Re Caason Investments Pty Ltd - [2021] VSC 487

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2021 01639

IN THE MATTER of CAASON INVESTMENTS PTY LTD (ACN 089 590 858)

CAASON INVESTMENTS PTY LTD (ACN 089 590 858)	Plaintiff
v
INTERNATIONAL LITIGATION PARTNERS NO 3 LTD (NO 1662762)	Defendant

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	11 August 2021
DATE OF JUDGMENT:	11 August 2021 (ex tempore, revised)
CASE MAY BE CITED AS:	Re Caason Investments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 487

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CORPORATIONS – Application to set aside a statutory demand – Service of the statutory demand – Whether service on legal counsel for the company by email effective – Legal counsel involved in the legal proceeding giving rise to the debt specified in the statutory demand – “Effective informal service rule” – Statutory demand served on the company by email – Application to set aside statutory demand not made in time – ss 109X and 459G of the Corporations Act 2001 (Cth) – reg 5.4.01AAA(2) of the Corporations Regulations 2001 (Cth) – Chen v Kornucopia Pty Ltd (No 1) (2019) 59 VR 305.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	R Flory (solicitor)	Richard Flory – lawyer
For the Defendant	C T Moller	Cornwalls (NSW)

HIS HONOUR:

By originating process filed 18 May 2021, the plaintiff, Caason Investments Pty Ltd (‘Caason’) seeks to set aside a statutory demand dated 22 April 2021 (‘Demand’) served on it by the defendant, International Litigation Partners No 3 Ltd (‘ILP’) pursuant to s 459G of the Corporations Act 2001 (Cth) (‘the Act’).

The parties to this proceeding have a long history with each other, including service by ILP of a number of statutory demands on Caason, but it is not necessary to detail that history here.

The amount claimed in the Demand is for $21,700 and is described in the schedule as being for:

Orders made by the Federal Court of Australia on 22 May 2019 in proceedings [sic] NSD 1558 of 2012 between Caason Investments Pty Ltd v Simon Xioa Fan Cao & Ors.

This proceeding had its first return before me on 2 June 2021, when orders were made for the filing of evidence and submissions. The application was listed for hearing on 25 August 2021.

On 26 July 2021, ILP requested the proceeding be listed for directions after Caason failed to comply with the orders made on 2 June 2021. The proceeding was subsequently listed for directions on 3 August 2021.

In advance of that hearing, the solicitors for ILP provided the Court with a tender bundle of documents. Within that bundle was a letter of 20 May 2021, sent from solicitors for ILP to Richard Flory, the solicitor for Caason in this proceeding and Group Legal Counsel for Caason. That letter raised, amongst other things, an issue as to whether the application of Caason had been filed within time, being the statutory period prescribed in reg 5.4.01AAA(2) of the Corporations Regulations 2001

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSC 487
Decision Date: 11 August 2021 (ex tempore, revised)

CaseChat Overview and Summary

In the case of Re Caason Investments Pty Ltd, the applicant sought to set aside a statutory demand that was served by email to the company's legal counsel. The demand arose from a debt, and the respondent argued that the service was effective despite the counsel's involvement in the legal proceeding that gave rise to the debt. The case was heard in the Supreme Court of Victoria. The applicant's contention was that the statutory demand was not properly served and therefore should be set aside. The legal issues in the case centred on the validity of the service of the statutory demand and whether the service met the requirements under the Corporations Act 2001 (Cth) and the Corporations Regulations 2001 (Cth). The court had to consider whether service by email to the company's legal counsel was sufficient and if the "effective informal service rule" applied in these circumstances.

The court held that the statutory demand was effectively served by email to the company's legal counsel, in accordance with the "effective informal service rule". It was noted that the applicant did not argue that the service was ineffective but rather that the application to set aside the statutory demand was not made in a timely manner. The court referenced Chen v Kornucopia Pty Ltd (No 1) in its reasoning, where it was established that service of a statutory demand on a company's legal counsel could be effective if the conditions for informal service were met. Given that the statutory demand was served by email and the respondent did not object to the validity of service, the court found that the demand was properly served. Additionally, the applicant's application to set aside the statutory demand was dismissed as it was not made within the requisite time period as stipulated by sections 109X and 459G of the Corporations Act 2001 (Cth) and regulation 5.4.01AAA(2) of the Corporations Regulations 2001 (Cth).

The Supreme Court of Victoria dismissed the application to set aside the statutory demand. The court confirmed that the statutory demand was effectively served by email to the company's legal counsel and that the application to set aside the demand was not made within the prescribed time frame. Consequently, the statutory demand stood as valid and enforceable against the company.

Orders