In the Matter of Badebi Pty Ltd State Bank of New South Wales Ltd v Badebi Pty Ltd

[1996] FCA 918

IN THE FEDERAL COURT OF AUSTRALIA                  )
  )
NEW SOUTH WALES DISTRICT REGISTRY                 )          NG 3675 of 1995
  )
GENERAL DIVISION  )

In the matter of Badebi Pty Limited
   ACN 002 872 344

STATE BANK OF NEW SOUTH   WALES LIMITED

Applicant

BADEBI PTY LIMITED

Respondent

Coram:           Whitlam J

Place:Sydney

Date:1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA                  )
  )
NEW SOUTH WALES DISTRICT REGISTRY                 )          NG 3675 of 1995
  )
GENERAL DIVISION  )

In the matter of Badebi Pty Limited
   ACN 002 872 344

STATE BANK OF NEW SOUTH   WALES LIMITED

Applicant

BADEBI PTY LIMITED

Respondent

Coram:           Whitlam J
Place:              Sydney

Date:25 October 1996

REASONS FOR JUDGMENT

The applicant has applied to the Court under s 459P of the Corporations Law ("the Law") for the respondent to be wound up in insolvency. The application relies on a failure to comply with a statutory demand, and it sets out particulars of service of that demand by post. The respondent has filed several grounds of opposition to the application, including one that the statutory demand was never served upon it.

The parties have accordingly asked that the Court decide separately before the hearing of the application the following questions:

"1.Is the service of the statutory demand dated 24 October 1995 as set out in paragraph 6 of the affidavit of Steven Mark Golledge sworn 15 February 1996 effective service of the demand upon the respondent for the purposes of the Corporations Law?

2.If the answer to 1 is yes, is the applicant precluded from relying on that service?"    

Mr Golledge is the applicant's solicitor.  In paragraph 6 of his affidavit sworn on
15 February 1996, he states that the statutory demand was "forwarded" under cover of a letter from his firm addressed to the respondent's managing director at "Level 8, 49-51 York Street, Sydney NSW 2000". (It is common ground that at all material times this was the address of the respondent's registered office notified under s 218 of the Law.) Mr Golledge gave evidence that these documents were posted to that address in an envelope franked as prepaid post. He also stated that they had not been returned to his firm as unclaimed.

The affidavit verifying the grounds of opposition is sworn by Gregory Harrison Healey, a director of the respondent.  On the present hearing statements in two other affidavits by Mr Healey have been admitted in evidence together with a bundle of correspondence.  The effect of this evidence may be briefly summarized.

Mr Healey appears to have practised as a solicitor in the building at 49-51 York Street, Sydney.  He occupied the eighth floor of that building pursuant to a licence granted by the applicant.  By a letter dated 11 November 1994 from Mr Golledge's firm, acting on behalf of the applicant, Mr Healey was given notice to vacate those premises.  This letter was signed by Mr Golledge's partner, Malcolm P. Bersten.  Mr Healey vacated the premises on 15 December 1994 and wrote the next day to the applicant's Mr Richard Walker, asking
that future correspondence be sent to him at an address in the suburb of Coogee.  (Mr Walker was an account manager in the applicant's Asset Management Group.  He has sworn the affidavit in support of the statutory demand.)

The respondent's solicitor practises under the firm name, G.H. Healey & Co.  A firm by that name apparently continued to occupy premises on the second floor at 49-51 York Street until July 1995, when it relocated to 141-143 Elizabeth Street, Sydney.  Mr Walker was informed of this move at that time, when the same solicitor who presently acts for the respondent wrote to him on behalf of the "G.H. Healey & Co" group.  Subsequently in August and September 1995 Mr Golledge's firm corresponded with G.H. Healey & Co at the Elizabeth Street address in connexion with proceedings in the Supreme Court, in which it acted for the applicant against a company called Nikutu Pty Limited.  (It may be inferred from this correspondence that the solicitors' address was the defendant's address for service in those proceedings.)  Finally, for what it is worth, Mr Healey states that neither he nor the respondent has been "served" with the statutory demand.

In cross-examination Mr Golledge said that, prior to 24 October 1995 he had never discussed with Mr Bersten the termination of Mr Healey's licence to occupy the premises on the eighth floor of 49-51 York Street.  He identified the author of the letters sent to G.H. Healey & Co in August and September 1985 as Nicolette Bearup, a solicitor employed by his firm.  I accept Mr Golledge's evidence that he was not aware, when he arranged service of the statutory demand, that the respondent did not occupy the premises. After filing the application herein, Mr Golledge attempted to arrange service at the respondent's registered
office.  When the process server was unable to gain entry to the eighth floor at that address, Mr Golledge sent the service copies by post to that address.

The most striking feature of the respondent's case is the implicit assumption that the address of Mr Healey is the address of the respondent.  There is no evidence that the respondent maintains an office anywhere at all.

Counsel for the applicant relies upon s 220(1) of the Law to prove service of the statutory demand. The facts deposed to in paragraph 6 of Mr Golledge's affidavit are not sufficient for that purpose. However, they have been supplemented by his oral evidence which establishes quite clearly that the demand was sent by post to the respondent's registered office. Counsel for the respondent attempts to meet this situation in two ways. First, it is submitted that service cannot be taken to have been effected by virtue of par 109Y(a) of the Law because the demand was not sent to the "last known address" of the respondent. In Re Rustic Homes Pty Ltd (1988) 49 SASR 41 von Doussa J held (at 43) that such an address was the registered office of a company for the purposes of the predecessor to s 220(1) of the Law. This disposes of that submission, but I should observe again that there is no evidence that the applicant knew of any other address for the respondent. Secondly, it is said that there is proof that the demand was not delivered by post. But Mr Healey's evidence that he did not receive the demand does not amount to proof that it was not delivered as addressed. Here there is no evidence of non-delivery. Cf. Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 95-97. The instant case may be contrasted with the evidence in Re Rustic Homes Pty Ltd, where the summons to wind up was returned
by Australia Post as unclaimed.  According to Mr Golledge, that did not happen here.  Delivery has thus not been disproved.  The second submission also fails.

Next, counsel for the respondent submits that it would amount to an "abuse of process" for the applicant to be able to rely on such deemed service of the statutory demand.  He repeats the submission that the applicant had actual knowledge that the respondent did not occupy the premises notified as the registered office.  I suppose it must be that someone in the applicant's employment knew whether the premises were occupied and, if so, by whom.  But these premises remained the respondent's registered office.  On this point, I respectfully agree with the remarks of Santow J about the deeming nature of s 220 being given an effective operation: FP Leonard Advertising Pty Ltd v KD Travel Services Pty Ltd (1993) 12 ACSR 136.

That case concerned circumstances where, after postal delivery, it was learned that a company was no longer contactable at its registered office which was the address of accountants who had ceased to act for it.  Santow J held that there was no apparent abuse of process and that service was effective.  He did, however, identify an "exception" in Deputy Federal Commission of Taxation v Abberwood Pty Ltd (1990) 2 ACSR 91.

In Abberwood Waddell CJ in Eq held that a default judgment had been irregularly obtained in circumstances where a statement of claim had been left at the defendant's registered office and, prior to signing judgment, it was known in the plaintiff's office that
service of the statement of claim could not have come to the defendant's knowledge.  His Honour said:

"In these circumstances it should be concluded that the judgment was irregularly obtained.  Indeed, it could be said, although I think the Court has not been pressed to say so, that it was an abuse of process for the plaintiff to sign judgment in default of appearance when it was known in its office that the statement of claim had not and could not have come to the attention of the defendant."

In Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559 McLelland CJ in Eq agreed with Santow J in FP Leonard Advertising subject to the following qualification:

"... an abuse of process in the circumstances postulated by [Santow J] is not strictly speaking an "exception" to the provisions of s 220(1) (which would suggest that there has been no effective service) but rather constitutes an over-riding ground for refusing relief notwithstanding that there has been effective service."

It may be observed, therefore, that what Waddell CJ in Eq said about an abuse of process was, strictly speaking, obiter.  In any event, I respectfully agree with McLelland CJ in Eq.  There is no doubt that in the instant case there has been effective service of the statutory demand.  Such a demand, of course, is not a process of the Court, and it may be a trifle strained to speak of its service constituting an "abuse of process".  Nevertheless, the applicant has commenced these proceedings in reliance on the failure to comply with that demand.  This is a very different case to Abberword.  The circumstances do not remotely suggest an "overriding ground" for precluding the applicant from relying on the service of the demand.

For these reasons, if they are reformulated appropriately in the light of the evidence, the proposed separate questions may be answered "Yes" and "No".  I shall stand the matter over for further directions and direct the applicant to bring in minutes of a proposed order.

I certify that the preceding 6 pages are a  true copy of the reasons for judgment herein of the Hon. Justice A.P. Whitlam

Associate: John Merity

Date: 25 October 1996

Counsel for the applicant:             M.R. Aldridge

Solicitors for the applicant:  Parish Patience

Counsel for the respondent:           J.T. Svehla

Solicitors for the respondent:         G. H. Healey & Co.

Date of hearing:  19 April 1996