In the matter of Complete Investing Services Pty Ltd (in liq) [2018] NSWSC 1003

Solicitors: McLean & Associates (Applicant) CLH Lawyers (Plaintiff/Respondent) Assured Legal Solutions (Liquidator) File Number(s): 2018/77192

Judgment

1. GLEESON JA: Application is made by Mrs Bobette McMillan, the sole director of the defendant, Complete Investing Service Pty Ltd (in liq) (the Company), pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 36.16(2)(b) to set aside orders made by a Registrar of the Court on 12 April 2018 winding-up the Company and appointing Mr Jason Porter of SV Partners as liquidator of the Company. Those orders were obtained by the plaintiff, Roam Tolling Pty Ltd (Roam).
2. UCPR r 36.16(2)(b) provides that the Court may set aside or vary a judgment or order after it has been entered if it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order.

Circumstances of the application

1. The Company carries on the business of providing electrical services and solar installation.
2. The winding-up order was made based on the presumption of insolvency arising from the failure by the Company to comply with a statutory demand dated 15 January 2018 under the Corporations Act 2001 (Cth), s 459C(2)(a).
3. The debt to which the statutory demand related claimed an amount of $5,240.04 said to be owing by the Company to Roam for unpaid tolls and fees for the issuing of Toll notices in respect of two motor vehicles, one for the period 28 June 2014 to 10 October 2016 and the other for the period 2 July 2014 to 25 October 2016. It is not in dispute that the Company is the registered owner of the two motor vehicles. The alleged unpaid tolls and fees related to the M7 motorway, which is operated by Roam.
4. The affidavit evidence of Mrs McMillan, the sole director, sole shareholder and secretary of the Company, establishes that she did not receive the originating process, nor have notice of the hearing date of the winding-up application. The evidence also establishes that Mrs McMillan did not receive the creditor's statutory demand for payment which was sent by post on 15 January 2018 to the Company's registered office being the residential address of Mrs McMillan and her husband at XXX Tizzana Road, Ebenezer, New South Wales.
5. There is an issue, which is addressed below, whether the Company has raised a doubt as to presumption of service of the originating process four working days after the date of posting under s 160 of the Evidence Act 1995 (NSW).
6. The amended interlocutory process filed 25 June 2018 seeks leave nunc pro tunc pursuant to s 198G(3)(b) of the Corporations Act for Mrs McMillan to exercise her power as sole director of the Company to bring this application in the name of the Company. The liquidator did not object to the grant of such leave and an order to that effect will be made.
7. In addition to seeking orders setting aside the orders made by Registrar Walton on 12 April 2018, the interlocutory process seeks an order that Roam's originating process dated 9 March 2018 be dismissed; that Roam pay the liquidator's costs and remuneration; and that Roam pay the Company's costs occasioned by the amended interlocutory process. In the alternative, relief is sought pursuant to s 482 of the Corporations Act that the winding-up of the Company be stayed until further order, and that the winding-up of the Company be terminated.
8. Notice of the application has been given to the liquidator and Roam. The liquidator appeared by his legal representative and took the position that he neither consented to nor opposed the relief sought by the Company. As to who should pay the liquidator's costs and remuneration estimated at $7,821.68 plus legal fees of $4,500 (plus GST), the liquidator submitted that this amount should be paid by Roam if the applicant was successful and alternatively, by the Company, if the applicant was unsuccessful. Roam appeared by its legal representative and opposed the relief sought by the Company.
9. At the conclusion of the hearing on 25 June 2018, the Court made an order pursuant to s 482(1) of the Corporations Act staying orders 1, 2 and 3 made by the Registrar on 12 April 2018 until judgment in this matter was delivered.

Relevant principles

1. In Re Day & Night Online Transport Pty Ltd (in liq) [2018] NSWSC 796, I summarised the principles applying in a case of the present sort at [9] - [13]: 9 In George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464 (George Ward Steel) at 465, Hodgson J expressed the following view: In my view, if an order winding up a company is made in the absence of the defendant company, and an application is brought promptly by the company, with notice being given to the liquidator, to the plaintiff and to any creditor who appeared at the hearing; and if the evidence shows an explanation for the non-appearance at the hearing and indicates solvency of the company; and if there is consent to setting aside, or at least non-opposition; and if the liquidator indicates that nothing in his investigations to date shows a reason for the company to be stopped from trading, then the court will normally set aside the order. 10 Subsequent authorities have expressed some qualifications with aspects of Hodgson J's statement in George Ward Steel. One qualification is that the reference by Hodgson J to there being some evidence which "indicates solvency" should not be understood as a requirement that there be "proof" of solvency in the sense that the company demonstrate it would be able to defeat the application for winding-up: see Deputy Commissioner of Taxation v Annesley Plant Hire Pty Ltd [2010] FCA 755 at [12] (Finkelstein J) and the authorities there referred to; Deputy Commissioner of Taxation, in the matter of SMAR Nominees Pty Ltd (in liq) v SMAR Nominees Pty Ltd (in liq) [2017] FCA 1384 at [12] (White J). 11 Another qualification suggested by Finkelstein J in Deputy Commissioner of Taxation v Annesley Plant Hire Pty Ltd at [13] is that it may be going too far to say that success of the application will depend upon there being consent by, or at least non-opposition from, the liquidator. Finkelstein J gave two reasons why that cannot be so. One is that whether or not the application to set aside a winding-up order is opposed is beside the point; what is important is that justice is done to the parties. The other matter is that Hodgson J's approach, if followed, would have the effect of converting the liquidator into a protagonist and that is most undesirable given the liquidator's duty to act impartially when dealing with persons interested in the liquidation. 12 Against this, Finkelstein J recognised that if the liquidator's investigation shows some reason why the winding-up should continue, for example if there has been misconduct on the part of the directors, he or she should inform the Judge because that would be a relevant matter to take into account: Deputy Commissioner of Taxation v Annesley Plant Hire Pty Ltd at [13]. 13 I agree with the remarks of Finkelstein J and have applied them in my approach to the present application.
2. The same approach is adopted on this application.
3. Reference should also be made to the remarks of Barrett J in Workers Compensation Nominal Insurer v Detailed Flooring Pty Ltd [2010] NSWSC 1056; (2010) 80 ACSR 1 at [22]: The mere fact that the defendant was absent and took no part in the proceedings is, of itself, not sufficient to warrant the exercise of the discretion to set aside a winding up order. Exercise of the discretion will be appropriate only if some additional factor makes it unjust for the ordinary outcome of the litigation process to stand.
4. In the present case, the following issues require determination: 1. Has a doubt been raised by the Company as to the presumption of service of the originating process under s 160 of the Evidence Act? 2. Has the Company provided a satisfactory explanation for its non-appearance at the hearing, and should the winding up order be set aside? 3. Should the winding-up application be dismissed because either: (a) the statutory demand was defective under s 459E(3) and accordingly, the presumption of insolvency did not arise? (b) the proceedings are an abuse of process because the alleged debt was not due and payable by the Company? (c) the Company is solvent? 1. What relief, if any, should be granted?

(1) Service of the originating process

1. There is no evidence of actual service of the originating process at the registered office of the Company. Roam relies upon the affidavit of Mr Bruce Smith sworn 12 March 2018 that he enclosed documents described as the "Legal Documents" in a pre-paid Australia Post envelope addressed to the Proper Officer of the Company at its registered office in Ebenezer, being the address referred to at [6] above, and deposited the envelope into an Australia Post mailbox at a specified location in Fortitude Valley, Queensland. Those documents included a sealed originating process filed 9 March 2018, affidavit in support of application for winding-up in solvency sworn by Ms Nedeljka Canak on 6 March 2018, affidavit of service of Mr Bruce Smith sworn 1 March 2018, consent of liquidator to act, and short form bill of costs.
2. Mr Smith also deposed that he sent copies of the same Legal Documents by the same procedure by pre-paid Australia Post addressed to Mrs McMillan as the director of the Company to the same address as the Company's registered office.
3. Both Mrs McMillan and her husband, Mr David McMillan, deposed that they did not receive the originating process in the post at their residential address at Ebenezer, which is located on a country road. It may be inferred from the evidence that there is a letterbox on the public road at that address. The evidence is silent as to the size of the letterbox, what might cause it to overflow, whether it has a lock on it, and how far it was from the front door of the residence at that address.
4. Mrs McMillan deposed to having made enquiries of her two children aged 18 and 13 and they had informed her that they had not opened any envelopes received in the letterbox in January 2018 when they were at home on school holidays. Mrs McMillan also deposed to there being regular issues in the past with receipt of mail at her residential address. She referred to three specific previous instances of letters not being delivered to her home address, and also non-receipt of accounts from Telstra and bank statements some time ago.
5. With respect to the service of the originating process on the Company, Roam relied upon a combination of s 109X of the Corporations Act and s 160 of the Evidence Act. Although not mentioned by Roam, s 29 of the Acts Interpretation Act 1901 (Cth) is also relevant.
6. Section 109X(1) of the Corporations Act provides that a document may be served on a company by, among other means, leaving it at, or posting it to, the company's registered office: s 109X(1)(a).
7. Section 29 of the Acts Interpretation Act and s 160 of the Evidence Act respectively and relevantly provide: 29 Meaning of service by post (1) Where an Act authorises 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 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 section 160 of the Evidence Act 1995. 160 Postal articles (1) It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted. ... (3) In this section: "working day" means a day that is not: (a) a Saturday or a Sunday, or (b) a public holiday or a bank holiday in the place to which the postal article was addressed.
8. It is common ground that the principles in relation to delivery of a winding-up application by ordinary post are conveniently stated by McKerracher J in Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd [2018] FCA 466 at [2]: (a) proof of non-receipt by the recipient does not prove non-delivery: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 (at 96-97); Re Rustic Homes Pty Ltd (1988) 49 SASR 41 (at 44); Dwyer v Canon Australia Pty Ltd [2007] SASC 100 per Debelle J (at [8]-[9]); and Deputy Commissioner of Taxation v Contract Synergies Administration Pty Ltd [2011] FCA 743 per Jacobson J (at [5]-[18]); (b) the permissive or facilitative service provisions under s 109X(1)(a) of the Corporations Act will suffice to establish proper service in ordinary circumstances, but this provision is also to be read, in an appropriate case, against the provisions in s 29 of the Acts Interpretation Act 1901 (Cth) and s 160 of the Evidence Act 1995 (Cth), which do, in essence, recognise the possibility that delivery may not have been effected by ordinary prepaid post. Section 29 of the Acts Interpretation Act and s 160 of the Evidence Act respectively and relevantly provide: … See also Deputy Commissioner of Taxation v Starpicket Pty Ltd (2012) 212 FCR 578 per Greenwood J (at [62]-[74]); (c) proof of non-receipt at a place, as distinct from non-receipt by a person, is likely to prove non-delivery at that place: Scope Data Systems Pty Ltd v Goman (2007) 70 NSWLR 176 per White J (at [49]); and (d) while mere denial of non-receipt by the addressee would scarcely, if ever, suffice to prove 'non-delivery', evidence of non-receipt at a place by an appropriate occupant, depending on the cogency of the evidence, may be sufficient to create a doubt for the purposes of s 160 of the Evidence Act. While such evidence needs to be sufficient to create a 'doubt', it does not need to be proof to the civil standard of fact finding at trial as to actual non-delivery. A 'doubt' ought not to be assimilated with proof or demonstration: Deputy Commissioner of Taxation v Manta's on the Beach Pty Ltd (2012) 88 ATR 193 per Logan J (at [12]).
9. It is now accepted, following the decision of White J in Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill (2007) 70 NSWLR 176; [2007] NSWSC 278 that s 160 of the Evidence Act applies to the service of a statutory demand: Sydney Constructions & Developments Pty Ltd v Reynolds Private Wealth Pty Ltd [2016] NSWSC 1104 at [7] (Barrett AJA); Workers Compensation Nominal Insurer v Lozito-Strada Pty Ltd [2013] FCA 625 at [6] (Jacobson J); Re Ege Foods Australia Pty Ltd [2014] NSWSC 983 (Ege) at [15] (Brereton J).
10. In Scope Data Systems Pty Ltd v Goman, White J summarised the interaction of the statutory presumptions in s 29 of the Acts Interpretation Act and s 160 of the Evidence Act at [38]: In my view, the position is as follows. If the evidence establishes the time at which the article is delivered to the postal address, then that is the time at which service is taken to be effected. If the evidence does not establish the time at which delivery was effected, then, unless the contrary is proved, delivery is deemed to have been effected in the ordinary course of post. What that is is a question of fact to be proved by evidence. In the absence of evidence on the topic, and in the absence of any presumption, there will be no proof that the article was delivered at a particular time. If it is established that the article was not delivered in the ordinary course of post, but the evidence does not establish when it was delivered, then again there will be no evidence as to the time of delivery. In either case, s 160 of the Commonwealth Evidence Act (applicable to federal courts), or s 160 of the New South Wales Evidence Act (applicable to New South Wales courts), affords a presumption as to when the article is to be taken to have been delivered. The presumption may assist in proving when delivery was made in the ordinary course of post. If the evidence shows that the article was not delivered in the ordinary course of post, the presumption may assist in proof of when the document was delivered.
11. Counsel for the Company submitted that evidence of non-receipt at a place by an appropriate occupant was sufficient to create a doubt for the purposes of s 160 of the Evidence Act and that it is not necessary for the Company to prove non-delivery but only to raise sufficient doubt to rebut the presumption: Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd at [2(d)]; Deputy Commissioner of Taxation v Manta's on the Beach Pty Ltd [2012] FCA 417; (2012) 88 ATR 193 at [12].
12. In support of this submission, the Company pointed to evidence from Mr and Mrs McMillan as the only persons who would be expected to receive mail at the Company's registered office that the originating process was not received. There is some tension between that evidence and the evidence of previous difficulties with the delivery of mail to the Company's registered office.
13. Roam referred to Partners of Piper Alderman v Sharjade Pty Ltd [2011] NSWSC 6 where the evidence showed that the mailbox of the registered office of a company was a unit number for a block of apartments at Cremorne Point and the mailbox for the unit was adjacent to the public walkway in front of the home unit building. There was no evidence about the size of the box, what might cause it to overflow, and whether it had a lock on it: at [11]. Barrett J stated at [18] that implicit in the statutory scheme, for service of documents by post under s 109X(1)(a) of the Corporations Act, is an expectation that there will be in place at the registered office a system for the safe and secure reception of documents delivered by post. Given the company chose as its registered office premises with mail deliveries facilities of the type described, his Honour observed at [20] "that anything might happen to documents put into a letterbox situated on the public walkway in front of the residential unit building and providing access to that building from the street". His Honour concluded the evidence of non-receipt did not prove non-delivery.
14. The same may be said in the present case where the company chose as its registered office premises with mail delivery facilities being a letterbox situated on a public road in front of residential premises on a country property.
15. Insofar as the Company suggested there are doubts as to the evidence of service in Mr Smith's affidavit because he did not depose to the amount of postage (the subject of the ink stamp), nor was a copy of the envelope in which the originating process and other documents were said to have been placed put in evidence, that submission is to be assessed in light of Mr Smith's evidence of his practice of placing the mail in envelopes, addressing and stamping the envelopes with a pre-paid ordinary inked stamp and depositing the mail into a specific Australia Post mailbox at an address in Fortitude Valley, Queensland. I do not consider that there is reason to doubt that Mr Smith posted the documents in the manner he described.
16. Roam did not seek to rely on the presumption of service by post under s 29 of the Acts Interpretation Act. Relevantly, Roam did not adduce evidence as to the time in which a letter addressed to the Company's registered office would be delivered "in the ordinary course of post". Instead, Roam relied upon the presumption under s 160 of the Evidence Act that the letter containing the originating process and other documents was received at the registered office of the Company on the fourth working day after having been posted.
17. The critical issue in this case (which was not in issue in Partners of Piper Alderman v Sharjade Pty Ltd) is whether the evidence is sufficient to raise a "doubt" about the presumption as to the time of receipt of the letter under s 160 of the Evidence Act. In my view, the evidence of non-receipt at the Company's registered office by the occupants of the home at that address, relevantly, Mr and Mrs McMillan, is not sufficient to create a doubt for the purposes of s 160 of the Evidence Act. The matters leading to this conclusion are: 1. the location of the letterbox on a public road in the country; 2. the absence of evidence of the size of the letterbox, what might cause it to overflow and whether it had a lock on it; and, 3. the evidence of Mrs McMillan of there being regular issues in the past with receipt of mail at her residential address.
18. I am satisfied that there was good and effective service of the originating process.

(2) Explanation for non-appearance

1. Mrs McMillan gave evidence in her first affidavit that on or around 21 March 2018 she received correspondence from ASIC that made reference to an application to wind-up the Company. She said this was the first communication that the Company had received in relation to the winding-up. Mrs McMillan was directed by that letter to the ASIC website and she obtained a copy of a Form 519 through an on-line search which disclosed that Roam filed a winding-up application on 9 March 2018. The Form 519 notice did not disclose the hearing date of the winding-up application. Mrs McMillan asked her husband to telephone the lawyers for Roam listed on the Form 519 notice.
2. Mr McMillan deposed that on 26 March 2018 he telephoned CLH Lawyers and left a message for Mr Jos Basson. He did not receive a return call that day. Mr McMillan said that on 27 March 2018 at around 10:30am he phoned CLH Lawyers and spoke with a person named "Chris" explaining that his wife was a director of the Company and stating "we do not know anything about this debt, nor have we received anything".
3. Mr McMillan gave evidence of a further telephone call at around 1:30pm that day with a person named "Aaron" from CLH Lawyers (who, on the evidence, is Mr Aaron Edmonds). Mr McMillan deposed that he told Mr Edmonds that he and his wife had never received anything, no demands, no correspondence and as far as they were aware the Toll account that the Company had was active and up-to-date. He said that Mr Edmonds replied that he would contact Roam to see if he could get an explanation. Mr McMillan said he responded, "Okay, I will wait to hear from you".
4. Mr McMillan deposed to another conversation with Mr Edmonds that day in which Mr Edmonds said words to the effect that he had found out some information, that there had been some credits taken from Mr McMillan's account at different times and put towards these notices, however, he did not know how or why that had happened. He said that Mr Edmonds stated that there must be some glitch in the system and that he knew there was an enormous backlog with Roam and that obviously there was a problem somewhere with how all of this had happened and that he would have to go back to Roam and get more information for Mr McMillan and get back to him. Mr McMillan deposed that he asked Mr Edmonds what they are supposed to do now and why should it be their problem if Roam had not reported correctly, charged correctly or informed them correctly. He said that Mr Edmonds responded, "I can't advise you, but there is still plenty of time. So let's wait and see what information we can get back from Roam and we can work from there". Mr McMillan said he concluded the conversation on the basis that he would wait to hear back from Mr Edmonds. He also said that Mr Edmonds did not inform him of any upcoming court date.
5. Mr McMillan deposed that when he had not heard back from Mr Edmonds by 7 April 2018, he telephoned CLH Lawyers but was unable to speak with Mr Edmonds so left a message asking him to call back. He said he did not receive a return call. He said that he tried calling Mr Edmonds again on 11 and 12 April 2018 but on both occasions he was unable to be put through and he left messages for Mr Edmonds to call him back but that he did not hear from Mr Edmonds. Mr McMillan deposed that he thought there was no urgency and that Mr Edmonds would get back to him with the information that he had promised. He said that he had kept his wife informed of each of the conversations that he had with people at CLH Lawyers.
6. Mr Edmonds responded to Mr McMillan's affidavit by stating that he did not agree with the content of the conversations deposed to by Mr McMillan on or around 27 March 2018. He deposed that he did not recall the exact words spoken during the conversation but did recall that it was in relation to the proceedings being commenced and how it may be resolved.
7. Mr Edmonds exhibited to his affidavit an email, which he said he sent to Mr McMillan at 1:53 pm on 27 March 2018 after their conversation. That email attached a copy of a winding-up application and confirmed the date and time of the court listing, confirmed the amount sought by Roam, including costs and confirmed that, unless payment was made by the date of the court listing, instructions were held to seek an order that the Company be wound up.
8. Mr McMillan replied in his second affidavit of 13 June 2018 that he did not receive the email from Mr Edmonds sent on 27 March 2018. He gave evidence annexing a copy of a screenshot of emails received on 27 March 2018 from his desktop computer in his home office (including emails in his Trash folder) which did not include the email from Roam's lawyers. He also gave evidence of extensive enquiries made by him of his email provider, Crazy Domains, to determine whether the email had been received by the provider. Ultimately, the provider was unable to assist. Mr McMillan deposed that the first time he saw the court documents relating to the proceedings was when the Company's solicitor, Ms Karen McLean, emailed them to him and his wife on 18 April 2018.
9. Mrs McMillan deposed in her second affidavit of 14 June 2018 that she did not know of any court date that had been fixed until after the Company had been wound up. She said that had she known about the court date she would have instructed a lawyer to appear and dispute the debt alleged to be owing. She also said that the first time she saw the court documents in relation to the proceedings was when they were provided to her by her lawyer on 18 April 2018. She said that at the date of liquidation, the Company's bank balance was $7,888.56 and the only creditors owed money by the Company were Telstra in the amount of $911.95 and Macquarie Leasing, which was a secured creditor in respect of motor vehicles owned by the Company.
10. I accept the unchallenged evidence of Mrs McMillan and Mr McMillan.
11. I am satisfied that Mrs McMillan has given a sufficient explanation for the Company's non-appearance on the hearing of the winding-up application. Although the terms of Mr Edmonds' email to Mr McMillan on 27 March 2018 are somewhat at odds with some of the statements attributed to Mr Edmonds by Mr McMillan, Mr Edmonds did not say in his affidavit that he told Mr McMillan during their conversation of the listing date of the winding-up application, and I accept Mr McMillan's evidence that he did not receive Mr Edmonds' email of 27 March 2018 notifying him of that listing date.

(3)(a) The demand and accompanying affidavit

1. The Company submitted that the presumption of insolvency did not arise from non-compliance with the statutory demand because the demand was fatally flawed given that the accompanying affidavit pre-dated the demand by three days. The affidavit verifying the demand was sworn on 12 January 2018, while the demand is dated 15 January 2018. Reliance was placed on the decision of the Full Court of the Supreme Court of Western Australia in Wildtown Holdings Pty Ltd v Rural Traders Co Ltd (2002) 172 FLR 35; [2002] WASCA 196 (Wildtown) for the following propositions, as summarised by Wigney J in Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2015) 230 FCR 28; [2015] FCA 221 at [83]: …: first, an accompanying affidavit that predates a demand does not or cannot verify the demand; second, such an affidavit does not satisfy the requirement in s 459E(3); third, the requirement in s 459E(3) is an important safeguard in the statutory scheme and is therefore mandatory; and fourth, except perhaps in one situation, non-compliance with s 459E(3) will justify, if not compel, the setting aside of the demand under s 459J(1)(b) of the Act. It is not necessary to point to any substantial injustice. The authorities that establish these principals include: Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2007] 2 Qd R 199; (2006) 202 FLR 459 (Ambassador) at [18]-[20]; R2M Pty Limited v Gourlay [2011] FCA 168 (R2M) at [31]-[36]; Ri-Co Holdings (Australia) Pty Ltd v Allied Sandblasters Pty Ltd [2010] 1 Qd R 293 (Ri-Co Holdings) at [23]; Chadmar Enterprises Pty Ltd v IGA Distribution Pty Ltd (2005) 190 FLR 466 (Chadmar) at [54]-[56]; Technology Licensing Limited v Climit Pty Limited [2002] 1 Qd R 566 (Technology Licensing) [24]-[25].
2. There is no suggestion in the present case that non-compliance with s 459E(3) arising from a defective accompanying affidavit was cured by an "updating affidavit" (verifying that the debt referred to in the demand remained due and payable on the date the demand was made), served either with the demand or within a reasonable time before the expiration of the 21 days available to the debtor to apply to set aside the demand: Wildtown at [58]; Chadmar Enterprises Pty Ltd v IGA Distribution Pty Ltd (2005) 190 FLR 466 at [52]; Ambassador at Redcliffe Pty Ltd v Barreau Peninsula Property Pty Ltd [2006] 2 Qd R 199; (2006) 202 FLR 459 at [21].
3. A question arises as to whether the defect in the accompanying affidavit required by s 459E(3) is fatal on an application to wind-up the Company because, according to the submission, the presumption as to insolvency under s 459C(2)(a) does not arise if the demand does not answer the description of a demand for the purposes of Pt 5.4 of the Corporations Act. This question is distinct from whether a statutory demand is liable to be set aside on an application under s 459G relying on s 459J because of a defect in the accompanying affidavit.
4. In Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 43 NSWLR 717 (Dolvelle), (leave to appeal refused: Australian Macfarms Pty Ltd v Dolvelle Pty Ltd [1998] NSWSC 480 (Sheller and Stein JJA)), Santow J held at 727 that a winding-up application based on a statutory demand did not fall outside Pt 5.4 of the Corporations Act merely because the accompanying affidavit was "two days premature". Santow J found that, while important, the exact coincidence of the date of verification of the statutory demand is not to be treated as an essential integer of the relief sought, where there is no dispute that the amount remains outstanding. It followed, his Honour continued, that s 459S applied since the issue raised was not a matter which went to solvency, there being no argument that the debt remained unpaid and no argument had been made under s 459G that the debt was genuinely in dispute. Santow J added at 728 that, in any event, s 467A applied and no substantial injustice would be caused by the defect or irregularity, subject to an affidavit of debt being filed stating the up-to-date position. Section 467A provides: 467A Effect of defect or irregularity on application under Part 5.4 or 5.4A An application under Part 5.4 or 5.4A must not be dismissed merely because of one or more of the following: (a) in any case - a defect or irregularity in connection with the application; (b) in the case of an application for a company to be wound up in insolvency - a defect in a statutory demand; unless the Court is satisfied that substantial injustice has been caused that cannot otherwise be remedied (for example, by an adjournment or an order for costs).
5. The remarks of Santow J in Dolvelle to the effect that strict contemporaneity between the demand and the accompanying affidavit was not an essential integer of a winding-up application, were obiter: see the analysis by Senior Master Mahoney in Dornay Nominees Pty Ltd v Blackbutt Nominees Pty Ltd [2001] VSC 20; (2001) 36 ACSR 749 at [4]-[6]. Nonetheless, the approach in Dolvelle has been adopted and applied in subsequent cases dealing with winding-up applications. See Victorian WorkCover Authority v Kay's Pty Ltd [2001] VSC 358; (2001) 39 ACSR 281 at [14] (Senior Master Mahony); CCH Workflow Solutions Pty Ltd v E Discovery Australia Pty Ltd [2011] FCA 994 at [16] (Jagot J); Roam Tolling Pty Ltd, in the matter of Lions Transport Pty Ltd v Lions Transport Pty Ltd [2016] FCA 1501 at [7] (Farrell J).
6. Counsel for the Company submitted that Dolvelle (and the cases which have followed and applied Dolvelle) is inconsistent with Ege. Ege involved an affidavit accompanying the demand which did not verify that the debt is due and payable, as required by s 459E(3). Brereton J distinguished Dolvelle on the basis that the premature verification of statutory demand by two days was far removed from the complete absence of any affidavit that verifies the demand: at [30]. Brereton J concluded at [31] that a statutory demand in respect of a debt which is not a judgment debt which is unaccompanied by an affidavit that complies with s 459E(3), would mean that the demand would not have been served as required by s 459E and thus could not give rise to a presumption of insolvency.
7. Ege is distinguishable from Dolvelle for the reasons given by Brereton J in Ege at [30]. As Brereton acknowledged in Ege at [20], the cases in which a purported statutory demand under s 459E have been held not to be a valid demand capable of triggering a presumption of insolvency if not first set aside are "few and far between".
8. The present case is distinguishable from Ege where there was no averment in the accompanying affidavit to the effect that the debt claimed was due and payable. Here there is an averment that the debt is due and payable, but two days before the date of the statutory demand. It is not suggested that this defect has caused the Company substantial injustice: s 467A.
9. I should follow the approach in Dolvelle and the cases which have followed it unless convinced that it is plainly wrong: Australian Securities Commission v Marlborough Mines Ltd (1993) 177 CLR 485 at 492; [1993] HCA 15. The need for uniformity of decision in the interpretation of uniform national legislation requires a single judge not to depart from an interpretation placed on such legislation by an intermediate appellate court unless convinced that the interpretation is plainly wrong. It has been said that this principle also requires single judges to give effect to the decisions of other single judges construing uniform national legislation unless convinced that the previous decisions of those judges are "plainly wrong": Promaco Conventions Pty Ltd (ACN 008 784 585) v Dedline Printing Pty Ltd (ACN 092 178 099) [2007] FCA 586; (2007) 61 ACSR 546 at [38] (Siopis J).
10. In any event, the practice of judicial comity, as distinct from the doctrine of precedent, compels that single judges of State Supreme Courts exercising federal jurisdiction should strive for uniformity in the interpretation of Commonwealth legislation, unless convinced that the decision of another judge of co-ordinate authority was clearly wrong: La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201 at 204 (Burchett J), citing Rogers J in Hamilton Island Enterprises Pty Ltd v Commissioner of Taxation [1982] 1 NSWLR 113 at 119.
11. For my part, I am not convinced that Dolvelle is plainly wrong.
12. I reject the Company's submission that the presumption as to insolvency did not arise in the present case, given the Company's non-compliance with the statutory demand.

(3)(b) Abuse of Process

1. The Company submitted that it was an abuse of process for Roam to bring the winding-up proceedings because the statutory demand and winding-up regime provided for by Pt 5.4 of the Corporations Act should never have been engaged by Roam in circumstances where, it was contended, at least from 16 January 2018, Roam accepted that no debt (or, at the very least, well below the statutory minimum threshold of $2,000) was due and payable by the Company. This submission was based on inferences from tolling history documents obtained by the Company's solicitors from a search of Roam's website for Toll notices issued in relation to the Company's vehicles.
2. According to the submission, Roam simply wished to enforce a debt that itself conceded is not due and payable, and this is a purpose collateral to the regime provided for by Pt 5.4 of the Corporations Act: TS Recoveries Pty Ltd v Sea-Slip Marinas (Aust) Pty Ltd [2007] NSWSC 1074; (2007) 25 ACLC 1317 at [17]-[19]; Re Gladstone Mortgagee No 1 Pty Ltd [2015] NSWSC 1551 at [56]-[59].
3. The Company pointed to the following matters in the Toll notices exhibited to an affidavit of Yi Fang Ou Yang, a solicitor in the employ of Mrs McMillan's solicitor.
4. First, some of the trip history documents for individual Toll notices contained entries described as "Notice Sent" after an entry described as "Toll Notice Pending" with an asterisk and the following words "A toll notice for this trip is pending. To avoid an additional administrative fee please pay for this trip by selecting 'Pay Now'".
5. Second, all of the trip history documents included an entry for 16 January 2018: On Hold. At your request we are currently investigating this transaction. No payment is require (sic) at present. You will be advised when the final status of these tolls has been determined.
6. Third, the total unpaid trips for the Company's first vehicle (while showing an administration charge of $20 and an unpaid toll of either $7.78 (or on occasions a smaller fee) in respect of each individual trip, showed the total payable as "$0.00". With respect to the Company's second vehicle the individual details of each trip were similar, but the total amount payable was shown as $216.19. In respect of the Company's third vehicle again the individual details were similar, but the total amount payable was shown as $905.03.
7. The Company also pointed to the affidavit evidence of its solicitor, Ms McLean, of telephone conversations with four persons from Roam, described as Migel, Keerthana, JR, and Vince. Ms McLean deposed that the person referred to as "JR" stated that the words "Toll Notice Pending" with an asterisk means that the Notice is still in the system and still waiting to be issued, and the person referred to as Vince, said that the words "On Hold" meant that the back office is already looking at it and there is no payment required.
8. Significantly, however, the Company did not seek to cross-examine Ms Canak whose affidavit of debt sworn 10 April 2014 was read by Roam on the present application. Ms Canak deposed that the Company remained indebted to Roam for the sum of $5,240.04 referred to in the statutory demand. The proposition that the debt was not due and payable by the Company because the trip history documents were inconsistent with that proposition, was not put to Ms Canak.
9. The solicitor for Roam submitted that some of the trip history documents were unreliable and contained discrepancies, given the different order of events recorded in the trip history documents at pages 1 -40 of Ex P1 compared to the documents at pages 41 to 477 of Ex P1. The latter documents showed the order of events as "Unpaid Toll", then "Payment Pending" with an asterisk, then "Notice Sent" and then "On Hold". There are other entries which are unnecessary to refer to. Roam submitted that there were obvious discrepancies in the earlier trip history documents and that the explanation given by telephone by persons staffing Roam's telephone call centre should not be taken to be admissions as to the correct position.
10. In my view, the evidence demonstrates the basis for a genuine dispute as to the existence or the amount of the debt claimed the subject of the statutory demand, but does not affirmatively establish, on the balance of probabilities, that no debt was due and payable at all when Roam issued the statutory demand and subsequently filed the originating process seeking a winding-up order. Although there was no direct evidence from Roam as to the meaning of the words "On Hold", a reasonable inference given the coincidence of this date and the issue of the statutory demand is that this notation refers to when the debt has been referred to legal recovery. As I have said the Company did not put the contrary proposition to Ms Canak who swore the updated affidavit of debt in support of the winding up application.
11. It is only necessary to address this issue in the context of the Company's contention that the winding-up proceedings are an abuse of process. I am not persuaded that the Company has established that Roam issued the statutory demand and subsequently filed the originating process for a collateral purpose, namely, to recover a debt which Roam itself conceded is not due and payable.

(3)(c) Solvency

1. Mr Nadin Joukhadar, the external accountant for the Company, provided affidavit evidence concerning the Company's solvency. He annexed to his affidavit copies of the Company's financial accounts for the year ending 30 June 2016, tax return for the 2016 year, and draft financial accounts for the year ending 30 June 2017 and the nine months ending 31 March 2018. Mr Joukhadar explained that the accounts were prepared in draft and he had not prepared a company tax return for the year ending 30 June 2017 or the current financial year because the Company was unable to lodge those returns whilst it remains in liquidation.
2. Mr Joukhadar also explained the differences between the profit and loss and balance sheet reports annexed to the affidavit of Mrs McMillan sworn 14 June 2018 and the draft financial accounts annexed to his affidavit, namely, that the earlier reports did not differentiate between transactions that were of a business nature and those of a private nature or not genuine expenses of the Company.
3. The 2017 accounts state that the Company made a profit of $18,882.22 on total sales of $275,464.30 and had net assets of $20,156.36. The accounts for the nine-month period ending 31 March 2018 state that the Company made a net profit of $36,711.71 on total sales and miscellaneous income of $226,522.43 and had net assets of $22,953.38.
4. Mr Joukhadar deposed that, having examined the Company's bank statements between 1 July 2016 and 31 May 2018, there is no evidence of any dishonoured payments during that period. Mr Joukhadar expressed the opinion that the Company is solvent and is able to pay its debts as and when they become due and payable. His evidence was not challenged.
5. On the evidence, as it appears, I am satisfied that the Company has demonstrated that it is arguably solvent, even when regard is had to the alleged debt owing to Roam which according to the affidavit supporting the winding-up application, was said to be $5,537.58. That amount included alleged unpaid tolls and fees in respect of another motor vehicle owned by the Company for the period 23 October 2017 to 30 November 2017, which was not the subject of the statutory demand.
6. Counsel for the Company submitted that the evidence demonstrated that the Company was in fact solvent and for this reason, among others, the originating process should be dismissed.
7. A company is solvent if and only if it is able to pay all its debts as and when they become due and payable: s 95A(1), Corporations Act. Section 95A(2) provides that a person who is not solvent is insolvent. It is well-established that this definition adopts a cashflow test of insolvency which requires consideration of the financial resources available to the company and the obligations it has to meet, although the state of the company's balance sheet remains of subsidiary relevance and can provide context for the application of the cashflow test: Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621; Australian Securities and Investments Commission v Plymin [2003] VSC 123; (2003) 175 FLR 124 at [370] ff; Sutherland (as joint liquidators of Australian Coal Technology) v Hanson Construction Materials Pty Ltd [2009] NSWSC 232; (2009) 254 ALR 650 at [8]-[9] (Barrett J).
8. The test of insolvency is objective and consideration needs to be given to the immediate future and how far into the future will depend on the circumstances, including the nature of the company's business and, if it is known, of the future liabilities: Lewis (as liq of Doran Constructions Pty Ltd (in liq)) v Doran [2005] NSWCA 243; (2005) 219 ALR 555 at [103] (Giles JA, Hodgson and McColl JJA agreeing).
9. It has been said that in order to displace the presumption of insolvency arising from non-compliance with a statutory demand, a company must put the "fullest and best" evidence as to its financial position before the Court, and that unaudited accounts and unverified claims of ownership or the value of assets will not ordinarily be sufficient for that purpose, and bald assertions of solvency made by an accountant from a general review of a company's accounts will not be sufficient to establish solvency, even if the relevant accountant has knowledge of how those accounts were prepared: Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459 at 463; Ace Contractors and Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728; Expile Pty Ltd v Jabb's Excavations Pty Ltd [2003] NSWCA 163 at [16].
10. On the other hand, as White J observed in Commonwealth Broadcasting Corporation Pty Ltd v Pacific Mobile Phones Pty Ltd [2008] QSC 210; (2008) 219 FLR 422, audited accounts and significant enquiries would not necessarily be required in dealing with a simple company. In that case, White J distinguished Expile Pty Ltd v Jabb's Excavations Pty Ltd on the basis that in the latter case the company had significant indebtedness, deficiencies in its account and lack of evidence of realistic borrowing capacity to refund short-term liabilities and distinguished that from the position of a small and viable company with no creditors.
11. The present case involves a relatively small and apparently viable company, with creditors being paid according to their terms. There is no evidence of any dishonoured payments to creditors. The Company has a history of steady sales income generating a modest net profit, after payment of wages to both Mr McMillan and Mrs McMillan. The balance sheets disclose positive net assets as at 30 June 2016 and 31 March 2017. The Company's financial position is relatively simple. Its assets comprise cash on hand, a small amount of equipment and three motor vehicles; its liabilities comprise a small amount of taxation liabilities (GST), and hire purchase liabilities with respect to the Company's motor vehicles. It can be inferred from the profit and loss statement and the balance sheet that the Company receives payment from its debtors on a regular basis and that its expenditure does not exceed its income. This is a case where weight can be given to the evidence of the Company's accountant, who has analysed the Company's financial records and prepared the financial statements. I accept that the Company has established that it is solvent.
12. Had this evidence of the Company's solvency been available before the Registrar, the winding-up order would not have been made. The presumption of insolvency based on non-compliance with the statutory demand does not operate as the Company has proved to the contrary: s 459C(3).

(4) Relief

1. The legal representative for the liquidator informed the Court that nothing in the liquidator's investigations to date showed a reason why the Company should not be allowed to continue trading.
2. The Company has explained the reason for its non-appearance at the hearing and made out its case that the winding-up order should be set aside.
3. The next question is whether the winding up application should be reheard or the application dismissed. The Company maintained its position that it disputed the debt the subject of the statutory demand, and has not paid this debt. Given the state of the evidence, it is not possible to determine that dispute. Nevertheless, as indicated, Roam did not contend that the Company was insolvent except for the statutory presumption of insolvency arising from non-compliance with the statutory demand: s 459C(2)(a).
4. Assuming the Company is liable to Roam for the amount of the debt the subject of the statutory demand, I am satisfied that the winding-up order should not have been made, given the material now before the Court concerning solvency which was not adduced before the Registrar.

Costs

1. Two issues arise. First, who should bear the liquidator's costs and remuneration? Second, who should bear the costs of the winding-up proceedings, and this application?
2. The question of who should pay the liquidator's costs and remuneration should be reserved to afford the parties an opportunity to make submissions on that question.
3. As to the costs of the winding-up proceedings and this application, costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.
4. Roam has been unsuccessful in opposing the application by Mrs McMillan in the name of the Company to set aside the winding-up orders. There is no reason why costs should not follow the event. Roam should pay the costs of the amended interlocutory process filed on 25 June 2018.
5. As to the costs of the winding-up proceedings, given my conclusion that the originating process should be dismissed, there should be no order as to costs of the winding-up proceedings (in relation to which the Company did not appear).

Conclusion and Orders

1. I am satisfied that Roam has demonstrated that there was good and effective service of the originating process on the Company by posting that document, among others, in a prepaid envelope addressed to the Company's registered office. That Mrs McMillan and her husband gave unchallenged evidence of non-receipt of the originating process does not, in all the circumstances relating to the letterbox maintained at the Company's registered office, create a doubt in my mind sufficient to rebut the presumption of service four working days after posting under s 160 of the Evidence Act.
2. That the affidavit accompanying the statutory demand was sworn three days prior to the date of the demand does not mean, for the purposes of the winding-up application, that the presumption of insolvency arising from non-compliance with the statutory demand did not arise. I am not satisfied that any injustice, let alone substantial injustice, has been caused by that defect: s 467A.
3. Contrary to the Company's contention, no collateral purpose has been demonstrated in relation to the issue by Roam of the statutory demand and the filing of the winding-up proceedings. The Company's contention that there was an abuse of process must be rejected.
4. The Company has given a sufficient explanation for its non-appearance at the hearing; there is no reason why the Company should not be allowed to continue trading; and the winding-up order made in the Company's absence should be set aside.
5. The Company has established on this application that it is solvent and accordingly the presumption of insolvency arising from non-compliance with the statutory demand does not arise: s 459C(3). Given that the Company has demonstrated solvency, the originating process should be dismissed as Roam did not otherwise seek to demonstrate that the Company was insolvent except for its reliance on the statutory presumption of insolvency. The parties should be given an opportunity to make submissions on the question of who should bear the liquidator's costs and remuneration, given these reasons.
6. The Court makes the following orders: 1. Grant leave pursuant to s 198G(3)(b) of the Corporations Act 2001 (Cth) for Mrs Bobette McMillan to exercise her power as sole director of the defendant to bring this application in the name of the defendant. 2. Pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 36.16(2)(b), set aside orders 1, 2 and 3 made on 12 April 2018. 3. Dismiss the originating process filed on 9 April 2018, with no order as to costs. 4. Plaintiff to pay the applicant's costs of the amended interlocutory process filed on 25 June 2018. 5. Reserve the question of who should pay the liquidator's costs and remuneration. 6. That these orders be entered forthwith.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 June 2018