Marx Land Holding Pty Ltd v Stewart

[2011] QSC 231

SUPREME COURT OF QUEENSLAND

CITATION:

Marx Land Holding Pty Ltd v Stewart and Anor [2011] QSC 231

PARTIES:

MARX LAND HOLDINGS PTY LTD
ACN 115 279 546
(applicant)
v         
ALLEN RUTHERFORD STEWART
(first respondent)       
PAMELA MAY STEWART
(second respondent)

FILE NO:

BS 6154 of 2011

DIVISION:

Trial

PROCEEDING:

Application

DELIVERED ON:

27 July 2011

DELIVERED AT:

Brisbane

HEARING DATE:

27 July 2011

JUDGE:

Fryberg J

ORDERS:

Application is dismissed with costs.

CATCHWORDS:

Corporations – Winding up – Winding up in insolvency –Statutory demand – Application to set aside demand – For defect or some other reason – Technical defect – affidavit – substantial compliance with form  

Corporations Act 2001 ss 459E, 459J
Uniform Civil Procedure Rules 1999 rr 1.7, 5.2

Victor Tunevitsch Pty Ltd v Farrow Mortgage Services Pty Ltd [1994] TASSC 121; (1994) 117 FLR 330

COUNSEL:

B Borhani (director) for the applicant

S W MacDonald (solicitor) for the respondent

SOLICITORS:

A W Bale & Son for the applicant

MacDonald Law for the respondent

HIS HONOUR:  This is an application to set aside a statutory demand.  The applicant company is represented by a Director by leave.

It submits that the demand should be set aside under section 459J of the Corporations Act 2001.  That section provides that on an application under section 459G which today's application is, the Court may set aside the demand if it is satisfied that (a) because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or (b) there is some other reason why the demand should be set aside.

The applicant relies on paragraph (a) of that provision on the basis that the demand has two defects, the first being that it is not accompanied by the affidavit to which it refers and the second being that the document which did accompany it was not an affidavit.

The demand is dated the 22nd of June 2011.  Paragraph 3 of the demand says, "Attached is the affidavit of Shane William McDonald dated the 22nd day of June 2011 verifying that the amount is due and payable by the company."

The demand was accompanied by an affidavit dated the 23rd of June 2011.  On behalf of the company, the Director Mr Borhani submits the demand shows that the intention was that it be accompanied by a different affidavit from the one which did accompany it.

I reject that submission.  It seems to me much more likely that this was simply a typographical error or that, at the time the demand was typed, it was intended that the demand be accompanied by an affidavit of the same date but in the event the affidavit was not made until the following day.  In other words, I conclude that the affidavit which accompanies the demand is the one to which the demand intends to refer. 

In any event, it seems to me that if that is a deficiency in the demand then it is not one which will result in substantial injustice unless the demand be set aside.  There is simply no evidence to suggest that the incorrect dating of the demand, if that is what it was, has caused any injustice to the company.

As to the alternative limb of the argument, namely, that the accompanying document was not an affidavit because there was no reference in the document identifying it as an affidavit, that is simply not correct.

At the foot of the document there are the words "affidavit accompanying statutory demand".  The affidavit purports, on its face, to be sworn by a deponent.  Those matters, clearly, identify it as an affidavit, not as Mr Borhani suggested as a statutory declaration.  Consequently the defect in the demand that is suggested is not a defect at all.  In any event, it is not one which could cause substantial injustice.

In the alternative, it was submitted that there was some other reason why it should be set aside and reference was made to the decision in Victor Tunevitsch Proprietary Limited v Farrow Mortgage Services Proprietary Limited (1994) 117 FLR 330.

The evidence before me, however, does not identify any other reason for the setting aside nor do the submissions which have been made orally.

In the further alternative, the company submitted that even if the demand is not to be set aside for the reasons already mentioned, the affidavit does not comply with the rules. Consequently it is not an affidavit, it is submitted, which answers the description in section 459E(3)(b).

The line of reasoning is this. Section 459E(3)(b) provides that the affidavit must comply with the rules. Rule 5.2 of the Rules states that an affidavit accompanying a statutory demand must be in form 7 and state the matters mentioned in that form and must not state a proceeding number or refer to a Court proceeding in the heading.

The affidavit is substantially in accordance with the form.  The arguable departures from the form consist of the heading on the affidavit, “Supreme Court of Queensland” with provision for a statement of the registry and the number and the words, "In the matter of Marx Land Holdings Proprietary Limited" with the ACN.  That form of heading is taken from form 7 and, in fact, seems to comply with form 7.  Those words are in the form.

The confusion seems to arise from the fact that halfway through the form the words, "Affidavit accompanying statutory demand" appear, which have not been repeated in the demand delivered in this case.

That does not, in my judgment, amount to non-compliance with the form but even if it did, the case would be covered by rule 1.7 which provides that it is sufficient compliance with the rules in relation to a document that is required to be in accordance with a form if the document is substantially in accordance with the form.  That rule covers this case and would cover any deficiency if I be wrong about the fact that there is no deficiency.

That, I think, covers all of the arguments that were submitted on behalf of the company.  I record that it was not submitted that the company had any genuine dispute about the amount owing nor that there was any offsetting claim.  It follows that the application must be dismissed.

...

HIS HONOUR:  The respondent seeks an order for costs; the applicant submits that each party should bear their own costs having regard to the nature of the application and the material. 

The prima facie rule is that costs follow the event.  There is nothing in the circumstances of the present case which would warrant departure from that rule.  Consequently the application is dismissed with costs.