Intelogent Pty Ltd v Onthego Group Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Intelogent Pty Ltd v Onthego Group Pty Ltd [2021] FCA 257

File number(s): ACD 10 of 2021
Judgment of: FARRELL J
Date of judgment: 16 March 2021
Date of publication of reasons: 26 March 2021
Catchwords: CORPORATIONS – Application for winding up on ground of insolvency – hearing of separate question of whether there was failure to comply with statutory demand within timeframe under s 459F of the Corporations Act 2001 (Cth) –– whether statutory demand was served pursuant to s 109X of the Corporations Act and/or s 28A of the Acts Interpretation Act 1901 (Cth) – where statutory demand was complied with within the timeframe under s 459F – application dismissed
Legislation:

Acts Interpretation Act 1901 (Cth) ss 28A, 29

Corporations Act 2001 (Cth) ss 5C, 109X, 146, 459C, 459F, 459G, 467

Corporations Law (Cth) (repealed) ss 109X, 109Y, 220

Evidence Act 1995 (Cth) s 160

Cases cited:

Australian Solar Electrics Pty Ltd v IPD Group Ltd [2012] FCA 786

Deputy Commissioner of Taxation v Starpicket Pty Ltd [2012] FCA 1196; (2012) 212 FCR 578

Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd [2005] SASC 48; (2005) 188 FLR 373

Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542

Players Pty Ltd v Interior Projects Pty Ltd (1996) 133 FLR 265; (1996) 20 ACSR 189

Polstar Pty Ltd v Agnew [2007] NSWSC 114; (2007) 208 FLR 226

Rochester Communications Group Pty Ltd v Lader Pty Ltd [1997] FCA 189; (1997) 143 ALR 648

Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 239 FLR 339

Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 43
Dates of hearing: 15–16 March 2021
Counsel for the Plaintiff:   Mr J Larkings
Solicitor for the Plaintiff:  Mills Oakley
Counsel for the Defendant:   Mr N Oram
Solicitor for the Defendant:  McInnes Wilson Lawyers
Solicitor for the Supporting Creditor Ms C Noble

ORDERS

ACD 10 of 2021
BETWEEN:

INTELOGENT PTY LTD ACN 612 666 752

Plaintiff
AND:

ONTHEGO GROUP PTY LTD ACN 159 056 087

Defendant
OTHER:

GMWEB PTY LTD ACN 612 564 191

Supporting Creditor

ORDER MADE BY:

FARRELL J

DATE OF ORDER:

16 MARCH 2021

THE COURT ORDERS THAT:

1.The originating process dated 25 February 2021 is dismissed.

2.The plaintiff pay the defendant’s costs of the proceedings.

3.The hearing listed at 2.15 pm on Thursday, 18 March 2021 be vacated.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

FARRELL J:

INTRODUCTION

  1. On 25 February 2021, Intelogent Pty Ltd (plaintiff) lodged an originating process, being an application for winding up on the ground of insolvency. 

  2. The plaintiff claimed that Onthego Group Pty Ltd (defendant) had failed to comply with a statutory demand dated 2 February 2021 which it said that it served on the defendant (together with an accompanying affidavit affirmed by Jesse…

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Details
Case
[2021] FCA 257
Decision Date

CaseChat Overview and Summary

The case of Intelogent Pty Ltd v Onthego Group Pty Ltd involved a winding up application filed by Intelogent against Onthego Group, alleging insolvency. The Federal Court was tasked with deciding whether Onthego Group failed to comply with a statutory demand within the required timeframe under s 459F of the Corporations Act 2001. The core legal issues centred around whether the statutory demand was properly served and whether the demand was met within the stipulated period.

The court addressed the issue of service under s 109X of the Corporations Act and s 28A of the Acts Interpretation Act 1901. Intelogent argued that the statutory demand was deemed served upon posting, in line with s 28A, and that this method of service was sufficient. Onthego Group contended that s 109X exclusively governed service on companies, thereby excluding the applicability of s 28A. The court found that s 109X, while providing a specific method of service, does not exclude the general service provisions of s 28A. This reasoning aligns with the interpretation in Polstar, where it was held that service can be deemed effective if made in a way contemplated by either s 109X or s 28A. As the statutory demand was served on 10 February 2021 and the demand was satisfied on 1 March 2021, the court concluded that the statutory demand was met within the required timeframe, and no presumption of insolvency arose.

The court dismissed the winding up application, as the statutory demand was satisfied within the requisite period. The court also ordered that Intelogent pay Onthego Group's costs of the proceedings. The hearing scheduled for 18 March 2021 was vacated as a result of the dismissal.

Orders

Orders of the court

1. The originating process dated 25 February 2021 is dismissed.

2. The plaintiff pay the defendant’s costs of the proceedings.

3. The hearing listed at 2.15 pm on Thursday, 18 March 2021 be vacated.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The plaintiff claimed that 10/15 Darling Street was the defendant’s “head office” as at 3 February 2021 and ss 28A(1)(b) and 29 of the Acts Interpretation Act 1901 (Cth) apply so that service on the defendant was deemed to have been effected at the time a letter would be delivered in the ordinary course of post, unless the contrary is proved. Mr Spencer, who was, as at 3 February 2021, one of two directors of the defendant and its managing director says that the statutory demand and its accompanying affidavit first came to his attention in the afternoon of 10 February 2021 when he found it with mail left for him on his desk at the defendant’s office on the upper mezzanine floor of 10/15 Darling Street.EVIDENCE The following evidence was read:(a)For the plaintiff:(i)affidavits affirmed by Mr Baird on 25 February 2021 (save for [5] and [6]) and on 12 March 2021. The plaintiff was not legally represented when the affidavit affirmed on 25 February 2021 was executed by Mr Baird and it was not witnessed. Mr Baird gave evidence, which was not challenged, that [1]-[4] and [7]-[8] of that affidavit are true and correct. (ii)an affidavit of Sonia Baird affirmed on 12 March 2021 (save for [7] and [9]-[14]); and(iii)admitted subject to relevance, an 11 page document obtained from the Australia Post website concerning domestic delivery updates.(b)For the defendant: (i)affidavits affirmed by Mr Spencer on 8 March 2021, save for the second sentence of [8], [19] and annexure M, [26] and annexure O, and, for the purpose of this application, [29] and [37]; 12 March 2021 lodged at 12.28 pm; 12 March 2021 lodged at 4.57 pm; and 15 March 2021 limited to [18] and annexure F; and(ii)an affidavit of Christopher Morgan sworn on 12 March 2021. These matters are conceded by the defendant:(a)At all relevant times, the defendant’s registered office according to records maintained by the Australian Securities and Investments Commission (ASIC) was Unit 4B, 69 Darling Street, Mitchell in the Australian Capital Territory. That property was vacated by the defendant by December 2020.(b)On 2 February 2021, Mr Baird put the statutory demand and accompanying affidavit in an express post envelope addressed to the defendant at 10/15 Darling Street and marked to the urgent attention of “Mick Spencer”. Mr Baird paid postage and posted the express post envelope, which had a tracking number attached to it. (c)The express post envelope was delivered at a roped off roller door entrance to the factory operated by OTG Labs Pty Ltd on the ground floor of 10/15 Darling Street at 12.39 pm on 3 February 2021. It is Mr Baird’s evidence that he knew that Unit 4B, 69 Darling Street had been vacated by the end of December 2020. He claims that 10/15 Darling Street was the “head office” of the defendant as at February 2021. He relies on: (a)A posting on the “OTG Custom Apparel” Facebook page that, on 19 November 2020, contained two references to the defendant’s new address being advertised as 10/15 Darling Street. (b)A message posted by Mr Spencer on his public Instagram page “OTG Custom Apparel” on or about 5 December 2020: mick_spencer – Unreal work @mad_murals for this design and spray, promoting #AussieMade and #WomenInSport in our craft new HQ showroom mural … can’t wait til the place is done. #2021 #newdigs @onthego_sports.(c)An email which Mr Spencer sent to Mr Baird on 8 December 2020 at 5.19 pm stating that: “We changed our address recently, and this changed the internet IP Address. Our new IP Address is: [redacted]”. (d)On 29 January 2021, Mr Baird visited the contact page at the website “onthegosports.com.au” to verify the new address, and it was shown as 10/15 Darling Street under the title “OTG HQ Canberra”.(e)The fact that he observed that there was no one at Unit 4B, 69 Darling Street when he visited on 2 February 2021 and all signage of the defendant had been removed.

Decision

Reasons for decision

Having regard to these findings it is not necessary for me to determine whether or not the plaintiff was, in fact, a creditor when the winding up application was filed and served on the defendant.CONCLUSION The separate issue concerned whether the defendant failed to comply with the statutory demand within the timeframe required by s 459F of the Corporations Act.As the statutory demand and accompanying affidavit were served on the defendant on 10 February 2021 and the demand was satisfied in full on 1 March 2021, the statutory demand was satisfied within the timeframe required by s 459F and no presumption of insolvency arises under s 459C(2)(a) of the Corporations Act. As the originating process relied on a failure to pay within the required timeframe, the application should be dismissed with costs.

Ratio Decidendi

Legal Principle Established

The argument was rejected by Barrett J in Polstar at [14]-[16] where he said with reference to the intersection of s 109X and s 28A:14 The co-existence of these provisions raises questions as to their interaction. A “company” registered as such under the Corporations Act is a “body corporate”: see s.119. Can it be said that s.109X, because it deals specifically with service on such a “company”, excludes the operation of s.28A in relation to service on that species of “body corporate” that such a company is?15 I am of the opinion that s.109X does not impliedly exclude the operation of s.28A in such a case. Section 109X is not a code regarding service on a company. By providing for specific methods of service on a company, it is facultative, not mandatory. I refer, in that connection, to the decision of Young J (as he then was) in Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542. Section 109X is thus a provision of the same kind as the provision of Commonwealth taxation legislation considered by McDougall J in Deputy Commissioner of Taxation v Keck (2006) 63 ATR 310. That provision used the words “the Commissioner may give the person a notice under section 222AOE by …”. His Honour held that this provision was merely facultative and did not prevent the Commissioner giving a notice of the relevant kind in some manner other than that specified in the provision; also that s.28A of the Acts Interpretation Act made available to the Commissioner some such other manner of giving the notice. In Deputy Commissioner of Taxation v Nercessian [2006] ATC 4693, Santow JA (with whom Mason P and McColl JA agreed) expressed a “provisional view” corresponding with that taken by McDougall J.16 The case before me warrants the same reasoning. Section 109X makes available (but does not make exclusive or mandatory) a particular mode of service by post upon the type of “body corporate” that is a “company” as defined by the Corporations Act. It does so, moreover, “[f]or the purposes of any law”, not just for the purposes of the Corporations Act. Section 28A, in the form made applicable to the interpretation of the Corporations Act by its own s.5C, makes available (but does not make exclusive or mandatory) a particular mode of service by post upon bodies corporate generally, including those of them that are “companies” as defined by the Corporations Act. It follows, in my view, that when a question of the sufficiency or effectiveness of service for the purposes of s.459G of the Corporations Act arises and that question relates to purported service by post on a “body corporate” that is a “company”, service must be held to be sufficient and effective if made in a way contemplated by either of the provisions. I am persuaded by Barrett J’s reasoning. In light of s 5C of the Corporations Act I do not consider that the mere fact that s 109X remained in the same form (save for the extraction of subsections (4) and (5)) in the Corporations Act when other interpretive provisions in Div 8 of Part 1.2 were removed is a sufficient basis to overcome the apparent intention of the enactment of s 5C at a time when the Corporations Law regime was being removed from the States’ legislative ambit.