International Factors (Singapore) Pty Ltd v Speedy Tyres Pty Ltd
[1991] TASSC 62
•11 June 1991
Serial No 43/1991
List "A"
COURT: SUPREME COURT OF TASMANIA
CITATION: International Factors (Singapore) Pty Ltd v Speedy Tyres Pty Ltd [1991] TASSC 62; A43/1991
PARTIES: INTERNATIONAL FACTORS (SINGAPORE) PTY LTD
v
SPEEDY TYRES PTY LTD
FILE NO/S: CWU28/1991
DELIVERED ON: 11 June 1991
JUDGMENT OF: Cox J
Judgment Number: A43/1991
Number of paragraphs: 12
Serial No 43/1991
List "A"
File No CWU28/1991
INTERNATIONAL FACTORS (SINGAPORE) PTY LTD
v SPEEDY TYRES PTY LTD
REASONS FOR JUDGMENT COX J
11 June 1991
By petition dated and filed in this court on 7 February 1991 the petitioner sought the winding–up of the respondent company claiming that the latter was indebted to it in the sum of $46,725.64 in respect of which a Demand under s364 of the Companies (Tasmania) Code had been duly served on 6 August 1990 and not complied with. Further, the petitioner claimed that in the circumstances it was just and equitable that the company be wound up. After its issue, but prior to the petition coming on for hearing, the respondent company paid a sum of $17,222.60 to the petitioner, and the parties, agreeing that a substantial dispute existed in respect of the balance and not one appropriate to be resolved on a winding–up petition, the petition was, on its return date, dismissed by consent. Each party, however, sought to have the other pay its costs of and incidental to the petition.
The arguments raised a number of somewhat technical points, but at the end of the day the court has a discretion to make what order appears just in the circumstances.
On 1 January 1991 the Corporations Law came into force. By s601 it was provided:
"The provisions of this Law with respect to winding up do not apply to any body corporate the winding up of which was started before the commencement of this Chapter and:
(a)any such company is to be wound up in the same manner, and with the same incidents, as if this Law had not been enacted; and
(b)for the purposes of the winding up, the previous law of this jurisdiction corresponding to this Chapter is taken to remain in force."
By s85(1) of the Corporations (Tasmania) Act 1990 it is provided:
"This section provides for the national scheme laws of this jurisdiction to supersede the co–operative scheme laws, which are to continue to operate of their own force only in relation to –
(a) matters arising before the commencement of this section; and
(b) matters arising, directly or indirectly, out of such matters –
in so far as the national scheme laws do not deal with those matters."
By s87 thereof it is further provided:
"To the extent that a co–operative scheme law ceases to operate because of section 85 or 86, the law is taken for the purposes of the Acts Interpretation Act 1931 to have been repealed by this Act."
In the present case the petitioner issued a Demand under s364 of the Companies (Tasmania) Code. It was dated 3 July 1990 and served on the respondent on 6 August 1990. Subject to some criticisms of it to which I will return, it was an appropriate vehicle for the petitioner to employ to endeavour to recover a debt exceeding $1,000.00 then due, and a failure by the respondent to comply with it would have founded a petition for winding–up of the respondent company under the Companies (Tasmania) Code if issued prior to the commencement of the Corporations Law on 1 January 1991. The petitioner, for unexplained reasons, did not file its petition by that date but delayed its petition until 7 February 1991. By that stage, however, it could no longer rely on the repealed Act and as the petition was not made in accordance with the Corporations Law but expressly by reference to s364 of the previous Companies (Tasmania) Code, it was argued that it was fatally flawed and should have been, in any event, dismissed. In the Supreme Court of South Australia, Legoe J has held in similar circumstances that such a petition should be dismissed (Eurotile (Sales) Pty Ltd v Granefield Pty Ltd (1991) 4 ACSR 162).
It was also submitted that the Demand, having been issued claiming payment of a balance in Singapore dollars, was defective, and that it was likewise defective in that it failed to nominate a place of payment in Australia. It was also submitted that there was no evidence that the person who signed it was, as he purported to be, an authorised agent of the petitioner.
The Demand was in this form:
"DEMAND
SECTION 364 OF THE COMPANIES (TASMANIA) CODE
TO: SPEEDY TYRES PTY LIMITED
35 Bathurst Street
LAUNCESTON TAS 7250
INTERNATIONAL FACTORS (SINGAPORE) PTE (sic) LIMITED (hereinafter called ‘IFS’) hereby requires Speedy Tyres Pty Limited, a company duly incorporated under the Companies (Tasmania) Code and having its registered office at 35 Bathurst Street, Launceston in the State of Tasmania to pay to IFS of 460 Alexandra Road #18–00 PSA Building, Singapore 0511 after service of this demand the amount of $S46,725.64 due to IFS as assignee of the debts owed by Speedy Tyres Pty Limited to Enmaru Trading Company for goods sold and delivered, particulars whereof are as follows:–
Date of Amount of Amount Balance
Invoice Invoice Credited
$S $S $S
______ ________ ________ ________
30.6.89 38,843.78 28,494.88 10,348.90
16.8.89 36,376.74 NIL 36,376.74
Balance outstanding $S46,725.64
DATED: 3rd July 1990
............. (signed)
John William Lees
of Messrs. Clayton Utz,
Solicitors,
Level 23,
Tower Building,
Australia Square,
George Street,
SYDNEY. N.S.W. 2000
(Ref: 708175660145)
Solicitor for and duly authorised
agent of IFS
Section 364(1) of the Companies (Tasmania) Code, provides, inter alia, that the Court may order the winding up of a company if the company is unable to pay its debts.
Section 364(2) of the said Code provides, inter alia, that a company shall be deemed to be unable to pay its debts if it has for 3 weeks after the service of a Demand under the hand of a creditor or his agent thereunto lawfully authorised neglected to pay the sum demanded or to secure or compound for it to the reasonable satisfaction of the creditor.
70851.542"
In my view, there is no requirement that the amount of the debt be expressed in Australian currency. It was submitted that the decision of Pincus J in Re Ikin [1985] FCR 582 should be followed in this respect. His Honour was, however, concerned in that case with a Bankruptcy Notice and the ratio of his decision was that as s41(1)(a) of the Bankruptcy Act requires such a notice to be in accordance with the prescribed form which so far as is material requires the debtor "to pay the sum of $ so claimed", a demand for payment in a foreign currency does not comply with the form, the $ implicitly meaning Australian currency. I think that case is clearly distinguishable. The courts have power to entertain claims for and to give judgment in foreign currencies (Miliangos v George Frank (Textiles) Ltd [1976] AC 443), and I see no reason why a Demand under Company legislation where no specific form is provided cannot be made in a foreign currency.
I reject the contention that the Demand is defective because it does not nominate a place for payment in Australia. It has been said that if only 21 days are allowed before there is a deemed insolvency, it could scarcely have been intended by the legislature to allow 21 days to "satisfy an otherwise proper demand for payment at the farthest point from civilisation as soon as a demand for payment in Victoria" (Delaine Pty Ltd v Quarto Publishing Plc (1990) 3 ACSR 81). However, the Demand in this case, on a proper reading of it, in my view, gives the respondent the option of paying the petitioner itself in Singapore or its authorised agent whose address in Australia is precisely stated.
As to the argument that there is no evidence that Mr Lees was in fact the authorised agent of the petitioner, that, in my view, is not germane to the issue of costs. It may be that had the petition been heard and no such evidence been forthcoming thereat, no order for winding–up based on the Demand might have been made (R. v Pavanui Investments Pty Ltd (1986) 4 ACLC 607; Collins Bros. Stationers Pty Ltd v Zebra Graphics Pty Ltd (1986) 10 ACLR 267; Re Kieran Byrne Pty Ltd (1987) 12 ACLR 367) but the petition did not come on for hearing and it was unnecessary to advert to such requirements. I see no reason to infer an absence of authority from the fact that there is no such evidence at the stage where the petition is in effect aborted and the only issue is the question of costs.
Finally it was argued that the petition as filed in the court referred to a different sum to that comprised in the Demand, while the copy petition served on the respondent referred to the same sum as that in the Demand. The petition in court alleges that $A46,725.64 was owing at the date of its presentation and that the Demand for that sum served on 6 August 1990 had not been complied with. The Demand in fact sought $S46,725.64. The copy petition served on the respondent expressed both figures in Singapore currency, ie $S46,725.64. Clearly this is a clerical error, and as Singapore dollars are worth less than Australian dollars, the amount in the filed petition exceeds the amount of the debt demanded and, according to the affidavit verifying, then owing. Nevertheless, the petition alleged and the respondent had notice by way of Demand that a debt in excess of $1,000.00 was due. There was a failure over a period of three weeks or more to dispute the debt, or to pay or secure or compound it, and no reasonable explanation for that failure has been advanced. In those circumstances the difference in figures would not have been a bar to an order winding–up the company (In re Pardoo Nominees Pty Ltd [1987] Tas R 1; Re Fabo Pty Ltd (1989) 7 ACLC 19).
At the end of the day it can be said that the petitioner issued a valid and effective Demand under the former legislation and it was not complied with. The admitted later payment of $17,222.60 is clear evidence that the respondent was, up until the time of the petition and subsequent payment, indebted to the petitioner in a sum exceeding $A1,000.00, and subject to proof of the authority of Mr Lees to sign the Demand, could, at the time of its issue, have anticipated the grant of its petition under the Companies (Tasmania) Code. If the petition is invalid for the reasons advanced by Legoe J in Eurotile (Sales) Pty Ltd v Granefield Pty Ltd (supra), which I have no reason to doubt, the petitioner is nonetheless the luckless victim of transitional provisions which it would seem required it to issue and serve a fresh Demand after 1 January 1991. While it could be said that it and its advisers ought to have been aware of the change in the law, I think it would be wrong to penalise it by an order in respect of the respondent‘s costs merely because it embarked upon the wrong procedure, a procedure which nonetheless seems to have had the result that a substantial proportion of the debt has now been paid. On the contrary, now that the payment has been made, it has responsibly not sought to prolong these proceedings but to have them dismissed. In all the circumstances, I consider it just that the respondent, whose default in payment occasioned these proceedings, should pay the petitioner’s costs of and incidental to the petition.
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