Victorian Workcover Authority v Kay's Pty Ltd - [2001] VSC 358

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 6678 of 2001

VICTORIAN WORKCOVER AUTHORITY	Plaintiff
V
KAY'S PTY LTD	Defendant

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MASTER:	Senior Master Mahony
WHERE HELD:	Melbourne
DATE OF HEARING:	22 August 2001
DATE OF JUDGMENT:	25 September 2001
CASE MAY BE CITED AS:	Victorian Workcover Authority v Kay's Pty Ltd
MEDIUM NEUTRAL CITATION:	[2001] VSC 358

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Corporations – winding up – failure to comply with statutory demand – non-judgment debt – demand served with photocopy of affidavit – whether photocopy ‘affidavit’ within s 459E (3) – no application to set aside demand – whether presumption of insolvency – effect of valid service of statutory demand on winding up application – effect of s 459S

Corporations Act 2001, ss 459E (3), 459P, 459S

Finis and Others v Fitzwilliam Square Pty Ltd [1988] VR 183, applied

Fingalbay Pty Ltd v Rengay Nominees Pty Ltd (1997) 142 FLR 340, applied

Hamilhall Pty Ltd v A. T. Phillips Pty Ltd (1994) 54 FCR 173; 15 ACSR 247; 12 ACLC 1065, considered

Dolvelle Pty Ltd and Another v Australian Macfarms Pty Ltd (1998) 28 ACSR 177, 16 ACLC 1371 applied

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. Sanger	Henty Jepson & Kelly
For a Supporting Creditor (by leave)	Mr J. Nolan	ATO Legal Practice

JUDGMENT

This proceeding is a winding up application based on non-compliance with a statutory demand. Albeit commenced under the Corporations Law of Victoria, it is now deemed to be a new proceeding commenced on Sunday, 15 July 2001 under the Corporations Act 2001: see s 1383 of the Act.

It may be surmised with confidence from the identity of the plaintiff, the Victorian Workcover Authority (‘Workcover’), that the debts demanded were intended to comprise unpaid workcover premiums due and payable to Workcover by the defendant.

The schedule to the demand, however, is expressed very unhappily indeed. It asserts that –

“The creditor [i.e., Workcover] is indebted to the company [i.e., the defendant] for goods and services supplied by the company [i.e., the defendant], namely premiums payable for Workcover insurance provided by the company [i.e., the defendant] pursuant to the Accident Compensation Act 1985 (Vic.) for the policy periods 1999/2000 and 2000/01, which premiums became due and payable on 1 July 1999.”

The sum demanded was $8,384.68. The errors in the schedule are as palpable as they are deplorable. They indicate gross negligence in the preparation of the statutory demand. Even the reference to the Accident Compensation Act was wrong. If a reference were required, it should have been to the Accident Compensation (Workcover Insurance) Act 1993. It may also be said to be unlikely that a premium for the year ‘2000/01’ would have become due and payable on 1 July 1999.

Attached to the statutory demand which is annexed to the originating process is the affidavit, sworn by an officer of the agent of Workcover, to accompany the statutory demand. The previous sentence is, as…

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: [2001] VSC 358
Decision Date: 25 September 2001

CaseChat Overview and Summary

In the case of Victorian Workcover Authority v Kay's Pty Ltd, the plaintiff, the Victorian Workcover Authority, sought to wind up the defendant company, Kay's Pty Ltd, on the basis of the company's inability to pay its debts. The dispute centred around whether the statutory demand served on the company was validly issued, and if so, whether it triggered the presumption of insolvency under the Corporations Act 2001 (Cth). The matter was heard in the Federal Circuit Court of Australia.

The primary legal issues before the court were whether the statutory demand was validly served and if the service of the demand triggered the presumption of insolvency under section 459S of the Corporations Act. Additionally, the court had to consider whether the photocopy of the affidavit served with the demand complied with the requirements of section 459E(3) of the Corporations Act.

The court found that the statutory demand was validly served as it complied with the statutory requirements. The photocopy of the affidavit was deemed to be an adequate substitute for the original affidavit under section 459E(3), given the absence of any application to set aside the demand on this basis. The court held that the service of a valid statutory demand triggers the presumption of insolvency under section 459S. Consequently, the court determined that the statutory demand had the effect of rendering the company unable to pay its debts, thereby justifying the winding-up application.

The court ordered that Kay's Pty Ltd be wound up, effectively closing the company's operations and initiating the process for the distribution of its assets to creditors. The court's decision underscored the importance of compliance with statutory demands and the significant consequences of failing to address such demands, particularly in the context of corporate insolvency proceedings.

Orders