T R & M R Wardle & Sons Pty Ltd v Tjaliri Aboriginal Corporation - [2009] SASC 146

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
T R & M R WARDLE & SONS PTY LTD v TJALIRI ABORIGINAL CORPORATION
[2009] SASC 146
Reasons of Judge Lunn a Master of the Supreme Court
29 May 2009
CORPORATIONS
Corporation under Commonwealth Corporations (Aboriginal and Torres Strait Islander) Act - statutory demand - service by sending copy by post to contact person - copy posted to post office box - not placed into box, but kept at post office and later returned to sender - held no effective service of demand - held no power to make presumptive service order under 6R 69 for service of statutory demand - winding up proceedings dismissed.

T R & M R WARDLE & SONS PTY LTD v TJALIRI ABORIGINAL CORPORATION
[2009] SASC 146
Reasons on plaintiff’s application to wind up the defendant.

JUDGE LUNN: The defendant is a corporation registered under the Commonwealth Corporations (Aboriginal and Torres Strait Islander) Act (the “CATSI Act”). At all relevant times the Register kept for the defendant by the Registrar of Indigenous Corporations has categorised it as a medium sized corporation whose contact person is Stephen Richard McCarthy whose residential address is “Mabel Creek Station PO Box 450 COOBER PEDY SA 5723”. However, Stephen McCarthy has not had any association with the defendant for many years. No substitute contact person has ever been registered with the office of the Registrar of Indigenous Corporations. The internal management of the defendant appears to have been unstructured and in breach of the CATSI Act and its predecessor.
On the hearing of this proceeding before me counsel for the plaintiff raised whether the solicitors who had lodged a notice of acting for the defendant were properly instructed by the defendant on the ground that the defendant did not appear to have any officers or organs who could give such instruction. Counsel for the defendant informed me that he considered he did have proper instructions from the defendant. As the plaintiff did not make any application to challenge the authority of the defendant’s solicitors to act I proceeded on the basis that I should not go behind the assurance given by the defendant’s counsel that he did have such instructions.
On 17 November 2008 the plaintiff instituted these proceedings seeking the winding up of the defendant on the grounds of its alleged insolvency. The defendant opposed the application on a number of grounds, but I need only deal with one of them, namely that the plaintiff had not proved effective service of the statutory demand on the defendant. The plaintiff’s counsel conceded that if the plaintiff did not have the benefit of the presumption of insolvency under s 459C of the Corporations Act through the failure of the defendant to comply with the statutory demand there was no other basis upon which to make any winding up order.
Up until the final hearing the plaintiff had sought to pursue proof of service of its statutory demand by several alternative means. However, in the end result its counsel conceded that the only mode of service which could have been effective was that which is dealt with in the next paragraph. Accordingly, I need not deal with the evidence about the other modes of attempted service except insofar as they are relevant to the only one which was pursued.
On about 9 October 2008 the plaintiff’s solicitors posted a copy of the plaintiff’s statutory demand in an envelope addressed:
“Attention: Mr Stephen McCarthy
Mabel Creek Station
PO Box 450
COOBER PEDY SA 5723”.
This was posted by registered post no RP 40946707, which required that it should be signed for by Stephen McCarthy. (In view of the other conclusions I have reached, it is not necessary to canvass whether registered post is the equivalent of ordinary post for this purpose).
At the same time the plaintiff’s solicitors also posted by registered post another copy of the statutory demand addressed to the defendant at the same address as that of Stephen McCarthy. This was registered post item no RP 40946706. It is conceded that this was not effective service on the defendant. The plaintiff has filed an affidavit of Stephen Baines, the postal manager of the Coober Pedy Post Office, sworn on 8 May 2009, dealing with what happened to this other registered letter, but the affidavit does not refer to the contemporaneous registered letter addressed to Stephen McCarthy. However, I infer that the Coober Pedy Post Office would have adopted a similar procedure in respect to this latter item as it did to the former. Thus when the registered letter addressed to Stephen McCarthy arrived at the Coober Pedy Post Office a card would have been placed into Box 450 stating there was an article for collection by Stephen McCarthy at the Coober Pedy Post Office. If no one responded to the card at the Coober Pedy Post Office after 30 days, the registered letter would be returned to the sender. This is what occurred on 18 November 2008 and the envelope and its contents were returned to the plaintiff’s solicitors. On the evidence of the general practice I find that that envelope containing the statutory demand was never placed into Box 450 at the Coober Pedy Post Office, but was apparently kept somewhere else at the Post Office until it was sent back. Hence it was never actually delivered to the address given for Stephen McCarthy.
The plaintiff relies on service of the statutory demand in accordance with s 120-1 of the CATSI Act, the relevant part of which provides:
120-1 Service on Aboriginal and Torres Strait Islander corporation
(1)A notice, demand, summons, writ or other document of process may be served on an Aboriginal and Torres Strait Islander corporation by:
…..
(c)If the corporation is registered as a small or medium corporation – serving a copy of the document personally on the contact person or by sending it by post to his or her address; …..
Also relevant is s 29(1) of the Commonwealth Acts Interpretation Act concerning service by post. This provides:
29 Meaning of service by post
(1)Where an Act 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, the unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
The plaintiff argued that it has satisfied s 120-1(1)(c) by having sent the statutory demand by post to the address of the contact person. It was submitted that its return by Australia Post to the sender did not negate this service because the section merely required that it was to be send by post.
In re Rustic Homes Pty Ltd (1998) 49 SASR 41, (“the Rustic case”) von Doussa J, as a single Judge of this Court as he then was, was considering s 528(1) of the Companies Code which provided:
“A document may be served on a company by leaving it at or by sending it by post to the registered office of the company”.
This does not materially differ from s 129-1(c) of the CATSI Act. He also considered the effect of s 15 of the Companies and Securities (Interpretation of Miscellaneous Provisions) (South Australia) Code which read:
Where a relevant Code authorises or requires a document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then, unless the contrary intention appears, the service shall be deemed 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 unless the contrary is proved, to have been effected at the time when the letter would have been delivered in the ordinary course of post.
This does not materially differ from s 29(1) of the Commonwealth Interpretations Act as quoted above.
In the Rustic case a winding up summons was attempted to be served by being posted to the defendant’s registered office, but it was returned by Australia Post as unclaimed. The issue was whether there had been good service of the summons pursuant to s 528(1) of the Code. In that case I had referred the validity of the service to a Justice of the Court because of what I believed were conflicting authorities on the point and uncertainty among the Masters. Von Doussa J held there had not been effective service. This decision has been consistently followed by Masters in this Court ever since. Although there have since been successive versions of the Corporations Law, the substance of s 528(1) has always been perpetuated.
In reaching his conclusion von Doussa J relied upon the following points:
·S 528(1) was a permissive provision which allowed for a number of alternative modes of service rather than stipulating one mode of service which would be sufficient in all circumstances. S 120-1 of the CATSI Act is also phrased in permissive terms and allows several alternative modes of service on a medium sized corporation although unfortunately none of them appear practicable in the particular circumstances of the defendant corporation.
·It is a fundamental principal that a defendant is to be given fair notice of proceedings so as to be able to respond to them and, if possible, legislation should not be construed so as to deny the defendant that right where it is apparent that the document has not come to its attention. While von Doussa J was referring to a summons instituting winding up proceedings, his comments apply with equal force to statutory demands where non-compliance can produce a deemed admission of insolvency.
·S 15 of the Companies and Securities (Interpretation and Miscellaneous Provisions)( South Australia) Code was to be construed as meaning that the contrary was proved on the presumption of service where the letter was returned unclaimed. A similar effect should be given to s 29(1) of the Commonwealth Interpretation Act in this matter.
Counsel for the plaintiff cited a number of cases from elsewhere on the interpretation and application of equivalents of s 120-1(1)(c) of the CATSI Act and s 29(1) of the Commonwealth Acts Interpretation Act. None of them expressly disapprove of Rustic’s case, although some of the statements of law in them may be inconsistent with Rustic’s case. I consider I should follow and apply the law as laid down in Rustic’s case until it is overruled at a higher level in this Court. I consider that what is said in Rustic’s case means that there has not been effective service of the statutory demand in this matter, particularly as there was non-receipt of the statutory demand by Stephen McCarthy. Accordingly, the winding up proceedings must be dismissed.
Counsel for the plaintiff requested that in the event of my reaching this conclusion I should give directions about how another statutory demand could be effectively serviced on the defendant. He could not point me to any power in the CATSI Act or the Corporations Act 2001 for me to give such directions. He could not cite any precedent where a Court has given such directions about the mode of service of a statutory demand under s 459E of the Corporations Act.
I do not consider that a statutory demand is a document for the purposes of R 69 of the Supreme Court Civil Rules 2006, and thus it cannot be made the subject of a presumptive service order under that Rule. At the time of its service a statutory demand is not part of any Court process and there are no proceedings in existence to which it then relates. A statutory demand is an evidentiary aid created by the Corporations Act and operates outside of the control of the Court. It is not a document in any Court proceedings: Dromore Fresh Produce Pty Ltd v W Paton (Fertilizers) Pty Ltd (1997) 137 FLR 307. In the same way as the Court has no power to extend the time for the compliance with the demand: David Grant & Co Pty Ltd v Westpac (1995) 184 CLR 265, so it has no power to vary or supplement the provisions of the Corporations Act about how it is to be served. I appreciate the dilemma of the plaintiff on how it can avail itself of the benefit of the statutory demand when there is no apparent way in which it can effectively serve such a demand, but this is a problem emanating from the terms of the relevant legislation and it cannot be overcome by the Court.