Nutri-Care Ltd v ACN 080 633 754 Pty Ltd

[2009] SASC 72

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

NUTRI-CARE LIMITED v ACN 080 633 754 PTY LTD

[2009] SASC 72

Reasons of Judge Burley a Master of the Supreme Court

17 March 2009

CORPORATIONS

Application to set aside statutory demand - proceedings served outside business hours on 21st day after service of statutory demand - whether service required to be within business hours - Held: service effective if service takes place outside business hours.

Corporations Act 2001 S 459G, referred to.
David Grant & Co Pty Ltd v Westpac (1995) 184 CLR 265, applied.
Cornick Pty Ltd v Brains Master Corporation (1995) 60 FCR 565; S.V. Steel Supplies Pty Ltd v Palwizat (2007) 208 FLR 113, considered.

NUTRI-CARE LIMITED v ACN 080 633 754 PTY LTD
[2009] SASC 72

1. JUDGE BURLEY: This is an application to set aside a statutory demand based on the provisions of s459G of the Corporations Act.  The parties have agreed that the question of whether or not there was service of these proceedings within the relevant 21 day period is largely determinative of the application.

2. The statutory demand was issued on 22 December 2008 and was served upon the plaintiff on 26 December 2008.  That is a matter of agreement between the parties and is substantiated by the affidavit evidence.  All of the affidavits filed in this action have been treated as being before me for the purposes of this application.

3. The parties agree, correctly in my view, that the expiration of the 21 day period from 26 December 2008 occurred on 16 January 2009. The plaintiff alleges, and it has not been disputed, that copies of the application and the supporting affidavits were sent by facsimile transmission by the plaintiff’s solicitors to the defendant’s solicitors. The transmission commenced at 7.44 pm on 16 January 2009.

4. In addition to that, the plaintiff asserts, and it is not disputed, that the plaintiff’s solicitor placed copies of the application and affidavits in support in the mail slot at the offices of Messrs Belperio Clark, the defendant’s solicitors. Their office had been given in the statutory demand as being the address at which proceedings might be served. The placing of the documents in the mail slot occurred at approximately 8.15 pm on 16 January 2009.

5. Section 459G permits an application to be made for an order setting aside a statutory demand. The application must be both issued and served on the defendant/creditor within 21 days after service of the demand.

6. The point taken by the defendant on this application is that there has not been compliance with s459G because the proceedings were not served within the relevant 21 day period. It was the defendant’s contention that, in order to comply with s459G(3)(b) of the Corporations Act, the documents had to be served within business hours on 16 January. It was the plaintiff’s contention that as long as the documents were served on the calendar day, that is up to 12 midnight on the given day, there has been compliance with the section.

7. If the defendant is correct, it follows that the application must be dismissed because there must be strict compliance with the provisions of s459G. Both parties accepted that there is no ability to extend the 21 day period: cf David Grant and Co. Pty Ltd v Westpac (1995) 184 CLR 265.

8. Neither party was aware of any authority directly relevant to the point at issue on this application. Mr Coppola, counsel for the plaintiff, referred me to two cases dealing with service of a statutory demand. The first is Cornick Pty Ltd v Brains Master Corporation (1995) 60 FCR 565. In that case Whitlam J had to consider whether or not the service of a statutory demand could be effected on a given day outside office hours. His Honour came to the conclusion that there was no requirement under the legislation or the rules that service had to be effected within normal business hours.

9. The same conclusion was reached by Cullinane J in SV Steel Supplies Pty Ltd v Palwizat (2007) 208 FLR 113. Mr Coppola argued that by parity of reasoning the proper interpretation of s459G should be that service on the day (as opposed to within business hours) is sufficient. Having heard the arguments of both counsel I have come to the conclusion that it is appropriate to apply the same reasoning to the question of service of these proceedings.

10. The defendant’s contended that the documents must be served within business hours so that they would thereupon come to the attention of a person who might then take some action in relation to the documentation. I disagree with that submission. S 459G creates a strict regime according to which an application to set aside a statutory demand might be made. It would be somewhat draconian to add a further limit to the section and read it to mean that any relevant service had to take place within business hours.

11. In my opinion, a proper interpretation of s459G allows for service to be effected on a given day, the underlying feature of the requirement being that if it is served out of hours on a particular day, in this case the last day of the 21 day period, it will shortly come to the attention of someone who might react to the proceedings the following day or, if the 21st day happens to be a Friday, the following Monday. It is for that reason that I have concluded that the proceedings have been effectively served by the plaintiff in accordance with the requirements of s459G.

12. Counsel for the defendant indicated that, if I came to the conclusion that there had been effective service of the proceedings within the requirements of s459G, there was little he would wish to say in opposition to the application itself. The affidavits in support of the application disclose that the plaintiff accepts that there is a liability under a contract between the parties for the plaintiff to pay the amounts the subject of the statutory demand, but it was submitted that the plaintiff had established a genuine offsetting claim exceeding the amount of the statutory demand. In my opinion, the affidavits relied upon by the plaintiff clearly established a genuine offsetting claim. The affidavits of the defendant do not deal specifically with that aspect of the plaintiff’s claim.

13. Accordingly, I conclude that the application should be granted. There will be an order that the statutory demand dated 22 December 2008 be set aside.