HIS HONOUR: On 26 March 2015, the defendant MX Holdings Pty Limited issued a creditor's statutory demand addressed to the plaintiff Cummins Equipment Hire Pty Limited demanding payment of a debt totalling $148,250.75. The demand was forwarded to the plaintiff by way of service by ordinary prepaid post addressed to the plaintiff at its registered office, 41 Dehavilland Circuit, Hamlyn Terrace, in the State of New South Wales.
Paragraph 7 of the demand was as follows:
The address of the creditor for service of copies of any application and affidavit is care of Beck Legal, Post Office Box 628, Bendigo, Victoria 3552.
Paragraph 1 of the demand identified the creditor's address as 110 Wills Street, Bendigo, in the State of Victoria, which is also confirmed by other evidence to be its registered address.
According to the evidence adduced on behalf of the plaintiff, which was not, on the present application, in dispute, the document was received on 6 April 2015, and is taken to have been served on that date. Any application to set aside the demand under (CTH) Corporations Act 2001, s 459G, had to be made within 21 days of that date; that is to say, by 27 April 2015.
Elan Copra Trading Pty Limited v JK International Pty Limited [2015] NSWSC 2085 | Case summary | Zoe
On 24 April 2015, the plaintiff filed in this Court an originating process seeking, pursuant to s 459G, an order setting aside the creditor's statutory demand. That application was purportedly served on the same day by express post, prepaid and addressed to the defendant at its registered office at 110 Wills Street, Bendigo, and by facsimile to the office of Beck Legal, and also by express post to Beck Legal at the post office box address referred to in the demand. I pause to observe, although it is not material to the present application, that I doubt that a post office box is a valid address for service, and I think there is authority to that effect.
None of the modes of service to which I have referred - that is, express post to the defendant's registered office, facsimile to the defendant's solicitor's office or express post to the nominated address for service, being the defendant's solicitor's post office box - was accompanied by a notice of service under (CTH) Service and Execution of Process Act 1992, s 16.
The application first came before the Court on 5 May 2015, when directions were made by consent providing for the matter to be listed before the Corporations judge on 11 May 2015. The consent order was signed by the solicitor for the defendant. The proceedings were adjourned to 11 May 2015 before the Registrar. On that day, the Registrar, by consent, made orders in accordance with the short minutes providing for the service of evidence. They were signed by counsel who then appeared for the defendant. The proceedings were adjourned to 15 June. On that day, the Registrar made directions that any interlocutory process be filed by that date and made returnable on 22 June, and for the service of evidence in connection with any such interlocutory application.
In conformity with that direction, the defendant on 15 June 2015 filed the interlocutory process which comes before the Court today, seeking an order that the originating process be set aside or that the proceedings be summarily dismissed. The essential ground of the defendant's application for summary dismissal is that no valid application has been made under s 459G, because the application was not duly served within the 21 day period referred to in that section, and thus the jurisdiction of the Court has not been validly invoked.
At the outset of the hearing, the respondent plaintiff foreshadowed an application for leave to amend its originating process to seek a declaration that the demand is null and void on the basis to which I adverted in In the matter of International Materials & Technologies Pty Limited [2013] NSWSC 787. Counsel for the defendant has indicated that he would desire a further opportunity to make submissions in response to that application rather than arguing it today. Thus, I shall grant leave to file that interlocutory process and give it a later date, and make some directions as to how it should proceed, as I do not think any further evidence could be required in respect of it.
The defendant's short point on the application for summary dismissal is that by reason of non-compliance with the Service and Execution of Process Act, there has been no valid service of the originating process.
Service and Execution of Process Act, s 9(1), provides that service of a process under the Act of a company is to be effected by leaving it at or by sending it by post to the company's registered office. Section 15 provides that in respect of an initiating process, service on a company must be effected in accordance with s 9. Section 16 provides that service is effective only if copies of such notices as prescribed, are attached to the process or the copy of the process served. There is, as I have said, no dispute that the prescribed notice was not attached.
In those circumstances, it necessarily follows from s 16 that service was not effected and that the application was not validly made and served within the 21 day period, unless one of the arguments raised by counsel for the plaintiff can be upheld.
The first such argument was that there was service in conformity with (NSW) Uniform Civil Procedure Rules 2005, r 10.3. The first problem with that submission is that the originating process did not bear any such note or statute as prescribed under UCPR, r 10.3(3).
Next, it was argued that service was effected in compliance with UCPR, r 10.6(1), which provides that a document, including originating process, may be served by one party or another, whether in New South Wales or elsewhere, in accordance with any agreement, acknowledgement or undertaking by which the party to be served is bound. I would readily find that specifying an address for service in a s 459E statutory demand amounts to an agreement, acknowledgement or undertaking by which the creditor is bound. However, the second problem with the argument under r 10.3, and the problem with the argument under r 10.6, is that posed by Service and Execution of Process Act, s 8A, which provides that the Act applies to the exclusion of a law of a State with respect to the service or execution in any other State of process of the relevant State that is process to which the Act applies. As it seems to me, that excludes the UCPR as a source of power for service where that service is in another State of Australia, as was held by Byrne J in Re Marlan Financial Services Pty Ltd; Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd [1999] VSC 435; (1999) 33 ACSR 259; (1999) 158 FLR 256.
The third, and it seems to be a most attractive argument in some respects, is that the creditor is estopped from denying that the purported service at the address for service nominated in the creditor's statutory demand was valid service. If the only issue in the case were that service had been effected on the nominated address for service and not on the registered office, there would prima facie be great attraction in that argument. However, there is significant authority that the mandatory provisions of the Service and Execution of Process Act cannot be outflanked in this way [see Re Marlan Financial Services Pty Ltd; Elan Copra Trading Pty Limited v JK International Pty Limited [2005] SASC 501; (2005) 226 ALR 349; 56 ACSR 416; 195 FLR 229; Energy Conservation System Pty Limited v Downer EDI Engineering Electrical Pty Limited [2008] NSWSC 1139; (2008) 221 FLR 293, 395-96, [18]-[23]].
Moreover, in the present context, there is, it seems to me, no room for such an estoppel for two reasons: first, even if an estoppel were otherwise available, its effect would be to preclude the creditor from disputing that service at the nominated address was not effective service. It is silent as to the requirement for compliance with the Service and Execution of Process Act in effecting such service.
Secondly, in any event, there cannot have been detrimental reliance on any relevant representation in this case, because service was effected by post to the registered office which, had it complied with Service and Execution of Process Act, s 16, would have been valid service, quite apart from the question of any service at the solicitors' office or post office box.
Thus the application to set aside the creditor's statutory demand was not validly and effectively served within 21 days after the date of service of the demand. In those circumstances, the Court's jurisdiction to set aside the demand pursuant to s 459G has not been validly invoked. Accordingly, insofar as the plaintiff seeks to have the statutory demand set aside pursuant to s 459G, its application is doomed to fail and ought to be summarily dismissed.
However, the plaintiff seeks leave to amend its originating process to claim a declaration that the demand is null and void on the basis referred to in International Materials & Technologies, and I propose to grant such leave.
The plaintiff is content to rely in that respect on the written submissions already made. The defendant desires the opportunity to bring in written submissions and also to address orally on the question. Although it seems to me that written submissions should suffice, I would be reluctant to preclude counsel from making oral submissions in circumstances where I am satisfied that there is a genuine wish to do so and where the question is not necessarily straightforward and there is some room for differences of opinion.
Accordingly, the Court orders that:
1. The claim for relief in paragraph 1 of the originating process filed 24 April 2015 be dismissed.
2. The plaintiff have leave to amend its originating process by filing an amended originating process claiming a declaration that the creditor's statutory demand dated 26 March 2015 is null and void, such amended originating process to be filed and served by 29 June 2015.
3. The defendant lodge with my associate and serve its written submissions in respect of the amended interlocutory process by 13 July 2015 2015.
4. The plaintiff may lodge any written submissions in reply by 20 July 2015.
5. The proceedings be adjourned to 27 July 2015 at 9.45 am in the Corporations List.
6. The costs of the interlocutory process are reserved to the hearing of the originating process.
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Decision last updated: 18 August 2016