Trycala Pty Ltd v Nature's Realm (Australia) Pty Ltd
[1998] FCA 1023
•24 AUGUST 1998
FEDERAL COURT OF AUSTRALIA
CORPORATIONS LAW – winding up – statutury demand served by creditor – application to set aside demand filed in time – supporting affidavit – service requirements – minimum requirements of affidavit – dispute as to whether the last page of the affidavit was served on the solicitors for the creditor
Corporations Law, s 459E, s 459G, s 459H
David Grant and Co. v Westpac Banking Corporation (1995) 184 CLR 265 - cited
Graywater Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund (1996) 70 FCR 452 - cited
TRYCALA PTY LTD v NATURE’S REALM (AUSTRALIA) PTY LTD
VG 3184 of 1998
BEFORE: RYAN JR
PLACE: MELBOURNE
DATE: 24 AUGUST 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 3184 of 1998
BETWEEN:
TRYCALA PTY LTD
APPLICANTAND:
NATURE'S REALM (AUSTRALIA) PTY LTD
RESPONDENTJUDICIAL REGISTRAR:
RYAN
DATE OF ORDER:
24 AUGUST 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
the respondent’s Motion filed 26 June 1998 and heard 3 August 1998 be dismissed (this being a Motion for a declaration that the applicant’s application to set aside a statutory demand filed 28 May 1998 be declared invalid).
the respondent pay the applicant’s costs in respect of the Motion.
the application to set aside the statutory demand be listed for hearing and determination as soon as practicable.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 3184 of 1998
BETWEEN:
TRYCALA PTY LTD
APPLICANTAND:
NATURE'S REALM (AUSTRALIA) PTY LTD
RESPONDENT
JUDICIAL REGISTRAR:
RYAN
DATE:
24 AUGUST 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
PRELIMINARY ISSUE
The preliminary issue for determination is whether an affidavit in support of an application to set aside a statutory demand has been served on the creditor.
An applicant under s 459G must file and serve the application and affidavit in support in time. Time to file and serve cannot be extended. Compliance with the requirement for service and filing is essential. There is no jurisdiction to entertain an application under s 459G in the event of non compliance: David Grant and Co. v Westpac Banking Corporation (1995) 184 CLR 265.
The respondent (Nature’s Realm), as a creditor, made a statutory demand on the applicant as debtor. The applicant (Trycala) seeks to set aside the statutory demand. Nature’s Realm, as respondent to the application to set aside the demand, has, by Notice of Motion, sought a declaration that the application to set aside the demand is invalid. Indeed, Mr T.P. Davies, a principal with the firm Oakley Thompson & Co (solicitors for Nature’s Realm) advised Bazzani Brand (solicitors for Trycala) by letter dated 3 June 1998 that:
the affidavit of Nicholas Kritsonis purportedly sworn 28 May had not been served in a complete form (this was the affidavit in support of the application to set aside the statutory demand)
Trycala had in the circumstances failed to comply with the statutory demand in that it had not served and filed an affidavit as required by the Corporations Law
an act of insolvency had occurred
being of the belief that the defect cannot be rectified an intention was expressed of seeking instructions to proceed with a winding up application.
Mr Goldstein, the solicitor acting for Trycala, claims that he personally served a sealed copy of the application, a copy of the three page affidavit of Nicholas Kritsonis and three exhibits and exhibit sheets. Mr Davies, the solicitor acting for Nature’s Realm, asserts that the application, the exhibits and the exhibit sheets were served but that the third and last page of the affidavit which included the jurat was omitted from the papers as served. I am asked to determine whether the entire affidavit was served and, if not, whether the papers as served constituted service within the terms of s 459G(3)(b) of the Corporations Law.
EVIDENCE AS TO SERVICE
Robert Mark Goldstein deposed in an affidavit sworn 8 July that he, on 28 May:
received an application (to set aside the statutory demand) and affidavit drawn by counsel
arranged for the preparation of exhibits to the affidavit and the exhibit sheets
arranged for Mr Kritsonis, the deponent, to attend at his office and swear the affidavit before him
dated and signed the application to set aside the statutory demand
arranged for Tracey Tipri to make three photocopies of the application, the signed affidavit and the exhibits
checked the documents and the copies made when they were returned
checked and stapled each copy affidavit
separately, using one staple, stapled each group of copy exhibit sheets and exhibits
collated the documents into four separate bundles, one containing the original application, affidavit and exhibits and the other three bundles containing one copy of each of the application, affidavit and exhibits
placed one of the bundles of copy documents on his file
placed a paper clip on each of the other bundles
took the original documents and two copies to the Federal Court Registry
gave the documents to the Registrar and drew his attention to the originals
observed the Registrar check each bundle and write on and stamp each of the original and copy applications
observed the Registrar retain the original application, affidavit and exhibits
received the copies back from the Registrar
at the Registry stapled one of the copy affidavits to the exhibits and attached the stapled papers to “an application” with a paper clip
“at about 3.30 p.m. … took the documents to the office of Oakley Thompson & Co at Level 17, 500 Collins Street Melbourne”
“handed the application and affidavit to the receptionist who said her name was Tanya, and told her the documents were for the attention of Tim Davies”.
During the hearing of the Motion, Mr Gronow, counsel for the respondent (the applicant in the Motion) (Nature’s Realm), tendered as part of exhibit A1 a sealed copy of the application to set aside the statutory demand. This is conceded to be the application as served on the respondent on 28 May.
Mr Gronow also tendered, as part of exhibit A1, pages 1 and 2 of a copy of an affidavit sworn by Nicholas Kritsonis on 28 May 1998 and copies of exhibits marked NK1, NK2 and NK3. The three exhibits were identified in attached exhibit sheets and were certified as produced and shown to Mr Kritsonis at the time of swearing his affidavit. Pages 1 and 2 of the Kritsonis affidavit and the exhibits and exhibit sheets tendered as part of exhibit A1 were identified by the respondent’s witnesse (Ms Parlevliet) as the documents served with the application on 28 May. Mr Nolan, counsel for the applicant (Trycala) did not concede that pages 1 and 2 of the affidavit and the exhibits and exhibit sheets tendered as part of exhibit A1 were the copies served on the respondent on 28 May and did not concede that the Kritsonis affidavit, as served, did not contain the third and final page which is part of the Kritsonis affidavit filed in Court and part of the Kritsonis affidavit as held on file by Mr Goldstein.
Reproduced below is an exchange in cross-examination of Mr Goldstein (T34 and 35):
“GRONOW:You’ve got two documents before you. One is the application and one is the affidavit. As you’ve probably gathered, your client accepts that the application is the original one which was served. Indeed, there's no other way that my instructors could have got hold of an original set or copy of the affidavit but by being served by you. It is in contention whether that copy of the affidavit is the one that was served. In fairness to you, I should say that I’ve already had a witness who has identified the affidavit as the one that was served as well. What I wanted to ask you to do was to look at the top left-hand corner of it and tell me whether you can see a number of staple holes there?
GOLDSTEIN: I can, yes.
GRONOW:Is it possible that at least some of those staple holes were put there before it was served by you?
GOLDSTEIN: I don’t see how.
GRONOW:My client’s case is that only one extra set of staple holes was added by the actions of my client’s solicitors in having the documents unpicked and then photocopied and restapled. I want to put it to you, as I’m going to be, in a matter of submissions – in fairness I think I have to put it to you that the other multiple staple holes were all put there by your firm or somebody in the process of preparing the document for filing and service, and that it follows from that that the document was unpicked and copied perhaps more than once prior to it being served?
GOLDSTEIN: The only evidence which I could perhaps put forward which might go some way to explaining this is when I got the affidavit and application material from counsel, there was a staple through it already. I had to unpick that and then I think my affidavit material sets out the procedure that happened thereafter. They had to unpick that. The documentation was handed to a clerk for photocopying and then, as you say, because of the urgency of the matter, it being important that it was the last day, I thereafter checked all the material and stapled it. When I say stapled it, I put one staple through the application, one staple through the supporting affidavit and one staple through all of the exhibits. There were three of them.
GRONOW:On that point too, Mr Goldstein, I want to put it to you that it’s possible that in the process, when the document was being prepared and collated and unpicked and so on, that one of the pages could have gone missing?
GOLDSTEIN: Mr Gronow, because of the urgency of the application, I took it upon myself personally to check the material and I checked the material carefully. If there was a page missing from one of the copies, I would have picked that up, especially the page which had the attestation, where I had stamped and my client had signed I would have picked that up, Mr Gronow.
GRONOW:Would you accept that it’s possible that in that sort of process, pages sometimes do go missing from documents?
GOLDSTEIN: It’s not possible in this instance because I carefully checked it.
GRONOW:You did, however, accept it as a possibility on 5 June 1998, didn’t you, Mr Goldstein?
GOLDSTEIN: I made no admissions in my letter of 5 June, if that’s what you’re referring to.”
Mr Goldstein’s letter of 5 June under the letterhead of Bazzani Laywers is addressed for the attention of Mr Davies and reads as follows:
“5 June 1998
Oakley Thompson & Co
Solicitors
DX 30975
STOCK EXCHANGEFAX NO. 9629 2883
Attention: T.P. Davies
Dear Sirs,
RE:TRYCALA PTY LTD AND NATURE’S REALM (AUSTRALIA) PTY LTD. FEDERAL COURT PROCEEDINGS VG 3184 OF 1998
We are in receipt of your letter of 3 June 1998.
We have noted with surprise your allegation that you have not received the third page of the Affidavit sworn by Nicholas Kritsonis on 28 May 1998. Both our file copy and the original Court copy contain the relevant page.
If there has been a clerical error, we apologise for same. We enclose a copy of the relevant page.
We hope and trust that this matter can be dealt with on its merits.”
Cross-examination of Mr Goldstein continued as follows (T36):
“GRONOW:I put it to you that you wouldn’t have written that letter the way you did unless there was a possibility that a third page of the affidavit wasn’t with it when it was served?
GOLDSTEIN: Well, if you put it in its context, I did phone Mr Davies before I wrote that letter. I’d left a message for him, called again and spoke to his secretary.
GRONOW:This was after you’d received his letter of 3 June?
GOLDSTEIN: After I received his letter of 3 June, because I wanted to discuss the issue. I wanted to point out to him that my file copy, my sealed file copy, had that page. I wanted to point out to him that I’d sent an articled clerk down to the court to check that the original had that page, which I obviously assumed it did but just to be sure, and it did have that page. I wanted to point out to him that as far as I was concerned it was impossible that that page was missing, that there was improper service. There may in fact be another reason from his side whey that page wasn’t there and I thought as two solicitors we could perhaps work the problem out and if necessary I’d send him a copy of the document that he was missing.”
EVIDENCE SUGGESTING FAILURE OF SERVICE – SECTION 459G
In an affidavit sworn 25 June Joanne Laurentia Parlevliet, secretary, Oakley Thompson & Co deposed as follows:
“1.I am a secretary in the sole and permanent employ of Messrs Oakley Thompson & Co.
2.Approximately mid-afternoon on 28 May 1998 the receptionist brought to my desk documents which had been left with her at the reception desk of Oakley Thompson & Co. The documents were not accompanied by any letter or other identifying cover. The receptionist said that the documents had been left for Tim (referring to Tim Davies) at reception. I then took the documents in to Mr Davies’s office and put them in his “in mail” area on his desk. The documents as received were not in any way re-collated or reorganised prior to me providing them to Mr Davies.
3.On 29 May 1998 I was requested by Mr T. Davies to photocopy the documents received from the applicant’s solicitors for the purpose of forwarding a copy of same to the client.
4.At the time of receiving the documents for photocopying from Mr Davies I noticed that the affidavit of Nicholas Kritsonis and exhibits thereto had apparently been stapled and pulled apart and re-stapled, as there were already several staple marks and staple holes in those documents. Apart from this observation I did not read the documents.
5.For the purpose of photocopying the affidavit and exhibits I removed the staples and placed the documents in the sheet feeder of the photocopier. I then photocopied the affidavit and exhibits as one document. By this I mean that the affidavit and exhibits were placed as one document in the sheet feeder of the photocopier to be copied together. The copies were automatically sorted and stapled by the sorter attached to the photocopier, and the originals were fed back out through the sheet feeder. On completion I then stapled the original affidavit and exhibits as one document using the stapler in the sorter. At no time during the copying of the affidavit and exhibits were they separated except within the sheet feeder of the photocopier.
6.At no time during copying did the photocopier malfunction or indicate any paper jam, nor was the copying process interrupted for any reason while the documents were being copied.
7.Before leaving the photocopier I made the usual check to ensure that no pages or documents had been left in or around the photocopier.
8.The photocopier is a Canon NP4050 which has an automatic sheet feeder and a sorter attachment. The photocopier also has a visual display as part of its operational panel, which advises of any paper jams in the photocopier, the sorter or the sheet feeder, and also if any pages remain on the platen glass copy surface.”
Early in cross-examination Ms Parlevliet conceded that “two sets of documents” were served at the offices of Oakley Thompson on the afternoon of 28 May. In each case Trycala was applying to set aside a statutory demand. In one case the statutory demand had been made by Nature’s Realm. In the other case the demand was made by another company, another Oakley Thompson client, namely Aloe Tech Laboratories Pty Ltd. Ms Parlevliet cannot “specifically recall” whether the “two sets of documents” were handed to her “at the same time” by the receptionist but expressed the view that “that would probably be right”.
In cross-examination Ms Parlevliet also admitted that she photocopied both sets of documents on 29 May but stated (T6) “I know I photocopied both sets because we were sending a copy of each to the client but I don’t remember whether I did them both at the same time … as I said, I don’t specifically recall that I did them at the same time but I would assume that I did”.
Ms Parlevliet recalls that Mr Davies gave her both sets of documents but cannot recall if he gave her both sets at the same time.
Mr Nolan, referring to the Nature’s Realm application, asked Ms Parlevliet if she had noticed “anything unusual about the affidavit which comprised part of those documents”. Her response (T7) was similar to but more detailed than paragraph 4 of her affidavit. She said:
“Well, the only unusual thing that I noticed – I didn’t read the document as such, but when I was taking the staples out to photocopy it, it had several staple hole marks in the top and it looked like it had been stapled and pulled apart or they had had trouble stapling it, and pulled the staples out. Also, the actual exhibits were stapled but not to the exhibit sheets, but they were all sort of attached together. It looked like a bit of a mess. … They were all stapled to the affidavit … but there were individual staples in the exhibits, in just the exhibit documents as opposed to the exhibit sheets on the documents.”
In response to further questions from the Court and from Mr Nolan Ms Parlevliet said (T7 and T8):
“As I said, it seemed somewhat unusual for a copy of an affidavit that the exhibits themselves would be stapled but they (the exhibit sheets?) weren’t stapled to the exhibits individually … that they were all then just sort of packed together and one staple through the whole lot of the affidavits … the affidavit and the exhibits all stapled together … there was one set of documents with a staple going right through the lot … well, I’m talking about just the affidavit, not including the application … there was one staple through the whole lot. The affidavit itself wasn’t stapled individually but the exhibits were stapled individually but not with the exhibit sheets stapled … I had to take out approximately four staples”.
While Ms Parlevliet is uncertain in her recall of the timing of certain events, she was adamant in cross-examination that she did not notice a missing page from the Kritsonis affidavit at the time when she was copying the documents. Indeed, her evidence is that Mr Davies advised her that a page was missing. The relevant extract from cross-examination is as follows (T9):
“NOLAN:When did you find out for the first occasion that it was alleged that there was a page of the affidavit missing?
PARLEVLIET: I recall that it was after I gave the documents back to Tim and he queried whether I’d noticed that there was a page missing. I hadn’t specifically noticed when I was copying it that there was a page missing.
NOLAN:So when did he query that with you?
PARLEVLIET: After I gave the documents back to him. I don’t recall whether it was immediately afterwards but it was certainly within a few minutes of me giving the photocopies and the documents that I had originally received back to him.
Mr Davies gave evidence through a brief affidavit. He also gave extensive oral evidence, primarily cross-examination arising from his affidavit and from the affidavit and evidence of Ms Parlevliet.
Paragraphs 2 to 5 of the Davies’ affidavit are as follows:
“2.On 28 May 1998 a copy of an application filed in this proceeding together with a document purporting to be an affidavit of Nicholas Kritsonis sworn 28 May 1998 was left on my desk by my secretary Joanne Parlevliet. I did not immediately read the documents, but left them on my desk to be attended to as soon as possible thereafter. I attended to the documents on 29 May 1998.
3.On perusing the purported affidavit I observed that it comprised two pages together with three exhibits. Now produced and shown to me marked “TPD1” is a true copy of the said affidavit and exhibits as received by me. I then gave the documents to my secretary to be photocopied.
4.Following receipt of the document I did on 1 June 1998 write to my client enclosing a copy of the purported affidavit and further advising that the affidavit was not complete.
5.On 3 June 1998 I wrote to the applicant’s solicitors advising that the affidavit of Nicholas Kritsonis was not complete in that only pages 1 and 2 had been delivered. Now produced and shown to me marked “TPD2” is a true copy of my said letter.”
Mr Davies does not say whether he saw Ms Parlevliet place the Kritsonis documents on his desk and he does not mention the Aloe Tech documents in his affidavit. He simply states that “a copy of an application filed in this proceeding together with a document purporting to be an affidavit of Nicholas Kritsonis was left on my desk by my secretary Joanne Parlevliet”. However, if he did not see the Kritsonis documents placed on his desk the assumption that they were placed there by Ms Parlevliet is a reasonable assumption and it is her uncontested evidence that she placed the documents there.
His brief affidavit evidence in paragraph 3 is more curious. He never states anywhere in his affidavit that he noticed that the Kritsonis affidavit was incomplete. He never states anywhere in his affidavit that he told Ms Parlevliet that the affidavit was incomplete. He never states anywhere in his affidavit that he noticed that the Kritsonis affidavit was incomplete before he gave the documents to Ms Parlevliet for copying. He never states in his affidavit that he gave the Nature’s Realm and the Aloe Tech papers to Ms Parlevliet for copying at the same time.
In cross-examination Mr Davies asserted that it was not necessary to refer in his affidavit to noticing that the Kritsonis affidavit was incomplete or to the time he noticed this. His position is that paragraph 3 refers to his “perusal” of the Kritsonis affidavit and to the observation that “it comprised two pages”. It is also part of his position that that observation together with attaching the two pages as part of exhibit “TPD1” made it obvious that he had observed that the Kritsonis affidavit was incomplete and that he had noticed the omission when he “attended to the documents on 29 May 1998”.
STAPLE HOLES
Mr Davies first mentioned staple holes when Mr Nolan asked him why he considered it necessary for Ms Parlevliet to say anything whatsoever about her handling of the Kritsonis affidavit if he (Mr Davies) knew or believed that the affidavit was missing a page and he had observed this before he provided the documents to Ms Parlevliet for copying. His response was as follows (T27, Line 23):
“For the simple reason that both copies – sorry, when I say both copies, both applications and both affidavits in both the matters bore numerous staple holes in the documents themselves. That was something which I observed at some point of time. As a matter of forensic – I guess forensic examination, questions soon are raised: why are there so many staple holes in this document? I thought it was better to address that issue and make sure, insofar as we had dealt with – when I say “we”, my Firm, had dealt with the document, that we explained our exact dealings with the documents so that the Court was aware as to the fact that we had taken the document apart for photocopying and restapled it.”
At no stage did Ms Parlevliet give evidence of noticing a number of staple holes in the Aloe Tech documents. Indeed, she states (T6, Line 26):
“I know I photocopied both sets because we were sending a copy of each to the client but I don’t remember whether I did them both at the same time … I don’t specifically recall that I did them at the same time but I would assume that I did.”
Mr Davies does not recall when he observed that “both applications and both affidavits in both of the matters bore numerous staple holes in the documents themselves” (T27, Lines 24-26).
He said that it was something he observed “at some point of time” (T27, Lines 26-27).
He seems at one stage (T27, Line 37) to suggest that he may have noticed the staple holes after he had received instructions to oppose the application to set aside the statutory demand.
At another stage (T31) Mr Davies stated that he could not recall whether he noticed “multiple staple holes in them” (i.e. both sets of documents) at the time when he noticed the affidavit in the Nature’s Realm matter was incomplete or at a later point of time.
“I certainly observed at a point of time that there were … a number of staple holes in the documents”.
Mr Davies and Ms Parlevliet gave somewhat different evidence about the staple holes and when and where each of them noticed the staple holes. Careful examination of their respective evidence does not reveal any direct contradictions, irreconcilable conflict or inconsistency but each gave quite different evidence on observations of the staple holes.
First of all, it seems curious, and I think unlikely, that each independently of the other, at different times, observed staple holes that led each of them to a similar conclusion. That conclusion was never expressed precisely by either Mr Davies or Ms Parlevliet. It was a conclusion by implication. The implication was that the handling of the Trycala documents, prior to service at level 17, 500 Collins Street on the receptionist, “Tanya”, might have been the subject of such a degree of processing, separation and collation as might have led to the service of the incomplete copy of the Kritsonis affidavit. Such conclusions are more likely to have been reached after a discussion between Mr Davies and Ms Parlievliet and after one of them drew the attention of the other to what was thought to be an unusual number of “multiple staple holes”. Furthermore, such a discussion would appear likely and understandable after the detection or discovery of a missing page.
The Court notes that the receptionist, Tanya, no longer works at Oakley Thompson and was not called to give affidavit or oral evidence.
The Court also notes that the general state of the evidence suggests that the third page of the Kritsonis affidavit could have been inadvertently omitted from the copy of the affidavit and exhbits assembled by Mr Goldstein in the Melbourne Registry of the Federal Court.
However, the evidence is equally open to the possibility that the third page was delivered to the receptionist Tanya and misplaced at some stage in the delivery and copying and reassembly of the Nature’s Realm and Aloe Tech documents and copies.
The evidence of Mr Goldstein as to the state of the documents when he received them from counsel and to how he copied, collated and then assembled copies of the Trycala application, the Kritsonis affidavit and the exhibits and exhibits sheets, provides a reasonable and possible explanation for the number of staple holes which are present in what is alleged to be the copy of the Kritsonis affidavit and exhibits and exhibits sheets as allegedly served on the receptionist at about 3.30 p.m. on 28 May.
The Court also notes that Tracey Tipri copied the affidavit, exhibits and exhibit sheets at Mr Goldstein’s office but she was not called to give evidence.
It seems to me inherently unlikely that Mr Davies and Ms Parlevliet independently, at different times, observed staple holes and, independently of each other, and at different times, drew similar conclusions that suggested a possible explanation as to why, as they assert, only two of the three pages of the Kritsonis affidavit as sworn and filed in Court was served on the receptionist.
Furthermore, Mr Davies’ evidence is of observing “multiple staple holes” in both the Nature’s Realm and Aloe Tech applications and in the accompanying affidavits in both cases. On the other hand, Ms Parlevliet only gives evidence of observing the multiple staple holes in the Kritsonis affidavit and exhibits and exhibits sheets. It is possible that she could have observed similar staple holes in the Aloe Tech affidavit and exhibits and exhibits sheets and made no mention of it. It is possible that she did not observe such holes in the Aloe Tech affidavit and accompanying documents but that such holes did exist.
If Mr Davies did in fact, as his evidence suggests, observe “multiple staple holes” in both applications and both affidavits, it would seem at least curious that he would have never discussed those observations with Ms Parlevliet or, if he did, that neither of their affidavits or Ms Parlevliet’s oral evidence refer to such discussions.
I am unable to reach a conclusion as to whether Mr Davies observed multiple staple holes in both sets of documents and in the applications, affidavits and exhibits in each set of documents. I have already expressed the view that it is unlikely that Mr Davies and Ms Parlevliet made independent, separate observations of staple holes.
THE TIMING OF DISCOVERY OF THE INCOMPLETE AFFIDAVIT – WAS THE OBSERVATION MADE BEFORE OR AFTER THE DOCUMENTS WERE PHOTOCOPIED?
In his own affidavit, Mr Davies made no direct reference to his discovery that the Kritsonis affidavit was incomplete. Initially, in cross-examination, he also declined to directly address this issue. However, when pursued, he was adamant that he observed the omission on the morning of 29 May before he directed Ms Parlevliet to copy the Nature’s Realm and Aloe Tech documents.
The evidence includes the following:
(T22, Lines 31-40):
“NOLAN:You say in your affidavit that – I’m reading from paragraph 3 – “On perusing the purported affidavit I observed that it comprised two pages, together with three exhibits.” Is it your evidence, therefore, that by saying you noticed it comprised two pages that you’re in fact saying that you noticed at that time that there was one or more pages missing?
DAVIES:It’s a matter of semantics, really, but what I had was two pages. I had a first page and a page marked number 2. I wouldn’t have known at that stage whether there was a page 3, 4, 5, 6 or whatever.
NOLAN:But did you notice at that time that the affidavit was incomplete?
DAVIES: Of course it didn’t have any attestation page.”
(T21, Lines 13-27):
“NOLAN:On 29 May, you gave documents to Ms Parlevliet to be photocopied. That is correct?
DAVIES:Yes.
NOLAN:Did you give her the application and the affidavit for photocopying?
DAVIES:Yes.
NOLAN:Did she photocopy both the application and the affidavit and return them to you?
DAVIES:Yes. I had the two sets together, the Aloe proceeding that you spoke of and also this proceeding. There was no covering letter when they were received, so they were just bundled together. I’d quickly looked through the documents on the 29th when I went through them, and then I gave them to her to photocopy so I had a spare copy for the file and then copies also to send out.
NOLAN:At the time that you gave them to her to photocopy, did you give her any special instructions?
DAVIES:Again, it’s a relative term, but I gave her instructions. They were to photocopy the documents.”
(T22, Lines 18-29)
“NOLAN: So what happened then on the 29th?
DAVIES:On the 29th, at some stage during the course of the morning, when I was going through the documents, I went through the applications, which were on the front of the – there was an application on top of the affidavit first, and I went through the affidavit. I’m not sure now which one was first in time, whether it was the Aloe Tech matter of the Nature’s Realm matter. But in the Nature’s Realm matter I noticed that the affidavit of Mr Kristonis, that had been served, only contained two pages, being the first and second page. At that point of time I didn’t know how many pages there were to follow in relation to the matter. I’d continued reading what was there in terms of both the affidavits and the exhibits, and also went through the other affidavit and the other application. I then gave the lot to Joanne, with the instructions to photocopy them.”
Davies also stated (T24, Line 19) “I read through the document. I noticed that it wasn’t complete. I then gave it to my secretary to photocopy.”
Ms Parlevliet does not recall whether she copied the two sets of documents at the same time but thinks this is likely. She also cannot recall photocopying the application in the Nature’s Realm matters:
(T6):
“I know I photocopied both sets because we were sending a copy of each to the client but I don’t remember whether I did them both at the same time … I don’t specifically recall that I did them at the same time but I would assume that I did.”
(T17):
Our photocopiers face up but I don’t actually recall photocopying the application. I’m not sure that we actually sent a copy of the application to the client. We certainly sent copies of the affidavits.”
Mr Davies has expressed the view that he may have told Ms Parlevliet that there was a page missing from the Kritsonis affidavit before he gave the “two sets of documents” to her for photocopying.
(T25, Lines 1-8):
“NOLAN:You didn’t bring it to her attention at all that it was your belief at that time that there was a missing page?
DAVIES:In fact I may have made some comment that the affidavits aren’t complete.
NOLAN:That’s not your secretary’s evidence?
DAVIES:Well, as I said, whether I made the comment at that point of time or not I don’t know. But I can’t recall, rather than I don’t know.”
(T25, Lines 27-43):
“NOLAN:It’s your evidence that you knew that at the time that you gave the document to your secretary that there was a page missing at that time?
DAVIES:Correct.
NOLAN:You didn’t tell your secretary that fact?
DAVIES:I can’t recall whether I did or I didn’t. I may have made some comment that there’s a page missing from the affidavit. But again, it wouldn’t have been necessary. I simply would have given the instruction to photocopy the document and to provide the copies back to me.
NOLAN:Wouldn’t you normally say to your secretary, if there was something unusual in respect of a document, that unusual aspect so that she won’t concern herself if she becomes aware of it during the photocopying process?
DAVIES:Yes and no. It would depend on a number of things: what she was doing, what I was doing at the time. But in this particular case the documents were there. I’d read through the documents. I’d noted myself that the affidavit wasn’t complete and I wanted copies. So I gave instructions to photocopy the documents and provide the copies back to me.”
(T26, Lines 46-47), (T27, Lines 1-6):
“NOLAN:When did you inform your secretary that there was an issue in respect of the affidavit and that she would be required to do an affidavit?
DAVIES:As I said, I’m not sure. I thought I might have mentioned at the time that the affidavit that we’d got wasn’t complete. She certainly would have known by the time she was preparing the letter – the first letter in time went out to the client. That letter’s dated 1 June. It pointed out that the affidavit that we’d received was not complete and the application was therefore probably defective under the Corporations Law.”
Ms Parlevliet is in no doubt that Mr Davies told her of the defective affidavit after she had completed the copying of the Nature’s Realm documents.
(T9, Lines 14-22):
“NOLAN:When did you find out for the first occasion that it was alleged that there was a page of the affidavit missing?
PARLEVLIET: I recall that it was after I gave the documents back to Tim and he queried whether I’d noticed that there was a page missing. I hadn’t specifically noticed when I was copying it that there was a page missing.
NOLAN:So when did he query that with you?
PARLEVLIET: After I gave the documents back to him. I don’t recall whether it was immediately afterwards but it was certainly within a few minutes of me giving the photocopies and the documents that I had originally received back to him.”
I have concluded that, in terms of likelihood and probability, Mr Davies is unlikely to have observed that the affidavit was defective until after he received back the photocopies of both the Nature’s Realm and the Aloe Tech documents and that it is very likely, as Ms Parlevliet concedes, that she copied the both sets of documents at the same time. I also consider that she probably copied the applications and the affidavits even through she cannot recall copying the Nature’s Realm application.
In terms of likelihood, I do not accept that Mr Davies would have noticed the defect in the Kritsonis affidavit before ordering photocopying of the two sets of documents and failed to alert Ms Parlevliet to that possibility before the copying began. In fact, if he had noticed the defect at that stage it could have been prudent and professional to preserve the documents without photocopying or, at the very least, personally attend to the photocopying with a witness present.
I accept the clear evidence of Ms Parlevliet that Mr Davies told her of the defect immediately after or soon after she returned all the documents and photocopies and that the probability is that it was after the copying that Mr Davies discovered that the Kritsonis affidavit was incomplete and, whatever else was lacking, the attestation page was missing.
PROBABILITIES AND POSSIBILITIES
It is possible that Tracey Tipri failed to provide adequate copies of the last page of the Kritsonis affidavit to Mr Goldstein and that the copy affidavit later served on Tanya, the receptionist at Oakley Thompson, was missing a page when Mr Goldstein took the documents to the Federal Court Registry.
It is possible that the missing page was undetected when the documents were checked and the application sealed in the Court Registry and undetected when Mr Goldstein reassembled the documents and set off the serve the application and affidavit.
It is possible that the third page was present when the papers were checked in the Registry but that the third page of the copy of the affidavit ultimately served on Tanya was misplaced as the documents were checked by a Court officer or misplaced by Mr Goldstein as he reassembled the documents in the Court Registry.
It is possible that the third page of the affidavit was served with the application but was misplaced when the documents were with Tanya or on transit with Tanya to Ms Parlevliet.
It is possible that the third page was misplaced in transit from Ms Parlevliet to Mr Davies or in transit from Mr Davies to Ms Parlevliet or during the copying process or after the copying process.
Neither counsel sought to challenge or impugn the good faith of Mr Goldstein, Mr Davies or Ms Parlevliet but the conflicting recollections of the three witnesses cannot be entirely reconciled and there are differences in the recollections and the evidence of Mr Davies and Ms Parlevliet.
I must determine the matter on balance of probabilities and I can only determine the matter on balance of probabilities. There is certainly ample room for doubt and it is impossible to make a confident determination as to what has actually happened. However, I note that neither Tracey Tipri or Tanya were called to give evidence. I have found that:
it is inherently unlikely that both Mr Davies and Ms Parlevliet made separate, independent, similar but different observations about staple holes and staple holes in different documents.
it is inherently unlikely that Mr Davies and Ms Parlevliet also reached similar and separate conclusions about the possibility of a missing page after observations of the presence of staple holes.
Ms Parlevliet was not told about the defective affidavit until after the copying process was complete and complete in respect of both the Nature’s Realm and Aloe Tech documents.
on a balance of probability Mr Davies did not observe the defect in the affidavit until after the copying process had been completed.
Given those findings, I also find that it is more probable than not that the complete Kritsonis affidavit was served by Mr Goldstein on Tanya at the office of Oakley Thompson and that there has been compliance with s 459G(3).
The alternative submission that the affidavit did not meet the minimum requirements and did set out the main elements supporting the case to have the demand set aside and did not state the grounds referred to in the application and did not state that the demanded debt is disputed must also fail, given that I have found that the entire affidavit was served: Graywater Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund (1996) 70 FCR 452. I find that the affidavit met the minimum requirement, disputed the debt and set out the grounds relied on.
DECLARATIONS AND ORDERS
I declare that:
Trycala Pty Ltd has applied to the Court within 21 days of service of a statutory demand and has applied for an order setting aside the statutory demand.
Within the 21 days required by s 459G(2) Trycala Pty Ltd has made an application in accordance with s 459G and that an affidavit supporting the application was filed in Court and a copy of the application, and a copy of supporting affidavit, were served on the person who served the demand on the company.
I order that:
the respondent’s Motion filed 26 June 1998 and heard 3 August 1998 be dismissed (this being a Motion for a declaration that the applicant’s application to set aside a statutory demand filed 28 May 1998 be declared invalid).
the respondent pay the applicant’s costs in respect of the Motion.
the application to set aside the statutory demand be listed for hearing and determination as soon as practicable.
I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Ryan
Associate:
Dated: 24 AUGUST 1998
Counsel for the Applicant: Mr G. Gronow Counsel for the Respondent: Mr J. Nolan Date of Hearing: 3 August 1998 Date of Judgment: 24 August 1998
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