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Re Ege Foods Australia Pty Ltd

Re Ege Foods Australia Pty Ltd

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Ege Foods Australia Pty Ltd [2014] NSWSC 983
Hearing dates: Monday, 21 July 2014
Decision date: 24 July 2014
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Application for winding up in insolvency dismissed

Catchwords: CORPORATIONS - External administration - winding up - winding up in insolvency - creditor's statutory demand - validity - where accompanying affidavit does not verify debt claimed - whether non-compliance with s 459E(3) renders demand ineffective - held, it does - service - by registered post - whether Evidence Act s 160 applies to service of demand - held, it does
Legislation Cited: (CTH) Acts Interpretation Act 1901, s 29
(CTH) Australian Postal Corporation Act 1989, s 5
(CTH) Corporations Act 2001, s 9, s 109X, s 109Y, s 459E, s 459G, s 459F, s 459J, s 459S, s 467A, s509H
(CTH) Evidence Act 1995, s 160
(CTH) Judiciary Act 1903, s 79
(CTH) Service and Execution of Process Act 1992
(NSW) Evidence Act 1995, s 160
(NSW) Supreme Court (Corporations) Rules 1999
Cases Cited: 2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd [2010] WASC 22
Achiever Investments Pty Ltd v Newtone Pty Ltd [2002] WASC 71
AZED Developments Pty Ltd v Frederick & Co (in liq) (1994) 14 ACSR 54
Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1663
Beralt Pty Ltd v Joe Battaglia Plastering Pty Ltd [2001] 1 Qd R 232
Chadah Pty Ltd v Kubota Tractor Australia Pty Ltd [2003] NSWSC 456
Crema (Vic) Pty Ltd v Landmark Property Developments (Vic) Pty Ltd [2006] VSC 338; (2006) 58 ACSR 631
Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 43 NSWLR 717; 28 ACSR 175 Giustginiano Nominees Pty Ltd v Redan Pty Ltd [1999] WASC 95
Hamilhall Pty Ltd v A T Phillips Pty Ltd (1994) 15 ACSR 247, 249
Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542; 21 ACSR 440
In the matter of International Materials & Technologies Pty Limited [2013] NSWSC 787
Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 51 FCR 446; (1994) 13 ACSR 525
Lane Cove Council v Geebung Polo Club Pty Ltd (No 2) [2002] NSWSC 118; (2002) 41 ACSR 15
Nemoto International Trading Pty Ltd v Vodac Pty Ltd (Supreme Court (NSW), Macready M, 10 November 1998, unrep)
NT Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 153 ALR 359
Noy's Works Pty Ltd v Allcast Pty Ltd [2005] WASC 185
Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 500; (2004) 49 ACSR 714
Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2003] NSWCA 359; (2003) 48 ACSR 222
Renegade Rigging Pty Ltd v Hanlon Nominees Pty Ltd [2010] VSC 385
Scope Data Systems Pty Ltd v Goman [2007] NSWSC 278; (2007) 70 NSWLR 176
Sheslow v Diamond Rose NL [2005] NSWSC 492; (2005)…

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: [2014] NSWSC 983
Decision Date: 24 July 2014

CaseChat Overview and Summary

In the matter of Ege Foods Australia Pty Ltd, the Court was presented with a dispute concerning the validity of a creditor's statutory demand. The demand was made under the Corporations Act, seeking a winding up of the company on the basis of insolvency. The primary issue before the Court was whether the statutory demand was valid when the accompanying affidavit did not verify the debt claimed. The Court was also required to determine if section 459E(3) of the Corporations Act rendered the demand ineffective due to this non-compliance. Additionally, the Court had to decide whether the service of the demand by registered post was in accordance with the requirements of the Evidence Act.

The Court held that the statutory demand was indeed ineffective due to the failure to verify the debt in the accompanying affidavit, as required by section 459E(3) of the Corporations Act. This non-compliance rendered the demand invalid. Furthermore, the Court found that the Evidence Act, specifically section 160, applied to the service of the statutory demand, and the demand was properly served by registered post. This decision underscores the importance of strict compliance with statutory requirements for both the content and service of a statutory demand in winding up proceedings.

The Court's decision clarified that non-compliance with the verification requirement in section 459E(3) of the Corporations Act is fatal to the validity of a statutory demand. The Court also confirmed that the Evidence Act governs the service of statutory demands, and service by registered post is acceptable. This case serves as a reminder to creditors and their legal representatives of the necessity of adhering to statutory provisions when issuing a statutory demand. The Court's ruling reinforces the principle that strict compliance with legal requirements is essential to the validity of statutory demands and the subsequent winding up proceedings.

Orders