Global Media and Entertainment Pty Ltd v Obelisk Ventures Pty Ltd

[2018] NSWSC 1894

Supreme Court

New South Wales

Medium Neutral Citation:

Global Media & Entertainment Pty Ltd v Obelisk Ventures Pty Ltd [2018] NSWSC 1894

Hearing dates:

3, 6 December 2018

Date of orders:

06 December 2018

Decision date:

06 December 2018

Jurisdiction:

Equity - Corporations List

Before:

Parker J

Decision:

(1) Order that the Originating Process filed 8 October 2018 be dismissed.
(2) Order that the plaintiff pay the defendant’s costs.

Catchwords:

CORPORATIONS – application to set aside a creditor's statutory demand – whether service of the application to set aside a creditor's statutory demand complied with the Corporations Act 2001 (Cth), s 459G – whether service of an application to set aside a creditor's statutory demand interstate must comply with the requirements of the Service and Execution of Process Act 1992 (Cth) within the 21 day period specified in the Corporations Act 2001 (Cth), s 459G(3)

Legislation Cited:

Corporations Act 2001 (Cth), ss 459G, 459S
Service and Execution of Process Act 1992 (Cth)

Cases Cited:

Elan Copra Trading Pty Ltd v J K International Pty Ltd (2005) 195 FLR 229; [2005] SASC 501
Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd (1999) 158 FLR 256; [1999] VSC 435
Re 8D Pty Ltd (2013) 279 FLR 98; [2013] NSWSC 1297

Category:

Principal judgment

Parties:

Global Media & Entertainment Pty Ltd (Plaintiff)
Obelisk Ventures Pty Ltd (Defendant)

Representation:

Counsel:
C Waterstreet (Plaintiff – appearing on 3 December 2018 only)
EAJ Hyde (Defendant)

 

Solicitors:
DSA Law (Defendant)

  No appearance:
Global Media & Entertainment Pty Ltd (Plaintiff – on 6 December 2018)

File Number(s):

2018/306898

Publication restriction:

Nil

Judgment – EX TEMPORE

Revised and reissued 7 December 2018

1. This is an application by the plaintiff (to which I will refer as "the Company") to set aside a statutory demand which was served on it by the defendant (to which I will refer as "Obelisk") in September 2018.

2. The Company is controlled by Damien Costas. Mr Costas is a publisher and, in particular, publishes a magazine known as Penthouse Magazine. He is also the promoter of speaking tours by people who have obtained some political notoriety overseas. The present dispute arises out of tours promoted by Mr Costas (through the Company) by Milo Yiannopoulos, the American political provocateur, and Nigel Farage, the former leader of the United Kingdom Independence Party and member of the European Parliament known for his involvement in the Brexit campaign.

3. Obelisk is a company controlled by Max Markson. Mr Markson is a publicist and his company was retained both for its connections with Mr Yiannopoulos and Mr Farage and to do publicity for the tour. Obelisk's statutory demand was for a sum of approximately $63,000, claimed as outstanding fees or expenses associated with the tours.

4. It appears that both Mr Costas and Mr Markson are based in Sydney. The Company is incorporated in New South Wales. Its principal place of business is in Darlinghurst in Sydney but its registered office is at the office of what appears to be an accounting firm at Parkville in Melbourne. Obelisk's statutory demand was served at that address. Consistently with the requirements of the prescribed form, the statutory demand gave an address for service in Victoria at the offices of the solicitors acting for Obelisk at Queen Street in Melbourne.

5. The statutory demand is dated 14 September but was served under cover of letter from those solicitors, delivered to the registered office of the Company on 18 September. The Company’s Originating Process was filed in this Court on 8 October, accompanied by an affidavit from Mr Costas which asserted that the debts claimed in the statutory demand were disputed. In particular, Mr Costas alleges that it had been agreed between himself and Mr Markson that there was to be an audit carried out to determine what, if anything, was owing between the Company and Obelisk as a result of the two tours in question.

6. The Originating Process bore an address for service at the offices of Obelisk's solicitors in Melbourne as notified in the statutory demand. At 6.58pm on 8 October, solicitors acting for the Company sent a sealed copy of the Originating Process and the affidavit filed in support to Obelisk's solicitors by email. The Originating Process, as sent, did not contain the notice required under the Service and Execution of Process Act 1992 (Cth) where an originating process is issued out of a court in one State and served in another.

7. At the hearing before me on 3 December 2018, counsel for Obelisk took the preliminary point that service had not been validly effected within the 21 day period allowed under Corporations Act 2001 (Cth), s 459G. This issue has arisen in a number of previous cases. The relevant provisions of the Service and Execution of Process Act are mandatory and apply to the exclusion of any State law which would otherwise provide for service. In Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd (1999) 158 FLR 256; [1999] VSC 435 Byrne J concluded that failure to include the relevant notice meant that the purported service was ineffective and, as a result, the application to set aside the statutory demand in that case had to be dismissed. The Full Court of the Supreme Court of South Australia expressed the same view in Elan Copra Trading Pty Ltd v J K International Pty Ltd (2005) 195 FLR 229; [2005] SASC 501. Those decisions were followed and applied by Black J in this Court in the matter of Re 8D Pty Ltd (2013) 279 FLR 98; [2013] NSWSC 1297.

8. When this point was explained at the hearing, Mr Charles Waterstreet, of counsel, who appeared apparently on a direct access basis for the Company, indicated that he wished to maintain that the proceedings had been validly served. In particular, he sought to rely on an email purporting to copy in Mr Markson which had been sent to Obelisk's solicitors on 8 October 2018, enclosing the Originating Process. Mr Waterstreet sought an adjournment to present further evidence directed to demonstrating that this amounted to effective service on Obelisk within New South Wales. It was also suggested that the Originating Process had been sent directly to the registered office of Obelisk in New South Wales.

9. The situation was unsatisfactory because it had been made quite clear on behalf of Obelisk at an early stage of the proceedings that the validity of service was in contest. Nevertheless, I granted Mr Waterstreet an adjournment until today to present further evidence and submissions on the question.

10. At 6.52pm yesterday evening, Mr Waterstreet sent an email to my Associate and to the representatives of Obelisk which states:

It is with my sincerest apologies I inform you I am unable to attend court tomorrow for this matter. I have another matter that I must appear for. I have been unable to secure a solicitor to stand in place for me.

Further, as there is no acting solicitor for the Plaintiff it has been difficult to obtain evidence to ascertain whether the letter of the originating process, sent to the registered office of the Defendant, was sent via same day services..

I apologise for that late notice but wished to alert His Honour and the Defendant of my non-attendance tomorrow.

11. The matter has proceeded today and there has been no appearance by Mr Waterstreet or by anyone else on behalf of the Company. As the Company is the plaintiff, I think that would, strictly speaking, justify the Court in dismissing the proceedings for want of prosecution. However, for the record, it seems to me that on the evidence before the Court the Company’s application must manifestly fail.

12. The point taken on behalf of Obelisk is a highly technical one but is well-established in the authorities. It is therefore not necessary to consider whether the evidence presented on behalf of the Company is sufficient to demonstrate that there is a genuine dispute about the statutory demand. It will, of course, be open to the Company to ventilate that issue under a Corporations Act s 459S application should Obelisk proceed to institute winding up proceedings.

13. I should also record that evidence has been placed before the Court which specifically denies that a copy of the Originating Process was sent to the Company's registered office in Sydney.

14. For these reasons, the plaintiff's application fails and must be dismissed.

15. The orders of the Court are:

1.   Order that the proceedings be dismissed.

2.   Order that the plaintiff pay the defendant’s costs.

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Decision last updated: 07 December 2018