Brand & Media v Aeropack

CATCHWORDS : CORPORATIONS - Application under s 459G of the Corporations Act 2001(Cth) to set aside statutory demand - Where address of registered office is particular numbered suite on wharf - Whether delivery to mailbox in mailroom some distance from suite under control of security staff and to which recipient does not have unrestricted access constituted delivery to registered office - Genuine dispute about existence of debt to which statutory demand relates where identity of debtor company is contested

LEGISLATION CITED : Corporations Act 2001 (Cth) Acts Interpretation Act 1901 (Cth)

Scope Data Systems Pty Ltd v Goman as Representative of Partnership BDO Nelson Parkhill [2007] NSWSC 278 CASES CITED : Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 Ketrim Pty Ltd v AS&L Pty Ltd [2004] NSWSC 1046

PARTIES : Brand & Media Pty Limited ACN 107 209 996 Aeropack Australia Pty Limited ACN 055 376 639

COUNSEL : A. Seward (Plaintiff) D. Ash (Defendant)

SOLICITORS : Baker & McKenzie (Plaintiff) Bartier Perry (Defendant)

• 8 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

1450/2007 BRAND & MEDIA PTY LTD v AEROPACK AUSTRALIA PTY LIMITED EX TEMPORE JUDGMENT 1 HIS HONOUR: This is an application under section 459G of the Corporations Act 2001 (Cth) ("the Act") to set aside a statutory demand for $35,756.61 made on the plaintiff by the defendant for "Goods sold and delivered by the creditor at the request of the company as set out in invoice 115099 dated 25 August 2006".

2 There are two issues in these proceedings: the first relates to the date upon which the demand was served; the second is whether, as envisaged by section 459H of the Act, the plaintiff has, to the required standard, satisfied the Court that there is a genuine dispute about the existence of the debt to which the demand relates. 3 These proceedings were commenced on 12 February 2007. Section 459G(2) of the Act provides that the application may only be made within 21 days after the demand is served. Hence, if the demand here was served any earlier than 22 January 2007, the application is incompetent. 4 The evidence established that late in the afternoon on 18 January 2007 the demand was posted by the defendant in an "Express Post" envelope in a yellow post box at or near the MLC Centre specially designated for express post. 5 At the relevant time, the plaintiff occupied premises at Suite 15, Jones Bay Wharf, 19 Pirrama Road, Pyrmont. The plaintiff occupied a designated suite on that wharf. 6 The wharf is a two level building with a mailroom on each level. Post was ordinarily delivered to a mailroom on the lower level being an area under the control of security guards and locked outside the hours of 6am and 8pm Monday to Friday. The plaintiff does not have unrestricted access to the mailroom. Post was sometimes initially left on the floor, then sorted by security operatives into mail boxes for each of the tenants and, so far as concerns the plaintiff, put into a designated post box for it. The mailrooms were some 400 metres from the plaintiff's suite, towards the land end of the wharf "a fair walk Office". 7 Brand Base Pty Ltd ("Brand Base") is a company related to the plaintiff by virtue of common directors. Mr Kieron Dowd is a director of both, and the managing director of Brand Base. 8 In January 2007 Mr John Mantle was the office manager. He was responsible for collecting mail addressed to the office, including mail addressed to the plaintiff and Brand Base from the mailbox in the upper level mailroom. Routinely, he collected that mail each day between about midday and 2.30pm. He would normally collect it on his way back from lunch, as the mail was generally not sorted into the tenant mail boxes before this time, or, if not during that time, in the afternoon at approximately 3pm when he was buying a new car parking ticket, which he did virtually every day. It was his practice that whenever he collected items of mail such as express post mail, he immediately handed them to Mr Dowd, or if Mr Dowd was out of the office when such items were received, he would call him to check if he wanted him to open the item for him.

9 On 22 January 2007, Mr Darryl Hunwick, a director of Brand Base, had a conversation with Mr Dowd. The subject was progress in relocating a Brand Base warehouse at Kings Park. Mr Dowd made no mention of the defendant or receipt of the demand. 10 However, on 23 January 2007, Mr Hunwick had a telephone conversation with Mr Dowd. In that conversation Mr Dowd said words to the following effect: "I have just received some legal documents from Aeropack. They're suing us for the products they made that we didn't order."

11 Although Mr Dowd, in one of his affidavits, refers to the demand having been received "on or about 23 January 2007", I am satisfied that it is more probable than not that he received it on 23 January 2007, but in any event no earlier than the commencement of that week, that is, on Monday 22 January 2007. 12 Section 109X of the Act headed "Service of documents" 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; ….." 13 Section 29 of the Acts Interpretation Act 1901 (Cth) applies to the Act and it provides: (1) Where an Act authorizes 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 unless the contrary intention appears 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 s 160 of the Evidence Act 1995."

14 Part 2B.5 of the Act contains provisions concerning registered offices and places of business of corporations. Section 142(1) provides that: "A company must have a registered office in this jurisdiction. Communications and notices to the company may be addressed to its registered office." 15 Under s 144(1): "A company must display its name prominently at every place at which it carries on business and that is open to the public." 16 Under s 145(1) a public company must display its name and the words "Registered Office" prominently at its registered office and it must also display its name and the details of the registered office prominently at its registered office. It must keep that registered office open to the public each business day between the business hours designated under section 145 of the Act. 17 In my view the registered office of the plaintiff was its particular suite, that is, Suite 15, not a mailroom under the control of security to which post was delivered but not directly to the plaintiff. It does not seem to me that the mailroom was, or was part of, the plaintiff's registered office, in the sense of a particular place contemplated by the Act. 18 Accordingly, in my view, delivery in this particular case to the registered office of the plaintiff was not at the time of delivery to the mailroom or the mailbox in it, but at the time the demand reached its suite: cf Scope Data Systems Pty Ltd v Goman as Representative of Partnership BDO Nelson Parkhill [2007] NSWSC 278 at par 72. 19 As I have said above, it was given to Mr Dowd no earlier than 22 January 2007, that is, in time for this application to have been launched by 12 February 2007. 20 The evidence did not establish when the demand was received in the mailroom as opposed to when it reached the physical possession of Mr Dowd. 21 There was admitted into evidence an extract (fairly described as a "blurb") downloaded on 15 March 2007 from the Australia Post internet site from which can be derived that the ordinary expectation of Australia Post is that express post will be delivered the business day next after the day of posting. If this expectation was met, in this case the demand would have been in the mailroom on 18 January 2007. 22 On the assumption that the demand was in the mailroom on 18 January 2007, the question arises whether delivery there, even if not service at the registered office, was service on the plaintiff by service on an agent duly authorised by it.

23 It does not seem to me that delivery to that mailroom, whether into the possession of the guards for sorting or into the box itself in that room to which the plaintiff, on the evidence, does not have unrestricted access, can fairly be said to be delivery to an agent of the plaintiff, let alone one authorised by it to accept service of documents when its registered office is 400 metres down the wharf. 24 In those circumstances, I find that the plaintiff's application was within time. 25 Turning then to whether the Court is satisfied that there is a genuine dispute about the existence of the debt to which the demand relates. 26 The Court does not, in the summary procedure involved here, embark upon any extended inquiry. An applicant who seeks to establish a genuine dispute will fail in that task only if it is found upon the hearing of the application that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The Court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that, on rational grounds, indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger: see Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 per Barrett J. 27 The primary dispute sought to be raised by the plaintiff is that the defendant has got the wrong entity. Mr Dowd says that from time to time Brand Base purchased goods from the defendant. He says that the plaintiff did not at any time place any order with the defendant to purchase the goods detailed in the invoice which is the subject of the statutory demand. He initially said on affidavit that the plaintiff has not ever had any commercial dealings with the defendant. He retreated from this in subsequent affidavit evidence which indicates that there was commercial intercourse between the plaintiff and the defendant. 28 The evidence also established that Mr Dowd gave to Mr Sherry, of the defendant, a business card reflecting himself as the managing director of the plaintiff. 29 There were emails exchanged between them; in particular, one dated 29 August 2006 upon which the defendant placed significant reliance. In that email Mr Dowd said to Mr Sherry, amongst others: "Sorry for not getting back sooner, but I was sure I left our position clear, i.e., we did not order the cans. Nice montage of emails you sent through, although my collection is bigger." 30 The submission was made that neither in that email nor in his affidavit evidence in reply did Mr Dowd deal with strong pointers that it was the plaintiff and not Brand Base which had contracted with the defendant. Accordingly, it was put, there is a powerful inference that the plaintiff was the contracting party. 31 Those points may be of substance in a contest between these parties on a final hearing when the defendant, if it so advised, sues for the debt. But that is not this case. 32 In my view, the evidence meets, by some distance, the low threshold required at this level of proceeding. In my view, the plaintiff has established that there is a genuine dispute between the parties about the existence of the debt to which the demand relates on the basis that it was not the plaintiff which contracted with the defendant. 33 A further point was raised by the plaintiff, namely, that the demand contains a defect as is envisaged in s 459J(1)(a) of the Act in that it claims an amount for goods sold and delivered, whereas it is common cause between the parties that the goods the subject of the invoice were not delivered. That, it seems to me, is a defect in the notice. However, the Court is not to set aside a notice for such defect unless substantial injustice would be caused unless it was set aside. 34 I do not consider that substantial injustice would be caused by allowing the demand to stand when the plaintiff would have come to Court in any event, because it denies that the demand is directed to the appropriate entity. The defect is one which, in my view, would not, if it were alone, provide the basis for setting aside the demand: Ketrim Pty Ltd v AS&L Pty Ltd [2004] NSWSC 1046. 35 The orders of the Court will be that the statutory demand dated 8 December 2006 served on the plaintiff by the defendant is set aside. 36 The defendant is to pay the plaintiff's costs of the application. **********

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