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Judgment - ex tempore

1. By Originating Process filed on 9 September 2015, the Plaintiff, Aircraft Support Industries Pty Limited ("ASI") applies, under ss 459G, 459H and 459J of the Corporations Act 2001 (Cth), to set aside a creditor's statutory demand for payment of debt dated 20 August 2015 ("Demand") issued by William Hare UAE LLC ("William Hare") to ASI. ASI also seeks a declaration that the Demand is not a creditor's statutory demand within the meaning of s 459E(2)(e) of the Corporations Act. That subsection does not provide a definitional provision as to a creditor's statutory demand, but instead provides that a demand must be in the prescribed form, a matter to which I will refer below.
2. ASI contends that the Demand does not specify any or any proper address of William Hare at which the obligation under paragraph 3 of the Demand, namely, to pay to William Hare the amount of the debt, or to secure or compound for it to William Hare's reasonable satisfaction can be satisfied, or alternatively that it does not provide an address at which those requirements can be satisfied in Australia. The application therefore ultimately raises two very narrow issues, which were addressed by Mr Johnson who appears for ASI, and by Mr Foreman who appears for William Hare with admirable efficiency in their submissions. Those issues are, first, the form of the address specified in the Demand; and, second, whether an address in a creditor's statutory demand must be an address within the Commonwealth of Australia.
3. It is necessary to refer to the terms of the Demand in order to give context to the analysis which follows. The Demand is dated 20 August 2015 and is for an amount of $US1,481,678.42 which is described as a judgment debt, reflecting a judgment of this Court. Paragraph 1 of the Demand states that the company, namely, ASI, owes William Hare of "PO Box 9838, Sector M 45, Mussafah Industrial Area, Mussafah, Abu Dhabi, United Arab Emirates" the specified amount. Paragraph 3 requires ASI to pay the amount of the debt, or to secure or compound for that amount to William Hare's reasonable satisfaction, within 21 days after service on ASI of the Demand. Paragraph 6 of the Demand specifies an address of the creditor for service of any application and affidavit, relating to an application to set aside the Demand, namely the address of William Hare's solicitors in Sydney. The issue which arises in this application turns upon paragraph 1 of the Demand, by reference to the manner in which it describes the address of William Hare, and the fact that the specified address is found in Abu Dhabi. I will deal with the issues as to the description of the address of William Hare, and the fact that that address is situated outside Australia, in turn.
4. Mr Johnson commences his submissions with the premise, to which he steadfastly held throughout those submissions, that the address specified in the Demand is that of a post office box and not a street address or office of William Hare. Mr Johnson went so far, in written submissions, as to advance the proposition that that matter did not appear to be in dispute. With respect, it seems to me that that matter is plainly in dispute, so far as the evidence led by William Hare seeks to establish that the address is, first, the address of William Hare, in the form in which that address is typically described in the United Arab Emirates and, second, is at least in part the physical address of William Hare, so far as it refers both to the post office address for William Hare and also to the physical location of William Hare's offices.
5. The basis on which Mr Johnson puts his submission reflects the evidence led by ASI in its case. Mr Justin Langbein, by his affidavit dated 7 September 2015, refers to the Demand and describes the address identified in paragraph 1 of the Demand as a post office box, and in turn submits that that post office box is not an address at which ASI could satisfy the obligations required by the Demand. The premise of that evidence is, of course, that the relevant address was, or was only, a post office box.
6. The evidence led by William Hare in response is, first, the affidavit of its Managing Director, Mr Nigel Moss, dated 30 September 2015. Mr Moss' evidence is that the reference in the address specified in the Demand to Sector M45, Musaffah Industrial Area, Musaffah, Abu Dhabi, is to the street address of William Hare's office. Mr Moss sets out how, by reference to that description, one would locate that office within Abu Dhabi. Mr Moss also refers to other examples, including one for an office of ASI in Dubai, which also adopt a similar format of specifying a post office box together with a geographical description for the relevant address. William Hare also relies on the affidavit of Mr Prosser, dated 29 October 2015, who is its Operations Director. Mr Prosser also refers to other usages of an address in similar form, including the subcontract dated 18 September 2009 between William Hare and ASI which, it appears, was the subject of the matters that gave rise to the debt that is the subject of the Demand, and also refers to other correspondence between William Hare and ASI which describe the address of William Hare in a similar form. I will return to other aspects of the evidence of Mr Moss and Mr Prosser below.
7. The significance of the question whether the address specified in the demand is, or is only, a post office box arises from the requirements of s 459E of the Corporations Act and the relevant form for a creditor's statutory demand specified in the Corporations Regulations. Section 459E(2)(e) of the Corporations Act requires that a demand must be in the prescribed form, if any, and the prescribed form is Form 509H made under the Corporations Regulations. That form prescribes, in paragraph 1, a statement that the company owes (name) of (address) the amount claimed in the demand. By contrast, paragraph 6 of the prescribed form requires that the address of the creditor for service of copies of any application to set aside the demand and supporting affidavit be an address for service in the state or territory in which the demand is served on the company. Plainly enough, it would be arguable, as Mr Johnson contends, that the address of a post office box would not be the address of the company, for the purposes of paragraph 1 of a creditor's statutory demand.
8. However, it seems to me that the premise of Mr Johnson's submission, that the address specified in the Demand is a post office box, or is only a post office box, is incorrect on the balance of the evidence. The form of the address specified does not lead to that conclusion, since it is equally consistent with specifying both a post office box address and a street address for William Hare. Mr Langbein's evidence does not lead to that conclusion, because it is simply an inference which Mr Langbein draws from the language of the Demand. The evidence led by William Hare is to the contrary, so far as its executives indicate that the address specified is, so far as it refers to Sector M45, Musaffah Industrial Area, Musaffah, the street address for William Hare. That evidence goes further, to indicate that the relevant post office box is physically located in a different location, in a different sector of Abu Dhabi.
9. It follows that, at best, so far as ASI's case is concerned, paragraph 1 of the Demand specifies a post office box, to which mail for William Hare could be delivered, and its street address. That may be sufficient for ASI's case in this respect to fail, so far as its essential premise was the specification of the post office box to the exclusion of a street address at which payment of the debt could be made.
10. There were, however, other difficulties with ASI's case. The first is that, even if it were accepted that the address specified was not an address at which payment could be made, it is by no means clear that either Form 509H or s 459E(2)(e) requires the specification of an address at which payment can be made, so far as it refers to the specification of the address of the creditor. In Vehicle Wash Systems Pty Ltd v Mark VII Equipment Inc (1997) 80 FCR 571 at 577, Finkelstein J, referring to earlier provisions in the Corporations Law and Corporations Regulations, noted that there was no requirement that a creditor's statutory demand specify a place for the payment of the claimed debt, while recognising the possibility that the contract that gives rise to the obligation to make the payment might do so. Mr Johnson submits that that decision is wrongly decided, but there is nothing in the face of Form 509H and the requirement of an address of the creditor that expressly requires that the address must be one at which, in Mr Johnson's submission, a receipt for payment could be issued.
11. In any event, ASI's case in this regard faces a potentially more fundamental difficulty, arising from an issue recognised by the Federal Magistrates Court of Australia in Boorowa Shire Council v Booth [2001] FMCA 31. In that case, what occurred, very similarly to what has occurred here, on the view of the evidence that I have taken, is that an address in a bankruptcy notice included both a post office box and the physical location of Boorowa Council. Raphael FM there observed at [9] that what had occurred in that case was not the inclusion of an incorrect address, but the inclusion of an otiose reference to a post office box in what was otherwise a correct and well-known address. Raphael FM also noted that, if the debtor had wished to comply with the terms of the bankruptcy notice, he could have taken himself to the council premises at the address specified and made the relevant payment. I do not understand that observation to be, necessarily, a proposition of law. It seems to me to be more a proposition of common sense. As a proposition of common sense, it seems to me to have much to commend it.
12. That in turn leads to what is perhaps the most fundamental difficulty with ASI's claim to set aside the Demand on the basis of the address specified in it. Mr Johnson accepts, rightly, it seems to me, that if he were otherwise correct as to the proposition that the inclusion of the post office box, or the reference to the post office box as he would have it, in the address in the Demand did not comply with Form 509H, it would be a "defect" in the Demand for the purposes of s 9 and s 459J(1)(a) of the Corporations Act. As Mr Foreman points out, it is well established that, where the relevant issue is a defect in the Demand, then the Demand may only be set aside if that defect has caused injustice to the person on whom the demand is served. That proposition plainly arises from the terms of s 459J, although there is ample authority for it, to the extent that authority were needed.
13. Section 459J(1)(a) provides that, on an application under s 459G, the Court may by order set aside a creditor's statutory demand if it is satisfied that, because of a defect in the demand, substantial injustice will be caused unless the demand is set aside. The term "defect" is in turn defined in s 9 of the Corporations Act in an inclusive manner, as including an irregularity or a misdescription of a person or entity. Section 459J(2) in turn provides that, except as provided in s 459J(1), the Court must not set aside a statutory demand merely because of a defect. It has been established, at least since the decision of the Full Court of the Federal Court of Australia in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452 at 458-459 that the Court's jurisdiction in respect of a "defect" in the demand is limited, by the combined operation of s 459J(1)(a) and s 459J(2), so that a demand may only be set aside because of a defect in it, where it gives rise to substantial injustice. The proposition that s 459J(1)(a) and 459J(1)(b) have mutually exclusive operation has in turn been endorsed by the Court of Appeal in Kisimul Holdings Pty Ltd v Clear Position Pty Ltd [2014] NSWCA 262 at [18] and recently restated by Davies J in Treasury Wine Estates Vintners Ltd v Garrett [2015] FCA 797 at [8]. Accordingly, and notwithstanding Mr Johnson's reliance on s 459J(1)(b) of the Corporations Act in the alternative, it does not seem to me that the Demand could be set aside for some other reason even if, contrary to my view, some other reason to do so had been established.
14. That in turn raises the question whether any substantial injustice is established by reason of the relevant defect, if such a defect were established. It seems to me that, on the evidence, no such injustice is established, both because of the matters as to which ASI's evidence is silent, and because of the evidence that is led by William Hare. Notably, ASI's evidence is silent as to any proposition that it at any point sought to make payment of the relevant amount, and had any difficulty in doing so, because the address specified in the Demand was a post office box, as ASI would have it, or as both a post office box and the street address of William Hare, as I have held. There is, in any event, evidence which plainly indicates that, had ASI wished to make the relevant payment, it would have had no difficulty doing so. The evidence of Mr Moss and Mr Prosser together establish that William Hare and ASI have been conducting business for a considerable period and that representatives of ASI, including Mr Langbein who is its General Manager and leads evidence in this case, have attended the offices of William Hare located at Sector M45, Musaffah Industrial Area, Musaffah on a number of occasions. In those circumstances, it can scarcely be contended that, ASI would have had any difficulty in finding that address in order to deliver payment in response to the Demand. It follows that, even if, contrary to my view the Demand had in fact specified only a post office box, and a defect in the Demand were in fact established, then no substantial injustice is established so as to require the Demand to be set aside.
15. The second issue raised by Mr Johnson, which he fairly acknowledged was not his strongest point, was a submission that the address specified in a creditor's statutory demand must be an address in Australia. Before turning to the authorities, it should be noted that that proposition faces two immediate difficulties with the contents of Form 509H of the Corporations Act. The first, and possibly the most fundamental, is that Form 509H requires the party that issues the demand to specify the name and address of the creditor. If the creditor's only address is overseas, it can scarcely be contended that the creditor must first establish a different address in Australia, before it can serve a creditor's statutory demand. That proposition, with respect, would seem to be both absurd on its face, and inconsistent with an environment in which international trade involving Australian companies is commonplace. It is not to the point to say that, for example, an overseas company could nominate its Australian solicitors to receive payment, because the requirement in paragraph 1 of Form 509H is not that there be an address nominated for payment, but that the creditor specify its address, and that address will not change because the creditor nominates another party to receive payment. The second difficulty with that proposition is that, by contrast with paragraph 1 of Form 509H, paragraph 6 specifies that the address for service of an application to set aside the demand be situated in the state or territory in which the demand is served on the company, suggesting that the legislature was well able to impose such a requirement, where it wished to do so, in express terms.
16. Turning now to the authorities, Mr Johnson rightly refers, in support of his contention, to two earlier decisions, Re Shuttle Datacomm Pty Ltd (1990) 2 ACSR 729 and Delaine Pty Ltd v Quarto Publishing plc (1990) 3 ACSR 81, which in turn adopted the earlier decision of the High Court in Hamilton v Warne [1907] HCA 24; (1907) 4 CLR 1293 at 1300, dealing with the position in bankruptcy. Mr Foreman points out, correctly in my view, that those decisions may be distinguished so far as they turned on earlier legislation, which was in different terms to Form 509H and s 459E of the Corporations Act. In particular, Mr Foreman points out that Form 509H does not require that a creditor's statutory demand stipulate a place for payment, and instead requires, as I have noted above, that the creditor's address must be shown. I would add that the reasoning in those earlier decisions appears to some extent to reflect a perception of the difficulties of payment at distant places, which reflects an earlier era of technology, and may have less to commend it where electronic payment systems are well established and in wide commercial use. That proposition is not essential to my reasoning, so far as my reasoning turns upon the language and terms of Form 509H, but it suggests that there is no reason to strain to read the Form other than in accordance with its terms.
17. As Mr Foreman also points out, it has been accepted in subsequent authorities that a creditor's statutory demand need not specify a place for payment in Australia. That position was expressly accepted by Barrett J in Standard Commodities Pty Ltd v Societe Socinter Department Centragel [2005] NSWSC 294; (2005) 54 ACSR 489 at [17]. Mr Johnson points out that that observation was, strictly, obiter, but an obiter observation of his Honour, who had substantial experience in dealing with these provisions, should nonetheless be afforded considerable weight. That observation has also been noted, without any suggestion of disapproval, in the leading practitioner text in the area, Mr Assaf's book, Statutory Demands and Winding Up in Insolvency, (2nd ed 2012, LexisNexis Butterworths), at [3.3]. I also can see no reason not to follow his Honour's observation in that respect.
18. For these reasons, both the grounds on which ASI relies to set aside the Demand are not established. There is no basis, in my view, for a declaration that the Demand is not a creditor's statutory demand within the provisions of s 459E of the Corporations Act. In my view, it is such a demand; it did not have a defect; and if it did have a defect, contrary to my view, that defect did not give rise to substantial injustice and would not require that it be set aside under s 459J of the Act. For these reasons, the application should be dismissed with costs.