R & R Consultants Pty Ltd v Deputy Commissioner of Taxation

[2006] NSWSC 1152

Reported Decision: (2006) 24 ACLC 1433

New South Wales

Supreme Court

CITATION:	R & R Consultants Pty Ltd v Deputy Commissioner of Taxation [2006] NSWSC 1152
HEARING DATE(S):	19/10/06
JUDGMENT DATE :	19 October 2006
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	White J
EX TEMPORE JUDGMENT DATE:	10/19/2006
DECISION:	Order that the amended originating process be dismissed with costs; note that the application originally made under s 459G is also dismissed by reason of the amendment made to the originating process and the dismissal of that originating process as amended.
CATCHWORDS:	CORPORATIONS – Winding-up – Statutory demand – Application to set aside statutory demand – Defendant served plaintiff with document purporting to be statutory demand – Document was a photocopy – Supporting affidavit was also a photocopy – Whether document was valid statutory demand – Meaning of “statutory demand” – ss 9 and 459E Corporations Act 2001 (Cth) considered – Held that document was valid statutory demand – Application dismissed.
LEGISLATION CITED:	Corporations Act 2001 (Cth) Taxation Administration Regulations
CASES CITED:	Parklands Blue Metal Pty Limited v Kowari Motors Pty Limited [2004] 1 Qd R 140 NM Superannuation Pty Limited v Hughes (1992) 27 NSWLR 26
PARTIES:	R & R Consultants Pty Ltd v Deputy Commissioner of Taxation
FILE NUMBER(S):	SC 5898/05
COUNSEL:	Plaintiff: M J Dawson Defendant: P Rodionoff
SOLICITORS:	Plaintiff: McMahons National Lawyers Defendant: ATO Legal Services Branch

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Thursday, 19 October 2006

5898/05 R & R Consultants Pty Ltd v Deputy Commissioner of Taxation

JUDGMENT

1 WHITE J: Prior to its amendment this morning, the originating process was an application under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand served upon the plaintiff company on 27 October 2005. A number of grounds were originally advanced in support of that application. However, this morning the plaintiff was given leave to amend the originating process and has advanced one ground in relation to the validity of the demand.

2 The plaintiff now seeks a declaration that the statutory demand dated 6 October 2005, and served on the plaintiff at its registered office on 27 October 2005, is not a statutory demand within the meaning of Div 2 Pt 5.4 of the Corporations Act. An alternative order is sought restraining the defendant from filing an application for the winding-up the plaintiff in reliance upon the statutory demand, but no separate ground was advanced in support of that order other than the ground advanced in support of the declaration. That ground is a short one.

3 The documents served upon the plaintiff on 27 October 2005 were photocopies of an original statutory demand and an original affidavit in support of it. Because the documents are photocopies, the plaintiff says that it was not served with a statutory demand at all.

4 Section 9 of the Corporations Act defines "statutory demand" as meaning, relevantly, "a document that is, or purports to be, a demand served under section 459E".

5 Section 459E(2) specifies the requirements of the demand, namely:

“ 459E Creditor may serve statutory demand on company

…

(2) The demand:
(a) if it relates to a single debt—must specify the debt and its amount; and
(b) if it relates to 2 or more debts—must specify the total of the amounts of the debts; and
(c) must require the company to pay the amount of the debt, or the total of the amounts of the debts, or to secure or compound for that amount or total to the creditor’s reasonable satisfaction, within 21 days after the demand is served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor. ”

6 Section 459E(3) provides:

“ (3) Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and

(b) complies with the rules. ”

7 The document served was in the prescribed form, namely, Form 509H. It was headed "Creditors Statutory Demand for Payment of Debt". It appeared to bear a facsimile copy of the Deputy Commissioner of Taxation’s signature. Pursuant to regulation 45(2) of the Taxation Administration Regulations 1975 (Cth), a document bearing the written, printed or stamped name, including a facsimile, of the signature of a Deputy Commissioner is taken to have been duly signed by that person unless it is proved the document was issued without authority.

8 The document served was a photocopy of the document upon which the facsimile of the signature of the Deputy Commissioner of Taxation was affixed. Likewise, the affidavit which was served verifying the demand was a photocopy of the original affidavit.

9 I do not accept that because the document was a photocopy it was not a statutory demand at all. It plainly purported to be a demand served under s 459E. Therefore, it came within the definition of statutory demand under s 9.

10 In Parklands Blue Metal Pty Limited v Kowari Motors Pty Limited [2004] 1 Qd R 140, a facsimile transmission of a demand to the registered office of the company was treated as service of a statutory demand.

11 The document, although a photocopy, nonetheless conveyed all of the information in the original document. It conveyed the demand of the Deputy Commissioner of Taxation that the company pay the debt said to be owed. It conveyed all of the information which would have been conveyed by the original of the document if the original document had been served.

12 Section 459E(2) relevantly requires that a demand be in writing, that it be in the prescribed form and that it be signed by or on behalf of the creditor. The document served was in writing and was in the prescribed form. It may well be the case that the demand was defective because the demand served was not signed by or on behalf of the creditor but rather bore a photocopy of the creditor's signature. (See by analogy NM Superannuation Pty Limited v Hughes (1992) 27 NSWLR 26 at 35.) However, although that may be a defect in the demand, it does not affect the status of the document as a statutory demand. No substantial injustice could be caused by the fact that the document was a photocopy (s 459J). The contrary was not suggested. Nor does the fact that the accompanying affidavit was a copy and not the original document mean that the document served was not a statutory demand.

13 Section 109X(1) of the Corporations Act provides that, for the purposes of any law, a document may be served on a company by, inter alia: (a) leaving it at or posting it to the company's registered office; or (b) delivering a copy of the document personally to a director of the company who resides in Australia, or an external territory.

14 If the copy document delivered to the registered office of the company was in turn delivered, by the solicitor who received it, to a director, or if a copy of that document was delivered to the director, it is hard to see why, even if the plaintiff's arguments were otherwise correct, the original document which remained in the office of the Commissioner of Taxation would not be taken to have been served on the company.

15 However, it is unnecessary to pursue that question, and it is unnecessary to pursue the question of whether I should infer that such a document was delivered to the director of the company.

16 For the reasons I have given, I am of the view that the document served at the registered office was a statutory demand. Accordingly, I order that the amended originating process be dismissed with costs.

17 The original application under s 459G for an order setting aside the statutory demand is to be taken to have been withdrawn or discontinued by the amendment of the originating process this morning. That claim for relief was struck out of the originating process this morning. However, for more abundant caution, I should note that the application originally made under s 459G is also dismissed by reason of the amendment made to the originating process and the dismissal of that originating process as amended.

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