2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd

Service 6The only relevant evidence on the issue of service establishes that on 3 December 2013, the demand and accompanying affidavit (such as they were) were placed in an envelope, addressed to the defendant at its registered office (in New South Wales), and lodged at Blakcell Post Office (in New South Wales) to be sent by registered post, stamped with the requisite postage. The lodgement receipt indicates that the sender did not select "delivery confirmation" or "person to person". There is no proof of delivery by Australia Post to the addressee, which proof can readily be obtained from Australia Post's on-line tracking system. On the other hand, the defendant has adduced no evidence of non-receipt, and it is appropriate in this case to infer that such evidence as it could have given on the question would not have assisted it. 7(CTH) Corporations Act 2001, s 109X(1)(a), provides that for the purposes of any law, a document may be served on a company by, inter alia, posting it to the company's registered office. (CTH) Acts Interpretation Act 1901, s 29, provides as follows: 29 Meaning of service by post (1) Where an Act authorises or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. (2) This section does not affect the operation of section 160 of the Evidence Act 1995. 8(CTH) Evidence Act 1995, s 160, relevantly provides as follows: 160 Postal articles (1) It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted. 9(NSW) Evidence Act 1995, s 160, is in identical terms. 10Mr Johnson, for the defendant, also relied on (CTH) Australian Postal Corporation Act 1989, s 5, which make provision to the effect that an article is carried by "ordinary post" is it is carried by means of the letter service in such a way as will not involve the supply of a special service to which a special charge or additional fee is payable in relation to the carrying of the article. 11Mr Johnson's argument was that (1) registered post is not "ordinary post"; (2) registered post is not "the ordinary course of post" (citing Giustginiano Nominees Pty Ltd v Redan Pty Ltd [1999] WASC 95), so that the "ordinary course of post" presumption could therefore not apply; (3) service by registered post was effected only when the article is actually collected by the addressee (citing Nemoto International Trading Pty Ltd v Vodac Pty Ltd (Supreme Court (NSW), Macready M, 10 November 1998, unrep)). 12In my view, however, the term "ordinary post" in the Australian Postal Corporation Act involves a different concept from the term "ordinary course of post" in the Acts Interpretation Act. In the former context, it is used to distinguish the ordinary postal service from premium services, such as registered post. In the latter case, it is used to describe the manner in which an article typically flows through the postal system from posting to delivery, and the time that it takes to do so. In Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1663, Owen J explained that for these purposes the "ordinary course of post" included a methodological as well as a temporal application, and relates to the ordinary course of post as it applies to the addressee. 13That an article is despatched by a means other than "ordinary post" does not mean that there is not an "ordinary course of post" in respect of it. For example (and leaving aside for the moment Evidence Act, s 160), the ordinary course of post for an article posted by "Express Post" may be more expeditious than that for one posted by "Ordinary Post". 14Registered Post is a means of post, though not the only means of post [cf Giustginiano Nominees Pty Ltd v Redan Pty Ltd, [5]]. It is therefore a means of service authorised by Corporations Act, s 109X(1)(a). Acts Interpretation Act, s 29, would then have the effect that service would be deemed to be to have been effected at the time at which the letter would be delivered in the ordinary course of post for an article posted by registered mail when and where it was posted. There is no evidence of that "ordinary course", although Thomas v Johnson (1979) ANZ Conv R 160 would suggest that four days might be allowed for the addressee to collect the article from the post office after delivery of a notification card in the letter box might be appropriate. In any event, in the absence of any evidence of non-receipt, when such could easily have been adduced by the defendant, the Court can comfortably take notice that the ordinary course of post for such an article would have involved delivery within a month (that is to say by 3 January 2014), well in excess of 21 days before the originating process was filed on 12 March. 15However, resort to "the ordinary course of post" is unnecessary where Evidence Act, s 160, applies. In three cases in this court, it was held that s 160 was not available in this context, initially on the ground that it was inconsistent with the specific provision formerly contained in Corporations Act, s 109Y, which was broadly to the same effect as Interpretation Act, s 29 [Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542; 21 ACSR 440 (Young J)], and subsequently (after the Corporations Act) on the ground that the reference in the Acts Interpretation Act to the Evidence Act was a reference to the Evidence Act of the Commonwealth, which does not apply in a State court, and the Evidence Act of the State was irrelevant to the construction of the Commonwealth Corporations Act, s 109X, particularly where the Commonwealth Acts Interpretation Act, s 29, made specific provision [Lane Cove Council v Geebung Polo Club Pty Ltd (No 2) [2002] NSWSC 118; (2002) 41 ACSR 15 (Barrett J); Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 500; (2004) 49 ACSR 714 (Austin J)]. However, in Scope Data Systems Pty Ltd v Goman [2007] NSWSC 278; (2007) 70 NSWLR 176, White J reviewed those authorities, and declined to follow them. His Honour explained that s 160 (of the State Evidence Act) was made applicable by (CTH) Judiciary Act 1903, s 79, as a means of proving when a document is taken to have been delivered in the ordinary course of post - or, if it is established that the document was not delivered in the ordinary course of post, when it is taken to be delivered (at [34]); that (particularly in the context of a national scheme) it would be a remarkable consequence of the earlier authorities that s 160 would be available if the proceedings were instituted in the Federal Court, but not in this Court (at [37]); that the provisions were not inconsistent but capable of harmonious, complementary operation (as, indeed, s 29(2) seems to contemplate) (at [40]); and that giving effect to s 160 in that way does not affect the meaning - or interpretation - of Corporations Act, s 109X, or Acts Interpretation Act, s 29, but by providing a rebuttable presumption facilitates proof of the matters for which those sections provide (at [43]). In Renegade Rigging Pty Ltd v Hanlon Nominees Pty Ltd [2010] VSC 385, Ferguson J agreed with White J's analysis and reasoning (at [17]-[21]), as do I. Accordingly, Evidence Act, s 160, is available. 16Here, the article was sent by prepaid post, addressed to a person at a specified address in Australia. The fact that it was sent by registered post does not detract from the application of s 160, as registered post is a form of pre-paid post, and s 160 does not refer to "ordinary prepaid post". There is no injustice in such an application of s 160 to registered post, as all the defendant has to do to displace the presumption is adduce evidence that raises a doubt. But no evidence to raise doubt about the presumption has been adduced. Accordingly, in conformity with s 160, it is presumed that service was effected on the fourth working day after the article was posted on 3 December 2013. 17It follows that the defence based on inadequate evidence of service fails, a conclusion that can be reached all the more comfortably given the absence of any evidence of non-receipt.

The demand and affidavit accompanying 18The principal objection raised by Mr Johnson to the validity of the demand was the omission from the demand (and from the accompanying affidavit) of the documents referred to in the Schedule to the demand. However, those documents were not an essential or fundamental element of the demand. Although paragraph 1 of the demand was somewhat convoluted, it is clear enough that the demand was for $135,784, said to be the amount agreed to be due on settlement. At worst, their omission was a defect in the demand, which could have been relied on an application under s 459G to set aside the demand and, not having been so raised, cannot without leave under s 459S now be invoked. Leave was not sought, no doubt because the issue would not have been material to establishing solvency. 19However, the affidavit accompanying the demand does not verify that the debt is due and payable, as required by s 459E(3). The expression "verify" in s 459E(3) is used in the sense of "a formal affirmation" [AZED Developments Pty Ltd v Frederick & Co (in liq) (1994) 14 ACSR 54, 56 (Hayne J); Hamilhall Pty Ltd v A T Phillips Pty Ltd (1994) 15 ACSR 247, 249], and such verification requires a statement that the debt is due and payable by the company [Chadah Pty Ltd v Kubota Tractor Australia Pty Ltd [2003] NSWSC 456], as paragraph 4 of the prescribed Form 7 stipulates. In this respect, there was non-compliance with the apparently mandatory requirements of s 459E(3), and had an application been made under s 459G to set aside the demand "for some other reason", it would have succeeded, as was the case in Victor Tunevitsch Pty Ltd v Farrow Mortgage Services Pty Ltd (in liq) (1994) 14 ACSR 565, where a statutory demand for a non-judgment debt was served unaccompanied by any form of affidavit. (While the affidavit also did not contain the statement required by paragraph 5 of Form 7, to the effect that the deponent believed that there was no genuine dispute, and while that too would have been sufficient to warrant the setting aside of the demand had a timely application to do so been made, it is not a requirement stipulated in s 459E(3) itself, and would not vitiate the validity and efficacy of the demand if its failure to verify the debt, which is an explicit requirement of s 459E(3), does not do so). Thus the critical issue is whether non-compliance with s 459E(3) means that the demand never took effect for the purposes of s 459F, notwithstanding that no application was ever made to set it aside. 20Cases in which a purported creditor's statutory demand under s 459E has been held to be not a valid demand capable of triggering a presumption of insolvency if not first set aside are few and far between. One reason for this is that in s 9, "statutory demand" is defined to mean "a document that is, or purports to be, a demand served under section 459E", and this has often been treated as having the consequence that so long as a document purports to be a demand it will be effective to trigger the presumption. However, this approach tends to overlook that the definition is subject to the usual caveat "unless the contrary intention appears". There can be no serious argument that the contrary intention does not appear in s 459G, so that a company can apply to set aside a purported demand, as well as an actual demand. But read in the context of the mandatory language of s 459E(2) and (3), there is every reason to find a contrary intention in s 459C(2)(a) and s 459F: it would be extraordinary if failure to comply with a purported demand, which did not satisfy the mandatory requirements of a statutory demand, would nonetheless trigger the presumption of insolvency unless the demand was, on a s 459G application, set aside. 21In Topfelt Pty Ltd v State Bank of NSW Ltd (1993) 47 FCR 226, 238; 12 ACSR 381, Lockhart J accepted (at ACSR 393) that it may be arguable that deficiencies in the form of a demand were so fundamental that the demand would be incapable of assuming the description of a statutory demand within the meaning of the legislation, though the demand in issue in Topfelt was not of that character, as it followed the prescribed form but contained a misdescription of the debt. Lockhart J's observation has been repeated in many later judgments, though rarely applied. Thus in Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 51 FCR 446; (1994) 13 ACSR 525, the omission of the notes subscribed to the prescribed form was held to be a "defect" in the demand which did not deprive it of the character of a statutory demand; in Vicbar Pty Ltd v Development Constructions (Newcastle) Pty Ltd (1995) 13 ACLC 1220, the fact that a demand claimed sums not yet payable did not render it a nullity; and in NT Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 153 ALR 359, the question did not arise as it was not accepted that the debt claimed was not due and payable (at 367). 22In Crema (Vic) Pty Ltd v Landmark Property Developments (Vic) Pty Ltd [2006] VSC 338; (2006) 58 ACSR 631 (at [91]-[116]), Dodds-Streeton J reviewed those authorities and held that, whatever the status of a statutory demand upon proof of an allegation that the debt was not due and owing, such an allegation was a ground which could be relied on in an application to set aside the demand and, if no such application were made, s 459S would apply. Her Honour held that where alleged deficiencies in a demand could have been raised on an application to set it aside they could only be raised in opposition to a winding-up application by leave under s 459S, and that only flaws of a fundamental character could deprive a demand of the status of even a purported statutory demand. See also 2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd [2010] WASC 22, [37]-[41]. 23Section 459E(2) sets out mandatory requirements of a statutory demand, including that it "must specify the debt and its amount" and "must be signed by or on behalf of the creditor". Most of the cases to which I have referred have emphasised that the definition of "defect" - as including an irregularity, a misstatement of an amount, a misdescription of a debt or other matter and a misdescription of a person or entity - is an inclusive one, intended to make clear that it was not limited to "minor defects". Nonetheless, what is "included" by an inclusive definition provides some guidance, analogous to the euisdem generis rule, as to what the term contemplates. Indeed, "inclusive" definitions usually extend the meaning that the term would otherwise bear. What is signally absent from the definition is any notion that the concept of "defect" extends to a fundamental non-compliance with a mandatory requirement of a notice stipulated by s 459E(2). 24The few cases in which a demand has been held to be a nullity include Sheslow v Diamond Rose NL [2005] NSWSC 492; (2005) 54 ACSR 376 (Barrett J), in which the demand was entitled under "Section 123(1)(a) or 222(1)(A) of the Insolvency Act 1986" (there was no such Act) and did not attempt to follow form 509H at all: because it did not purport to be served under the Corporations Act 2001 it did not fall within the definition in s 9; and Beralt Pty Ltd v Joe Battaglia Plastering Pty Ltd [2001] 1 Qd R 232 (at [59]-[60]), in which Ambrose J held that the demand was fundamentally deficient because it did not contain the words in the prescribed for 509H "that the application [to set aside the demand] must be made within 21 days after the demand was served" - the rationale being that it was a fundamental requirement of a statutory demand that it inform the debtor company of that matter - and thus was ineffective for the purpose of s 459E. In In the matter of International Materials & Technologies Pty Limited [2013] NSWSC 787 (at [18]-[19]), I held that the failure of a demand to comply with the requirements of the prescribed form by stipulating an address for service in the jurisdiction in which the demand was served, and instead stipulating an address in a different state which was not the registered office of the company and at which service would be ineffective (because of the requirements of the (CTH) Service and Execution of Process Act 1992), was positively misleading and calculated to entrap the company into not making an effective application to set aside the demand within time, and not a valid or effective demand because it did not comply with the fundamental requirement of s 459E(2) that it be in the prescribed form. 25At the heart of Beralt and of International Materials & Technologies is that a failure to comply with a mandatory requirement of s 459E that adversely affects the ability of the company to make a valid application to set aside the demand is not a mere defect which may render the demand liable to be set aside only if it is productive of substantial injustice, but a non-compliance with a mandatory requirement that deprives the demand of the character of a compliant demand and renders it ineffective. This reflects the observations of Lockhart J in Topfelt (at 394): Assume, for example, a statutory demand that fails to follow critical parts of the prescribed form by not informing the company that the consequence of failing to comply with the demand is that the creditor may rely upon that failure as a ground for an application to wind up the company; or a demand may fail to inform the company that it may apply under s 459g to set the demand aside. The company may wish to lead evidence before the court, that it assumed the document was simply a demand for payment, but it had no idea of the consequences under the Corporations Law of failure to comply with it. It would be odd indeed if the court could not take this evidence into account in deciding whether to exercise its discretion to order the winding up of the company. That may be a case (I do not say that it is or is not) of a demand that is so deficient as to be incapable of answering the description of a statutory demand within the meaning of the Corporations Law. But if it does answer that description the court would not set it aside at that stage because that is a function to be performed at the earlier time when application is made under s 459g. However, in exercising its general discretion, it may be relevant for the court to take into account the facts that surround the service of the demand and the form of the demand itself that was in fact served in exercising the court's powers to decide whether or not to make a winding up order (as distinct from the s 459j power to set the demand aside). 26While this approach has been seen predominantly in cases where the non-compliance affects the ability of the company to make a valid and timely application to set aside the demand, the principle is of application to all the fundamental requirements stipulated by s 459E(2). While not every departure from the prescribed form will amount to a fundamental non-compliance with the mandatory requirements of s 459E(2) - the circumstance that the section refers to the prescribed form "if any" is indicative that mere matters of form are not essential, and the judgment of the Court of Appeal in Quitstar Pty Ltd v Cooline Pacific Pty Ltd [2003] NSWCA 359; (2003) 48 ACSR 222 confirms that strict compliance with Form 509H is not required - non-compliance with the other mandatory requirements of s 459E(2) will do so. Non-compliance with the other mandatory requirements of s 459E(2) will also have that effect. I am therefore unable to agree with the decisions of the Supreme Court of Western Australia in Achiever Investments Pty Ltd v Newtone Pty Ltd [2002] WASC 71 (Bredmeyer M), on a s 459G application to set aside the demand, that a failure to sign the demand was a mere defect which did not render the demand liable to be set aside because it was not productive of substantial injustice, and in Noy's Works Pty Ltd v Allcast Pty Ltd [2005] WASC 185 (Newnes M), on a winding up application, that the same flaw did not deprive a demand of the character of a demand (at [17]). The intention of s 459E(2) is that the demand be authenticated by a signature, and a demand not so signed is not a demand at all; a demand that has not been signed is no more a demand than a cheque that has not been signed is a cheque. 27Similarly, s 459E(3) stipulates that except in the case of a judgment debt, a demand must be accompanied by an affidavit that verifies that the debt is due and payable by the company. In Hamilhall Pty Ltd (in liq) v A T Phillips Pty Ltd, Branson J expressed the view that while it was not clear that a statutory demand would fail to be a statutory demand if unaccompanied by an affidavit that complies with s 459E(3), a demand that was not accompanied by a compliant affidavit would not have been served as required by s 459E and thus could not give rise to a presumption of insolvency. Her Honour said (at 249): Although it is not necessary for me to decide the point I point out that it is not clear that a statutory demand will fail to be a statutory demand within the meaning of the Corporations Law if it is not accompanied by an affidavit that complies with the requirements of s 459e(3). Section 459e(2) deals explicitly, and one might think comprehensively, with the requirements of a statutory demand. In my view the more likely position is that a statutory demand which is not accompanied by an affidavit which complies with s 459e(3) has not been served as required by s 459e. On this approach a statutory demand which when served is not accompanied by such an affidavit will not support a presumption of insolvency. As its proper service could never be established failure to comply with it could consequently never be established as required by s 459f of the Corporations Law. 28(It is worth noting that her Honour's observations support the view that failure to comply with the mandatory requirements of s 459E(2) will deprive the notice of the quality of a statutory demand). However, in Victorian Workcover Authority v Kay's Pty Ltd [2001] VSC 358; (2001) 39 ACSR 281, Mahony SM, though initially attracted to the views expressed by Branson J, was, albeit in the absence of a contradictor, persuaded to a contrary view, holding that a statutory demand takes effect, notwithstanding that it has been served without a conforming affidavit (at 285-6): [12] Mr Nolan submitted that whether time begins to run for the purposes of s 459F - or, in other words, whether a statutory demand comes into "effect" for the purposes of that section - depends on the service of the statutory demand (assuming it fulfils the requirements of s 459E(2)), not on the service of the affidavit required to accompany it, nor on the service of both. Deficiencies in the service of the affidavit are to be dealt with by resort to s 459G, as, for example, in Victor Tunevitsch. Where (as in this case) no application has been made under s 459G and the question about the service of the affidavit arises from the plaintiff's evidence on the hearing of a winding-up application under s 459P, the court is expressly limited by the provisions of s 459S while nevertheless retaining the ultimate discretion it has always had not to make a winding-up order even though the grounds for it are made out (the preservation of which is found in the permissive language of s 459A). An example of the proper exercise of that ultimate discretion, Mr Nolan submitted, may be the refusal of a winding-up order in a case where, as in Victor Tunevitsch, no form of affidavit at all had accompanied the statutory demand at the time of service, but he urged that the exercise of the discretion might be thought inappropriate where (as in this case) the defendant had received an image of the accompanying affidavit, albeit not that document itself. As for s 459S, it could not be utilised in this case, first, because, the defendant not appearing, there was no one to seek leave; and, second, and more fundamentally, because leave could not be granted in any event to raise an argument about failure to serve the affidavit required to accompany the statutory demand, because the argument could not be "material to proving that the company is solvent": see s 459S(2). ... [14] I have come to the conclusion that I should accept Mr Nolan's submissions. Not only do they appear cogent in themselves, but they enjoy the support of what was said in a similar situation by Santow J of the Supreme Court of New South Wales in Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 43 NSWLR 717; 28 ACSR 175 at 185; 16 ACLC 1371 at 1379-80. In that case, in which a winding-up order was sought, it was urged upon Santow J by the defendant that the proceeding should be dismissed inter alia because the statutory demand served by the plaintiff had not been accompanied by an affidavit as required by s 459E(3), in that the affidavit had been made 2 days before the statutory demand was signed. ... Santow J was concerned - as I have been too - with the mandatory language ("must be accompanied") in s 459E(3), but did not regard strict compliance with the requirement expressed by that section (as interpreted in that case) "as an essential integer of the relief sought": at ACSR 185; at ACLC 1379. His Honour accepted the plaintiff's submission that, the proceeding being an application for winding up, s 459S applied so that the defendant could not rely on the alleged failure of the plaintiff to "accompany" the statutory demand with an affidavit as required by s 459E(3) because that could not be "material to proving that the company [was] solvent". 29With great respect, I have come to a different view, and prefer the approach of Branson J. First, in my judgment, the scheme of Pt 5.4 Div 2 is that a statutory demand can only be made in respect of a judgment debt, or a debt that is verified by an accompanying affidavit. A demand's effect depends not only on service, but also on its being accompanied, where required, by a compliant affidavit. The requirement that the demand "must" be accompanied by the affidavit is in the plainest mandatory language. The intent is that a demand can be made only in respect of a judgment debt, or a debt that is verified, and that the serious consequences for a company that flow from service of a s 459E demand should be attracted only where the demand is in respect of a debt that has been established by judgment or is verified. 30Secondly, I differ in my understanding of what Santow J said in Dolvelle was not "an essential integer": his Honour was referring in this respect to the requirement of exact coincidence of date for verification of the statutory demand, in the context that the affidavit was two days premature. That is far removed from the complete absence of any affidavit that verifies the demand. 31In my view, therefore, a statutory demand in respect of a debt that is not a judgment debt does not come into effect for the purposes of s 459F unless it is accompanied by an affidavit that complies with s 459E(3). As, in this case, the demand was not accompanied by any affidavit that verified that the debt, which was not a judgment debt, was due and payable by the company, service of the demand - without a compliant affidavit - could not trigger the presumption of insolvency. 32It remains to consider the impact of s 459S, which prevents a company without the leave of the Court opposing an application that it be wound up in insolvency on a ground that it could have but did not rely on for the purpose of an application to set aside the demand, whether or not it made such an application. The company could have relied on the plaintiff's failure to comply with s 459E(3) on an application under s 459G to set aside the (purported) demand for "some other reason", but it made no such application. Accordingly, it is precluded from relying upon it now as a ground of opposition, without leave. Had leave been sought, there might have been a question as to whether the ground was material to proving solvency; but as its effect would have been to deprive the plaintiff of the presumption of insolvency where that presumption was the only evidence of insolvency, it would have been material to establishing solvency. Accordingly, leave under s 459S, had it been sought, would have been given. However, leave was not sought. 33But although without such leave the company may not rely on the non-compliance with s 459E(3) as a defence, the Court retains a discretion, under s 467A, to dismiss the application - though it cannot do so on account of a defect in the application or the demand unless satisfied that it has caused substantial injustice. Lockhart J referred to the tension between s 459S and s 467A in Topfelt (at 394): Although the court's power under s 467a to dismiss an application to wind up order may be exercised because of a defect in a statutory demand, the court must not make such an order unless it is satisfied that substantial injustice has been caused that cannot otherwise be remedied. There is at first glance an apparent tension between s 467a and s 459s in that the debtor company cannot attack the demand on the ground of a defect in it on the hearing of the winding up application without the leave of the court, which can be given only if the court is satisfied that the ground is material to proof of solvency; yet the court may decline to wind up the company because of a defect in the demand, though only if satisfied that substantial injustice has been caused that cannot otherwise be remedied. A question arises whether this power of the court may be exercised under s 467a in a case where the defect in the demand does not relate to the solvency of the company. The ambit of this power of the court is not a matter that arises for consideration in this case, so I shall not discuss it except to say two things. First, the new regime which Act No 210 of 1992 has brought into being will, I think, give rise to a fair number of questions of interpretation in future cases. Secondly, there may be sound reasons why courts should, in the interests of justice, be entitled to decide, on the hearing of applications to wind up, whether a particular statutory demand is defective or not, notwithstanding that no prior application was made under s 459g to set it aside. The court may for instance, on the hearing of the application to wind up, have before it a statutory demand which is so defective that it would be unjust to allow it to be the vehicle for the presumption of insolvency, notwithstanding that the company did not make application under s 459g to set it aside. Is the company or the court precluded by s 459s from raising the defect? 34In my view, although the defendant may not be entitled to rely on the non-compliance with s 459E(3) as a ground of opposition, the Court should nonetheless dismiss the application. 35The first reason for this is not discretionary. If it is to make a winding up order, the plaintiff must satisfy the Court - regardless of what grounds of opposition the company may or may not raise - that the company is insolvent. As there was no effective demand to trigger the presumption of insolvency, and no other evidence of insolvency, I cannot be so satisfied. The ground of insolvency is not proven. 36The second reason is that the absence of an affidavit accompanying the demand that verifies the debt warrants the dismissal of the application on discretionary grounds [cf Victorian Workcover Authority v Kay's, [15]]. It was never intended that a debt that was neither a judgment debt nor verified could found a presumption of insolvency and, in due course, a winding-up order. The absence of a compliant affidavit is not a defect "in the demand" within s 459J(1)(a) or s 467A(b), though it may furnish "some other reason" for setting aside a demand [Victor Tunevitsch; Victorian Workcover Authority v Kay's, [15]]. Thus the prerequisite of "substantial injustice" would not in any event be applicable.

Conclusion 37For the foregoing reasons, I have reached the following conclusions. 38(NSW) Evidence Act, s 160, provides a (readily) rebuttable presumption that an article sent by prepaid post to a person at a specified address in Australia is received on the fourth working day after it is posted. That provision is not inconsistent with, but complements, (CTH) Acts Interpretation Act, s 29. The demand was sent by prepaid post addressed to a person at a specified address in Australia, registered post being a form, though not the only form, of prepaid post. No evidence to raise doubt about the presumption has been adduced. Accordingly, in conformity with s 160, it is presumed that service was effected on the fourth working day after the article was posted on 3 December 2013. Even if that were incorrect, under Acts Interpretation Act, s 29, the ordinary course of post for an article posted by registered post would have seen it delivered well in excess of 21 days before the originating process was filed, and there is no evidence that it was not. The defence based on inadequate evidence of service fails. 39Omission from the demand, and accompanying affidavit, of the annexures referred to in the demand is a defect in the demand which could have been, but was not, relied on in an application to set aside the demand, and does not render the demand a nullity. 40However, the affidavit accompanying the demand did not verify that the debt was due and payable by the company as required by s 459E(3). Such non-compliance with the mandatory requirements of s 459E(3) means that the demand does not take effect for the purposes of s 459F and cannot trigger a presumption of insolvency. 41Although the failure to comply with s 459E(3) could have been but was not relied on in an application to set aside the demand, and although leave under s 459S was not sought, the plaintiff must still satisfy the Court of the ground that the defendant is insolvent, and in any event the Court retains a discretion to dismiss a winding up application whether or not the ground is established. As the presumption of insolvency did not arise, and there was no other evidence of insolvency, the ground for winding up is not established, and the application must be dismissed. Alternatively, the absence of a compliant s 459E(3) affidavit in a case where there was no judgment debt warrants the discretionary dismissal of the application. As has been observed more than once, it is not asking too much of creditors who wish to invoke the presumption of insolvency to at least comply with the mandatory requirements of s 459E [cf Topfelt, 396; Victor Tunevitsch, 568]. 42The ground on which the application has failed was not distinctly raised, even in the amended grounds of opposition, and was one which the defendant was not entitled itself to raise, without leave. Most of the grounds of opposition as formulated have failed. In those circumstances, I do not think the defendant should have its costs. 43The Court orders that the originating process be dismissed. There will be no order as to costs, to the intent that each party bear its own costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 July 2014