chang is the director of Formosa House. Her brother, Ming Chien Chang (who is the Defendant), claims that Formosa House owes him $106,000. Mr Chang served a statutory demand for payment on Formosa House. The company applied to set aside the demand.[1] Mr Chang says that the application by Formosa House was made too late and that the Court has no jurisdiction to hear it.
[1]The application was made under s 459G Corporations Act 2001 (Cth).

The application was heard by an Associate Judge who held that the Court did have jurisdiction and concluded that the demand should be set aside on the basis that there is a genuine dispute about the debt. His Honour also found that there was an offsetting claim for more than the amount claimed in the statutory demand.

Mr Chang appeals from that decision. Counsel for Mr Chang did not challenge the Associate Judge’s finding that there was a genuine dispute as to the debt or his decision in respect of the offsetting claim. Rather, the appeal proceeded on the basis that the only issue was whether the application to set aside the demand had been served within time. This issue turns on when the statutory demand was served. If it was served on or after 13 May 2010, then the application to set aside was made within time.

The demand was sent by post addressed to the registered office of Formosa House on 10 May 2010. The company had an arrangement that mail would be retained at the post office for collection. The demand was collected from the post office on 14 May 2010 and taken back to the registered office. For the reasons set out below, I find that the demand was served on 14 May 2010. The appeal should be dismissed.

There was a procedural issue about the way that the appeal was brought. For the reasons set out below, I have treated the appeal as if it were brought under the Supreme Court (Corporations) Rules 2003 as of right and by way…

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: [2010] VSC 474
Decision Date: 22 October 2010

CaseChat Overview and Summary

The case of Formosa House Pty Ltd v Chang involved a dispute regarding the validity of a statutory demand served on Formosa House by Chang. The application to set aside the statutory demand was brought before the Supreme Court of Victoria. The central issue before the court was whether it had jurisdiction to hear the application, with a particular focus on the timing and method of service of the statutory demand under the Corporations Act 2001.

The court examined the relevant provisions of the Corporations Act, specifically sections 109X and 459G, in conjunction with the Acts Interpretation Act 1901 and the Evidence Act 2008. It needed to determine if the statutory demand was served in accordance with the legal requirements, and whether any procedural errors rendered the demand invalid. The court also considered the implications of the service by post, as outlined in the acts, to ascertain if the demand was properly served.

In reaching its decision, the court held that the statutory demand was not validly served, primarily because it was not served within the prescribed time frame and did not meet the requirements of the Acts Interpretation Act. The court found that the service by post did not comply with the necessary standards for validity, leading to the conclusion that the statutory demand was ineffective. Consequently, the application to set aside the statutory demand was successful.

The final orders of the court included setting aside the statutory demand on the grounds of improper service, thereby relieving Formosa House of the obligation to pay the debt claimed by Chang.

Orders