Heirloom Vineyards Wine Company Pty Ltd v Sante Wines Pty Ltd

[2018] SASCFC 56

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

HEIRLOOM VINEYARDS WINE COMPANY PTY LTD v SANTE WINES PTY LTD

[2018] SASCFC 56

Judgment of The Full Court

(The Honourable Justice Parker, The Honourable Justice Lovell and The Honourable Justice Doyle)

15 June 2018

CORPORATIONS - WINDING UP - WINDING UP IN INSOLVENCY - STATUTORY DEMAND - APPLICATION TO SET ASIDE DEMAND - PROCEDURAL REQUIREMENTS

The appellant (Heirloom) and Dandelion Vineyards Pty Ltd (Dandelion) are both winemakers based in South Australia.  The respondent Sante is a wine wholesaler based in Victoria.  Heirloom and Dandelion both served statutory demands upon Sante claiming monies owed to them by Sante for wine supplied by them to Sante.  Sante then brought proceedings in which it sought an order that both statutory demands be set aside or varied.

A Master of this Court dismissed Sante’s claim, essentially on the basis that while it was permissible to seek to set aside both statutory demands in a single set of proceedings, it was not permissible to do so by means of the single order sought by Sante in respect of both statutory demands. 

A single judge of this Court allowed Sante’s appeal from the decision of the Master, upholding the contention that it was not only permissible to seek to set aside both statutory demands in a single set of proceedings, but also permissible to do so by means of the single order sought by Sante in respect of both statutory demands.  The order sought in this case was capable of being read distributively, and hence as seeking an order in respect of each of the statutory demands.

In the further appeal to this Court, Heirloom challenges the single judge’s conclusions in relation to both issues. 

Held (per Doyle J, Parker and Lovell JJ agreeing):

1. Section 459G of the Corporations Act 2001 (Cth) does not require that each application to set aside a statutory demand be the subject of separate proceedings, or even a separate order.

2.       It is permissible to seek to set aside multiple statutory demands in a single originating process provided that the requirements of s 459G have otherwise been complied with.

3.       It is also permissible to do so through an originating process that seeks one order which relates to more than one demand, provided that the order is, as a matter of substance, capable of being read distributively as seeking or including separate relief in respect of each such demand.

4.       The originating process in the present case complied with the requirements of s 459G, and the order sought was capable of being read as seeking or including separate relief in respect of each of the two statutory demands.

5.       Appeal dismissed.

Corporations Act 2001 (Cth) s 459G, 2 459H, s 467A; Acts Interpretation Act 1901 (Cth) s 23, referred to.
Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18, distinguished.
Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2007] 2 Qd R 199; Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828; Filaria Pty Ltd v Carlisle [2004] ACTSC 95; Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279; Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13; Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331; Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409; Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375, discussed.
Cooloola Dairys Pty Ltd v National Foods Milk Ltd [2005] 1 Qd R 12; Gujarat NRE Australia Pty Ltd v Williams [2006] NSWSC 518; Isaco Pty Ltd v Davey (2003) 180 FLR 183; Re John Farlow Pty Ltd [2015] NSWSC 939, considered.

HEIRLOOM VINEYARDS WINE COMPANY PTY LTD v SANTE WINES PTY LTD
[2018] SASCFC 56

Full Court:      Parker, Lovell and Doyle JJ

1. PARKER J:          I agree that the appeal should be dismissed.  I have nothing to add to the comprehensive reasons given by Doyle J.

2. LOVELL J:          I agree with Doyle J that the appeal should be dismissed.

3. DOYLE J:             The appellant (Heirloom Vineyards Pty Ltd) (Heirloom) and Dandelion Vineyards Pty Ltd (Dandelion) are both winemakers based in South Australia.  The respondent (Sante Wines Pty Ltd) (Sante) is a wine wholesaler based in Victoria.  Heirloom and Dandelion both served statutory demands upon Sante claiming monies owed to them by Sante for wine supplied by them to Sante.  Sante then brought proceedings in which it sought an order that both statutory demands be set aside or varied.

4. A Master of this Court dismissed Sante’s claim, essentially on the basis that while it was permissible to seek to set aside both statutory demands in a single set of proceedings, it was not permissible to do so by means of the single order sought by Sante in respect of both statutory demands. 

5. A single judge of this Court allowed Sante’s appeal from the decision of the Master, upholding the contention that it was not only permissible to seek to set aside both statutory demands in a single set of proceedings, but also permissible to do so by means of the single order sought by Sante in respect of both statutory demands.  The order sought in this case was capable of being read distributively, and hence as seeking an order in respect of each of the statutory demands.

6. In the further appeal to this Court, Heirloom challenges the single judge’s conclusions in relation to both issues. 

   Background

7. From about 2012, Sante was responsible for the distribution of both Heirloom’s and Dandelion’s wines in Victoria.  Heirloom and Dandelion had the same registered office and principal place of business, but had different directors and shareholders. 

8. In about 2015, Sante provided each of Heirloom and Dandelion with a proposed written agreement governing their distribution arrangements; however, none of these parties ultimately executed any written agreement.  There was accordingly some uncertainty about the parties’ termination rights, and in particular what period of notice of termination might be required (assuming an implied obligation to provide reasonable notice).

9. Heirloom and Dandelion both purported to terminate their respective arrangements with Sante on 27 May 2016, giving one month notice to Sante.  The basis for the purported terminations was alleged failures by Sante to comply with contract terms in relation to the payment of invoices issued by Heirloom and Dandelion for wine supplied by them to Sante.  Heirloom and Dandelion contended that a number of their invoices remained outstanding.

10. By letter dated 19 August 2016, the solicitor for Heirloom and Dandelion served Sante with two statutory demands, one from each company.  The statutory demands claimed amounts said to be owing under various outstanding invoices.  The one from Heirloom was for the sum of $234,652.32, and the one from Dandelion was for the sum of $72,985.69.

11. On 7 September 2016, Sante filed a single originating process, purporting to be an application under s 459G(1) of the Corporations Act 2001 (Cth) (the Act). Omitting the formal parts, it was in the following terms:

    On the facts stated in the supporting affidavit the plaintiff seeks the following orders:

    1.   An order that the statutory demands both dated 19 August 2016, served by the first defendant and second defendant upon the plaintiff, be set aside or varied (Section 459H(1)(a) or (b) and/or Section 459J(1)(a) and/or (b);

    2.   Further, or in the alternative, that any order under Sections 459H or 459J be made subject to conditions pursuant to Section 459M;

    3.   Such further or other order as this honourable court deems fit; and

    4.   An order that the first defendant and second defendant pay the costs of the application;

    5.   Costs.

12. The originating process was supported by an affidavit from the solicitor for Heirloom and Dandelion (Mr Hamilton), which exhibited a further affidavit from the sole director and manager of Sante (Mr Lichti).  Both affidavits were sworn 7 September 2016.[1]  Both affidavits stated that, by the originating process filed, Sante had applied to set aside (or vary) “each of the statutory demands dated 19 August 2016 respectively” served by Heirloom and Dandelion upon Sante.  Both also stated that Sante made its application on the ground that Sante had off-setting claims against each of Heirloom and Dandelion under s 459H(1), and other grounds, as set out in Mr Lichti’s affidavit.

    [1]    The original of Mr Lichti’s affidavit was independently filed on 8 September 2016.

13. Mr Lichti’s affidavit explained that Sante’s position was that inadequate notice of termination had been provided to it, and that a minimum of six months was required by way of reasonable notice given the nature of the parties’ relationships and the industry in which they operated.  The affidavit exhibited a letter prepared by Sante’s solicitors briefly outlining the claim for the alleged breach of distribution agreement and setting out a calculation suggesting that Sante would have earned a gross profit of $104,956.33 over a six month notice period.  The affidavit also exhibited a copy of a claim issued in the Magistrates Court on the same day, making the same claim.  The Magistrates Court claim was voluntarily confined by Sante to $100,000 so as to bring it within the jurisdictional limit of that court. 

14. Mr Lichti also deposed that he had carried out a reconciliation (as described in an exhibited email) which had identified a potential overstatement of $30,959.  The affidavit concluded with Mr Lichti deposing that Sante intended to pay the amount properly owing, after both the off-setting claims and reconciliation, by way of weekly payments of up to $25,000.

15. By 11 November 2016, Sante had paid the debt due to Dandelion in full.  As a consequence, Dandelion withdrew its statutory demand but continued to seek its costs incurred in defending Sante’s originating process.  Dandelion thus remained a party through to the conclusion of the appeal before the single judge, but it is not a party to the present appeal.

16. By 11 November 2016, Sante had also paid various amounts to Heirloom, leaving a balance due in respect of the amount claimed in its statutory demand of $122,386.22.

17. The matter came before a Master of this Court for argument on 16 November 2016.  Heirloom and Dandelion submitted that the Court did not have jurisdiction to grant the primary relief sought by Sante because its originating process did not conform to the requirements of s 459G of the Act.  Heirloom and Dandelion pressed two objections, based on what they contended were the inviolable requirements for proceedings seeking to have more than one statutory demand set aside.  The first contended requirement was that there be a separate originating process for each statutory demand.  The second contended requirement was that, even if it were permissible to proceed through one originating process, there be separate orders sought for each statutory demand.

18. The Master rejected the first contention but accepted the second contention, and dismissed the originating process on this basis.  Her Honour did not proceed to consider the merits of Sante’s application to set aside or vary the statutory demands.

19. In response to the Master’s decision, Sante filed an interlocutory application on 17 February 2017 seeking permission to amend its originating process to cure the defect in the terms of the orders sought.  On 6 March 2017, the Master refused Sante’s interlocutory application.  The Master agreed with the submission of Heirloom and Dandelion that the Court did not have jurisdiction to grant the application because there was no valid originating process on foot, available to be amended, during the 21 day period after service of the statutory demands, as required by s 459G of the Act.  Of course, this 21 day period having expired, it was also too late for Sante to file a fresh originating process in accordance with s 459G.

20. On 2 March 2017, Sante made a further payment of $34,934.71 to Heirloom with the consequence that only $87,451.51 of the debt the subject of Heirloom’s statutory demand remained outstanding.

21. Sante appealed to a single judge of this Court challenging the Master’s conclusion in relation to the second contention.  The appeal was heard by Nicholson J.  During the hearing of the appeal, Heirloom and Dandelion challenged the Master’s conclusion in relation to the first contention.  Whilst they did not file a notice of contention, no objection was taken to this course.

22. As mentioned earlier, Nicholson J upheld the Master’s conclusion on the first contention, but reached a different conclusion on the second contention.  In other words, Nicholson J accepted that it was permissible for Sante to challenge both statutory demands in the one originating process, and to do so by means of the single order sought by Sante.  The latter was permissible in the circumstances of this case because the order sought by Sante was able to be read distributively as seeking an order in respect of each of the statutory demands.

23. It is convenient to commence by considering the legislation, and then reviewing the numerous authorities that have considered the issues arising in this case, before returning to consider the reasons of Nicholson J in more detail.

    The legislation

24. A company served with a statutory demand is entitled to apply to have the demand set aside under s 459G of the Act.  Section 459G of the Act provides:

    Company may apply

    (1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

    (2)     An application may only be made within 21 days after the demand is so served.

    (3) 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.

25. On an application made under s 459G, the court may set aside (or in some situations, vary) the statutory demand if satisfied that there is a genuine dispute as to the existence or amount of the debt to which the demand relates (s 459H(1)(a)); if the plaintiff company has an offsetting claim (s 459H(1)(b)); if there is a defect in the demand as a result of which substantial injustice will be caused unless the demand is set aside (s 459J(1)(a)); or there is some other reason why the demand should be set aside (s 459J(1)(b)).

26. Section 459G forms part of the regime in Pt 5.4 of the Act dealing with statutory demands and applications to set them aside.  The relevant provisions were introduced into the then Corporations Law in 1992 by way of implementation of recommendations made in an Australian Law Reform Commission report on insolvency, known as the Harmer Report.

27. The regime (and in particular Div 3 of Pt 5.4, headed ‘Application to set aside statutory demand’) was intended to be “a complete code for the resolution of disputes involving statutory demands, and to do so on the basis of the commercial justice of the matter, rather than on the basis of technical deficiencies.”[2]

    [2]    Explanatory Memorandum to the Corporate Law Reform Bill 1992 (Cth), paragraph 688; quoted by Gummow J in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 270.

28. In David Grant & Co Pty Ltd v Westpac Banking Corporation (David Grant),[3] Gummow J described the regime in the following terms:[4]

    The provisions of the new Pt 5.4 constitute a legislative scheme for quick resolution of the issue of solvency and the determination of whether the company should be wound up without the interposition of disputes about debts, unless they are raised promptly.  The salient features of the scheme … are as follows.

    Section 459E provides for the service by a creditor of a statutory demand on a company.  Failure by the company to comply with the demand within the period for compliance may found an application that the company be wound up in insolvency.  If, during or after the three months ending on the day when the application is made, the company failed to comply with the demand, the Court must presume that the company is insolvent (s 459C(2)(a)).

    [3]    David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265.

    [4]    David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 270-271.

29. Bearing in mind this nature and purpose of the regime, the High Court in David Grant accepted that the 21 day time frame for service of an application to set aside in s 459G(2) was not able to be extended. Both an application and affidavit conforming to the requirements of s 459G were required to be filed within this period.

30. The issues arising in this case involve consideration of the requirements of s 459G, and in particular whether it imposes a requirement, upon a plaintiff company seeking to set aside a statutory demand, that each statutory demand must be the subject of a separate proceeding, or at least a separate order.

    The authorities

31. As Nicholson J identified at the start of his reasons, when applying Commonwealth legislation the courts of the various States generally apply the construction adopted by courts of other States, unless satisfied that construction is clearly wrong.  For a single judge, this is required in respect of decisions of the intermediate appellate courts of other States, and is the general approach, as a matter of comity, in respect of the decisions of other single judges.  However, where there are conflicting decisions on an issue (as there were in this case) the Court must reach its own decision, but in doing so be informed by the approaches discussed in the authorities.[5] 

    [5]    Citing passages to this effect from Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [31], and the authorities referred to therein.

32. These matters of precedent and comity were significant as far as Nicholson J was concerned, given the numerous single judge decisions addressing the issues in these proceedings.  However, as there has been no intermediate appellate consideration of the issues, this Court is entitled to reach its own conclusion.  That said, it remains appropriate and instructive to consider the approaches taken in these earlier authorities.

33. An appropriate starting point in reviewing these authorities is the decision of Young J (as he then was) in Help Desk Institute Pty Ltd v Adams (Help Desk).[6]  This was the first case in which the issues were considered in any detail, and has been the starting point for most subsequent considerations of the issues arising from attempts to set aside multiple demands through one set of proceedings, or indeed, in the one order.

    [6]    Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18.

    The decision of Young J in Help Desk

34. In Help Desk, two statutory demands were served on the plaintiff.  They bore the same date, and were served on the same day.  But each came from a different creditor, and concerned a separate and distinct debt.  The plaintiff filed a single summons in which it sought separate orders setting aside each of the two statutory demands. 

35. Young J dismissed the summons on the ground that it was not an application within the meaning of s 459G of the Act, and thus did not entitle the Court to order any relief. While this conclusion was based in part upon his Honour’s view that the supporting affidavit did not conform to what was required under s 459G(3), his Honour also expressed a conclusion that “there can be only one summons dealing with one demand”.[7]

    [7]    Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 21.

1. While acknowledging in his apparently ex tempore reasons that this conclusion did not accord with his initial reaction to the merits, his Honour identified several features of the text of s 459G, its construction by the High Court in David Grant,[8] and the aims of the regime set up by Pt 5.4 of the Act.  In his view, these features ultimately supported the conclusion that each application to set aside a statutory demand could only deal with one demand.

   [8]    David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265.

2. Young J commenced his consideration of these features by noting that s 459G(1) was expressed in the singular, in terms of a company being entitled to apply for an order setting aside a statutory demand. His Honour acknowledged that s 23(6) of the Acts Interpretation Act 1901 (NSW),[9] which provided that the singular included the plural unless the context otherwise provides, would allow the Court, if there were not more, to read s 459G(1) as though it were expressed in the plural. However, there were some features of the legislation which in his Honour’s view told against a plural reading of s 459G(1).

   [9]    Which applied by reason of s 10(1) of the Corporations (NSW) Act 1990 (NSW).

3. First, his Honour noted an “interesting comparison” between the use of the singular in s 459G(1) and the express differentiation between single debts and multiple debts in s 459E.[10]

   [10]   Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 20.

4. Secondly, his Honour identified what he described as a “real difficulty” arising from the 21 day time limit in s 459G(2). His Honour explained that the legislature had made it clear, and it had been underscored by the High Court in David Grant, that the section itself limited the way in which applications could be made, and provided a strict time frame within which an application could be brought (namely, 21 days “after the demand is so served”).  Young J reasoned that if more than one demand was contemplated, one would have expected the legislature to have said “after the demand is so served, or if more than one demand is served, by 21 days after the first of such demands is served”.  While noting that in that case the two demands were in fact served on the one day, his Honour said that did not affect the construction of the section, which was to cover all cases.[11]

   [11]   Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 20.

5. Thirdly, Young J made reference to the nature of the regime of which s 459G forms part. His Honour explained that it was intended to facilitate the making of demands, which could then be challenged through an application that was to be considered by the court in a summary way. His Honour reasoned that the regime did not contemplate supporting affidavits under s 459G(3) that would include a whole lot of extraneous matters. His Honour said that the inclusion of some extraneous material would not nullify the effect of the affidavit for the purposes of s 459G(3). However, the affidavits in that case contained a significant amount of such material, and only three paragraphs devoted to the statutory demands, with the result that the affidavits did not qualify as a supporting affidavit within the meaning of s 459G(3).[12] 

   [12]   Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 21.

6. Drawing these threads together, Young J appears to have determined to dismiss the summons on two bases. The first related to the absence of an affidavit properly characterised as a supporting affidavit within the meaning of s 459G(3), with the result that it was “not now possible for the summons to succeed”.[13]

   [13]   Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 21.

7. The second basis for dismissing the plaintiff’s summons related to the impermissibility of challenging two statutory demands in the one summons.  His Honour said:[14]

   It seems to me that when one adds all those matters together a contrary indication is given in the statute, that is, there can be only one summons dealing with one demand. In the instant case the two demands deal with similar disputes which might have been joined under Pt 8 of the Supreme Court Rules. … However, despite [counsel for the plaintiff’s] submissions that the rules have not been displaced by s 459G of the Corporations Law, it seems to me that the approach taken by the High Court in Grant’s case … is that the statute has set up a very closely knit regime and that regime does displace many ordinary provisions of the Corporations Law and the Supreme Court Rules.

   [14]   Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18 at 21.

   Other decisions in the Help Desk line of authority

8. Several subsequent decisions have taken a similar approach, adopting the second aspect of Young J’s reasoning in Help Desk.

9. In Calquid Pty Ltd v A & DR Illes Pty Ltd (Calquid),[15] the plaintiff was served with two statutory demands by the same creditor.  The two demands related to distinct debts.  The debts were alleged to have arisen under a single building contract, but related to separate and successive progress claims for separately certified work.  The plaintiff sought to set aside both demands through one summons and supporting affidavit.  The ground for challenging the statutory demands was said to be the same in each case, namely deficiency in the work done.  While it was said that this gave rise to a common legal substratum, the factual substratum for each differed given the differing certified work the subject of each demand.

   [15]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523.

10. Santow J dismissed the plaintiff’s summons. His Honour did so on the ground that it was out of time pursuant to s 459G(2). However, his Honour also considered that the objection identified by Young J in Help Desk applied to this situation.

11. Noting that the two demands sought to be set aside were served on different days, Santow J referred to Young J’s concern with the difficulty of reconciling the 21 day time limit under s 459G(2) with the use of one application to deal with a multiplicity of statutory demands. [16]  The 21 day period would need to run from different days.

    [16]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [44].

12. Santow J also observed that the difficulties associated with a single application challenging multiple demands were further illustrated by the problems which would arise in relation to the supporting affidavit required by s 459G(3).[17] The affidavit would need to deal with “a plurality of distinct subject matters”, even if the same grounds were used in relation to the different demands.  His Honour added:[18]

    One can imagine the complexities that would then follow if the subsequent elaboration of the subject matter of that single affidavit had to bifurcate and deal with each of two distinct debts.  Such a contemplation is hardly compatible with the object of Pt 5.4, namely that, “disputes in relation to the existence or amount of a debt be dealt with quickly …”

    [17]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [46].

    [18]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [46].

13. His Honour later added that even if a supporting affidavit purporting to challenge two statutory demands did permit an assessment of whether there was a genuine dispute in respect of each debt, it would not enable it to be done quickly and in a way that would not impede the resolution of an application for the winding up of a company in insolvency.[19]

    [19]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [48].

14. These considerations led Santow J to conclude that s 459G sets up a statutory regime that was incompatible with an application to set aside being in respect of two statutory demands for separate and distinct debts.[20]  In his Honour’s view, the application in that case did not satisfy the requirements of s 459G.[21]

    [20]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [43].

    [21]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [52].

15. Santow J did not accept that the power to cure any defect or irregularity in the absence of substantial injustice under s 467A could be called in aid.  This was because s 467A required an application “under” Pt 5.4, and the application in that case had not been made in conformity with the basic requirements of that part, and so did not meet the description of being “under” Pt 5.4.[22]

    [22]   Calquid Pty Ltd v A & DR Illes Pty Ltd (2000) 34 ACSR 523 at [47].

16. In Filaria Pty Ltd v Carlisle (Filaria),[23] the plaintiff was served with three statutory demands by three different creditors, albeit prepared by the same solicitor and dated the same date.  The demands claimed sums said to be owing in respect of taxed costs orders made against the plaintiff in earlier proceedings brought against it by the three creditors (and a number of other parties).  The plaintiff brought a single application to set aside the three demands, and indeed, sought to do so through a single order.  While his reasons do not disclose the terms of the order sought, Master Harper said the application was “framed as though there has been a single demand made by the three respondents”.[24]

    [23]   Filaria Pty Ltd v Carlisle [2004] ACTSC 95.

    [24]   Filaria Pty Ltd v Carlisle [2004] ACTSC 95 at [18].

17. Master Harper held that the plaintiff’s supporting affidavit did not make out any ground to set aside the statutory demands.  But his Honour also addressed, and upheld, the creditors’ submission to the effect that s 459G did not permit a plaintiff to make a single application seeking to set aside three separate demands.[25]  In relation to the latter, Master Harper simply referred to, and applied, the decisions of Young J in Help Desk and Santow J in Calquid without any discussion or analysis of the issue.

    [25]   Filaria Pty Ltd v Carlisle [2004] ACTSC 95 at [22].

18. In Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd (Ambassador at Redcliffe),[26] there were four statutory demands.  There were two plaintiff companies (referred to as Ambassador and Emerald), and three defendant creditors (referred to as BPPT, Ambron and Kanebay).  The first statutory demand was served on Ambassador by BPPT and Ambron, and related to monies allegedly due by Ambassador under a contract for the sale of land.  The second statutory demand was served on Emerald by BPPT and Ambron, and related to monies allegedly due by Emerald as guarantor of the obligations of Ambassador under that contract.  The third statutory demand was served on Ambassador by BPPT and Kanebay, and related to monies allegedly due by Ambassador under a sale of business agreement.  The fourth statutory demand was served on Emerald by BPPT and Kanebay, and related to the monies alleged due by Emerald as guarantor of the obligations of Ambassador under the sale of business agreement. 

    [26]   Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2007] 2 Qd R 199.

19. While it is apparent that the plaintiffs brought a single or joint application, it is not apparent from the reasons of Douglas J precisely how the originating process was structured and expressed.  His Honour held that the application was “formally defective in being brought as a single application in respect of the four separate demands”.[27]  In so concluding, Douglas J summarised the reasoning of Young J in Help Desk, and mentioned the various cases that had applied that reasoning, and two decisions (see below)[28] in which that reasoning had been distinguished on the basis that the debts in question were joint, or joint and several, debts. His Honour explained that as the debts in the four statutory demands were separate debts, and not joint or joint and several debts, the case was one “falling squarely within the reasoning of Young J in Help Desk in circumstances where his Honour’s reasoning is persuasive and has been followed on several occasions”.[29]

    [27]   Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2007] 2 Qd R 199 at [17], [32].

    [28]   Namely, the decisions, considered below, of Santow J in Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 (application relating to joint debt of a partnership of companies) and Barrett J in Isaco Pty Ltd v Davey (2003) 180 FLR 183 (application relating to joint and several debts).

    [29]   Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2007] 2 Qd R 199 at [16].

    Trend towards a less prescriptive view of s 459G

20. There are now a number of decisions that have taken a somewhat more relaxed or flexible view of what s 459G requires.  Some have distinguished the reasoning of Young J in Help Desk on the grounds that the statutory demands involve joint debts, or joint and several debts.  Others have simply taken a different, and less prescriptive, view of what s 459G requires.

21. In Femley Pty Ltd v Salken Engineering Pty Ltd (Femley),[30] the three plaintiff companies were partners with one another.  Each was served with a separate statutory demand, but by the same creditor and claiming the same debt said to have been incurred by the partnership.  The claimed debt was thus one for which each of the plaintiffs would be jointly and severally liable.  The plaintiffs brought composite proceedings by way of a single summons in which they sought to set aside the three statutory demands.  The summons was supported by a single affidavit, and relied upon the same factual and legal grounds in respect of all three statutory demands. 

    [30]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828.

22. Santow J accepted the plaintiffs’ submission that the reasoning of Young J in Help Desk was distinguishable, holding that it “can properly be distinguished on the facts before me, though it is necessary to do so with some care”.[31]

    [31]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [14].

23. Santow J commenced his analysis by explaining that he did not think that Young J’s conclusion in the circumstances of that case was “plainly wrong”.[32]  Indeed, his Honour considered that there was some force in the contention that the scheme in Pt 5.4 could not work as intended if, in relation to non-jointly owed debts, there was a single application and affidavit challenging the separate indebtedness in each demand on varying grounds.[33]  His Honour explained:[34]

    Grounds for setting aside each statutory demand for each alleged debtor company need to be separately identified, where there are non-joint debts; how could this be done with the one composite affidavit and one composite application?  Even if for separate and distinct debts such gymnastics could be achieved, at least as a matter of drafting, Pt 5.4 would fail to achieve expeditious resolution of disputes as to such debts as Parliament intended.

    [32]   Which is what would have been necessary for Santow J to decline to follow it, and the position contended for by the plaintiffs.

    [33]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [14].

    [34]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [14].

24. Santow J reasoned that with a joint debt, such as a partnership debt, these difficulties fall away because the same grounds to set aside will apply uniformly to each alleged debtor company.[35]

    [35]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [15].

25. Further, Santow J concluded that there was nothing in the wording of s 459G that prevented a composite application operating as intended in relation to a joint alleged debt, even if there were separate statutory demands for each debtor, “so long as the application is expressed so it can be read distributively, along with the accompanying affidavit”.[36] 

    [36]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [20].

26. Further, in considering whether the application was able to be read distributively, his Honour considered that a non-technical approach, with some latitude for defects in expression, was appropriate:[37]

    Section 467A directs, not merely allows, latitude for any defect or irregularity in that expression, absent substantial injustice, and provided the application remains “under” Pt 5.4; that is, complying with any mandatory time limits or methods which have been directed with the emphasis of “may only” in s 459G; David Grant & Co Pty Limited at 278-9 …  Indeed even without aid of s 467A, a non-technical approach to construing such an application is appropriate; that is by adopting parity of reasoning as applies to the affidavit supporting the application.  There the courts apply a benevolent construction in requiring an affidavit that contains the material facts relied on but which may read like a pleading without setting out in admissible form all of the evidence which supports the argument of the applicant …

    His Honour also emphasised that the application by way of summons was to be read in conjunction with the affidavit in support, which in that case made it plain that each plaintiff sought to set aside the demand served on it, and to do so on grounds that were common to all three plaintiffs and demands.[38]

    [37]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [20].

    [38]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [22].

27. Santow J also held that the rules of court were relevant in determining the requisite formal content of the application.  His Honour explained:[39]

    The simple reference to “may apply” in s 459G and the absence of any detailed prescription of the form of that application, presupposes that, provided the application is in terms – as this is – for an order setting aside a statutory demand served on the company, it derives its formal content from the relevant rules of court. 

    [39]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [23].

28. His Honour concluded by summarising his reasoning:[40]

    To sum up. Here, where the debt in question is a joint debt … I can find nothing in s 459G(1) or (2) which would preclude such a composite application being made on behalf of each of the joint debtors in sufficient conformity therewith, provided the application is expressed so as to be capable of being read distributively as applicable to the relevant statutory demand applicable to the relevant Plaintiff. I am satisfied that it can and should be so read; further, that s 467A directs that any irregularity or defect in expression be ignored in reaching that conclusion. Section 459G does impose a strict time requirement on the filing of an application. That presupposes only that there is an application meeting the general description in s 459G(1) for s 459G(1) does not lay down any detailed mandatory description as to content. This application does meet that general description, allowing as regards its formal expression similar latitude as applies to affidavits in support. The mandatory directive in s 467A can be called in aid to disregard any irregularity or defect that does not rise to the level where the application is no longer “under” Pt 5.4, in circumstances where, as here, no substantial injustice results.  If it be the case that separate and distinct debts require a separate and distinct application such that a single application could not be utilised (see Help Desk), that conclusion does not entail that a joint debt must be treated in the same way.  Section 23(b) of the Acts Interpretation Act 1901 (NSW) … applies “unless the context otherwise provides”.  Here the context does not otherwise provide, as the debts, if they exist, are joint debts.  There are in the case of joint debts none of the difficulties to which I have earlier referred in the application of various provisions of Pt 5.4 to separate and distinct debts.

    [40]   Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [24].

29. On one reading of Santow J’s reasons in this case, his Honour not only distinguished Help Desk in relation to multiple demands involving a joint indebtedness, but also cast doubt upon, or at least softened the significance of, various aspects of Young J’s reasoning in that case more generally.  That said, in the subsequent decision of Calquid (as summarised above), Santow J did apply the reasoning of Young J, emphasising that the situation was very different from that which arose in Femley.

1. In Isaco Pty Ltd v Davey (Isaco),[41] there were multiple statutory demands in relation to debts that were treated by Barrett J as joint and several.  The nine plaintiffs had each been served with statutory demands by the same creditor.  The demands were identical in form save for the addressee, and related to a debt said to be owing under a deed entered into by the creditor and various companies within a corporate group (which included the nine plaintiff companies).  The plaintiffs filed a single originating process, application and affidavit, although the relief it sought was articulated in terms of nine separate orders setting aside the various demands.

   [41]   Isaco Pty Ltd v Davey (2003) 180 FLR 183.

2. In addressing the defendant creditor’s challenge to the plaintiffs’ application, Barrett J commenced by noting that s 459G enabled a particular company to apply for an order setting aside a demand served on that company, and made that company the only competent applicant for an order in respect of that demand.  His Honour explained that where, as in that case, nine companies were together plaintiffs, the originating process would be regular, in terms of s 459G, only if it is properly to be regarded as a means by which the first company makes an application in respect of the demand served on the first company, the second company makes an application in respect of the demand served on the second company, and so forth.[42]

   [42]   Isaco Pty Ltd v Davey (2003) 180 FLR 183 at [7].

3. Barrett J undertook a review of the authorities.  Having concluded that the obligation underpinning the debts in the present case was joint and several, his Honour concluded that the reasoning in Femley was applicable, and that the circumstances were distinguishable from those in both Help Desk and Calquid.[43]

   [43]   Isaco Pty Ltd v Davey (2003) 180 FLR 183 at [16].

4. Barrett J proceeded to consider the issue as a matter of general principle.  His Honour said that the crucial question was whether the proceeding was constituted in such a way that, in conformity with s 459G, each of the nine plaintiffs was the applicant for an order setting aside the statutory demand served on that plaintiff.  His Honour noted the rules of court permitted proceedings with more than one plaintiff; that for reasons of efficiency multiple claims were often brought under the umbrella of a single proceedings; and that in cases involving multiple plaintiffs, each may pursue some independent claim of their own.  Barrett J said that, in the present case, it was necessary to find that the single originating process, in the words of Santow J in Femley, “is expressed so it can be read distributively, along with the accompanying affidavit” and “is expressed so as to be capable of being read distributively as applicable to the relevant statutory demand applicable to the relevant plaintiff”.[44]

   [44]   Isaco Pty Ltd v Davey (2003) 180 FLR 183 at [17].

5. Applying that approach, Barrett J held that there was no doubt, on the face of the originating process, that a separate and distinct order was sought in relation to each statutory demand.  While the omnibus form of the originating process (expressed in terms that “the plaintiffs claim orders that …”) meant that all nine plaintiffs were in effect seeking all nine orders, there was no doubt that each plaintiff sought an order setting aside the statutory demand served on it.  The originating process, upon its proper construction, included an application by each plaintiff for an order setting aside the statutory demand served upon it.  The fact that the other eight plaintiffs were included in the group of plaintiffs seeking each order did not detract from this conclusion.  The other eight, lacking standing, could simply be ignored.  Alternatively, the inclusion of eight incompetent applicants along with the sole competent applicant in respect of each order was a defect or irregularity of the kind contemplated by s 467A, and hence would not be a ground for dismissing the application.  His Honour left open the possibility of amending the originating process to confine it to a single plaintiff seeking each of the orders.[45]

   [45]   Isaco Pty Ltd v Davey (2003) 180 FLR 183 at [18]-[21].

6. The issue of permissibility of a single proceeding seeking to set aside multiple statutory demands was touched upon in two further decisions. 

7. In Gujarat NRE Australia Pty Ltd v Williams,[46] the plaintiff was served with three statutory demands from three different creditors.  While the defendant creditors did not challenge the use of a single proceeding to attempt to set the demands aside, Austin J said that, had the issue been raised, he would have been inclined to distinguish the Help Desk line of cases, having regard to the fact that the three statutory demands all purportedly related to the same debt arising out of the same dispute, were all directed to the same debtor and had all been served at the same time.[47]

   [46]   Gujarat NRE Australia Pty Ltd v Williams [2006] NSWSC 518.

   [47]   Gujarat NRE Australia Pty Ltd v Williams [2006] NSWSC 518 at [12].

8. In Cooloola Dairys Pty Ltd v National Foods Milk Ltd,[48] while the main issue in the case was whether a creditor who alleges that several debts are due must include all the debts in a single statutory demand, Chesterman J observed in passing that there was no necessary inconvenience in having multiple demands because, in his view, “a debtor can in the one application brought pursuant to s 459G seek orders that all or some of the demands be set aside”.[49] 

   [48]   Cooloola Dairys Pty Ltd v National Foods Milk Ltd [2005] 1 Qd R 12.

   [49]   Cooloola Dairys Pty Ltd v National Foods Milk Ltd [2005] 1 Qd R 12 at [24].

9. The issue was then considered in more detail in Remo Constructions Pty Ltd v Dualcorp Pty Ltd (Remo Constructions).[50]  The plaintiff was served with two statutory demands relating to two distinct debts allegedly owed by the plaintiff to the same creditor.  The statutory demands were dated and served on different dates.  The plaintiff issued one originating process, but sought two distinct orders, each of which was directed exclusively to one of the statutory demands. 

   [50]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375.

10. Barrett J commenced by reviewing the authorities that I have summarised above.  His Honour said that the situation he was confronted with differed from that in Help Desk, Ambassador at Redcliffe and Filaria because in each of those cases there were not only several distinct debts allegedly due by the plaintiff, but also a different creditor in respect of each.  The situation was closer to Calquid, where there were distinct debts allegedly due by the plaintiff but to the same creditor.

11. The only distinction was that in Calquid the debts arose from a right to progress payments under a building contract and the ground of challenge to the statutory demands was the existence of a genuine dispute; whereas the debts in Remo Constructions arose from judgment debts and the ground of challenge was an offsetting claim.[51]  Barrett J said that potential problems concerning the supporting affidavit called for by s 459G did not arise in that case.  As the ground of challenge in respect of both statutory demands was the one off-setting claim, the same evidence was relevant to the attack on each statutory demand.[52]

    [51]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [22].

    [52]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [23].

12. While that left the other potential problem identified by Young J in Help Desk, namely that the demands were served on different days and hence gave rise to two different 21 day periods under s 459G(2), his Honour said that this consideration did not appear to have been central to Young J’s decision. Rather, Young J’s decision was primarily based upon the absence of any supporting affidavit conforming to the requirements of s 459G(3).[53]

    [53]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [24]-[28].

13. Barrett J said that in light of the fact that Young J’s observations about the unacceptability of the inclusion of two applications in one summons were apparently not essential to his decision, and that the subsequent decisions of Santow J in Calquid, Master Harper in Filaria and Douglas J in Ambassador at Redcliffe did no more than adopt, without discussion or analysis, what had been said by Young J, it was desirable that the case be approached from first principles.[54]

    [54]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [30].

14. Barrett J considered that four issues arose:[55]

    (a) whether the plaintiff, by filing its originating process on 9 May 2008, applied to the court for an order setting aside the first statutory demand (dated and served 18 April 2008);

    (b) whether the plaintiff, by filing its originating process on 9 May 2008, applied to the court for an order setting aside the second statutory demand (dated and served 22 April 2008);

    (c) whether the plaintiff applied to the court, in each case, within 21 days after the demand was served; and

    (d) whether the affidavit of 9 May 2008 filed with the originating process was, in truth, an affidavit supporting the applications in respect of both statutory demands.

    [55]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [31]-[32].

15. Barrett J concluded that the answer to each of (a) and (b) above was “yes”.  The plaintiff had sought separate orders seeking to set aside each of the two statutory demands.  The originating process was thus the vehicle by which the two distinct applications were made.[56]

    [56]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [34].

16. His Honour did not accept that the legislation required the court to proceed according to “an abstract rule of general application that ‘there can only be one summons dealing with one demand’”.[57] There were two reasons for this. The first was that such a requirement was not discernible from the language of s 459G. Young J’s concern, for example, about the time limit in s 459G(2) expressed by reference to the words “after the demand is so served” could be quite easily met by applying those words separately to each claim in the originating process.[58]  The second reason was that, in proceedings under the Act, the rules of procedure in the relevant court apply.[59]  His Honour noted that under the rules applicable in the Supreme Court of New South Wales, a plaintiff may, in an originating process, claim relief against the defendant in respect of more than one cause of action.  His Honour noted that while that would cover the situation in that case, it would not cover the situation of several defendants in cases such as Help Desk, Ambassador at Redcliffe and Filaria.  But the situation in those cases would be covered by the rules in relation to the joinder of parties.[60]

    [57]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [35].

    [58]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [36].

    [59]   Citing Gordon v Tolcher (2006) 231 CLR 334.

    [60]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [37].

17. As to question (c), the answer was again “yes”.  The originating process filed on 9 May 2008 was filed within 21 days after 18 April 2008 (in respect of the first demand) and within 21 days after 22 April 2008 (in respect of the second demand).  Question (d) did not arise.

18. Barrett J thus concluded that by filing the 9 May 2008 originating process, the plaintiff made both an application conforming with s 459G in  relation to the first statutory demand, and an application conforming with s 459G in relation to the second statutory demand.[61]

    [61]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [43].

19. His Honour concluded by cautioning that, in other circumstances, one originating process dealing with several demands may nevertheless founder.  It might founder because the affidavit put forward as a supporting affidavit was not in truth of that character.  It might also founder “if in the Filaria form”; that is, in a form embodying a claim for a single order in respect of multiple demands.[62]

    [62]   Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [35], [44].

20. In Indigo Financial Money Pty Ltd v Moustrides (Indigo Financial)[63] the plaintiff was served with two demands by two creditors.  The creditors were represented by the same solicitor, and appear to have been brother and sister.  Their statutory demands were both dated and served on the same date.  However, the demands claimed different amounts and related to two distinct debts.  The plaintiff issued a single originating process seeking to set aside both demands, but sought separate orders in respect of each demand.

    [63]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331.

21. Applying the reasoning of Young J in Help Desk, a Master dismissed the originating process.  On appeal to a single judge of this Court, White J took a different view, allowing the appeal and upholding the validity of the procedure adopted by the plaintiff.

22. White J reviewed each of the authorities mentioned above.  While noting the usual requirements of comity governing the construction of national legislation (as summarised above), his Honour considered that the existence of conflicting decisions of single judges meant that he was required to reach his own decision, informed by the approaches discussed in the cases.

23. In the opinion of White J, the approach of Barrett J in Remo Constructions was to be preferred.[64]  His Honour gave several reasons for this.

    [64]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [32].

24. First, his Honour said that, like Barrett J, he was unable to discern in s 459G an abstract general rule that each initiating process issued under that section should deal with only one demand.  While it was true that s 459G referred to “an application” and “the application” in the singular, the same may be said of many provisions to which s 23(b) of the Acts Interpretation Act 1901 (Cth) applies.[65]  His Honour did not consider that comparison with the express references to single demands dealing with multiple debts in s 459E, or indeed to single applications to wind up multiple companies in s 459T, assisted in construing s 459G.  There were particular reasons for the express references in those sections that did not apply in relation to s 459G.[66]

    [65]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [33].

    [66]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [34]-[35].

25. White J referred to the observation of Gummow J in David Grant[67] to the effect that it was inappropriate to read provisions which confer jurisdiction upon, or grant powers to, a court by the making of implications or imposition of limitations not found in the express words of the legislative provision.  White J said that, in the absence of express words, the view that s 459G allowed only a single application dealing with a single demand seemed to involve the imposition of a restrictive implication of the kind to which Gummow J referred.[68]

    [67]   David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-276.

    [68]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [36]-[37].

26. Next, White J said that in accepting that multiple demands might be challenged in a single originating process, he had not overlooked the possibility of inconvenience, and the possible impact on a court’s ability to deal expeditiously with applications for the setting aside of notices of demand.  But his Honour was influenced by the fact that the courts had an armoury of powers by which to deal with such circumstances as and when they arise.[69]  His Honour added that it was also to be kept in mind that the approach adopted by Young J in Help Desk might, if applied universally, itself produce inconvenient results and cause the incurring of additional expense.  His Honour suggested that the circumstances of Femley, Isaco and Remo Constructions provided examples.  In his Honour’s view, it was reasonable to suppose that the legislature may have been just as concerned to avoid inconvenience and expense of this kind, adding that it could also be said that provisions such as s 459J and s 467A indicated that in this area the courts should eschew technicality.[70]

    [69]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [37].

    [70]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [38].

27. White J then raised another matter.  His Honour noted that in each of Femley and Isaco the courts distinguished Help Desk, and did so by finding that the rationale for this decision was inapplicable in the particular circumstances of those cases.  However, as White J observed, it is difficult to find in s 459G, or its associated provisions, any textual basis for concluding that some kinds of applications dealing with multiple notices of demand were permissible, but not others.  His Honour added:[71]

    Section 459G should be taken to have a constant meaning:  not a meaning which, chameleon like, changes according to the different circumstances in which it is invoked.  If the proper construction of s 459G does not permit applications dealing with two or more statutory demands, then that is its effect, even if the rationale used to determine that construction is not applicable in all cases.  Conversely, the very fact that it is necessary to adopt exceptions to the Help Desk construction tends to indicate that that construction may be inappropriate.

    [71]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [39].

28. Finally, White J also considered it significant that, in accordance with the approach indicated by the High Court in Gordon v Tolcher,[72] and hence subject to compliance with the procedural requirements contained in s 459G (or any other provisions of the Act), it was the Corporations Rules 2003 (SA) which governed both the commencement and conduct of an application under s 459G made in this Court. 

    [72]   Gordon v Tolcher (2006) 231 CLR 334 at [32], [40].

29. It is true that s 459G does contain some procedural requirements; namely, that there be a written application supported by an affidavit, and that the application and affidavit be filed and served within 21 days after the notice of demand is served.  However, as White J pointed out, it is otherwise silent as to the procedure to be adopted.

30. While the Corporations Rules did not contain any provision concerning joinder of parties or joinder of causes of action, they provided for the application of the Supreme Court Rules to the extent they are relevant and not inconsistent with the Corporations Rules.  Accordingly, the Corporations Rules incorporate by reference the rules relating to matters such as the joinder of parties, joinder of causes of action, the power to strike out parties or causes of action, the power to require the plaintiff to proceed only with some causes of action, and the power to order separate hearings.  White J concluded that the Court thus had an armoury of powers with which to control the conduct of the action, and hence to avoid at least some of the inconvenience to which some of the authorities in this area have referred.[73] 

    [73]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [40]-[45].

31. White J thus accepted that it was permissible to seek to set aside multiple statutory demands through the one originating process, adding that any complaint about the joinder of the two defendants, or the causes of action in relation to the two statutory demands, ought to have been addressed through the relevant Supreme Court Rules. 

32. However, his Honour concluded with a note of caution for any plaintiff contemplating a single application under s 459G in relation to multiple demands. He said that they would need to consider the risks or potential pitfalls associated with the need to ensure that the application and supporting affidavit were filed and served within 21 days of the service of the first in time of the demands, and that the affidavit in support was not deficient (in the sense explained in some of the authorities) such that it did not count as the kind of affidavit to which s 459G(3) refers.[74]

    [74]   Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [47]-[48].

1. In Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd (Greenhills Securities)[75] the plaintiff was served with three demands by two creditors.  The first and second demands were served by the creditor Loire Consultants Pty Ltd, and related to the same debt.  The third demand was served by a different creditor, Mr Dixon, and related to a different debt.  The plaintiff commenced proceedings through an originating process that sought separate orders setting aside each of the three demands.  It was conceded by Loire that the first demand should be set aside, and so in effect the proceeding became proceedings in which the plaintiff company sought to set aside two demands from two different creditors in respect of two different debts.  The plaintiff contended that there was a genuine dispute in respect of both debts, and relied upon four affidavits in support of that contention.  The plaintiff also complained of some defects in the third demand.  While there was some overlap in the matters relied upon by the plaintiff in respect of both debts, the genuine dispute asserted in respect of each relied upon different factual and legal matters.

   [75]   Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13.

2. Relying upon the reasons of Young J in Help Desk, the defendants contended that it was impermissible for the plaintiff to challenge multiple demands through the one originating process.  Ball J summarised the effect of the authorities reviewed above.[76]  His Honour concluded that, in his opinion, the approach taken by Barrett J in Remo Constructions and White J in Indigo Financial was preferable to the approach taken by Young J in Help Desk.  His Honour explained his reasons for preferring an approach that reflected a more relaxed view of the procedural requirements, and that looked more to the substance of what has happened rather than its form.  His Honour said:[77]

   The provisions of Div 3 of Pt 5.4 of the Act provide a strict regime for setting aside statutory demands and set out clearly what must be done and when. If the legislature had intended to depart from the rules of procedure concerning the joinder of parties and claims, it is to be expected that it would have said so expressly, rather than leaving that conclusion to be reached by inference based on the purpose of the Division. Moreover, as White J pointed out, it is not obvious that the purpose of achieving a swift disposition of applications to set aside statutory demands will always best be achieved by requiring separate applications to be made in respect of separate demands. Where the demands have a common underlying factual basis, it may be more convenient to deal with the demands together. As is apparent in the present case, there is no difficulty in applying the provisions of s 459G separately to separate relief sought in the one originating process. Although Div 3 imposes a strict regime, I do not read it as intending to displace the general approach to the law of procedure that the court should look to the substance of what has happened rather than its form. If in substance an alleged debtor has made an application to set aside a statutory demand within the timeframe specified by s 459G and that application is supported by an affidavit that has been filed and served in accordance with the section, that it seems to me should be sufficient.

   [76]   And the decision of Barrett J in Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279

   [77]   Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13 at [19].

3. In Re John Farlow Pty Ltd (John Farlow),[78] four plaintiff companies were served with four relevantly identical demands by the one creditor.  Each sought an amount said to be owing by the four plaintiff companies to the creditor under a judgment in the latter’s favour.  The plaintiffs issued a single originating process seeking to set aside each of the four demands.  Objection was taken by the creditor to this composite style of proceedings. 

   [78]   Re John Farlow Pty Ltd [2015] NSWSC 939.

4. Brereton J noted the existence of both the Help Desk line of authority, as well as other cases such as Remo Constructions and Indigo Financial which had held that, at least in some circumstances, a single proceeding can be brought in respect of multiple demands.  Brereton J said that he would only depart from the views expressed in the Help Desk line of authority with great hesitation, but then expressed an inclination to do so.  His Honour explained:[79]

   … it seems to me that all those cases are sourced in the view that by requiring that an application may only be made within 21 days after the demand is so served, s 459G(2) evinces an intention that an application can only be made in respect of a single demand. Otherwise, so it is said, it would have said 21 days after the first of the demands is so served. With great respect, that seems to me to read too much into s 459G(2), and if it were necessary to do so, I would be inclined to depart from the views that have been taken, in particular, in the three cases to which I have just referred.

   [79]   ReJohn Farlow Pty Ltd [2015] NSWSC 939 at [8].

5. But his Honour ultimately stopped short of a general departure from the Help Desk line of authority on the basis that the debt relied upon in the present case was a joint (or “coordinate”) liability owed by all four plaintiffs, and hence it was sufficient to rely upon those authorities that had taken a more liberal view of s 459G in respect of cases involving debts of this nature.  This was sufficient for his Honour to conclude that the composite proceeding in that case was compliant and competent.[80]

   [80]   Re John Farlow Pty Ltd [2015] NSWSC 939 at [10].

6. I note that Brereton J had earlier expressed a similar (but tentative) view in Re ACES Sogutlu Holdings Pty Ltd.[81]

   [81]   Re ACES Sogutlu Holdings Pty Ltd [2014] NSWSC 240 at [3].

   Other authorities

7. While the above review of the authorities reflects a general trend towards a more relaxed view of the procedural requirements attending an application under s 459G of the Act, and an approach which focuses more on the substance than the form of the procedure used, it has not been all one-way (judicial) traffic. 

8. I refer in this respect to the decisions of Barrett J in Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd (Golden Plantation)[82] and Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation (Mossimo Systems),[83] both of which were decided between the decisions of Barrett J in Remo Constructions and White J in Indigo Financial.

   [82]   Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279. This matter subsequently made its way to the Court of Appeal, but on a different issue. The Court expressly declined to express any opinion as to the correctness of Barrett J’s reasoning in relation to this issue: TQM Design & Construct Pty Ltd v KCL Developments Pty Ltd [2011] NSWCA 7 at [13], [39], [44].

   [83]   Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409.

9. In Golden Plantation there were two plaintiffs, GP and KCL.  They had both been served with statutory demands by the defendant, TQM.  While arising out of a common substratum of dealings, the two debts relied upon by TQM in the two statutory demands were separate and distinct debts, with separate and distinct contractual sources.  The plaintiffs filed a single originating process, described as an application under s 459G of the Act.  It contained a claim for relief in the following terms:

   An order that the statutory demands, copies of which are annexed hereto, dated 20 May 2010 served by the defendant on the first plaintiff and the second plaintiff, be set aside.

10. The defendant challenged the validity of the procedure adopted by the plaintiffs.  Barrett J referred to the various authorities I have reviewed in these reasons.[84]  In his view, they left little scope for setting aside multiple demands in a single proceeding.  His Honour said:[85]

    The cases allow very little scope indeed for the pursuit of two or more setting aside claims in a single proceeding.  To the extent that such an approach might be found to comply with s 459G, it is necessary at the very least (and I do not say this is the only requirement) that there be a separate claim in respect of each statutory demand so that one originating process is, as I put it in Remo Constructions … , the vehicle by which each of several distinct applications is made.

    In other words, a conforming application in respect of one statutory demand might possibly be advanced by an originating process which also advances a conforming application in respect of another statutory demand; but the separateness of the applications so that each application, as it relates to a single and particular statutory demand, has a distinct existence and relates to that demand alone is crucial to compliance with the scheme of s 459G.

    [84]   Including the decision of the Master, but not White J, in Indigo Financial.  As mentioned, the latter was not delivered until after Barrett J’s decision in Golden Plantation.

    [85]   Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279 at [16]-[17].

11. Barrett J held that the distinct existence of several applications had not been achieved by the originating process in that case.[86]  GP had not sought an order setting aside the demand served on it by TQM; and KCL had not sought an order setting aside the demand served on it by TQM.  Rather, both plaintiffs claimed a single order, being an order operating upon and in relation to both statutory demands.  Barrett J considered that the approach taken by the plaintiffs did not contemplate the setting aside of one statutory demand independently of the other.  The claim was an all or nothing claim in respect of both statutory demands.[87]  His Honour concluded that the plaintiffs had thus not made a valid application under s 459G in respect of either statutory demand, and the court had no jurisdiction to set aside either demand.[88]  In his Honour’s view, the case was in this respect the same as Filaria.

    [86]   Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279 at [18].

    [87]   Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279 at [13]-14]

    [88]   Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279 at [18].

12. In Mossimo Systems the nine plaintiff companies were all served with statutory demands by the Deputy Commissioner of Taxation.  Each demand claimed a separate tax debt said to be owing by the relevant company under the taxation legislation (by reason of notices of assessment having been issued, and despite there being undetermined objections to the sums claimed to be owing).  Each of the plaintiffs were companies associated with the proposed development of an education and training centre.  All nine companies were named as plaintiffs in a single originating process which advanced a claim for an order setting aside the statutory demands.[89]  Each company contended (on essentially the same grounds) that there was a genuine dispute as to its tax debt, and an off-setting claim.  As it happens, two companies had been deregistered and so the claim was treated as being on behalf of the remaining seven plaintiffs.

    [89]   The judgment in the case does not reveal the form of the relief sought, although the language used at [5] and [9] (namely, “an order” setting aside the statutory demands) suggests that the plaintiffs may have sought only one omnibus order.

13. Barrett J dismissed the originating process.  His Honour said that the approach adopted did not accord with s 459G of the Act.  His Honour referred to his own reasons in Golden Plantations, adding that this case was precisely the same.  The originating process did not advance any claim in the manner contemplated and allowed by s 459G.  His Honour concluded that this was a sufficient reason to dismiss the originating process.[90]

    [90]   Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409 at [11].

14. Both Golden Plantation and Mossimo Systems were ex tempore decisions, delivered in late 2010, and hence after Barrett J’s earlier decisions in Isaco and Remo Constructions, but shortly before White J’s decision in Indigo Financial.  Indeed, they were decided while White J was reserved in Indigo Financial, and it would appear that neither decision was brought to his Honour’s attention.  Certainly White J did not mention either of these decisions. 

15. On the other hand, Ball J did refer, in his reasons in Greenhills Securities,[91] to the decision of Barrett J in Golden Plantation.  Ball J appears to have confined the significance of that decision to a view by Barrett J that there had to be separate claims, or orders sought, in the originating process in respect of each statutory demand.  In any event, Ball J did not regard Golden Plantation as standing in the way of his preference for the approach taken by Barrett J in Remo Constructions and White J in Indigo Financial in relation to the permissibility of challenging multiple demands through a single originating process.  Similarly, in both John Farlow and ACES Sogutlu Holdings, Brereton J mentioned Golden Plantation as an example of the Help Desk line of authority, while at the same time expressing an inclination to depart from that line of authority in favour of the approach taken by Barrett J in Remo Constructions and White J in Indigo Financial.

    [91]   Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13 at [18].

16. While not necessarily inconsistent with the trend of authority (of which Barrett J’s earlier decision in Remo Constructions forms an important part), the decisions in Golden Plantation and Mossimo Systems do suggest a limit to the procedural flexibility that might be permissible – particularly in relation to the form of the orders sought when seeking to set aside multiple statutory demands.

    Reasons of Nicholson J in this case

17. In reviewing the relevant authorities, Nicholson J started with the decision of Young J in Help Desk and the other decisions that had adopted that analysis, namely Calquid, Filaria and Ambassador at Redcliffe.[92] 

    [92]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [19].

18. However, his Honour noted the existence of a number of single judge authorities that had taken a somewhat more relaxed view.[93]  Having also noted the submission by Heirloom and Dandelion to the effect that any exception allowed for by these authorities extended only to multiple statutory demands relating to the same debt owed jointly and (or at least jointly and severally), his Honour then undertook a detailed analysis of the reasoning of Barrett J in Remo Constructions and White J in Indigo Financial.[94] 

    [93]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [20].

    [94]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [21]-[23], [31]-[34].

19. Nicholson J also referred to the intervening decisions of Barrett J in Golden Plantation and Mossimo Systems.  His Honour said that it was of significance in both of those cases that each plaintiff company joined in seeking the one order which dealt with the statutory demand in which it had an interest, together with the statutory demand or demands in which it had no interest and with respect to which it did not have standing to set aside.  His Honour referred to Barrett J’s description of the relief sought in those cases as not contemplating the setting aside of one statutory demand independently of the other; that is, they each involved an all or nothing claim in respect of multiple demands.[95]

    [95]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [30].

20. Nicholson J concluded his review of the authorities by referring to Greenhills Securities, in which Ball J expressed a preference for the approach taken by Barrett J in Remo Constructions and White J in Indigo Financial.[96]  Nicholson J said that he also preferred the reasoning and approach in those cases.  On this basis, his Honour concluded that the Master was correct in declining to dismiss Sante’s single originating process simply on the basis that it sought to deal with more than one statutory demand.[97]

    [96]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [35].

    [97]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [36].

21. Nicholson J then turned to address the alternative submission of Heirloom and Dandelion, namely that it was fatal to Sante’s application that it had sought to have both statutory demands set aside by way of a single order.  In this respect, his Honour noted the difficulty encountered in this respect in Filaria, and the subsequent reference to this difficulty by Barrett J in Remo Constructions (referring to the possibility that an application in respect of multiple demands might founder “if in the Filaria form”; that is, embodying a claim for a single order in respect of multiple demands, and expressed in an “all or nothing” way). 

22. However, as Nicholson J observed, in both Filaria and Remo Constructions the difficulty associated with a single order was merely raised in the context of consideration of the issue of the permissibility of proceeding by way of a single originating process.[98]  The only authority in which the single order issue had been directly addressed was Golden Plantation.  In relation to Golden Plantation, Nicholson J reiterated that it involved an application by two plaintiffs seeking one order dealing with both applications (despite each plaintiff only having an interest and standing in respect of one of the demands).[99]  His Honour said that he did not understand Barrett J in Golden Plantation to be propounding an inflexible rule of law to the effect that a single originating process which seeks one order seeking to set aside more than one statutory demand can never conform to the requirements of s 459G.  Barrett J’s language did not go that far; it was consistent with the guarded language employed by his Honour in Remo Constructions.[100]

    [98]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [37]-[39].

    [99]   Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [40].

    [100] Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [42].

23. Nicholson J explained that in Remo Constructions Barrett J had left the door ajar for a single order relating to multiple statutory demands.  This was consistent with the reasoning of both Barrett J in that case and White J in Indigo Financial, to the effect that s 459G does not provide for an abstract rule of law to the effect that there must always be a separate originating process referrable to each statutory demand; and that to impose an inviolable requirement would involve a restrictive implication of the type referred to by Gummow J in David Grant.[101]

    [101] Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [43].

24. Nicholson J considered that ultimately the question was one of construction:  what are the requirements demanded by s 459G, and does the particular originating process, on its proper construction, satisfy those requirements?  Adopting the view espoused by White J in Indigo Financial, Nicholson J said that s 459G required that there be a written application supported by an affidavit; that each of the application and supporting affidavit be filed and served within 21 days after the notice of demand is served; and that the application be one for an order setting aside a statutory demand on the company.[102]

    [102] Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [44]-[46].

25. Turning to the issue of the construction of the originating process in the present case, Nicholson J referred to the observations of Santow J in Femley to the effect that the originating process had to be read in conjunction with the affidavit in support;[103] and that the originating process in that case was expressed so as to be capable of being read distributively as applicable to each statutory demand.[104]  While these observations were made in the context of demands relating to joint and several partnership debts, Nicholson J saw no reason as a matter of principle why they should not apply more generally.  His Honour noted Barrett J’s adoption of these observations in Isaco.[105]

    [103] Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [20].

    [104] Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [24].

    [105] Isaco Pty Ltd v Davey (2003) 180 FLR 183 at [17]; Sante Wines Pty Ltd v Heirloom Vineyards Wine Co Pty Ltd [2017] SASC 65 at [47].

1. As to the second of Young J’s concerns, namely the asserted complexity and confusion that would flow from a composite supporting affidavit or affidavits, this is at most an issue that will occur in some cases but not others. 

2. The issue will not arise, for example, where the plaintiff company relies upon the same off-setting claim in seeking to set aside multiple demands.  This was the situation addressed by Barrett J in Remo Constructions.[119]  In that situation, as the evidence relevant to each demand is the same, a composite application would not result in any complexity or confusion; to the contrary, it would tend to streamline the proceedings and would also serve the useful function of avoiding the vice of potentially inconsistent findings. 

   [119]  Remo Constructions Pty Ltd v Dualcorp Pty Ltd (2008) 222 FLR 375 at [23].

3. Even in cases where the grounds relied upon in seeking to set aside multiple demands differ in their factual or legal detail, there is no reason to think that this will be productive of any significant complexity or confusion, let alone complexity or confusion to such a degree that it can be inferred that the legislature would not have intended that it be permitted.  Court documents are routinely required to address multiple causes of actions.  There is no reason to think that an affidavit intended to support the setting aside of more than one demand cannot do so.  To the extent it is not otherwise obvious from the nature of the matters deposed to, the affidavits (whether through the use of headings, appropriate explanatory text, or otherwise) can identify which evidence is intended to support which ground(s) of challenge to which demand(s).

4. There is always a risk that an affidavit will be so poorly drafted or structured that it fails to meet the description of an “affidavit supporting” an application to have a demand set aside for the purposes of s 459G(3). In my view, that risk is not materially greater in the case of an affidavit or affidavits intended to support a challenge to more than one demand. While a potential risk associated with a composite proceeding, which White J in Indigo Financial gave as a reason why plaintiffs might exercise caution before utilising a composite proceeding,[120] I do not regard this as a reason for inferring an intention on the part of the legislature that they not be permitted.  Nor do I regard the spectre of extraneous material in the affidavits as providing a reason for drawing such an inference.  As long as it is reasonably apparent which material is intended to support which ground of challenge to which demand, the Court can readily pass over any material that is extraneous to determination of the issues arising in respect of any particular demand.

   [120] Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [47].

5. Indeed, as both White J in Indigo Financial[121] and Ball J in Greenhills Securities[122] emphasised, it is difficult to make any assumptions about how an attempt to set aside multiple demands might be most efficiently addressed.  White J gave Femley and Isaco (both involving multiple plaintiffs seeking to set aside multiple demands based upon jointly, or jointly and severally, owing debts) as two examples of situations where one might assume it was more efficient and convenient, and certainly no more complex, to proceed by way of a composite proceeding.  In other cases, where there is not a jointly owed debt, but nevertheless some overlap in either the parties, or factual or legal issues raised by multiple demands, there is at least some prospect that there will be scope for efficiency and convenience, without undue complexity, in composite proceedings. 

   [121] Indigo Financial Money Pty Ltd v Moustrides (2010) 245 FLR 331 at [37]-[38].

   [122] Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13 at [19].

6. As White J also pointed out in Indigo Financial, to the extent that a particular composite proceeding does give rise to undesirable complexity, the court’s procedural rules provide an armoury of powers with which to address that complexity.  The court might decide, for example, to hive off one or more issues (or indeed all issues in relation to a particular demand or demands) for separate hearing.

7. The point is that I do not accept that it can be assumed that the permissibility of composite proceedings will be so productive of complexity or confusion, or will otherwise so undermine the regime intended in Pt 5.4, that it can be inferred that the legislature would not have intended that this would be permitted.  To the contrary, I consider it more likely that the legislature, to the extent that it considered the issue at all, would have anticipated that composite proceedings might be productive of efficiency and convenience in some cases, but perhaps not all cases, and to have intended that the matter be left to the courts (through their armoury of procedural powers) to determine how best to address any complexity or confusion that might arise in a particular case.

8. For these reasons, I do not accept that the legislature intended that there be a preclusionary rule of the kind suggested by Young J in Help Desk, and contended for by Heirloom in this case, that would be of universal application.  At the same time, I also do not accept that the legislature intended that there be a preclusionary rule the application of which would be determined on a case by case basis depending upon the Court’s view of whether a composite proceeding was a convenient approach (or consistent with the rationale for the Pt 5.4 regime) in the particular case.  Such an approach would create unworkable uncertainty, given the consequences of a conclusion (well after the 21 day window has closed) that the court’s jurisdiction under s 459G had not been validly invoked.  In my view, it is likely that the legislature intended that composite proceedings be permitted (or at least did not intend that they would be proscribed), with any complexity or confusion that might arise to be addressed by the relevant court through its usual armoury of procedural powers.

9. In my view, this approach is not only the one dictated by, or at least most consistent with, the text of s 459G, but is also consistent with the nature of the regime of which s 459G forms part.  As mentioned earlier, by reference to the Explanatory Memorandum and the decision of the High Court in David Grant, the regime was intended to encourage a focus upon the “commercial justice” or substance of the relevant dispute, as opposed to “technical difficulties” or matters of form.  This intention is evidenced, for example, in the s 467A provision to the effect that an application under Pt 5.4 must not be dismissed merely because of a defect or irregularity in connection with the application. 

10. It is true that the operation of s 467A does not extend to cure defects that have the consequence that the court’s jurisdiction under s 459G has not been invoked.  However, the existence of s 467A is consistent with an intention on the part of the legislature that the overall focus be on matters of substance rather than form.  It is also true that in emphasising a focus upon the commercial justice of the dispute, and upon substance over form, the legislature most likely had in mind that it would typically be recalcitrant debtors who might seek to exploit technicalities or matters of form, rather than creditors.  But I do not think that it follows that substance is to be preferred over form only where that is to the advantage of the creditor.  Rather, it is a general approach that should guide the Court in its consideration of issues arising under Pt 5.4, including in relation to the mode of invoking the court’s jurisdiction under s 459G.  In this respect, it is significant that s 467A expressly extends to defects in relation to the application and not simply in relation to the demand, and hence to defects that might be raised by both the debtor and the creditor.

    Permissibility of composite proceedings

11. In the end, I have come to the conclusion that there is no general rule, whether founded in the text of s 459G or otherwise, that a proceeding or application to set aside a statutory demand under s 459G must deal only with one statutory demand.  Rather, the only requirements imposed by the legislation are those found in the text of s 459G, namely that:

    1.   the company make an application to the Court (s 459G(1));

    2.   the application and supporting affidavit be filed and served within 21 days after service of the demand (s 459G(2) and (3));

    3.   the application seek “an order setting aside [the] demand” (s 459G(1)); and

    4.   the affidavit filed with the application is in truth an affidavit “supporting” the application to set aside the particular demand (s 459(3)(a)).

12. In the case of a proceeding seeking to set aside multiple demands, these requirements must be separately considered and met in respect of each demand.  If the requirements are not met in respect of any particular demand or demands, then the proceeding will fail in respect of that demand or demands; but the proceeding will remain valid for any other demand or demands in respect of which the requirements have been met.  The multiplicity of demands, or composite nature of the proceedings, is otherwise irrelevant in determining compliance with the requirements of s 459G.  There is no prohibition against composite proceedings, and no requirement that each proceeding or application deal only with one demand.

13. In the case of the demand served on Sante by Heirloom, there is no dispute[123] about compliance with the first and second requirements.  The application was brought by way of an originating process, and the originating process and affidavit were filed within 21 days of the demand being served on Sante.  There was also compliance with the fourth requirement, namely that the affidavit meet the description of an affidavit “supporting” the application in relation to the Heirloom demand.  While some submissions were made about the uncertainty in the formulation of the off‑setting claim and the genuine dispute as to the amounts claimed, the uncertainty was not such as to deprive the affidavit of its status as a supporting affidavit. 

    [123]  That is, aside from the broader constructional issue as to the permissibility of composite proceedings that I have decided against Heirloom.

14. That leaves the third requirement.  The issue raised by this requirement is essentially the second objection to the composite proceedings in this case, which was determined in Heirloom’s favour by the Master at first instance, and in Sante’s favour by Nicholson J on appeal.

    Proceedings seeking a single order

15. Even if, as I have concluded, one proceeding (here, one originating process) may function as, or be the vehicle for, multiple applications to set aside demands, it remains necessary, in order to achieve compliance with s 459G(1), that the proceeding seek “an order setting aside [the relevant] statutory demand.” There may be cases in which the single composite proceeding is so poorly constructed or drafted that it cannot be said to encompass such an order in respect of one or more of the demands apparently sought to be set aside.

16. In Filaria, where the plaintiff sought to set aside three demands, Master Harper’s reasons did not disclose the terms of the order sought; however, his Honour was critical of the application, describing it as “framed as though there had been a single demand made by the three respondents”.[124]  In later cases, what I have described as the third requirement has been formulated in terms that the proceeding or application must be expressed so that it can be read (along with the accompanying affidavit) distributively; that is, it must be expressed so that it can be read as including a claim for an order setting aside the particular demand.  This required form of proceeding has been contrasted with the (impermissible) “all or nothing” form of order said to have been sought in Filaria. 

    [124]  Filaria Pty Ltd v Carlisle [2004] ACTSC 95 at [18].

17. In Remo Constructions, Barrett J said that an application seeking a single order in respect of multiple demands may founder “if in the Filaria form”.  Subsequently, in both Golden Plantation and Mossimo Systems, Barrett J dismissed applications on the grounds that, while a single application might serve as the vehicle for several distinct applications, that had not been achieved in those cases.  In seeking a single composite order on behalf of multiple plaintiffs (which did not each have an interest in respect of all of the statutory demands sought to be set aside) it could not be said that there was a (distinct) application for an order setting aside each demand.

18. None of these authorities goes as far as to suggest there is a general rule against seeking relief in respect of two demands in the one order within otherwise conforming composite proceedings to set aside multiple demands.  They stop short of this, holding merely that in order to comply with s 459G, the composite proceeding (including the order(s) sought) must be capable of being read distributively so as to apply to each statutory demand. 

19. That said, it is not entirely clear what it means to say that the order(s) sought must be capable of being read distributively so as to apply to each statutory demand, or what it is that might preclude it from being read in this way.  In Filaria the concern appears to have been the seeking of a single, or rolled-up, order in terms that did not expressly acknowledge the existence of multiple demands.  In Golden Plantation and Mossimo Systems, on the other hand, the concern appears to have been the seeking of a single, or rolled-up, order on behalf of multiple plaintiffs in circumstances in which not all plaintiffs had an interest or standing in all of the demands included within the terms of the order sought.

20. I agree that in order to be valid in respect of a particular demand, the composite proceedings must include or encompass a claim for an order setting aside that particular demand. That requirement comes from the terms of s 459G(1) and is inherent in what I have described as the third requirement. I also have no difficulty with this requirement being described in terms of the relief sought needing to be expressed so that it can be read distributively so as to apply to each demand.

21. However, in applying this test, I see no reason for taking a technical approach, or an approach that emphasises form over substance.  To the contrary, I would favour an approach that looks to the substance of what is sought, assessed in light of the proceeding as a whole and hence including the supporting affidavit material.  In Femley, Santow J, when considering whether an application was able to be read distributively, favoured an approach that eschewed technicalities and allowed some latitude for defects in expression, provided that the application remained one “under” s 459G. His Honour drew support for this approach from the existence of s 467A, and the benevolent and non-technical approach taken by the courts in construing “supporting” affidavits to determine whether they were truly of the character required by s 459G(3).[125] 

    [125]  Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [20].

22. Care is needed in the application of s 467A in the present context, given that the issue is whether the present application meets one of the minimum requirements of such an application s 495G, and hence whether there is any application “under” s 459G.  However, the existence of that section does, at least in a general way, support a non-technical approach.  But even putting s 467A to one side, there is no reason for the courts to take a technical or pedantic approach to the requirements of s 459G.  While the decision in David Grant emphasises the importance of observing those requirements, it says nothing to dissuade the courts from applying their usual preference for substance over form in determining whether there has been observance.

23. I also see no difficulty in having regard to the supporting affidavit in determining whether the application can be read distributively. Again there is support for this approach in the reasons of Santow J in Femley.[126]  Indeed, if I am right in my earlier suggestion that the “application” for the purposes of s 459G encompasses both the originating process and supporting affidavit, then it would be expressly permitted.  While the focus in the present context will be on the terms of the order sought in the originating process, I see no reason why their meaning should not be considered with the assistance of any light that might be shed on the substance of what is being sought by the supporting affidavit.

    [126]  Femley Pty Ltd v Salken Engineering Pty Ltd (1999) 17 ACLC 828 at [22].

24. Approached in this way, I agree with Nicholson J’s reasoning and conclusion that the single order sought in this case should be read as seeking an order (or at least seeking relief that encompassed an order) setting aside each statutory demand. 

25. The only qualification to this is that I would not attach any significance to the reference in paragraph 3 of the originating process to “such further or other order as this honourable court deems fit”, other than as a reminder or illustration of the fact that it is commonplace that the precise terms of the order or orders made by a court often differ from the terms of the originating process.  While this serves to underscore the appropriateness of an approach that focuses upon the substance of what the plaintiff seeks, rather than its precise terms, the absence of paragraph 3 would not have made a difference to the outcome in this case.

26. While on a literal reading the originating process sought an “all or nothing” style of order, when read in a common sense way, and in conjunction with the supporting affidavit references to the application seeking to set aside “each” of the demands, it was plainly intended to seek orders in respect of both demands.  It is a case of the greater encompassing its lesser component parts; a claim for an order in respect of both demands that also encompassed a claim for orders in respect of each of either of those demands.

27. For this reason, I consider that Heirloom’s challenge based on the form of the single order sought in these proceedings must fail. 

28. I conclude by observing that I do have some reservations about the ability to distinguish the order sought in the present case from the orders held to be impermissible by Barrett J in Golden Plantation and Mossimo Systems.  There is an obvious distinction in that both of those cases, unlike the present case, involved multiple plaintiffs, and hence included (on the face of the single order sought) relief on behalf of plaintiffs which did not have any interest or standing in relation to all of the demands the subject of the order.  However, it is not clear to me that this is a distinction that makes a difference as a matter of principle in the context of determining whether a single order can be read and understood distributively.  I do not find this a convincing basis for distinguishing the order sought in the present case.  It is not obvious to me why the order sought in those cases, despite their literal terms, could not be understood and read distributively, as encompassing claims for orders by the individual plaintiffs in respect of the particular demand or demands which were served on them.

29. Thus, while I have agreed with the conclusion of Nicholson J in relation to the form of the order (that is, the application of the third requirement I have identified), I have some sympathy for the Master’s inability to distinguish, and hence decision to follow, Golden Plantation.  I see no need for this Court to express a concluded view as to the correctness of Golden Plantation.  It is sufficient for me to observe that to the extent that the decision in that case is inconsistent with, and unable to be distinguished from, the present case, then I would decline to follow it.

    Disposition of the appeal

1. For the reasons set out above, I would dismiss the appeal.