In the matter of Empire Plant Hire Pty Ltd
[2020] VSC 307
•29 May 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2019 05699
IN THE MATTER OF: EMPIRE PLANT HIRE PTY LTD (ACN 626 953 580)
| C.C. INVESTMENT ENTERPRISES PTY LTD (ACN 092 386 760) | Plaintiff |
| v | |
| EMPIRE PLANT HIRE PTY LTD (ACN 626 953 580) | Defendant |
---
JUDICIAL REGISTRAR: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 March 2020 |
DATE OF RULING: | 29 May 2020 |
CASE MAY BE CITED AS: | In the matter of Empire Plant Hire Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 307 |
---
CORPORATIONS – Application for winding up in insolvency pursuant to s 459P of the Corporations Act 2001 (Cth) – Whether statutory demand served at registered office – s 109X, Corporations Act2001 (Cth); s 28A Acts Interpretation Act 1901 (Cth); – Service of statutory demand by leaving it at the registered office established – SV Steel Supplies Pty Ltd v Palwizat [2007] QSC 624 – Chief Commissioner of Stamp Duties v Palifilex Pty Ltd (1999) 149 FLR 179 – Technology Licensing Limited v Climit Pty Ltd [2001] QSC 084.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S A Lowry | Peter G Richards |
| For the Defendant | Mr S K Morris | Madgwicks Lawyers |
JUDICIAL REGISTRAR:
Introduction
This proceeding is a winding up application brought by the plaintiff against the defendant, pursuant to s 459P of the Corporations Act 2001 (Cth) (‘Act’). The plaintiff relies on a failure by the defendant to comply with a statutory demand purportedly dated 15 November 2019 (‘Second Statutory Demand’)[1] allegedly served by leaving it at the registered office of the defendant on 15 November 2019. The Second Statutory Demand is in respect of the amount of $1,986,952.71 plus GST, for monies said to be due and payable pursuant to a contract for sale of personal property executed by the parties on 27 February 2019 (‘Claimed Debt’).
[1]The reason for defining the subject statutory demand as the Second Statutory Demand will be explained below.
Pursuant to s 459C(2)(a) of the Act, a company is presumed to be insolvent if it has failed to comply with a statutory demand within the meaning set out in s 459F of the Act. Relevantly, that section provides that the period for compliance with a statutory demand is 21 days after the demand is served.[2]
[2]For completeness I note that the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) was introduced in March of this year which temporarily extends the time for compliance with a statutory demand to 6 months for statutory demands served on or after 25 March 2020. As the Second Statutory Demand was allegedly served on 15 November 2019, these changes do not affect this ruling.
In this proceeding, the plaintiff relies on this statutory presumption of insolvency. For that presumption to apply, there must have been a failure to comply with the Second Statutory Demand. For there to be such a failure, the Second Statutory Demand must have been served on the defendant.
The defendant disputes service of the Second Statutory Demand: it says that the Second Statutory Demand was not served upon it. It is common ground that the registered office of the defendant, as shown in the records maintained by the Australian Securities and Investments Commission, was at all material times ‘14A Tullamarine Park Road, Tullamarine VIC 3043’ (‘Registered Office’). This decision concerns the question of whether the Second Statutory Demand was served on the defendant by it being left at the Registered Office.
The proceeding was listed for hearing on 5 February 2020. At that time, it being apparent that the defendant disputed service of the Second Statutory Demand, the parties agreed that this question of service of the Second Statutory Demand should be dealt with first, as a preliminary question (before the balance of the proceeding), and the hearing was adjourned to 27 February 2019 to allow for further affidavits to be filed and for a hearing in relation to this question. Relevantly, I made orders for the filing of any further affidavits relied upon as to service by the defendant to be filed and served by 14 February 2020, any further affidavits relied upon as to service by the plaintiff to be filed and served by 14 February 2020, and for written outlines of submissions by 24 February 2020.
The defendant did not file any further affidavits regarding service until 26 February 2020, the day before the scheduled hearing. It also filed an outline of submissions on 26 February 2020.
When the matter came on for hearing on 27 February 2020, I granted an adjournment of the hearing until 19 March 2020 and made orders for the plaintiff to file any further affidavits by 11 March 2020 and for the parties to file any further submissions by 16 March 2020.
For the reasons set out below, the answer to the preliminary question ‘have the Second Statutory Demand and the Second SD Affidavit been served on the defendant’ (‘Preliminary Question’) is ‘Yes’: the Second Statutory Demand and the Second SD Affidavit were served on the defendant by them being left at the defendant’s registered office.
Background
Some background is necessary so as to understand the parties’ evidence and submissions.
It is common ground that on or around 25 October 2019, the plaintiff served a statutory demand dated 25 October 2019 on the defendant by post, claiming payment of the amount of $1,986,952.71 plus GST, for monies said to be due and payable pursuant to a contract for sale of personal property executed by the parties on 27 February 2019 (‘First Statutory Demand’). It is readily apparent that the amount claimed, and the means by which it is said to arise, is the same as in the Second Statutory Demand, being the Claimed Debt. It is also common ground that accompanying the First Statutory Demand was a purported affidavit sworn by Cataldo Timpanaro in support which, as was subsequently apparent, was incomplete as it was missing the page containing the jurat (‘First SD Affidavit’).[3]
[3]The First SD Affidavit as received by the defendant is part of Exhibit VR-01 to the Roberts Affidavit.
In a letter dated 14 November 2019, the defendant’s solicitor set out the reasons why the defendant said that the Claimed Debt was disputed, and it also stated that First SD Affidavit was defective as it did not contain the jurat. The defendant called for the First Statutory Demand to be withdrawn.
On 15 November 2019, the plaintiff’s solicitor informed the defendant’s solicitor by letter that the First Statutory Demand would not be withdrawn and that a re-sworn affidavit was going to be served on the defendant that day.[4] It is a matter of contention between the parties as to whether the plaintiff’s solicitor also informed the defendant’s solicitor in a telephone conversation on 18 November 2019 that another statutory demand had been served.[5] I do not need to resolve this conflict for this application, however it may be relevant at the trial of the proceeding.
[4]Richards Affidavit, [11], [15]; Exhibit PGR3.
[5]Richards Affidavit, [17]-[19].
On 15 November 2019, the defendant made an application to set aside the First Statutory Demand. By orders made by consent on 4 December 2020 (consent having been reached by the parties on 2 December), the First Statutory Demand was set aside, the application to set it aside was dismissed and there was no order as to costs.[6]
[6]Roberts Affidavit [4]-[5]; Exhibit VR-03.
It is apparent from the material filed that the Secondary Statutory Demand is the same document as the First Statutory Demand except that the date ’25 October 2019’ has been crossed out and the date ’15 November 2019’ has been hand-written alongside the crossed-out date. It does not appear to have been re-signed.[7]
[7]The First Statutory Demand is part of Exhibit VR-01 to the Roberts Affidavit. The Second Statutory Demand is attached to the Originating Process in this proceeding and marked ‘A’.
It is also apparent from the material filed that the purported affidavit of Cataldo Timpanaro in support of the Second Statutory Demand (‘Second SD Affidavit’) is the same document as the First SD Affidavit, except it contains the page which had been missing, such that the original jurat from 25 October is present and it then has the following added:
RESWORN by Cataldo Timpanaro the abovenamed deponent at Melbourne this 15th day of November 2019’
This was followed by the deponent’s signature and the details and signature of the person taking the affidavit (being Peter Richards, the defendant’s solicitor, who had also taken the First SD Affidavit).[8]
[8]The letter from Mr Richards to Madgwicks of 15 November 2019 enclosing a copy of the re-sworn affidavit explains that this is how the Second SD Affidavit was prepared: Exhibit AK-03 to the First Kovaceski Affidavit.
Evidence
When making the orders referred to above for the conduct of the hearing of the Preliminary Question, I also made orders stipulating a time by which notices of persons required to attend for cross-examination were to be served. So far as I am aware, notices in respect of Ms Roberts, Mr Moffat and Mr Kovaceski were filed by the plaintiff.[9] In the end, no witnesses were called for cross-examination at the hearing on 19 March 2020.
[9]Although no notice was filed, I understand that Mr Orlando attended the Court precinct on the day of the hearing so as to be available for cross-examination.
In summarising the evidence adduced by the parties, I have attempted to confine myself to matters relevant to the service of the Second Statutory Demand. Many of the deponents traversed matters which were not relevant to the Preliminary Question and unless otherwise set out, there is no need for me to rehearse that evidence here.
Plaintiff’s evidence
In relation to service of the Statutory Demand, the plaintiff relies on the affidavits of:
(a) Felice Orlando sworn 12 December 2019 (‘First Orlando Affidavit’). Mr Orlando says that he is a consultant to the plaintiff in respect of this matter;
(b) A further affidavit sworn 6 March 2020 by Mr Orlando (‘Second Orlando Affidavit’); and
(c) Peter Gregory Richards sworn 6 March 2020 (‘Richards Affidavit’). Mr Richards is the solicitor for the plaintiff.
Felice Orlando
In his first affidavit, Mr Orlando deposes that on 15 November 2019 he served ‘a statutory demand’ on the defendant by hand delivering it to the Registered Office at approximately 3.59pm.[10] He then deposes that he handed the statutory demand and Second SD Affidavit ‘to a man at the front desk of the defendant’s office, who introduced himself as “Patrick”, and stated to me that he would pass the documents to the director of the defendant Veronica Roberts’.[11] The statutory demand and Second SD Affidavit is said to be attached to the First Orlando Affidavit and marked ‘A’.[12]
[10]First Orlando Affidavit, [2].
[11]First Orlando Affidavit, [3].
[12]First Orlando Affidavit, [4].
I note at this juncture the following:
(a) There is no attachment, marked A or otherwise, to the First Orlando Affidavit as filed;[13] and
(b) The statutory demand said to have been served is not described by reference to any identifying detail, such as its date.
[13]For completeness, I also note that it is not attached to the copy of the First Orlando Affidavit as served with the originating process, which is ascertainable from the exhibits to the affidavit of service of the originating process as filed with the Court.
In his second affidavit, Mr Orlando deposes that the statutory demand referred to in the First Orlando Affidavit as having been served on 15 November 2019 was a statutory demand originally dated 25 October 2019 and re-dated 15 November 2019, that is, the Second Statutory Affidavit.[14] He says that prior to serving the Second Statutory Demand and the Second SD Affidavit, he attended Mr Richards’ office and collected an envelope containing those documents, which he saw Mr Richards place in the envelope.[15]
[14]Second Orlando Affidavit, [5]-[7].
[15]Second Orlando Affidavit, [8].
Mr Orlando states that prior to 15 November 2019, he had attended the premises of the defendant on at least five occasions and had met Ms Roberts at least ten times, was familiar with the premises, and knew what car Ms Roberts drives.[16]
[16]Second Orlando Affidavit, [9].
As to the circumstances of service of the Second Statutory Demand, Mr Orlando deposes that:[17]
[17]Second Orlando Affidavit, [10].
(a) he arrived at the premises at about 3.56pm and parked his car in the carpark area adjacent to the front office door, noticing that Ms Roberts’ car was parked in the carpark;
(b) he approached the front door of the office, which was locked, and noticed a man standing in the reception area standing just inside the front door. Mr Orlando says that this man saw him and without him ringing the buzzer, the man opened the door and he entered into a reception area; and
(c) he recorded the exchange with the man, who he now knows is Mr Moffat, in audio and video on his mobile phone.
Mr Orlando then provides the following transcript of his conversation with Mr Moffat, where PO is himself (he is also known as Phil Orlando) and PM is Mr Moffat:[18]
[18]Second Orlando Affidavit, [11].
PO: (Cough). How are you?
PM: How are you mate? You alright?
PO: Are the girls here?
PM: Which ones?
PO: I dunno; the secretary. You know.
PM: Ah Sarah?
PO: Sarah? Ring any bell?
PM: Umm, ah well. Depends; who are you after?
PO: I dunno. Ah well just the secretary.
PM: Umm. She is not here at the moment.
PO: How about Amatel? Is she here?
PM: Good question. I don’t think so. Inaudible … Umm …
PO: Right, can you give that to Veronica?
PM: Yep, I can do that. (He then took the envelope).
PO: What’s your name?
PM: Patrick.
PO: Alright. Thanks mate.
Mr Orlando then deposes, still as part of the transcript he has set out, as follows:[19]
(Patrick then took the envelope, turned and walked away, I verily believe then walked briskly up the adjacent stairs. I was left with the impression as I turned to leave that he was then and there going to deliver the envelope to Veronica to her office upstairs).
[19]Second Orlando Affidavit, [11].
Mr Orlando states that the envelope he handed to Mr Moffat contained the Second Statutory Demand and the Second SD Affidavit.[20] He deposes that:[21]
At my request, Patrick stated to me he would give the envelope immediately to Veronica and I observed him after the conversation to head upstairs to Veronica’s office.
[20]Second Orlando Affidavit, [12].
[21]Second Orlando Affidavit, [13].
Peter Gregory Richards
Mr Richards deposes that on 15 November 2019, Mr Timpanaro attended his office and re-swore the same affidavit he had previously sworn. Mr Orlando also attended his office, collected the re-sworn affidavit, which Mr Richards placed into ‘an envelope addressed with the’ same statutory demand as the First Statutory Demand, which was re-dated by him as 15 November 2019.[22]
[22]Richards Affidavit, [15].
Mr Richards deposes that on Saturday 29 February 2020 he attended the Registered Office. He exhibits a copy of a photograph of the front door of the office on the ground floor at that address and a photograph of the inside area of that office taken from the outside. [23] He does not say who took the photographs.
[23]Richards Affidavit, [25]-[26].
Mr Richards says that it appears that entry by the front door is not open access and to gain entry, a visitor must activate the intercom to announce his or her presence. The reception desk is approximately 2.5 metres from the front door.[24]
[24]Richards Affidavit, [27].
Mr Richards also deposes that he has examined the screen shot and video of the premises exhibited to the Second Orlando Affidavit and can say that the reception area just inside the front door is the same as can be discerned from the screen shot.[25]
[25]Richards Affidavit, [28].
Defendant’s evidence
In relation to service of the Statutory Demand, the defendant relies on the affidavits of:
(a) Aleksandar Kovaceski sworn 5 February 2020 (‘First Kovaceski Affidavit’). Mr Kovaceski is a solicitor employed by Madgwicks Lawyers, solicitors for the defendant;
(b) Matthew Peter Sultana sworn 26 February 2020 (‘Sultana Affidavit’). Mr Sultana is employed by Nationwide Concrete Pumping Victoria Pty Ltd (‘Nationwide’) as a bookings allocator;
(c) Sarah Rachel Da Silva sworn 26 February 2020 (‘Da Silva Affidavit’). Ms Da Silva is employed by Nationwide as a receptionist;
(d) Patrick John Moffat sworn 26 February 2020 (‘Moffat Affidavit’). Mr Moffat is employed by Nationwide as a yard hand;
(e) Veronica Mary Hodgers Roberts sworn 26 February 2020 (‘Roberts Affidavit’). Ms Roberts is the sole director and company secretary of the defendant. Ms Roberts is also the sole director of Nationwide; and
(f) A further affidavit of Mr Kovaceski sworn 26 February 2020 (‘Second Kovaceski Affidavit’).
Sarah Rachel Da Silva
Ms Da Silva deposes that she is employed full-time by Nationwide as a receptionist.[26] She said that she has been informed by Ms Roberts that another two companies share the same office as Nationwide and that if any mail or documents are delivered at the office reception for those companies, she has to give them to Ms Roberts. She says that she believes the names of those companies are the defendant and Empire Consortium.[27]
[26]Da Silva Affidavit, [1].
[27]Da Silva Affidavit, [2].
Ms Da Silva also deposes that she works in the office reception area behind the reception desk at the Registered Office. Her working hours are generally 9am to 5pm on weekdays, with a one hour break for lunch during which time she often leaves the office area.[28]
[28]Da Silva Affidavit, [3].
Ms Da Silva says that when anyone attends to make a delivery, they press the buzzer at the entrance and she goes and lets them through the entrance and into the office reception area.[29] She does not describe this in any further detail.
[29]Da Silva Affidavit, [4].
Ms Da Silva says that she did not receive any mail or other deliveries on 15 November 2019 addressed to the defendant.[30]
[30]Da Silva Affidavit, [5].
Matthew Peter Sultana
Mr Sultana says that he is employed full-time by Nationwide as a bookings allocator and that he works in a room adjacent to the reception located in the office reception area.[31] He says that from time to time when Ms Da Silva is not at the reception desk, he will on occasion cover her reception duty by bringing a visitor into the office if they press the buzzer at the entrance. On the occasions when he receives a delivery in the office reception, he brings it to Ms Da Silva’s attention for her to deal with it.[32] Mr Sultana says that he did not let anyone into the office area on 15 November 2019 or receive any mail or document deliveries in the office reception area on that date.[33]
[31]Sultana Affidavit, [1]-[2].
[32]Sultana Affidavit, [4].
[33]Sultana Affidavit, [5].
Patrick John Moffat
Mr Moffat says that he is employed by Nationwide as a general yard hand, and his job is to help in the yard area, repair equipment and machines where possible, and perform general day to day tasks in the workshop. He says that to access the area he works in, you walk down the driveway through a steel gate entrance and walk all the way to the back of the factory where maintenance and refuelling is done on vehicles and equipment.[34]
[34]Moffat Affidavit, [1]-[2].
Mr Moffat deposes that he does not have any role in the administration of Nationwide or any other company and does not have authority to accept documents for them.[35]
[35]Moffat Affidavit, [3].
Mr Moffat then deposes as follows:[36]
4.To the best of my recollection on the 15th of November 2019, as I was ending my shift on that day around 3.30pm, I remember going by the front entrance on the way to the store and being stopped by a lady who gave me an envelope, asked my name and then walked off back to the road.
5.I remember it was a busy time for Nationwide around the 15th of November 2019 and things were pretty hectic. I do not recall what I did after the lady stopped me and when I went back to the store and then left for the day. I have no idea what was inside the envelope.
[36]Moffat Affidavit, [4]-[5].
Veronica Mary Hodgers Roberts
Ms Roberts is the sole director and company secretary of the defendant.[37] She deposes that on or about 28 October 2020 the defendant received the First Statutory Demand and she instructed Madgwicks to make an application to set it aside on the basis of there being a genuine dispute and there being defects in the First SD Affidavit.[38] As set out above, consent orders were made setting aside the First Statutory Demand, amongst other things.
[37]Roberts Affidavit, [2].
[38]Roberts Affidavit, [4]; Exhibit VR-01.
Ms Roberts says that neither she nor the defendant had seen or received a copy of the Second Statutory Demand until she received, on or about 18 December 2019, a letter from Mr Richards enclosing, amongst other things, a copy of the originating process in this proceeding.[39] She deposes that had she been aware of the Second Statutory Demand, she would have instructed Madgwicks to file an application to set it aside, as she had done with the First Statutory Demand.[40]
[39]Roberts Affidavit, [6]-[7].
[40]Roberts Affidavit, [20].
In respect of the alleged service of the Second Statutory Demand, Ms Roberts deposes that:[41]
[41]Roberts Affidavit, [8]-[18].
(a) she is the only representative of the defendant, which has no employees;
(b) the Registered Office was the registered office of the defendant until 13 December 2019;
(c) as at 15 November 2019, the Registered Office was also occupied by Nationwide and Empire Consortium Group Pty Ltd (‘Empire Consortium’). She is the sole director of Nationwide and Mr Richard Grieve is the director of Empire Consortium;
(d) there is ‘only one registered office area located inside the only building on the premises.’ There is also a long driveway to the side of the building which leads to a yard and workshop where machinery used by Nationwide is stored. The signage on the premises is that of ‘Nationwide’ and ‘Nationwide Concrete Pumping’;
(e) the office reception area is located through the street level entrance behind security doors with a buzzer on the outside that intercoms to the office area accessible through the entrance and via a small staircase. When the buzzer is pressed, the receptionist can either press a button at reception to allow the person to access the office reception area or otherwise go to the entrance to bring the person to the office reception area. There is no other way to access the office reception area;
(f) Ms Da Silva is employed full-time by Nationwide as a receptionist in the office reception. She has told Ms Da Silva that Nationwide shares the same registered office and to give her any mail or documents delivered to reception addressed to Nationwide and the defendant, and she believes Mr Grieve has told Ms Da Silva the same in respect of Empire Consortium;
(g) Ms Da Silva sits at the office reception area during the hours of 9am to 4.30pm on weekdays, except for 12pm to 1pm when she takes a lunch break, during which reception is generally unattended;
(h) Mr Moffat is employed by Nationwide as a general hand, works in the yard and workshop, and has no role in the administration of Nationwide and does not work in the office. He has no authority to accept documents on Nationwide’s behalf. Mr Moffat is unrelated to the defendant and does not have authority to do anything on behalf of the defendant; and
(i) it is not possible for any document to be received by the defendant on 15 November 2019 in the manner stated in the First Orlando Affidavit.
Aleksandar Kovaceski
Other than in respect of one aspect, I have not summarised the evidence of Mr Kovaceski, as it goes either to matters concerning the First Statutory Demand, the correspondence between the parties, and the conduct of this hearing (which in the end are not relevant to the determination of the Preliminary Question).
It appears that Mr Richards mentioned in an email to Mr Kovaceski on 18 February 2020 that the plaintiff had video and audio evidence of service. On the same day, Mr Kovaceski sent an email to Mr Richards, requesting a copy of this video and audio evidence. Mr Kovaceski deposes that as at the date of his second affidavit, 26 February 2020, this had not been provided.[42] I mention this evidence so as to observe that at the time of preparing their affidavits, it appears that none of the defendant’s witnesses had had access to the video and audio evidence of service referred to by Mr Richards. I presume that this is the same evidence as referred to in the Second Orlando Affidavit and the Richards Affidavit.
[42]Second Kovaceski Affidavit, [3]-[5].
Relevant law
Section 109X(1) of the Act (‘Section 109X’) relevantly provides:
For the purposes of any law, a document may be served on a company by:
(a) leaving it at, or posting it to, the company’s registered office;
…
Section 28A(1) of the Acts Interpretation Act 1901 (Cth) (‘Section 28A’) relevantly provides:
For the purposes of any Act that requires or permits a document to be served on a person, whether the expression “serve”, “give” or “send” or any other expression is used, then the document may be served:
…
(b)on a body corporate – by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate.
Submissions
The parties provided the following written outlines of submissions prior to the hearing on 19 March 2020, and made oral submissions at that hearing:
(a) Defendant’s outline dated 27 February 2020 (‘Defendant’s Outline’);
(b) Plaintiff’s outline dated 16 March 2020 (‘Plaintiff’s Outline’); and
(c) Defendant’s further outline dated 16 March 2020 (‘Defendant’s Further Outline’).
As with the evidence, I have not sought to summarise aspects of the parties’ submissions which are irrelevant to the determination of the Preliminary Question.
Plaintiff’s submissions
The plaintiff submits that the defendant alleges a defect in service of the Second Statutory Demand in circumstances where:
(a) The defendant knew[43] that the plaintiff was intending to effect service of a Second Statutory Demand on 15 November 2019. Paragraphs 11-14 of the Richards Affidavit are relied upon in support of this submission;
[43]Emphasis in the Plaintiff’s Outline.
(b) The plaintiff has produced a video recording demonstrating the manner in which service was effected;
(c) Service was prima facie compliant with the statutory requirements for service, and thereby effective; and
(d) Despite all the circumstances, including having been served with the originating process in December 2019 and having done nothing about it until the afternoon before the first return date, the defendant assets that if the Second Statutory Demand had been brought to its notice, it would have instructed Madgwicks to file an application to set it aside.
In this regard, I note that the Richards Affidavit does not contain evidence such that it can be said that the defendant knew that the plaintiff was intending to serve the Second Statutory Demand on 15 November. Further along in the Plaintiff’s Outline, it is said that by reference to Exhibit PGR3 to the Richards Affidavit, which is a letter dated 15 November 2019 from Mr Richards to Madgwicks, ‘we know that the Defendant’s solicitors certainly were informed of an intention of the Plaintiff to serve a further statutory demand, which they did’.[44] I have reviewed Exhibit PGR3 and the letter does not refer to or mention a further statutory demand, it refers only to the intention to serve a re-sworn affidavit and sets out the reasons why the plaintiff will not withdraw the First Statutory Demand.
[44]Plaintiff’s Outline, [16(a)].
The plaintiff submits that the defendant contends that service was not effective because:
(a) the initial recipient of the Second Statutory Demand, Mr Moffat, was not authorised to accept service of documents on behalf of the defendant;
(b) the Second Statutory Demand did not come to the attention of Ms Roberts and, if it had, she would have sought to set it aside; and
(c) Mr Orlando, referred to by Mr Moffat as a ‘lady’, could not possibly have effected service in the manner alleged.
The plaintiff says that the matters relied upon by the defendant are misconceived and/or without foundation in fact.
The plaintiff submits that service in accordance with s 109X(1)(a) of the Act will be good, effective, service regardless of whether the party to be served receives actual notice of the document, unless the lack of notice is the result of deliberate suppression or some other improperly motivated conduct of the serving party.[45] It says that in order to render service ineffective where service has been effected in accordance with the statutory provision, some impropriety on the part of the serving party must be shown.[46]
[45]In this regard, the plaintiff relies upon SV Steel Supplies Pty Ltd v Palwizat [2007] QSC 624 (‘SV Steel Supplies’).
[46]SV Steel Supplies, [26], [31], [36].
The plaintiff also submits that the method of service set out in s 109X(1)(a) of the Act is to be interpreted liberally, relying on Chief Commissioner of Stamp Duties v Palifilex Pty Ltd as follows:[47]
[24]Literally, these provisions mean that if the demand is left at the address which is the registered office of the company according to the Commission’s records … then the demand has been effectively served on the company. As far as effective service is concerned, this is the result regardless of whether the registered office has in fact been changed though not notified to the Commission, and of whether the creditor is aware that the company no longer has an office there at the time when service is effected.
…
[26]Where service is effected by leaving the demand at the place recorded as the registered office, rather than by posting it, the statutory provisions to which I have referred are conclusive and without qualification.
[47](1999) 149 FLR 179, [24] and [26] (‘Palifilex’).
The plaintiff also refers to the following passages in SV Steel Supplies:[48]
[30]There is no requirement that service be effected for the purposes of section 109X(1)(a) during office hours or which requires any particular steps to be taken to bring it to the notice of any person in the office …
[31]Service may be disregarded however where the court is satisfied that the creditor’s actions amount to an abuse of process. This … constitutes an overriding ground for refusing relief notwithstanding that there has been effective service.
[48][2007] QSC 624, [30]-[31].
The plaintiff submits that even if each and every factual allegation raised by the defendant is accepted, it remains the case that service of the Second Statutory Demand was effected on 15 November 2019. Without any further elaboration on this point, the Plaintiff’s Outline then goes on to state that for the reasons set out below, the defendant’s evidence cannot be accepted. I will summarise that part of the submission next, but before doing so I pause to observe that the link between these two propositions is not exposed in the Plaintiff’s Outline.
The plaintiff submits that the defendant’s evidence cannot be accepted for the reasons set out in the following paragraphs.
In respect of Ms Roberts’ evidence:
(a) Ms Roberts states accurately that ‘there is only one registered office area located inside the only building on the premises’;
(b) Ms Roberts then misrepresents the layout, stating that the reception area is located via a small staircase that can only be accessed when entry is granted by the receptionist. The photographs exhibited by Ms Roberts fail to depict the desk on the street level inside the security doors that appears to be a reception desk. Further, other persons within the office can and do open the security doors to permit guests to enter the premises and to deal on behalf of the entities therein without reference to the receptionist or the asserted reception area accessed via stairs;
(c) Ms Roberts does not explain how she says that it is not possible for any document to be received by the defendant on 15 November 2019 in the manner stated in the First Orlando Affidavit; and
(d) Ms Roberts swears that had she been aware of the Second Statutory Demand she would have instructed Madgwicks to apply to set it aside, yet she was aware of it by around 18 December 2019 and did nothing about it until this proceeding returned to Court on 5 February 2020.
In respect of Mr Moffat’s evidence:
(a) Mr Moffat describes and downplays his role in Nationwide and while he says he does not have authority to accept documents for Nationwide or any other company, he plainly did accept them and demonstrated his familiarity with the personnel of the defendant and Nationwide, and spoke for them;
(b) Mr Moffat refers to being given an envelope by a lady, when there can be no confusion as to Mr Orlando’s sex, and he fails to make any mention of the exchange between him and Mr Orlando; and
(c) conveniently, Mr Moffat swears that he fails to recall what he did ‘after the lady stopped me’, failing to say anything about immediately walking up the stairs and telling Mr Orlando he would give the envelope to Ms Roberts, yet he can recall that he went back to the store and left for the day.
Defendant’s submissions
The defendant disputes that service of the Secondary Statutory Demand was effected on it, either formally in accordance with the statutory provisions or informally.
In relation to the plaintiff’s evidence regarding service, the defendant submits that:
(a) in respect of the First Orlando Affidavit:
(i) it is unclear whether Mr Orlando is saying that Mr Moffat used the words ‘director’ or ‘Veronica Roberts’ or some other words, or whether these words are a conclusion Mr Orlando reached having had a conversation with him and based on some presumption he had met an employee of the defendant; and
(ii) there is an unexplained discrepancy as to how Mr Orlando is said to have entered the building to reach the second floor where the reception desk is located. He could only have reached it by being granted access either by ringing a buzzer or by someone opening the door for him, whereby he would have needed to traverse to the back of the entrance and walk up the flight of stairs to the reception desk.
(b) in respect of the Second Orlando Affidavit:
(i) Mr Orlando made no enquiries of Mr Moffat to determine who his employer is;
(ii) Mr Orlando did not inform Mr Moffat what was in the document, did not say it was important and did not say that it was process to be served. He did not raise the significance of the documents;
(iii) Mr Orlando asked for Sarah and at no point did he say the envelope was for service on the defendant; and
(iv) Mr Orlando did not proceed to the reception desk upstairs.
The defendant submits that Mr Orlando ought to have proceeded upstairs to the reception desk, asked for someone to identify themselves as a representative of the defendant, stated his purpose, and left the documents in the presence of the relevant person or on the reception desk.
The defendant also says that the signage of the premises is marked as Nationwide, and there is no signage to invite Mr Orlando to assume that the persons arriving at, walking around or leaving the premises were employees of the defendant.
Further, the defendant submits that the Statutory Demand did not come to the attention of the defendant or its sole director. Ms Roberts has given evidence to that effect, which is said to be supported by the fact that if it had come to her attention, she would have sought to set it aside as she had done with the First Statutory Demand. Therefore, submits the defendant, the requirements for informal service have not been satisfied.
Consideration
I accept the plaintiff’s criticism of Ms Roberts’ evidence as summarised in paragraph 58(c) above. Without an explanation, it is not evidence which I can accept and, in any event, is what I would regard as a conclusionary statement.
I also accept the defendant’s criticism of the First Orlando Affidavit as summarised in paragraph 61(a)(i) above. It is unclear whether Mr Moffat referred to Ms Roberts as the defendant’s director or whether that is Mr Orlando’s description.
While I accept the defendant’s observations as to the matters referred to in paragraph 61(b) above, I do not regard those matters as leading to a conclusion that service was not effected at the Registered Office, for reasons which will be elaborated upon below.
In respect of the transcript of the video/audio recording made by Mr Orlando, the defendant’s Counsel conceded in oral submissions that the transcript is almost entirely accurate, with the word ‘just’ needing to be inserted somewhere but it does not make much difference.[49]
[49]T8.15-17.
Without objection from the defendant, the plaintiff’s solicitor provided a copy of the video recorded by Mr Orlando to my Associate for me to view. I have watched the video and note the following:
(a) the recording has both video and audio;
(b) the video shows very little: as I understand it, it was taken on a mobile phone by Mr Orlando and the camera is pointed at the floor. All that can be seen of either person is their feet. The video shows who I take to be Mr Orlando entering the premises from outside through a sliding door, speaking with who I take to be Mr Moffat inside the door, and then Mr Orlando leaving through the same door;
(c) the video does not show where in the building Mr Moffat went after his conversation with Mr Orlando;
(d) the documents and the envelope are not visible on the video; and
(e) the audio recording is as described in the Second Orlando Affidavit.
Mr Orlando’s statement in his second affidavit that Mr Moffat told him he ‘would give the envelope immediately to Veronica’ (see paragraph 26 above) is not accurate, which is apparent from both the recording and the transcript provided by Mr Orlando. Mr Moffat just said that he could give it to Veronica. The Court is not assisted by such inaccuracies in the affidavit material.
The defendant relies on Technology Licensing Limited v Climit Pty Ltd,[50] particularly paragraphs 4-6 of that decision. It is necessary to consider this case in some detail.
[50][2001] QSC 084 (‘Technology Licensing’).
In Technology Licensing, the registered office of the subject company was ‘Level 11, 131 York Street, Sydney’. It appears to have been common ground in that case that Level 11 of that building was occupied by the subject company and by another separate entity, on different parts of the floor, with the subject company occupying two small rooms and the other entity’s offices almost surrounding it. As a person exits the lift, there is a reception desk to the right for the other entity with a large sign behind it for that entity’s name, and there is a sign to the left pointing to the subject company’s offices. The commercial agent serving the documents exited the lift, went to the reception desk for the other entity, asked a person if it was the premises of the subject company and was told it was. He then asked the person if they would accept the documents and she said she would. In evidence, it was established that that person was an accountant employed by the other entity, did not work for the subject company and was not authorised to receive documents for it, and had answered ‘yes’ to it being the subject company’s premises. She had no recollection of being handed the documents or what she had done with the documents handed to her, although she gave evidence that on occasion she sent documents to the subject company that had been left with the other entity.[51]
[51]Technology Licensing, [4]-[6].
Justice Chesterman accepted that the accountant had likely received the documents and had likely posted them to the subject company (there being evidence that the company had received them later by post).[52] Nonetheless, his Honour held that service of the statutory demand had not occurred by them being delivered in the manner described by the commercial agent.[53] His Honour said that:[54]
Section 109X of the Corporations Law provides that a document may be served on a company by leaving it at the company’s registered office. Other modes of service are, of course, permissible but the section provides a convenient means of effecting service. It is not onerous. There is no warrant for reading the section in such a way as to deem service to have occurred by leaving documents at some office other than those of the company to be served. The strict time limit allowed by s 459G(2) provides a reason why the court should not take too lenient a view of the requirements of s 109X. That section means what it says: a company is served by leaving documents at its registered office. A company which gives an ambiguous address (as did Golden Orchid Pty Ltd) may not complain when documents are left at a place within the limits of the ambiguity, but where a company has its offices at a location more-or-less precisely identified it is not too much to expect that service will be effected at those premises and not some other.
[52]Technology Licensing, [7]-[8].
[53]Technology Licensing, [9].
[54]Technology Licensing, [11].
The reference to Golden Orchid Pty Ltd in the above passage is a reference to a case which Chesterman J distinguished from the one before him, being Golden Orchid Pty Ltd v Comax Pty Ltd.[55] In that case, the circumstances of service of a statutory demand were as follows. The registered office was ‘274 Victoria Street, Darlinghurst’. At that location there was a substantial building, on the ground floor of which was a shop occupied by a company whose directors and shareholders were the same as the directors and shareholders of the company to be served. The subject company had its registered office on another floor of the building but conducted the bulk of its business elsewhere. There was no directory board or other signage showing where in the building the registered office of the subject company could be found. The documents were left with an employee of the ground floor shop who told the process server that it was owned by the man who owned the subject company and who agreed to give the documents to him. The Court concluded that service on the employee at premises which were at the address given as the subject company’s registered office was sufficient.
[55](1995) 17 ACSR 442 (‘Golden Orchid’).
Referring to Golden Orchid, Chesterman J stated that:[56]
Whether service has been effected as required by statute or rules of court is in every case a question of fact for which authorities are of limited use. Even small differences of fact can lead to different conclusions. The facts in Golden Orchid were different … The case is authority only for the proposition that service in those peculiar circumstances was good. The facts of this case are that the description of the registered office of [the subject company] referred to a floor of a building at which there were signs indicating that separate parts of it were occupied by two companies. [The other entity’s] premises were not those of [the subject company]. The documents were not left at the company’s registered office. They were left with a neighbour who had no authority to accept them.
[56]Technology Licensing, [9]-[10].
The defendant submits that the circumstances in the case before me are analogous to those in Technology Licensing, as the premises were occupied by more than one company and the documents were left with a person (Mr Moffat) who was not an employee of the defendant and was not authorised to represent the defendant or accept documents for it.
In oral submissions, the defendant’s counsel stated that the defendant now accepted that the documents (being the Second Statutory Demand and the Second SD Affidavit) were the ones in the envelope and that they were given to Mr Moffat, but submitted that this did not mean that the documents were left at the Registered Office.[57]
[57]T18.18-27.
In determining whether the requirements of s 109X(1)(a) of the Act have been met, it is necessary to identify precisely what is the registered office ‘at’ which the statutory demand could be left.[58] That is ascertained by reference to what is recorded in the ASIC register.
[58]Career Training On Line Pty Ltd v BES Training Solutions Pty Ltd [2010] NSWSC 460.
The author of Statutory Demands and Winding Up in Insolvency[59] surveys a number of authorities dealing with the question of whether a statutory demand was served by leaving it at the registered office. It emerges from that review of the authorities that where a particular part of a building is specified in the ASIC register as the registered office, then it is that location within the building where the statutory demand must be left ‘at’ for service to be effective, but where no specific part of a building is specified then leaving the statutory demand inside the building is generally sufficient. This is particularly so where there is no signage at or within the building to point to a particular location within it as the registered office of the relevant company.
[59]Farid Assaf, Statutory Demands and Winding Up in Insolvency (Second Edition, 2012, Lexis Nexus Butterworths Australia) (‘Assaf Text’), paragraphs [3.46] – [3.52] and the citations referred to therein.
I do not accept that the circumstances in the instance before me are analogous to those obtaining in Technology Licensing. The Registered Office did not designate a part of the building as being the registered office and there was no signage at the premises to indicate that the registered office of the defendant was located in a particular part of the building. I accept that Mr Moffat was not employed by the defendant or authorised to accept documents on its behalf, but that does not mean that the documents were not left at the defendant’s registered office. It was not a situation where Mr Orlando went to someone else’s premises and gave the documents to someone employed by the entity occupying those premises, as was the case in Technology Licensing.
Mr Moffat was asked if he could give the envelope to Veronica, and he said that he could. There was no evidence before me as to how the envelope containing the Second Statutory Demand and the Second SD Affidavit was addressed. The only evidence is that of Mr Richards, who describes the envelope as ‘addressed’ (see paragraph 27 above). I infer that the envelope was addressed to the defendant.
There is no obligation when serving documents on a company by leaving them at its registered office to tell the person to whom the documents were given what they were or that they are significant/important. Not doing so does not negate service.
Much was made, in the defendant’s affidavits and in submissions, of Mr Orlando not delivering the documents to the reception desk at the top of the stairs, accessed from the foyer when entering the building. It seems that there is a reception desk on the ground level, just inside the door, which is apparently not used. There is no evidence of any sign being placed on or near that desk, or on the door, or elsewhere, directing visitors to proceed upstairs to the reception area located there. It is clear from Ms Roberts’ affidavit that she does not regard the ground floor area as the ‘only one registered office area located inside the only building on the premises.’ However, as noted above, the address of the Registered Office does not specify any particular floor. I do not accept the proposition that delivery to the first floor reception desk is required in this instance for it to constitute service at the Registered Office.
It follows that the ground floor of the building forms part of the Registered Office of the defendant.
Therefore, leaving the Second Statutory Demand and the Second SD Affidavit with a person at the location where it was left, inside the ground floor of the building, was leaving those documents at the Registered Office of the defendant. In circumstances where Mr Moffat was asked if he could give the documents to Veronica, and he said he could, and then took them, that is leaving the documents at the Registered Office of the defendant.
The terms of s 109X(1)(a) of the Act are clear: in this instance, it is service by leaving the document at the company’s registered office that is relied upon. The Act does not contain any qualification of that:[60] it should be noted that s 109Y of the Act, which had provided that service is taken to be effected unless the contrary is proved, has not been part of the Act for many years. That concept effectively applies in the case of service by post, as the presumptions of service by post created by s 29(1) of the Acts Interpretation Act 1901 (Cth) and s 160(1) of the Evidence Act 2008 (Vic) apply unless the contrary is proved (in the former) or evidence sufficient to raise doubt about the presumption is adduced (in the latter). It is clear from cases such as Palifilex and SV Steel, as cited above, that all that is required is that the document to be served be left at the registered office of the company.
[60]Palifilex, [26].
There is a clear distinction in the authorities between ‘non-delivery’ and ‘non-receipt’ when it comes to service of statutory demands. It is non-delivery which must be established if contending that service has not been effected: non-receipt is not sufficient.[61] Accordingly, Ms Roberts’ evidence that she did not receive the Second Statutory Demand is not evidence of non-delivery.
[61]Assaf Text, paragraph [3.58] and the citations referred to therein.
The defendant made several submissions to the effect that service had not occurred because serving the Second Statutory Demand was an abuse of process. It seems to me that that is a separate question: it is not that service has not been effected, but that service should be disregarded due to there being an abuse of process. That is the way it is expressed in SV Steel, such that this is a basis for refusing relief in appropriate circumstances.[62] That issue does not form part of the Preliminary Question or its consideration, and I make no findings in that regard.
[62]SV Steel, [31].
Conclusion
It follows that the Preliminary Question should be answered as follows: Yes, the Second Statutory Demand and the Second SD Affidavit were served on the defendant by them being left at the defendant’s registered office.
Given that this proceeding is likely to continue, it is important that I state the following. This decision does nothing more than answer the Preliminary Question: it does no more than find whether service of the Second Statutory Demand and the Second SD Affidavit was effected. In particular, this decision does not concern any of the following:
(a) whether the Second Statutory Demand and the Second SD Affidavit were received by the defendant;
(b) the validity of the Second Statutory Demand;
(c) the validity of the Second SD Affidavit; and
(d) whether serving the Second Statutory Demand was an abuse of process.
I will list the proceeding before me for 10 June 2020 for directions as to the further conduct of the proceeding, as well as for orders to be made following delivery of these reasons, including as to costs.
0
1
0