Edifice Corporation Pty Ltd v JPQS Pty Ltd

CATCHWORDS : CORPORTIONS - Application to extend time under s 459G of the Corporations Act 2001 (Cth) - Whether application filed within 21 days of service of statutory demand.

Acts Interpretation Act 1901 (Cth) LEGISLATION CITED : Corporations Act 2001 (Cth) Evidence Act 1995 (NSW)

David Grant & Co Pty Ltd (Receiver Appointed) v Westpac Banking Corporation [1995] HCA 43; 184 CLR 265 CASES CITED : Emhill Pty Ltd v Bonsoc Pty Ltd [2004] VSC 322; 185 FLR 389 Emhill Pty Ltd v Bonsoc Pty Ltd [2005] VSCA 239; 12 VR 129 Howship Holdings Pty Ltd v Leslie [1996] NSWSC 314; 41 NSWLR 542

Edifice Corporation Pty Ltd (Plaintiff) PARTIES : Edifice Services Pty Ltd (Plaintiff) Construction Plus (NSW) Pty Ltd (Plaintiff) JPQS Pty Ltd (Defendant)

FILE NUMBER(S) : SC 5297/2008; 5296/2008; 5299/2008

COUNSEL : Mr R Glasson (Plaintiff) Mr S Blanks (Defendant)

SOLICITORS : Pattin Bell Davey Lawyers (Plaintiff) SBA Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

No. 5297 of 2008 EDIFICE CORPORATION PTY LIMITED Plaintiff

No 5296 of 2008 EDIFICE SERVICES PTY LIMITED Plaintiff

No 5299 of 2008 CONSTRUCTION PLUS (NSW) PTY LIMITED Plaintiff

JPQS PTY LIMITED Defendant JUDGMENT 1 HIS HONOUR: I have before me three applications. In each case, the plaintiff seeks an order setting aside a statutory demand which the defendant ("JPQS") claims to have served on the plaintiff. Each of the three plaintiffs is apparently related to the others. Each of the statutory demands concern moneys said to be due to JPQS, a quantity surveyor, for services it provided to one or other of the plaintiffs or by reason of the dishonour of a cheque payable to JPQS. 2 Each plaintiff maintains or has maintained that it is entitled to have the relevant statutory demand set aside on the ground that there is a genuine dispute between it and JPQS about the existence or amount of the debt to which the demand relates: Corporations Act 2001 (Cth) ("Corporations Act") s 459H(1)(a). 3 Before the issue of a genuine dispute arises for determination, the plaintiff must establish that the application to set aside the statutory demand was filed within 21 days of service of the demand: Corporations Act s 459G(1), (2). It is common ground that if the plaintiff cannot satisfy the Court that the application was filed within the 21 day period specified in s 459G(2), the application must fail. This follows from the decision of the High Court in David Grant & Co Pty Ltd (Receiver Appointed) v Westpac Banking Corporation [1995] HCA 43; 184 CLR 265 that s 459G(2): "define[s] the jurisdiction of the court by imposing a requirement as to time as an essential condition of the new right conferred by s 459G. An integer or element of the right created by s 459G is its exercise by application made within the time specified."

See David Grant at [25] (277) per Gummow J (with whom other members of the Court agreed). 4 The evidence in each of the three cases, with minor exceptions, is the same. The parties agreed that it was necessary to consider only one of the cases, namely that in which the plaintiff is Edifice Corporation Pty Ltd, ("Edifice"). If Edifice satisfies the Court that it filed its application within the statutory time limit, JPQS accepts that the same result on that issue should follow in the other cases. Equally, if Edifice fails to show that the "essential condition" of the right to apply to set aside the statutory demand has been satisfied, the plaintiffs in the other two cases accept that they must also fail in their applications. 5 Section 109X(1) of the Corporations Actrelevantly provides that, 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 … "

6. Mr Glasson, who appeared for the plaintiffs in all three matters, accepted that if the statutory demand to Edifice had been delivered to its registered office and received there, service of the document was effected on the date of delivery. Mr Blanks, who appeared for JPQS, was content to proceed on this basis, although he also advanced alternative arguments based on statutory presumptions relating to the service or receipt of documents: see Corporations Act s 109X(6); Acts Interpretation Act 1901 (Cth) s 29; Evidence Act 1995 (NSW) s 160(1); Howship Holdings Pty Ltd v Leslie [1996] NSWSC 314; 41 NSWLR 542 at 544 per Young J; Emhill Pty Ltd v Bonsoc Pty Ltd [2004] VSC 322; 185 FLR 389 at [27] per Mandie J, affirmed Emhill Pty Ltd v Bonsoc Pty Ltd [2005] VSCA 239; 12 VR 129. 7 Edifice filed its application seeking an order setting aside the statutory demand on 21 October 2008. Mr Glasson accepted that Edifice's application had to be dismissed if it could not establish that the statutory demand had been served on or after 30 September 2008. (Edifice did not contend that the statutory demand had never been validly served: cf Emhill Pty Ltd v Bonsoc Pty Ltd at [12] per Mandie J.) The parties therefore identified the critical factual issue as whether the statutory demand had or had not been delivered to Edifice's registered office on or after 30 September 2008. If it was, Edifice has established that its application was filed within time and it will be necessary to consider whether there is a genuine dispute relating to the existence or amount of the debt claimed in the statutory demand. If, however, the statutory demand was delivered to Edifice's registered office before 30 September 2008, its application to set aside the statutory demand must be dismissed. 8 Much of the evidence was either not disputed or was not seriously disputed. The evidence establishes the following:

· Edifice's registered office at the material times was: MKP Associates 37 Shelley Street Sydney NSW 2001

· Edifice's principal place of business at the material times was:

Level 1 125 Cosgrove Road Belfield NSW 2191

· At the material times, MKP Associates Pty Ltd (" MKP ") conducted an accounting practice at premises located at 37 Shelley Street, Sydney. The principal of MKP was Mr M Papaklonaris.

· On 4 September 2008, a solicitor employed by the legal firm representing JPQS personally posted an envelope addressed to Edifice at its registered office at MPK Associates, 37 Shelley Street, Sydney NSW 2000. The statutory demand directed to Edifice and the accompanying affidavit were enclosed in the envelope. The envelope was properly stamped. The solicitor herself typed the address on the envelope.

· At the same time, the solicitor personally posted a separate letter similarly addressed, enclosing a statutory demand and accompanying affidavit, to Edifice Services Pty Ltd (" Edifice Services "). This letter was also properly stamped and the address was typed by the solicitor herself.

· On 8 September 2008, the solicitor posted to Construction Plus (NSW) Pty Ltd (" Construction Plus ") a letter enclosing a statutory demand dated 5 September 2008 and an accompanying affidavit. The letter was addressed to Construction Plus at its registered office and it, too, was properly stamped and had a typewritten address.

· By an arrangement made between Mr Papaklonaris and Australia Post, any mail addressed to MKP at 37 Shelley Street, Sydney was redirected to a particular GPO Box number. By a separate arrangement made with Australia Post, mail redirected to the GPO Box number (and, presumably, any mail sent directly to the GPO Box number) was delivered daily to MKP's office at 37 Shelley Street, Sydney. MKP's premises at that address were described by Mr Papaklonaris as " stand alone " offices in a substantial building.

· MKP did not keep a record of incoming mail. Mr Papaklonaris' practice at the time was to collect personally mail from the reception desk at his offices. The mail was then opened by him.

· Mr Papaklonaris was responsible for forwarding correspondence, as appropriate, to clients and, in particular, to Mr Taouk, the sole director and secretary of Edifice.

· On 30 September 2008, the receptionist for the Edifice Group collected the mail delivered on that day to Mr Taouk or to members of the Edifice Group (of which Edifice is one). The mail had been delivered to the ground floor of the premises at 125 Cosgrove Road, Belfield. The receptionist collected the mail from the ground floor and took it to the first level, Edifice's principal place of business.

· Among the items of mail collected by the receptionist on 30 September 2008 was a single envelope containing all three statutory demands that had been posted by JPQS's solicitor on 4 and 8 September 2008. The envelope contained neither a covering letter nor a compliments slip. The envelope was handwritten and had no markings to show that it had been redirected. The receptionist discarded the envelope.

· The receptionist drew the contents of the letter to the attention of Mr Taouk on the day it arrived. Mr Taouk sent an email to Mr Papaklonaris at 4.52 pm on 30 September 2008 enquiring whether Mr Papaklonaris had ever received a demand from JPQS addressed to Edifice.

· Mr Papaklonaris replied at 5.07 pm on 30 September 2008 that he had looked through his files and could not locate anything from JPQS. 9 On the basis of this evidence, it might be thought that the overwhelming likelihood is that:

· the three letters posted by the solicitor on 4 and 8 September 2008, each containing a statutory demand, were duly delivered by Australia Post to the registered office of each of the companies named in the statutory demand;

· Mr Papaklonaris received and opened the letters at his office (the registered office of each of the companies); and

· Mr Papaklonaris forwarded by post the originals of the statutory demands in a single envelope addressed to Mr Taouk or the Edifice Group at Level 1, 125 Cosgrove Road, Belfield.

In his submissions, Mr Glasson did not suggest that there was any possibility that the statutory demands could have been delivered to MKP on 30 September 2008 and then mailed by Mr Papaklonaris and received by Mr Taouk on the very same day. 10 Mr Glasson relied on the evidence of Mr Papaklonaris to resist the conclusion that I have suggested that follows from the evidence. Mr Papaklonaris said in his principal affidavit that "on most occasions" he forwarded correspondence to Mr Taouk by email after scanning the relevant documents. Otherwise, he simply mailed the documents to Mr Taouk. Mr Papaklonaris also said that when he scanned and emailed documents, to Mr Taouk, his practice was to post the documents to Mr Taouk in a new envelope, addressed to Mr Taouk's principal place of business. Usually, Mr Papaklonaris would include a compliments slip, but he did not suggest that this was an invariable practice. Mr Papaklonaris stated that, depending upon his workload or commitments, he would forward correspondence to Mr Taouk within one to three days of receiving it at MKP's offices. 11 In his affidavit, Mr Papaklonaris did not assert categorically that he had never received the statutory demands directed to the three companies. Nor did he assert categorically that he had never forwarded them by mail to Mr Taouk. He said that he could not recall receiving any documents relating to statutory demands made by JPQS and that he had no record of receiving any such documents. 12 In his oral evidence, Mr Papaklonaris appeared on occasions to be more definite in his denial that he had received the statutory demands at his office. However, on other occasions, he limited himself to stating, as he had in his affidavit, that he had no recollection of having received them. Mr Papaklonaris asserted in his oral evidence that he would have scanned an important document such as a statutory demand. However, he acknowledged that he had received perhaps 20 such documents directed to companies associated with Mr Taouk within a relatively short period. 13 I am prepared to accept that Mr Papaklonaris had no recollection of receiving the statutory demands, in particular the statutory demand directed to Edifice, either on 30 September 2008 or when giving evidence. I also accept that there was no record in his office that the statutory demands had been received. However, the absence of any record in his office relating to the statutory demands does not carry the matter very far. Mr Papaklonaris had no system for recording documents as they were delivered to his office. Nor did he have any system for recording documents sent by post to his clients. Whether or not particular documents were scanned and sent by email depended upon Mr Papaklonaris' assessment of their importance. He did not uniformly adopt that procedure with all documents delivered to his office. 14 In my opinion, the evidence strongly suggests that Mr Papaklonaris received at his office, by means of the redirected mail, the three statutory demands posted by the solicitor on 4 and 8 September 2008. The evidence also strongly suggests that, although Mr Papaklonaris had no memory of it, he forwarded the statutory demands in a single envelope addressed to Mr Taouk or the Edifice Group at their Belfield office. Mr Papaklonaris may have thought that the statutory demands were of insufficient insignificance to warrant forwarding them by email or he simply may have omitted to follow his general, but not uniform practice of scanning important documents addressed to Mr Taouk or his companies. 15 Whatever the explanation, the very strong probabilities are that the three statutory demands, including the statutory demand directed to Edifice, were actually delivered to the registered office of the companies well before 30 September 2008. They were then posted by Mr Papaklonaris to Mr Taouk in the manner I have described and were duly received by Mr Taouk on 30 September 2008. Mr Glasson could advance no plausible hypothesis as to how the statutory declarations arrived at Edifice's place of business, other than the obvious explanation that Mr Papaklonaris posted them to Mr Taouk or the Edifice Group. 16 For these reasons, I find that the statutory demand on Edifice was served on the company at its registered address well before 30 September 2008. It follows that the application to set aside the statutory demand directed to Edifice was not filed within 21 days of service of the statutory demand as required by s 459G of the Corporations Act. 17 Accordingly, Edifice's application must be dismissed. It also follows that the other two applications must be dismissed. The applicants must pay JPQS's costs.

                  I certify that this and the 11 preceding pages is a true copy of the reasons for judgment herein of the Acting Justice Sackville

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