Neodel v PRC

[2001] NSWSC 197

CITATION:	Neodel v PRC [2001] NSWSC 197
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 3098 of 2000
HEARING DATE(S):	05/03/2000
JUDGMENT DATE:	5 March 2001
PARTIES :	Neodel Pty Ltd T/A Bookaburra Books v PRC Publishing Ltd
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr B. Debuse for plaintiff Mr R. Beasley for defendant
SOLICITORS:	Marsdens for plaintiff Peter Cornelius & Partners for defendant
CATCHWORDS:	Corporations Law. Application to set aside statutory demand under s 459G of the Corporations Law. Whether failure to specify an address in Australia for payment is a reason for setting aside. - Held no substantial injustice and proceedings dismissed.
CASES CITED:	James v The Federal Commission of Taxation (1955) 93 CLR 631 Delalne Pty Ltd v Quarto Publishing (PLC) 3 ACSR at page 81. P H and J P Harding Pty Ltd (1986) 10 ACLC 365 at 366
DECISION:	Para 23

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

MONDAY 5 MARCH 2001

3098/00 - NEODEL PTY LTD T/A BOOKABURRA BOOKS v P R C PUBLISHING LTD

JUDGMENT

1 MASTER: This is an application to set aside a statutory demand under s 459G of the Corporations Law. The statutory demand was dated 16 June 2000 and claimed an amount of $211,055.50. The description of the goods in the schedule was:

"Being for goods sold and delivered by the creditor for the company between 14 January 1999 and 27 September 1999."

2   No point was taken about the time or the manner in which the application to set aside was taken. The affidavit in support of the application to set aside the statutory demand made some references to some problems with delivery, however on the evidence that was admitted before me on the application, there is no evidence which would allow me to quantify either any off-setting claim or any claim in diminution of the purchase price. Accordingly the matter has been debated before me in respect of the form of the demand itself and whether there are defects which might lead to it being set aside.

3   There are three points that are made in relation to the demand and they are:-

"(1) The address of payment.

(2) Inclusion of multiple debts.

(3) The signature on behalf of the creditor."

4   So far as the first matter is concerned, the demand refers to a debt being due to the creditor and gives an address in paragraph 1, 210 New Kings Road, London. Paragraph 3 is in accordance with the statutory form required and is in the form that the creditor requires the company within twenty-one days after service of the demand to pay to the creditor the amount of the debt.

5   In paragraph 6 an address for service is given in Australia but that is only in respect of the service of any application and an affidavit. Reliance was placed upon a decision of the High Court of Australia in James v The Federal Commission of Taxation (1955) 93 CLR 631, a decision which concerned bankruptcy notices.

6   The problem with the bankruptcy notice in that case was that it required the debtor to pay the debt at one particular place. In the judgments and in particular at page 639 there was reference to it being the duty of the debtor to seek out the judgment creditor and pay the judgment debt to the creditor if he is in Australia and the Court held that it was because of that ability to pay anywhere in Australia, that the restriction by the terms of the bankruptcy notice was too onerous to be effective.

7   Reference was also made to what was said at pages 641 and 642 of the judgment. That has also been considered by his Honour Young J in Delalne Pty Ltd v Quarto Publishing (PLC) 3 ACSR at page 81. In that case the s 364 notice did not give an address for payment. He referred to the decision of Master Mahoney in re P H and J P Harding Pty Ltd (1986) 10 ACLC 365 at 366 in which the Master held that a demand for payment out of the jurisdiction would not be within the section. That view was followed by Young J.

8 The present situation so far as the Corporations Law is concerned is that there is a somewhat greater degree of precision in the legislation than we were concerned about before. Section 459J(1) is in the following form:-

"459J(1) [Defect or other reason] On an application under section 459G, the Court may by order 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.

459J(2) [Mere defect] Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect."

9   In order to understand what the section means it is necessary to look at the definition of 'defect' in section 9. That definition is as follows:-

“"defect", in relation to a statutory demand, includes:

(a) an irregularity; and

(b) a misstatement of an amount or total; and

(c) a misdescription of a debt or other matter; and

(d) a misdescription of a person or entity;"

10 It is notable that the definition includes an irregularity. It seems to me that the prescription by the Corporations Law of the particular form of the demand and no provision being made in the form of the demand for the place in which payment is to be made, that the argument that applied before to section 364 and the Bankruptcy Act may not necessarily apply when considering the present legislation. It is not as though trade between Australia and England is something new. Parties engaged in such trade have been able to pay each other overseas without difficulty. I acknowledge the force of the fact that there may be some places where it might be difficult but rather than decide that particular point at this stage it seems to me that there is also the additional question as to whether substantial injustice would be caused.

11   The question is whether there would be a substantial injustice in requiring payment overseas to the creditor.

12   The orders in this case were placed on what the debtor well knew was the agent in New South Wales for the purposes of a foreign supplier with whom the debtor corresponded concerning the debt. There are in evidence various copies of orders and also statements from the creditor to the debtor. These clearly show the appropriate details for payment by way of Australian dollars to the bank accounts of the creditor in England. All appropriate details are provided. There would seem to me to be no substantial injustice in the requirement that payment in the circumstances of this case should be made in England and that only the English address of the creditor should be shown in the demand.

13   I turn to the second point which is the question of whether there are multiple debts or one debt. It is perfectly clear that under section 459E(2) requires the demand that relates to two or more debts to specify the total amount of the debts.

14   A reference to the prescribed form suggest that the demand must include a description of individual debts and state their amounts as well as state the total of those amounts. See Delta Beta Pty Ltd v Vissers, 20 ACSR 583 at 585.

15   The facts in this matter make it perfectly plain that there were in fact four shipments of books from England to Australia and there are four separate invoices in respect of these amounts. The case is somewhat different from Delta Beta Pty Ltd v Vissers where the nature of the debts was quite different. Here in this case, although perhaps they would be described as separate debts, they were all for goods sold and delivered.

16   Once again it is a matter of not finally deciding that there are more than one debt as on one view the fact that there are a series of transactions for goods sold and delivered might lead to just one indebtedness. But leaving that aside one can look at the question of whether there is substantial injustice.

17   It was submitted that, like the earlier point, there may be some other reason why the demand should be set aside. It is clear that if there is a defect in the demand sub-clause (a) of section 459J(1) will apply. Given the definition of “defect” to which I have referred in this case clearly the defect is in the demand itself.

18   The nature of the charges that have been made are well-known to the defendants. I have earlier referred to the statements which are in annexure L, which was a statement of 12 December 1999. It gives details of the invoices which no doubt are available and all those tally with the description of the period between which the debts are said to accrue as appears in the demand.

19   Those statements and others led to a letter from the debtor on 12 January 2000 in which there was a clear admission of the liability for payment, then explanation as to why payment has not been made and suggestions for placing the books elsewhere to sell.

20   In these circumstances there is clearly no substantial injustice. The debtor well knew what was being referred to, there being statements and invoices. No difficulty in respect of amounts was raised by the debtor at that stage other than the fact that they could not pay.

21   I return to the first point just to deal with one other submission and that related to whether or not there was some other reason why the demand should be set aside. It was suggested that the failure to provide an address in Australia was not a defect in the demand but was some other reason for setting the demand aside. I do not think this is correct because essentially the submission is that the demand itself should have specified some place in Australia for making a payment. Presumably that would be to some agent who is authorised to receive payment. That clearly would require an alteration to the prescribed form either I think most likely in paragraph 3. It seems to me therefore that it is in relation to the demand rather than for some other reason and therefore the question of substantial injustice must be considered.

22   The third point concerns the signature on the demand. The demand has been signed on behalf of the creditor by a gentleman who is described as 'executive chairman of the creditor'. The creditor is a company and in such a case has to be signed by a director or secretary or an executive officer of the corporation. The description uses the word 'executive chairman'. Certainly I would have thought that it would be sufficient for me to infer in the circumstances that the person would be an officer of the company particularly as he is described as an executive.

23   In the circumstances on the evidence before me I am satisfied that the demand was served and signed on behalf of the company. Accordingly I dismiss the summons and order the plaintiff to pay the defendant's costs.

o0o

Last Modified: 03/27/2001