Rams Developments Pty Ltd v Allen and Anor No. Scgrg-00-198

[2000] SASC 133

RAMS DEVELOPMENTS PTY LTD  V  ALLEN AND ANOR

[2000] SASC 133

1. JUDGE BURLEY. The plaintiff has applied for an order that a statutory demand served upon it by the defendants be set aside. The summons was issued on 7 March 2000. The defendants maintain that the application to set aside the statutory demand was not made within the 21 day period referred to in Section 459G(2) of the Corporations Law. That section also provides that the application is only made if the application and affidavit in support are filed and served within the 21 day period.

2. The commencement of the 21 day period is determined by the date of service of the statutory demand.  The defendants contend that the statutory demand was served on 14 February 2000.  The plaintiff contends that service was not effected until 16 February 2000.  The application has been brought on for a determination of this question as a preliminary point.

3. If the defendants are correct the application must be dismissed because it has not been made within time.  If the plaintiff is correct the application should proceed to a hearing on the question of whether or not the statutory demand should be set aside.

4. It is common ground that by letter dated 11 February 2000 the defendants’ solicitors forwarded by registered mail a statutory demand to the registered office of the plaintiff.  The letter was posted on 11 February 2000.

5. It is also common ground that when the registered letter arrived at the Unley Post Office, being the post office nearest to the registered office of the plaintiff, it was not then sent to the registered office but was diverted to a post office box maintained by the plaintiff at that post office.  It is common ground that the letter and statutory demand was collected by Mr Monz, a director of the plaintiff, on 14 February 2000.  He took the registered letter to the registered office of the plaintiff, but it is not known when he did so.  It is common ground that the envelope containing the letter, as opposed to any other envelope bearing the registered post stickers, was opened by Mrs Rawcliffe, the other director of the plaintiff, on 16 February 2000.

6. The first question to be answered is whether or not there has been effective service of the statutory demand.  Section 109(X) of the Law provides:

   “(1).. For the purposes of any law, a document may be served on a company ... by:

   (a).... leaving it at, or posting it to, the company’s registered office; ...”

7. It was not contended that any other part of Section 109X applied to the facts of this case.

8. Section 109Y deals with the meaning of “service by post”.  It provides:

   “Where a provision of this Law authorises or requires any document to be served by post, whether the expression ‘serve’ or the expression ‘give’ or ‘send’ or any other expression is used, then:

   (a).... the service is taken to be effected by properly addressing and posting (under prepaid post) the document as a letter to the last known address of the person to be served; and

   (b).... unless the contrary is proved, the service is taken to have been effected at the time at which the letter would have been delivered in the ordinary course of post.”

9. These two sections do not sit well together.  Section 109X is clearly a provision which authorises service by post but only at the company’s registered office.  Section 109Y only purports to deal with service at the last known address of the person to be served.  The concepts of registered office and “last known address” are quite different.  The former is determined by reference to a notified address at a public registry, whereas the latter is determined by the state of knowledge of the person wishing to serve a document.  However, I think it is possible to reconcile the two provisions.  The reference to “the person to be served” in Section 109Y includes a corporation because of the provisions of Section 85A of the Law.  I think “the last known address”, insofar as corporations are concerned, must be determined by reference to a search of the public register which provides that information.  Consequently, Section 109Y of the Law may be taken as applicable to service by post effected in accordance with the provisions of Section 109X of the Law.  This does not necessarily mean that if service is effected by registered post, the provisions of Section 109Y assist with determining when service is taken to have been effected.

10. The case law on the meaning of the two sections or their former equivalents is not easy to reconcile.  In Racecourse Totalizators Pty Ltd v Hartley Cyber Engineering Pty Ltd (1989) 15 ACLR 457, O’Bryan J concluded that a demand sent by security post which was collected from the post office by a director would only prove service upon one director. At that time, service on a corporation required service on two directors and his Honour held that the service was not sufficient. The decision was followed by Senior Master Mahoney in Re Amanatidis Holdings Pty Ltd (1991) 4 ACSR 253. These decisions are to be contrasted with the decision of Mildren J in CFC Corporation Pty Ltd v Lanier (Australia) Pty Ltd (1993) 11 ACSR 772. His Honour came to the view that the presumption raised by Section 109Y(b) of the Law was rebutted by evidence that the statutory demand was received by a director of the plaintiff on a particular date. The date of service was at issue, but his Honour held that service on one director was sufficient.

11. What is clear from the cases is that if the provisions of Section 109Y of the Law are applicable, it becomes a question of whether there is a deemed time of service ascertained by reference to what constitutes “the ordinary course of post”, or whether service must be ascertained by reference to any contrary facts before the Court.  If those facts rebut the presumption raised by the section, it seems to me clear that the time of service must be ascertained by reference to those contrary facts and the means of service that are available.

12. In this case there has not been effective service by registered post in the sense that the document is taken to the registered office of the corporation and, if someone is in attendance there, a signed receipt is obtained by the postal employee when the document is delivered.  Nor has there been an attempt to deliver the document to the registered office in circumstances where, there being no one in attendance, a card has been left requesting the occupant of the premises to collect the document from the post office.  Instead, the document was diverted to the post office box maintained by the defendant.  It was then collected by a director of the plaintiff company, Mr Monz.  Those circumstances, in my view, constitute effective service pursuant to the provisions of Section 109X(1)(b).  The document has been delivered personally to a director of the company by means of the post office.  Service on one director is now sufficient.  The fact that the director did not open the letter and that it was not subsequently opened until 16 February 2000, in my view, is not to the point.  If the director chooses not to open mail received on a given day, that cannot delay effective service until such time as the envelope is actually opened.  To hold otherwise would leave it open to corporations to argue that there has been no effective service until the mail is actually opened.  By this means the commencement of the rigorous time limit of 21 days provided for in Section 459G of the Law could be deferred for indefinite periods of time.

13. For these reasons I hold that service of the statutory demand was effected on 14 February 2000 and consequently these proceedings were not issued within the required 21 day period.  It follows that the application must be dismissed.  I will hear counsel as to costs.