D B Mahaffy & Associates Pty Ltd v Mahaffy

CATCHWORDS : PROCEDURE - application by defendant for summary dismissal of plaintiff's application for order setting aside statutory demand - question whether service effected before statutory deadline - apparently conflicting evidence - summary dismissal refused

LEGISLATION CITED : Corporations Act 2001 (Cth), s 459G

David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43: (1995) 184 CLR 265 CASES CITED : Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309

PARTIES : D B Mahaffy & Associates Pty Ltd - Plaintiff Jeffrey Mahaffy - Defendant

COUNSEL : David Mahaffy, Director of Plaintiff in person Jeffrey Mahaffy - Defendant in person

SOLICITORS : David Mahaffy, Director of Plaintiff in person Jeffrey Mahaffy - Defendant in person

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

2010/092009 D B MAHAFFY & ASSOCIATES PTY LTD v JEFFREY MAHAFFY

1 These proceedings were commenced on 15 April 2010 when the plaintiff filed an originating process claiming an order setting aside a statutory demand served on it by the defendant. The originating process was expressed to be returnable on 24 May 2010. 2 On 24 May 2010, the defendant filed in court an interlocutory process claiming an order that the originating process be dismissed. Directions for evidence in relation to the interlocutory process were then made on that day. 3 I heard the defendant's interlocutory process on 7 June 2010. The following reasons relate to that application. 4 Implicit in the application is the proposition that the case sought to be advanced by means of the originating process is so devoid of merit that there is no point in allowing it to go to a final hearing on the merits. To succeed in such a claim, the defendant must show that the case is within the following principle stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action--if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal--is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'. 5 The defendant's contention is that the plaintiff's application is bound to fail because the plaintiff did not satisfy the requirements of s 459G(3) of the Corporations Act 2001 (Cth) within the time allowed by that section. Section 459G is as follows: "(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within 21 days after the demand is so served.

(3) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company." 6 If it is clear that the 21 day requirement set down by s 459G(3) was not met by the plaintiff, the originating process cannot succeed: David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43: (1995) 184 CLR 265. 7 The defendant pursued his summary dismissal motion on the express footing that 16 April 2010 was the last available day for completion of the s 459G(3) steps. The defendant must therefore be taken to have accepted, for the purposes of this application, a certain position regarding the time of service of the statutory demand. In the light of that apparent concession by the defendant upon this application, I do not pause to consider the question of the timing of service of the statutory demand. 8 If, as the defendant apparently accepts, 16 April 2010 was the s 459G(3) deadline, the plaintiff's case will be manifestly hopeless if any of the following events did not occur on or before 16 April 2010:

(b) filing of an affidavit supporting the originating process;

(c) service of a copy of the originating process on the defendant; and

(d) service of a copy of the supporting affidavit on the defendant. 9 As I have said, the originating process was filed on 15 April 2010. There is no dispute about this, which is, in any event, borne out by the court file. Also filed on 15 April 2010 was an affidavit of Mr MacCallum, the plaintiff's then solicitor, sworn on 15 April 2010. To that affidavit was annexed a copy of an affidavit sworn on 14 April 2010 by Mr David Mahaffy, the sole director of the plaintiff. The original of the last mentioned affidavit was filed on 16 April 2010 and concludes, in its paragraph 21: "In the circumstances set out above, the Plaintiff has both a genuine dispute as to the debt claimed in the Statutory Demand and also an offsetting claim in excess of the amount claimed in the Statutory Demand.' 10 Evidence led on the hearing of the interlocutory process does not disclose anything about service of Mr David Mahaffy's affidavit of 14 April 2010. 11 The issue raised by the defendant's interlocutory process goes to service of copies of the originating process and Mr MacCallum's affidavit. He contends that service of those documents did not occur on or before 16 April 2010. 12 In so contending, the defendant challenges the proposition that a copy of the originating process and a copy of the affidavit of Mr MacCallum of 15 April 2010 were served on him personally on the pavement of Goulburn Street Sydney on 16 April 2010. 13 The plaintiff relies, in this respect, on an affidavit of Ms Brown, a process server. Ms Brown gave evidence that, on 16 April 2010, she attended Court 18A at the District Court, John Maddison Tower, Goulburn Street, at 2.30pm and there met Mr MacCallum outside the courtroom. Mr MacCallum pointed out to her through a glass panel in the door a man he said was the defendant. The man was sitting at the bar table. Ms Brown could see only the man's back and the back of his head. He was with another man whose face she could see although from the side and back only. Mr MacCallum told her that the other man was the defendant's brother, Peter. 14 Ms Brown's evidence is that she then went down to the ground level of the court complex and waited until informed by Mr MacCallum by mobile telephone that the defendant and Peter were on their way down. Thereafter, when two men walked out into Goulburn Street at 4.05pm, Ms Brown spoke to one of them identified by her as the defendant and said: "Jeffrey Mahaffy. I have an originating process and affidavit for you." 15 Ms Brown's evidence is that the man replied: "My name is Stephen." 16 Ms Brown then asked the man if he had any identification to prove that he was not Jeffrey Mahaffy, to which he gave a negative answer. Ms Brown then said to the man: "I have been told that you are Jeffrey Mahaffy. I am serving these documents by placing them down in your presence." 17 Ms Brown then put the documents down on the man's trolley case and said: "You have been served." 18 The defendant relies on his own affidavit of 23 May 2010 and the affidavit of his brother Peter of the same date. 19 The defendant confirms that he was at the District Court in Goulburn Street at the relevant times on 16 April 2010. He denies that he was served with the originating process and affidavit on that day. He says that Mr MacCallum, who was there as solicitor for the present plaintiff in the particular District Court proceedings, did not make him aware that the originating process had been filed. 20 Mr Peter Mahaffy deposes that he was with the defendant at the District Court from 2.15pm on 16 April 2010, that they left the court building together at about 4.30pm, that they remained together thereafter for the rest of the day until finishing dinner and that no one served any documents on the defendant for a Supreme Court matter at any time during the period from 2.15 until the conclusion of dinner. 21 The defendant sought to tender documents issued by the ticket machine in the District Court registry with a view to proving that he was in that registry at times after 4.05pm on the day in question but the tender was rejected on the hearing of the dismissal motion because the provenance and authentication of the documents were not established by evidence and they were, from an evidentiary perspective, merely unexplained pieces of paper: National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309. The possibility that the defendant might, at the final hearing, lead admissible evidence based on the tickets is, however, real. 22 It is clear that there is a live factual issue to be explored in full at trial as to whether copies of the originating process and Mr MacCallum's affidavit were served on the defendant on 16 April 2010 or at all. The situation is thus such that, in the words of Latham CJ in Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91, "there is a real question to be determined whether of fact or law and that rights of the parties depend upon it". That being so, the plaintiff's case cannot be dismissed as manifestly hopeless and the court must not put an end to the proceedings peremptorily in the way envisaged by the defendant's interlocutory process. Rather, the court must allow the matter to proceed to trial in the normal way. 23 I merely note at this point that the defendant did not seek to explore on the dismissal motion the question whether the affidavit of Mr MacCallum sworn on 15 April 2010 is, in truth, "an affidavit supporting the application", as referred to in s 459G(3)(a). 24 I make the following orders and directions:

1. Order that the defendant's interlocutory process filed on 24 May 2010 be dismissed.

2. Direct that any further affidavits to be relied on by the plaintiff be filed and served by 16 June 2010.

3. Direct that any further affidavits to be relied on by the defendant be filed and served by 24 June 2010.

4. Direct that the proceedings be placed in the Corporations Judge's directions list on 28 June 2010 with a view to allocation of a hearing date for the originating process. 25 I have made no order regarding the costs of the interlocutory process since neither party was legally represented at the time it was filed or at any time thereafter.

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