In the matter of St George Bank - A Division of Westpac Banking Corporation ABN 33 007 457 141

[2015] NSWSC 2052

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of St George Bank – A Division of Westpac Banking Corporation ABN 33 007 457 141 [2015] NSWSC 2052
Hearing dates:	27 April 2015
Date of orders:	27 April 2015
Decision date:	27 April 2015
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	Application to set aside judgment dismissed.
Catchwords:	CORPORATIONS – winding up – creditor’s statutory demand – application to set aside statutory demand – where statutory demand defective – where order made setting demand aside – application to set order aside – where application to set aside statutory demand duly served on creditor at address specified in demand – held, no reason to set order aside.
Legislation Cited:	(Cth) Corporations Act 2001, s 459H, s 459J
Category:	Principal judgment
Parties:	St George Bank – A Division of Westpac Banking Corporation (plaintiff/respondent) Michael Jon Hammer (defendant/applicant)
Representation:	Counsel: M Pike (plaintiff/respondent) M Pytellek (assisting defendant/applicant)   Solicitors: Kemp Strang (plaintiff/respondent)
File Number(s):	2014/94441

Judgment (ex tempore)

1. HIS HONOUR: On or about 11 March 2014, the solicitors for the plaintiff St George Bank Limited received from the defendant Michael John Hammer a creditor's statutory demand dated 7 March 2014 addressed to St George Bank alleging that the bank (or possibly its chief executive officer) owed the defendant $4,000,000, and purporting to require payment of that sum within seven days.

2. Paragraph 6 of the creditor's statutory demand specified the address for service upon the creditor of any application to set aside the demand as Michael John Hammer of 768 Friday Hut Road, Possum Creek, NSW 2479. The demand was apparently signed by Mr Hammer and dated 7 March 2014. It was accompanied by the requisite affidavit which stated "Affirmed by Michael John Hammer on 7 March 2014 at Bangalow, New South Wales,” in the presence of someone who has signed as Wayne Ward. As it transpires, it appears that Mr Hammer was not in New South Wales or at Bangalow on 7 March 2014. It is not apparent whether Wayne Ward is a Justice of the Peace or other person authorised to attest affidavits and administer oaths in New South Wales.

3. The demand is defective for many reasons on its face. In paragraph 4, it allows only seven days for compliance, whereas the prescribed form requires 21 days for that purpose to be allowed.

4. By an application filed on 28 March 2014, the plaintiff sought an order setting aside the demand pursuant to (Cth) Corporations Act 2001, s 459H and s 459J. The affidavit of David Babby sworn 7 April 2014 proves that the application and affidavit were left for the defendant at 768 Friday Hut Road, Possum Creek (the address for service recorded in the demand) on 28 March 2014.

5. Numerous cases establish that where a creditor's demand specifies an address for service as it is required to do so, service may be effected by posting the application to or leaving the application at that address, and that personal service is not required. This is understandable enough, given the serious consequences that flow from not making and serving an application to set aside a demand within the 21-day period.

6. The application came before the Court on a number of occasions. On 8 April 2014, directions were made for the plaintiff to file any evidence in reply by 24 April, and for the defendant to file any further evidence by 1 May. The proceedings were adjourned to 5 May, the plaintiff to notify the defendant of the orders made that day.

7. On 5 May, there was no appearance on behalf of the defendant and the proceedings were adjourned to 26 May. Directions were made permitting the defendant to serve any material in reply and requiring the plaintiff to notify the defendant of the orders made by e-mail to [email protected].

8. On 26 May 2014, the proceedings were referred by the Registrar to me for hearing and, in the absence of the defendant, who did not appear, the Court ordered that the statutory demand be set aside and that the defendant pay the plaintiff's costs as assessed in the sum of $12,500.

9. The evidence before the Court on that occasion included e-mails sent to Mr Hammer's e-mail address on 2 May, 5 May and 23 May giving notice of the directions that had been made and its various adjournments. Mr Hammer received these e-mails, or at least some of them, because on 19 April 2014 he sent an e-mail to Mr Pike, the solicitor at Kemp Strang, forwarding an e-mail sent three days earlier, apparently from Odessa in the Ukraine, asserting that he had been travelling in Europe for the past month and was now in Odessa, Ukraine, "and just received your notice of Supreme Court proceedings. Please allow me an extra three weeks for me to return to Australia to enable me to file and forward affidavit material to you. Please send all future correspondence to my Hawaii address."

10. The next e-mail of 2 May from Mr Pike stated that the bank was happy to accommodate his request for an additional three weeks, and the directions made accommodated that. Mr Hammer did not respond. A further e-mail was sent on 5 May, giving notice of the adjournment to 26 May; and a further e-mail was sent on 23 May, giving notice that no reply had been received and that it was intended to have the matter referred to the judge on 26 May for determination.

11. As it seems to me, the Bank’s application had to succeed, if for no other reason than the reference to seven days in the statutory demand as opposed to the 21 days which the prescribed form requires, and additionally because it is as plain as can be that there was a genuine dispute as to whether the debt existed. The Court was not required to determine whether or not the debt existed, but only whether there was a genuine dispute. It was for those reasons that the orders were made setting aside the statutory demand last year.

12. Now, by Notice of Motion filed on 13 March 2015, Mr Hammer seeks an order setting aside the 2014 orders. In support of that application, he says that he was not in Australia at the time, and points to evidence that he departed for the United States on 5 March 2014 and returned to Australia on 25 November 2014.

13. Amongst other things, that falsifies the jurat in the affidavit verifying the demand, which purports to have been sworn at Bangalow at a time when he was overseas. In any event, as it seems to me, a person who issues a creditor's statutory demand, specifies an address for service on it, and then leaves the jurisdiction and does not return, cannot complain if the application is duly served at the address for service within time.

14. In those circumstances. it seems to me there is absolutely no reason for setting aside the order that was made.

15. First, it was duly served; secondly, despite what Mr Hammer now says, his e-mail correspondence of last year shows that he was aware of the application in April of last year; and, thirdly, there is no tenable defence to the application, because of the patent defects in the demand and the fact that it is clearly the subject of a genuine dispute.

16. The Court therefore orders that the Notice of Motion be dismissed, and that the defendant pay the plaintiff's costs of the motion assessed in the sum of $4,400.

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Decision last updated: 26 February 2016