Australian Solar Electrics Pty Ltd v IPD Group Ltd

introduction 1 The Defendant issued to the Plaintiff a statutory demand for payment of $220,000. The demand was dated 9 March 2012. On 14 March 2012, the demand was taken by a process server to the Plaintiff's registered office - c/ Bentley Partners, Suite 14, 84 Church Street, Richmond in the State of Victoria. The demand was not left because the premises were vacant. On the same day, the process server instead took the demand to the new premises occupied by Bentley Partners - 744 Bourke Street, Docklands. The receptionist at Bentley Partners confirmed that the premises were the registered office of the Plaintiff. On or about 19 March 2012, Mr Daniel Cobb, one of the two shareholders in the Plaintiff, received a copy of the demand and supporting affidavit. On 11 April 2012, 23 days after the demand came to Mr Cobb's attention, the Plaintiff applied under ss 459G and 459J of the Corporations Act 2001 (Cth) (the Act) to set aside the demand. On 17 May 2012, Registrar Luxton dismissed the application. 2 The Plaintiff seeks to set aside the orders made by Registrar Luxton.

analysis 3 The Plaintiff submitted that the orders made by Registrar Luxton should be set aside on the grounds that the demand was not served in accordance with s 109X of the Act: Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648. The Plaintiff submitted that service of a demand must be effected in accordance with that section. The Plaintiff submitted that service of a demand was not able to be effected in accordance with the "effective informal service rule" and that, even if that informal rule was applicable, service of the demand was not effected in accordance with that rule. 4 The question of service is important. The Court has no jurisdiction to entertain the Plaintiff's application to set aside the statutory demand if it was made more than 21 days after service of the demand: David Grant & Co Pty Ltd v Westpac Banking Corporation (1996) 184 CLR 265. Put another way, none of the affidavit material disclosed any grounds that would constitute "some other reason" justifying an order under s 459J of the Act. 5 Was the demand served? The simple answer is, yes. 6 Section 109X of the Act provides: (1) For the purposes of any law, a document may be served on a company by: (a) leaving it at, or posting it to, the company's registered office; or (b) delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory; or … (6) This section does not affect: (a) any other provision of this Act, or any provision of another law, that permits; or (b) the power of a court to authorise; a document to be served in a different way. (7) This section applies to provisions of a law dealing with service whether it uses the expression "serve" or uses any other similar expression such as "give" or "send". 7 For present purposes, I agree with and adopt the following principles propounded by Palmer J in Woodgate v Garard Pty Ltd (2010) 78 ACSR 468 at [44] about the proper construction of s 109X and the so called effective informal service rule, namely: 1. if a document required to be served on a company by the Act is served in accordance with any of the modes prescribed in s 109X(1) of the Act and s 28A of the Acts Interpretation Act 1901 (Cth) (the prescribed modes), the document is validly served; 2. where service is effected by leaving the document at the company's registered office in accordance with s 109X(1)(a), it makes no difference whether the document is left within or outside normal business hours or within or outside the hours at which that office is kept open, and the date of service is the date of leaving the document, not when it comes to someone's attention; 3. the prescribed modes are not exhaustive. Whether there has been good service depends upon whether the serving party can prove to the Court's satisfaction that the document actually came to the attention of an officer of the company who was either expressly or implicitly authorised by the company to deal directly and responsively with the document, or documents of that nature (a responsible officer); 4. 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; 5. 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 the director is the responsible officer and that service is good; and 6. a party invoking the effective informal 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 view of the serious consequences which may result, the Court will not lightly draw inferences or make assumptions as to the time of service. 8 Consistent with those principles, the present application must fail. Section 109X is facultative. It is not proscriptive. Section 109X(6) makes that clear: see also Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542 at 544-5. In the present proceedings, the demand was not served in a prescribed mode: see s 109X(1). The issue then is whether, consistent with the third principle (see [7] above) the Defendant "can prove to the [C]ourt's satisfaction that the [demand] actually came to the attention of an officer of the company who was either expressly or implicitly authorised by the company to deal directly and responsively with the [demand], or documents of that nature". 9 In a sworn affidavit, dated 11 April 2012 and filed with the Court, Mr Daniel Cobb, who described himself as the "General Manger of the Plaintiff", stated he was "duly authorised" to make the affidavit on behalf of the Plaintiff and provided the following sworn evidence: On or about 19 March 2012 the Plaintiff received a Creditor's Statutory Demand from the Defendant dated 9 March 2012 … The Plaintiff disputes the debt on the basis that the debt is not a debt of the Plaintiff but of Solar Shop Australia Pty Ltd. Lack of, or defective service, was not then in issue. That was not surprising. The demand had come to the attention of the general manager of the Plaintiff. In those circumstances, I accept that, as general manager of the Plaintiff, Mr Cobb was either expressly or implicitly authorised by the Plaintiff to deal directly and responsively with the demand. That conclusion is fortified by two further facts: 1. the balance of Mr Cobb's 11 April affidavit sets out facts and matters which appear to seek to establish that the debt is not a debt of the Plaintiff but of Solar Shop Australia Pty Ltd. In other words, Mr Cobb knew of or had made sufficient enquiries to ascertain facts and matters relevant to the validity of the demand; and 2. the Plaintiff made this application to set aside the demand, which application was initially heard by Registrar Luxton. 10 For the sake of completeness, I note that the Plaintiff filed a further affidavit of Mr Daniel Cobb sworn on 7 June 2012 in which his occupation is again described as "General Manager". It is in this later affidavit that he asserted on behalf of the Plaintiff that: … the Demand was not served at the [Plaintiff's] registered address. There was no service of the … Demand in accordance with s 109X of the [Act] and s 28A of the Acts Interpretation Act. … the Affidavit of Daniel Cobb [of 11 April 2012] does not constitute evidence that the … Demand had been brought to the attention of an officer of the Plaintiff who was expressly or impliedly authorised by the Plaintiff to deal directly and responsively with the … Demand. 11 I reject the later evidence of Mr Cobb. In my view, it is self serving, conclusionary and contradicts his earlier affidavit. The demand was not served in a prescribed mode; it was, however, otherwise served in accordance with s 109X of the Act. Any other result would be absurd: Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542 at 544C. 12 Effective service of a statutory demand otherwise than in one of the prescribed modes occurs on a daily basis. That is what occurred here. 13 For those reasons, the application is dismissed. I will order that the Defendant pay the Plaintiff's costs of this application. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.