Montt Capital Pty Ltd v MBF Consulting Pty Ltd - [2004] WASC 146

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: MONTT CAPITAL PTY LTD -v- MBF CONSULTING PTY LTD [2004] WASC 146

CORAM: MASTER NEWNES

HEARD: 23 JUNE 2004

DELIVERED : 1 JULY 2004

FILE NO/S: COR 95 of 2004

BETWEEN: MONTT CAPITAL PTY LTD (ACN 100800646)
Applicant
AND
MBF CONSULTING PTY LTD (ACN 092423704)
Respondent

Catchwords:

Corporations - Application to set aside statutory demand - Served outside 21 days - Incorrect address for service on statutory demand - Whether document therefore not constitute statutory demand - Turns on own facts

Legislation:

Corporations Act2001 (Cth), s 459E, s 459G, s 459J

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Ms L Horwood
Respondent: Mr C V Eastwood

Solicitors:

Applicant: Smyth & Thomas
Respondent: Cameron Eastwood

Case(s) referred to in judgment(s):

Daewoo Australia Pty Ltd v Suncorp Metway Ltd [2000] NSWCA 35
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Kalamunda Meat Holdings Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 51 FCR 4469
Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2002] NSWCA 329
Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2002] NSWSC 402
Re Ad‑A‑Cab Holdings Pty Ltd, unreported; SCt Qld (McKenzie J); 25 October 1996
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1977) 76 FCR 452
Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226

Case(s) also cited:

Centurion Constructions Pty Ltd v Beca Developments Pty Ltd (No 2) (1996) 14 ACLC 312
N T Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 16 ACLC 957

MASTER NEWNES: This is an application by the plaintiff to set aside a statutory demand served on it by the defendant. The application is opposed by the defendant on the ground that the application and supporting affidavit were served outside the 21‑day period prescribed by s 459G of the Corporations Act2001 (Cth).
The statutory demand and the accompanying affidavit were served on the defendant on 25 March 2004. The defendant was therefore required to file and serve any application to set aside the statutory demand, and the affidavit in support of that application, by 15 April 2004. While those documents were filed on 14 April 2004, they were not served until 24 April 2004, when they were served on the managing director of the defendant.
The plaintiff says that the statutory demand contained an incorrect address for service of the defendant. The address for service on the demand was Unit 19, 61 Smith Street, Highgate. The plaintiff says there is no such address and the process server who was engaged to serve the application and affidavit was unable to find the address to serve the defendant. Accordingly, service was finally effected on the managing director of the plaintiff.
Affidavits have been filed on behalf of the defendant directed to demonstrating that the address for service in the statutory demand was correct. Equally, affidavits have been filed on behalf of the plaintiff directed to demonstrating that that is not the case. The problem seems to have come about because the building in question is on the corner of Broome and Smith Streets in Highgate and its configuration is such that what the defendant describes as "61 Smith Street" might well be thought to be 61 Broome Street. That is because the building has frontage onto both Broome Street and Smith Street and the street number appears on the Broome Street frontage.
The evidence on behalf of the defendant, however, was that that is the address it has been using for some time and that it has received visitors and mail directed to 61 Smith Street without difficulty. A person who has visited the defendant's premises on business has sworn an affidavit saying that, having been given that address, he had no difficulty in finding it.
It does not seem to me, however, that, in the end, anything turns on that issue. Even if it were the case that the address for service was wrong, I do not consider that that would affect the validity of the demand or provide a ground upon which it should be set aside.
Section 459G of the Corporations Act provides:
"(1)A company may apply to the Court for an order setting aside a statutory demand served on the company.
(2)An application may only be made within 21 days after the demand is so served.
(3)An application is made in accordance with this section only if, within those 21 days:
(a)an affidavit supporting the application is filed with the Court; and
(b)a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company."
In David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, it was held that the Court had no power to extend the period within which an application may be made under s 459G. If an application for an order setting aside a statutory demand is not filed and served within 21 days after service of the demand, there is no application before the Court under s 459G. The powers of the Court to set aside the statutory demand do not arise. The Court acknowledged that, in some circumstances, the Act may operate harshly, but said that "that is a consequence of the legislative scheme which has been adopted to deal with perceived defects in the pre‑existing procedure in relation to notices of demand".
It is not in issue that, in the present case, the application to set aside the statutory demand was not made within the 21‑day period. On the evidence, however, that was not because of any difficulties in connection with the address for service stated in the statutory demand. It appears from the affidavit of the process server charged with the responsibility of serving the application and supporting affidavit that he first attempted service on 17 April 2004. It was then he discovered the alleged problem with the address for service. That was, of course, two days after the 21‑day period expired. There is no evidence that any attempt was made to effect service within the 21‑day period.
It was submitted on behalf of the plaintiff that the alleged error in the address for service had the consequence that the demand served was not a statutory demand within the meaning of s 459E. Such a demand must, pursuant to s 459E(2)(e), be in the prescribed form. The relevant form is Form 509H. That form requires the demand to include an address for service.
I do not accept that, even if it were the case that the address for service was wrong, the demand that was served was not a statutory demand under s 459E.
In the Corporations Act, "statutory demand" means "a document that is, or purports to be, a demand served under section 459E": s 9. In Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226, Lockhart J said, at 238:
"There may, however, be cases where deficiencies in the form of demands are so fundamental that the demands are incapable of assuming the description of statutory demands within the meaning of the Corporations Law ...
Assume, for example, a statutory demand that fails to follow critical parts of a prescribed form by not informing the company that the consequence of failing to comply with the demand is that the creditor may rely upon that failure as a ground for an application to wind up the company; or a demand may fail to inform the company that it may apply under section 459G to set the demand aside. The company may wish to lead evidence before the Court that it assumed the document was simply a demand for payment, but it had no idea of the consequences under the Corporations Law of failure to comply with it. It would be odd indeed if the court could not take this evidence into account in deciding whether to exercise its discretion to order the winding up of a company. That may be a case (I do not say that it is or is not) of a demand that is so deficient as to be incapable of answering the description of a statutory demand within the meaning of the Corporations Law."
In that case, the defect was said to be an error in the description of the debt and its amount. His Honour went on at 241:
"I do not accept, however, the argument of counsel for the applicant that, because of the nature and extent of its defects, the demand does not follow the description of a statutory demand for the purposes of Pt 5.4 of the Corporations Law. The demand purports to follow the prescribed form of statutory demand, but falls into error in its description of the monies claimed to be due by the applicant. Nevertheless, it purports to be a statutory demand."
In Kalamunda Meat Holdings Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 51 FCR 4469, certain of the prescribed notes had been omitted from the statutory demand. Hill J concluded that the document nevertheless purported to be a statutory demand in that it professed or claimed to be such, albeit it was not in precisely the prescribed form, and that it was a statutory demand under s 459E. The omission of the words was a defect in the ordinary sense of the word. His Honour accepted that there may be occasions where there is an omission of so many words that, rather than seeing the matter as one involving a defect, the correct answer would be that the notice was not one which purported to be a statutory demand at all. But his Honour went on to say that in such circumstances the Court would have no power to set aside such a demand. The Court has no power to set aside a demand which does not purport to be a statutory demand. Such a document would simply have no legal force or effect under the Corporations Act. An application to set it aside would therefore be misconceived.
A misdescription in the address for service, as alleged in this case, would not, in my view, have the result that the demand does not meet the description of a statutory demand under the Act. The fact (if it be the fact) that in that respect it is not precisely in the prescribed form is not sufficient. It purports to be a statutory demand and it substantially conforms to the prescribed form; the defect is not so serious that the demand does not answer the description of a statutory demand.
That conclusion, it seems to me, is consistent with other cases where there have been deficiencies in the address for service. In Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2002] NSWSC 402, for instance, the insertion of a post office box address as the address for service was regarded as a defect in the statutory demand, although it was not sufficient in that case to cause the demand to be set aside under s 459J, as the company was nevertheless able to serve the application and affidavit in time. That decision was affirmed on appeal: Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2002] NSWCA 329. In Daewoo Australia Pty Ltd v Suncorp Metway Ltd [2000] NSWCA 35, the failure to specify an address within the State was regarded as a defect in the statutory demand, but on the facts no substantial injustice was caused within the meaning of s 459J. On similar facts to that case, the same conclusion was reached in Re Ad‑A‑Cab Holdings Pty Ltd, unreported; SCt Qld (McKenzie J); 25 October 1996.
In my view, therefore, even if the plaintiff were able to establish that the address for service in the statutory demand was incorrect, that would simply amount to a defect within the meaning of s 9 of the Corporations Act and, as an application to set aside the statutory demand and supporting affidavit were not served within the 21‑day period, the Court would have no jurisdiction to set aside the statutory demand by reason of such defect.
Accordingly, s 459J of the Act, on which counsel for the plaintiff sought to rely, has no application in this case. That provision applies only to an application under s 459G. As the current application was not served within time, it is not an application under s 459G.
I might go on to observe that, in any event, even if s 459J applied, there would be no basis to set aside the statutory demand pursuant to that provision.
Under s 459J(1)(a) no substantial injustice could be shown to have arisen by reason of the defect. As no attempt was made to serve the application and affidavit within the 21‑day period, the correctness or otherwise of the address for service in the statutory demand was irrelevant.
I do not consider that s 459J(1)(b) would have any application. In my view, the question of whether par (b) applies to a defect in a statutory demand has been concluded by the decision of the Full Federal Court in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1977) 76 FCR 452, where the Court held that a demand is only to be set aside by reason of a defect in it if a substantial injustice would otherwise be caused and that par (b) only applies to reasons for setting aside a demand other than a defect in the demand.
I consider that the application should be dismissed.