Complete Equipment Solutions Pty Ltd v Tesab Engineering Limited (A Company Registered in the United Kingdom, Company No. NI026214) [2016] VSC 253 (18 May 2016): Statutory demand, whether service within 21 period

May 19, 2016 |

In Complete Equipment Solutions Pty Ltd v Tesab Engineering Limited (A Company Registered in the United Kingdom, Company No. NI026214) [2016] VSC 253  Associate Justice Randall considered the question of service. This is not a common issue in modern day jurisprudence relating to statutory demands. In this case a failure to comply with the service requirements resulted in the plaintiff’s application being dismissed.

FACTS

The plaintiff, by originating process dated 9 November 2015,  made an application under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand dated 14 October 2015 [1]. The court noted, with some annoyance, that the affidavit referred to the receipt of a statutory demand without specifying the actual date of receipt [2]. Accordingly the  the Court could not ascertain if it had  jurisdiction to hear an application under s 459G had it not been the affidavit in response affirmed which provided material  evidencing that the letter enclosing the statutory demand and accompanying affidavit, each dated 14 October 2015 was delivered to the plaintiff’s registered office at 9.16am on 19 October 2015. From that the court could determine that the last day for compliance with the provisions of s 459G was 9 November 2015 [3].

As at 16 October 2015 the solicitors acting for the defendant were ClarkeKann Lawyers, which had  offices in Brisbane and Sydney. The statutory demand and the supporting affidavit was sent from the Brisbane office [5]. They were not nominated as the address for service of the application and did not offer to accept service of documents on behalf of the defendant [9].

The address of the creditor was in Northern Ireland while the address for service was “c/- Oakley Thompson & Co, Level 17, 459 Collins Street, Melbourne, VIC 3000” [7], overcoming any issue regarding service upon a foreign company at its registered office and service interstate [8].

On 9 November 2015 a representative of the plaintiff emailed ClarkeKann Lawyers a sealed Form 2 application,  the Service and Execution of Process Act 1992 (“SEPA”) notice and supporting affidavit [10] and the originating process, a SEPA notice and  affidavit[13]. ClarkeKann Lawyers did not respond to the transmissions from the plaintiff’s solicitors  [14].

DECISION

The Court framed the question, at [15] as:

Can service of the application to set aside the statutory demand be effected upon an interstate solicitor in circumstances where an address for service has been specified in Victoria? If yes, were the facsimile or email transmissions an acceptable mode of service of the application to set aside the statutory demand?

The Court summarised the plaintiff’s position, at [16],  as:

(a) The originating process and affidavit in support were served upon the defendant pursuant to the provisions of the SEPA within the 21 day period as ClarkeKann Lawyers, as the defendant’s solicitors in Australia, were a ‘responsible officer’.

(b) It must be assumed that the documents provided to ClarkeKann Lawyers were brought to the attention of the (Irish) directors prior to the expiration of the 21 days UK time and that by the failure of Mr Khan to specify if he transmitted the documents prior to the expiration of 21 days (UK time) entitled a Jones v Dunkel inference adverse to the defendant.

His Honour :

  •  declined to  draw a Jones v Dunkel inference as the plaintiff did adduce any evidence about re-transmission or notification which the defendant might be required to or expected to contradict and without that evidence the onus remains upon the plaintiff to demonstrate jurisdiction[16].
  • cited the principles, at [17], set out in Woodgate v Garard Pty Ltd [2010] NSWSC 508 regarding the ‘effective informal service rule’ as being:

(v) there is no special exception to the ‘effective informal service rule’ in the case of service by email or facsimile — the question remains whether that mode of service actually brought the document to the attention of a responsible officer: (authorities omitted).

(vi) where a document, not served in a prescribed mode, comes to the actual attention of the sole director of a company it will be presumed, unless a strong case to the contrary is shown, that director is the responsible officer and that service is good: Emhill,[6] at [28]; Polstar,[7] at [24].

(vii) a party invoking the effective and formal service rule bears the onus of proving the time at which the document came to the actual attention of a responsible officer of the company and, in the view of the serious consequences which may attend, the Court will not lightly draw inferences or make assumptions as to the time of service..

  • stated that a ‘responsible officer’ is a person charged with or authorised to deal with the application on behalf of the creditor. He noted that while that usually is a sole director or one with appropriate authority there is no reason why the categories of ‘responsible officer’ cannot be expanded when appropriate but this was not one of those instances.  While ClarkeKann Lawyers were retained in the dispute that retainer did not extend to dealing with the statutory demand issues [18].
  • stated that the specification of an address for service other than at the offices of ClarkeKann Lawyers negated the concept that the firm would be a ‘responsible officer’ for dealing with the issues in the application to set aside the statutory demand [18].
  • cited. at [19], Gardiner AsJ in Greenmint Pty Ltd where he:
    • reviewed Opensoft Australia Pty Limited v Miller Street Pty Limited  to the effect that s 459G(3)(b) of the Corporations Act requires a copy of the application and supporting affidavit to be “served on the person who served the demand on the company”.
    • stated that where the statutory demand specifies a street address and not any electronic address for service it is not permissible to accept service by means other than those specified in the statutory demand itself.   The situation might be different if the recipient receives an email at the address for service specified in the statutory demand, opens the email, and reads the attachments.  Then the recipients would have  brought the documents to his/her actual attention the application and supporting affidavit as filed.
    • stated that where it can be demonstrated that documents electronically transmitted (at least the document sent by facsimile transmission) had actually been received in a readable form by the recipient, who is acting for the creditor it will prove to the Court’s satisfaction that the documents actually came to the attention of someone authorised  to “deal directly and responsibly” with the document, or documents [20]
    • cited authorities providing that the combination of s 459E and s 459G shows that the legislation contemplates that the application under s 459G(3) may be served on the creditor at the address shown on the statutory demand. It is sufficient for the purposes of s 459G(3) if copies of the application and affidavit are served at the relevant address, that being the address nominated by the giver of the statutory notice. How they come to be left there is irrelevant. What is required by s 459G(3) is that the respondent should receive copies of the relevant documents at the address nominated by it [21].

His Honour found that as the statutory demand nominated a Victorian address for service of copies of any application and an affidavit and the defendant neither has a registered address in Australia, nor does any of its directors reside in Australia the place for service of the creditor in Australia is specified in the statutory demand. The address for service of the application and supporting affidavit is also specified as in Victoria [23].

As the plaintiff chose to serve the documents at the Queensland office of ClarkeKann Lawyers the provisions of the SEPA Act apply [24]. The defendant is not a company incorporated or to be taken to be incorporated under the Corporations Act 2001 (Cth) and not within the definition of ‘company’ in s 3 of the SEPA [25].

The court was not satisfied that the Irish creditor obtained or was even notified of the proceeding before the expiration of the 21 day period [34].  The plaintiff had the choice of serving the company in Ireland or serving at the address nominated in the statutory demand. It did neither [40].

On a review of the authorities his Honour noted:

  • service interstate of an application made in accordance with s 459G must comply with the requirements of SEPA including its notice requirements. If it does not, it is ineffective [44].
  • s 11(4) is to be construed by reading it distributively, ie, as applying where appropriate to the means of service provided for in ss 9 and 10 for service on companies, registered bodies and body corporates other than companies. SEPA has prescribed a larger number of places at which a body corporate which is not a company may be served than it has in the case of either companies or registered bodies [46].
  • Section 9 of SEPA precluded service other than at the registered office in accordance with the other means specified in s 9 [52].

The email transmission and facsimile transmissions were sent to ClarkeKann Lawyers which was not the defendant’s registered office and therefore did not qualify as an address for service under s 10 of the SEPA Act [47]. As the 21 day period is immutable and not open to variation by consent of the parties the fact that defendant’s appearance by ClarkeKann Lawyers to argue jurisdiction does not regularise service [50].

The specification of an address for service negates any argument that service upon the solicitors who posted the demand would be sufficient [57].

As a result the Court found, at [58]:

(a) The s 459G application was not served upon the defendant;

(b) The s 459G application was not served in accordance with SEPA;

(c) The s 459G application was not served at the address specified in clause 6 of the statutory demand;

(d) The specification of an address for service negated the concept that service upon the solicitors would be sufficient service;

(e) I am not satisfied that the concept of informal service is applicable as I am not satisfied (the onus being on the plaintiff) that the material was brought to the defendant’s attention within the 21 day period in any event.

As a result the Court  dismissed the proceeding for lack of jurisdiction [59].

ISSUE

The decision makes clear that it is imperative to have regard to the statutory demand and affidavit in determining addresses for service.  It is a highly technical jurisdiction and as such assuming that a party serving a document is the party that will be recipient of process will cause problems, as was the case here.

 

One Response to “Complete Equipment Solutions Pty Ltd v Tesab Engineering Limited (A Company Registered in the United Kingdom, Company No. NI026214) [2016] VSC 253 (18 May 2016): Statutory demand, whether service within 21 period”

  1. Complete Equipment Solutions Pty Ltd v Tesab Engineering Limited (A Company Registered in the United Kingdom, Company No. NI026214) [2016] VSC 253 (18 May 2016): Statutory demand, whether service within 21 period | Australian Law Blogs

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