Technitrade Pty Ltd v Compucon Computers (SA) Pty Ltd - [2002] SASC 309

TECHNITRADE PTY LTD V COMPUCON COMPUTERS (SA) PTY LTD
[2002] SASC 309

JUDGE BURLEY. The plaintiff has applied for an order that the creditor’s statutory demand for payment of debt dated 21 May 2002 be set aside. The application has been made pursuant to Section 459G of the Corporations Act (the Act). The plaintiff contends that there is a genuine dispute between the plaintiff and the defendant about the existence of the debt (Section 459H of the Act). The plaintiff also contends that there are a number of defects in the demand and that substantial injustice will be caused unless the demand is set aside (Section 459J of the Act).
Before setting out the relevant facts, it is convenient to deal with one of the submissions made by the plaintiff relating to service of the statutory demand. It is common ground that the statutory demand was delivered on 30 May 2002 to 133 Railway Terrace, Ascot Park, which, according to Exhibit ELH1, was the principal place of business of the plaintiff. It is common ground that at the relevant time the registered office of the plaintiff was 77 Palmer Place, North Adelaide. It was submitted by Mr Ryder, counsel for the plaintiff, that service at the Railway Terrace address was not effective service. He characterised this as a defect in the notice but I consider that this is an incorrect characterisation. The alleged failure to serve a statutory demand does not constitute a defect in the written demand itself. Rather, it would constitute a failure to comply with the provisions of Section 459E of the Act which requires a creditor to “serve” the demand before it becomes effective. Be that as it may, it is necessary for me to determine whether or not the demand has been effectively served.
Mr Ryder submitted that service of documents upon a company is provided for in Section 109X of the Act. He submitted that unless service was effected in accordance with the provisions of that section, there could be no effective service. He relied upon the decision of Cohen J in Vicbar Pty Ltd and Anor v Development Constructions (Newcastle) Pty Ltd (1995) 13 ACLC 1220. In that case the applicant, who applied to the Court to set aside a statutory demand, served the proceedings at an address which was not the registered office of the creditor company and which was not the address for service referred to in the statutory demand. There was no evidence that the address to which the proceedings were sent was ever the registered office of the defendant. Cohen J formed the view that the proceedings consisting of the application to set aside the statutory demand were not served within the relevant 21 day period and he dismissed the application.
His Honour did not deal with the question of whether or not the means of service referred to in Section 109X of the Act were the only means by which the company might be served. This point was…

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: [2002] SASC 309
Decision Date: 20 September 2002

CaseChat Overview and Summary

Technitrade Pty Ltd sought to have a statutory demand for payment issued by Compucon Computers (SA) Pty Ltd set aside, arguing that there was a genuine dispute about the existence of the debt and that there were defects in the demand that would cause substantial injustice unless the demand was set aside. The dispute centred on whether the statutory demand was properly served, whether there was a genuine dispute about the debt, and whether there were defects in the demand that would warrant its setting aside. The court found that the statutory demand was effectively served, that the debt was genuinely disputed, and that there were defects in the accompanying affidavit that warranted setting aside the demand. The court concluded that the statutory demand should be set aside due to the genuine dispute about the existence of the debt and the defects in the affidavit.

The court first considered whether the statutory demand was effectively served. It noted that the demand was delivered to the plaintiff's principal place of business, and that the application to set aside the demand was issued and served within the relevant 21-day period. The court concluded that the demand came to the attention of someone in authority within the company, and that the demand was effectively served. The court then considered the plaintiff's argument that there was a genuine dispute about the existence of the debt. The court found that the evidence adduced by the parties raised a serious question to be tried as to whether the goods were purchased on behalf of the plaintiff or in the agent's own right. The court also considered the plaintiff's argument that there were defects in the accompanying affidavit that warranted setting aside the demand. The court found that the omission of certain matters from the affidavit, such as the deponent's belief that there was no genuine dispute about the existence or amount of the debt, was a significant defect that warranted setting aside the demand. The court concluded that the statutory demand should be set aside due to the genuine dispute about the existence of the debt and the defects in the affidavit.

Orders