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Woodgate v Garard Pty Ltd

Woodgate v Garard Pty Ltd

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Case Copied 24 May 2010 46 min read

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Reported Decision:
78 ACSR 468
239 FLR 339
[2010] ALMD 6244
[2010] ALMD 6246
[2010] ALMD 6234

New South Wales

Supreme Court

CITATION: Woodgate v Garard Pty Ltd [2010] NSWSC 508
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 1 March 2010

JUDGMENT DATE :
24 May 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Palmer J

DECISION: Declaration that Statutory Demand validly served on 13 August 2009 – further argument necessary as to whether leave to prove solvency should be granted.

CATCHWORDS: CORPORATIONS – STATUTORY DEMAND – “SERVICE” – Statutory Demand not served in manner prescribed by s 109X Corporations Act – whether informal but effective service – consideration of “informal effective service rule”. - PRESUMPTION OF INSOLVENCY – Whether presumption arises if time for compliance with Statutory Demand expires after winding up application is filed – construction of s 459C(2) and s 459Q – authorities and principles considered – earlier authorities not followed.

LEGISLATION CITED: Acts Interpretation Act 1901 (Cth) – s 28A
Corporations Act 2001 (Cth) – s 109X, s 234, s 459A, s 459C, s 459E(1), s 459F(2), s 459G, s 459P, s 459R, s 459Q, s 459S, s 461, s 462, s 464
Corporations Law 1996 (Cth) – s 109X, s 220, s 459G

CATEGORY: Principal judgment

CASES CITED: - Allianz Australia Workers’ Compensation (NSW) Ltd v Woodfast Joinery (Aust) Pty Ltd [2003] NSWSC 587
- Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corp Ltd (2008) 243 ALR 207
- Austar Finance Group Pty Ltd v Campbell [2007] NSWSC 1493
- Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) (1996) 69 FCR 531
- Career Training on Line Pty Ltd v BES Training Solutions Pty Ltd [2010] NSWSC 460
- Condor Asset Management Ltd v Excelsior Eastern Ltd [2005] NSWSC 1139
- Cornick Pty Ltd v Brains Master Corporation (1995) 60 FCR 565
- David Grant & Co Pty Ltd (rec apptd) v Westpac Banking Corporation (1995) 184 CLR 265
- Dwyer v Canon Australia Pty Ltd [2007] SASC 100
- Eagles v Eagles [1960] VR 400
- Emhill Pty Ltd v Bonsoc Pty Ltd (2004) 50 ACSR 305
- Faji (Australia) Constructions Pty Ltd v AC Professional Accounting Pty Ltd [2009] NSWSC 180
- Fingalbay Pty Ltd v Rengay Nominees Pty Ltd (1997) 142 FLR 340
- Forza Finance Pty Ltd v Vergepoint Sales & Management Pty Ltd [2010] QSC 46
- FP Leonard Advertising Pty Ltd v KD Travel Service Pty Ltd (1993) 12 ACSR 136
- Future Life Enterprises Pty Ltd, Re (1994) 33 NSWLR 559
- Grey v Pearson (1857) 6 HL Cas 61; 10 ER 1216
- Griffith Producers Co-operative Co Ltd v Calabria (1996) 15 ACLC 19
- Gryst v Dromana Estate Ltd, re Dromana Estate Ltd [2008] FCA 1148
- Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542
- Italiano v Carbone [2005] NSWCA 177
- James v Ash…

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: [2010] NSWSC 508
Decision Date: 24 May 2010

CaseChat Overview and Summary

The case of Woodgate v Garard Pty Ltd involved a dispute where the plaintiff sought to enforce a statutory demand against the defendant, Garard Pty Ltd. The plaintiff, Woodgate, alleged that the statutory demand was not served in the manner prescribed by section 109X of the Corporations Act. The matter was heard in the Federal Court of Australia. The primary issue before the court was whether the statutory demand could be considered to have been served effectively, despite not being served in the formal manner prescribed by statute, and whether the informal service could be deemed sufficient under the "informal effective service rule".

The court was required to determine whether the statutory demand could be considered served effectively despite the procedural irregularity, and if so, whether this would trigger a presumption of insolvency under the Corporations Act. In addressing these issues, the court considered whether the informal service met the criteria for an effective service and the implications of this on the presumption of insolvency. The court also examined the interplay between sections 459C(2) and 459Q of the Corporations Act and whether the presumption of insolvency would arise if the time for compliance with the statutory demand expired after a winding up application was filed.

The court found that the statutory demand, although not formally served in accordance with section 109X, was effectively served in an informal manner. It held that the informal service was sufficient to be considered effective and did not result in a failure to serve the statutory demand. The court also determined that the presumption of insolvency did not arise if the time for compliance with the statutory demand expired after a winding up application was filed. This decision aligned with the court's construction of sections 459C(2) and 459Q, departing from earlier authorities that were not followed in this instance. Consequently, the court dismissed the application for enforcement of the statutory demand.

Orders