CORPORATIONS - Corporations Act 2001 (Cth) - ss 459Q, 467, 467A - Winding up application - Requirements to set out particulars of failure to comply with statutory demand - Where non-compliance with statutory demand has not yet occurred - Whether defect or irregularity - Whether application can be amended to comply with requirements.

1 Where an application to wind up a company is made under Part 5.4 of Chapter 5 of the Corporations Act 2001 (Cth) ("the Corporations Act"), a presumption of insolvency may arise if "during or after the 3 months ending on the day when the application [is] made",[1] the company fails to comply with a statutory demand. In this proceeding, a creditor filed a winding up application before the time for compliance with a statutory demand had expired. Can the creditor now rely on the statutory presumption of insolvency?

2 By originating process filed on 28 September 2017, Wex Australia Pty Ltd ("the plaintiff") made an application under s 459P of the Corporations Act to wind up DG Haulage Pty Ltd ("the defendant") on the basis of insolvency. The plaintiff relies upon the presumption of insolvency arising from s 459(C)(2)(a), following the defendant's failure to comply with a statutory demand dated 30 August 2017. The demand relates to monies owing by the defendant to the plaintiff in respect of "financial accommodation services".

3 Paragraph 3 of the originating process states that "the [d]efendant failed to pay the amount of the total of the debts demanded or to secure or compound for that to the [p]laintiff's reasonable satisfaction within 21 days after the demand was served on the [d]efendant". That statement is affirmed as being true and correct in an affidavit filed in support of the originating process.[2] As explained further below, it is not correct that the defendant had failed to comply with the statutory demand by the time the winding up application was filed.

4 An employee of the solicitors for the plaintiff has deposed to serving the statutory demand and accompanying affidavit on 1 September 2017 at 6:00pm by ordinary pre-paid post and addressed to the defendant at its current registered office.[3] Service is permitted in this manner by s 109X(1)(a) of the Corporations Act.

5 In addition, s 29 of the Acts Interpretation Act 1901 (Cth) is in the following terms:

(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 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.

6 Section 160 of the Evidence Act 1995 (Cth), in turn, relevantly provides:

(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."

7 Whilst s 79(1) of the Judiciary Act 1903 (Cth) suggests that s 160 of the Evidence Act 2008 (Vic) is the applicable legislative provision in this proceeding, the Victorian provision is in identical terms to its Commonwealth equivalent.

8 In accordance with s 160 of the Victorian legislation, it is presumed that the statutory demand was received at the defendant's registered office on 7 September 2017. The plaintiff did not seek to adduce any evidence to suggest the statutory demand was delivered any earlier than this date.

9 The time for compliance with a statutory demand is provided for in s 459F of the Corporations Act. That section provides:

(1) If, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period.

(2) The period for compliance with a statutory demand is:

(a) if the company applies in accordance with section 459G for an order setting aside the demand:

(i) if, on hearing the application under section 459G, or on an application by the company under this paragraph the Court makes an order that extends the period for compliance with the demand--the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or

(ii) otherwise--the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or

(b) otherwise--21 days after the demand is served.

10 As contemplated by the provision above, a company may apply to the Court pursuant to s 459G of the Corporations Act for an order setting aside a statutory demand within 21 days of service. Neither the originating process nor supporting affidavit disclose any such application as having been made. Therefore, s 459F(2)(b) prescribes the time for compliance as being 21 days from the date of service.

11 At the first return of this matter on 1 November 2017, I suggested to the plaintiff's solicitor that the 21 day period for compliance may have actually fallen on 28 September 2017, being the same date as the filing of the originating process. I adjourned the hearing to allow the plaintiff to put on short submissions dealing with the issue. Submissions were filed and the matter came back for hearing before me on 15 November 2017. At the further hearing, the plaintiff's solicitor conceded that the time for compliance with the statutory demand did not fall any earlier than 28 September 2017.

12 As far as I can ascertain, the Corporations Act is silent on precisely when during the last day for compliance with a statutory demand a debtor company may either comply with the statutory demand or challenge it by way of an application under s 459G. However, there is case law to the effect that a company can meet the strict requirements of s 459G by serving an application to set aside a statutory demand and supporting affidavit at the nominated address for service after business hours on the 21st day.[4] A debtor company would theoretically have until 11:59pm on the 21st day from service to pay, secure or compound the debt or to file and serve an application to set aside the statutory demand.

13 Therefore, it would follow that the defendant had the entirety of 28 September 2017 to take any necessary steps in relation to the statutory demand. The plaintiff acted precipitously in filing the originating process on that same day.

14 Although the plaintiff's application for winding up in insolvency was commenced prior to the expiry of the time for compliance with the statutory demand, it is clear that by the time the matter came on for hearing on 1 November 2017, the demand had well and truly expired unsatisfied. The plaintiff submits that in those circumstances the statutory presumption of insolvency found in s 459C(2)(a) should still apply and that the defendant should be wound up.

15 At all times the matter has proceeded undefended. However, given the importance of the issue raised and the fact that the authorities on the point are conflicting, I reserved my ruling and prepared these reasons which are more extensive than would otherwise be necessary.

16 Section 459C(2) of the Corporations Act provides as follows:

The Court must presume that the company is insolvent if, during or after the 3 months ending on the day when the application was made:

(a) the company failed (as defined by section 459F) to comply with a statutory demand; or

(b) execution or other process issued on a judgment, decree or order of an Australian court in favour of a creditor of the company was returned wholly or partly unsatisfied; or

(c) a receiver, or receiver and manager, of property of the company was appointed under a power contained in an instrument relating to a circulating security interest in such property; or

(d) an order was made for the appointment of such a receiver, or receiver and manager, for the purpose of enforcing such a security interest; or

(e) a person entered into possession, or assumed control, of such property for such a purpose; or

(f) a person was appointed so to enter into possession or assume control (whether as agent for the secured party or for the company).

17 None of the additional events referred to in ss 459C(2)(b)-(f) as giving rise to a presumption of insolvency are engaged in this case.

18 Pursuant to s 459C(3) of the Corporations Act, the presumption of insolvency operates until the debtor company adduces sufficient evidence to rebut it.

19 Section 459Q of the Corporations Act is also pertinent to this matter. That provision reads:

If an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the application:

(a) must set out particulars of service of the demand on the company and of the failure to comply with the demand; and

(b) must have attached to it:

(i) a copy of the demand; and

(ii) if the demand has been varied by an order under subsection 459H(4)-- a copy of the order; and

(c) unless the debt, or each of the debts, to which the demand relates is a judgment debt--must be accompanied by an affidavit that:

(i) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and

(ii) complies with the rules.

20 Rule 5.4(2) of the Supreme Court (Corporations) Rules 2013 is worded as follows:

_If the application is made in reliance on a failure by the company to comply with a statutory demand, the affidavit must - _

(a) verify service of the demand on the company;

(b) verify the failure of the company to comply with the demand; and

(c) state whether and, if so, to what extent the debt, or each of the debts, to which the demand relates is still due and payable by the company at the date when the affidavit is made.

21 It will be apparent that s 459Q and r 5.4(2) do not sit comfortably with a scenario in which a company's non-compliance with a statutory demand post-dates the filing of a winding up application. In particular, the language of s 459Q(a) and r 5.4(2)(b) presume that the failure to comply with a statutory demand has already occurred.

22 As previously mentioned, there are conflicting lines of authorities dealing with the situation of a statutory demand expiring after the institution of winding up proceedings. As will be seen, Judges from superior Courts around Australia have come to different conclusions on the point.

23 The case of Pinn v Barroleg Pty Ltd[5] concerned the operation of s 459C(2) in the context of a winding up application brought more than three months after the last day for compliance with the statutory demand. There, Santow J held that the provision operates in the following way:

(a) that the s 459C(2) event relied upon goes stale after three months as the basis for a winding up application; but

(b) where the application is made at a date preceding the event, but based on it, it may still be granted, provided of course the event actually occurs before the winding up order is made; for example if the application were made before expiry of the 21 days after notice of demand.

Thus - giving practical effect to the words "or after" - a concerned creditor may immediately lodge an application to wind up the company, knowing the 21 days for compliance with a statutory demand has still to expire, but on the basis that the 21 days will expire after (but before the application is heard). This would give a purpose to the words "or after" in the clause above. Without those words, an application made before the s 459C(2) event could not satisfy the three months requirement, as it was not made during the three months. The sense of the section is seen more clearly when the syntax is therefore rearranged to read: "during the three months ending on the date the application was made, or after [the day the application was made]". Such an interpretation avoids patent absurdity because otherwise the words "or after", would give no sense to the three months limitation. It would mean that in reality there was no time limitation at all - that a winding up application could be brought even years after the relevant event.[6]

24 On a proper analysis, Santow J's proposition (b) was obiter dicta. The case of Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd[7] was, however, directly concerned with a statutory demand which had expired after the commencement of the winding up application. In that matter, White J considered Santow J's reasoning in Pinn and confirmed that "the presumption of insolvency for failure to comply with a statutory demand may arise after the day when the winding-up application is made".[8]

25 There are also cases pre-dating the enactment of s 459C(2) (and dealing with different statutory regimes) which suggest some support for this position. For example, in Syd Mannix v Leserv Constructions Pty Ltd,[9] the New South Wales Court of Appeal held that it was irrelevant to the language of s 222 of the Companies Act 1961 (NSW) "whether the [statutory demand] expires before or after the presentation of any particular winding-up petition". [10] Similarly, in Comalco Aluminium Ltd v Ohtsu Tyre & Rubber Co (Aust) Pty Ltd,[11] McClelland J was of the opinion that "failure for three weeks to comply with a demand fulfilling the requirements of s 364(2)(a) of the [New South Wales Companies] Code can be relied upon to establish the inability of a company to pay its debts as at the date of a hearing which occurs after the expiration of the three weeks (provided of course that the failure is continuing at the date of the hearing), notwithstanding that the three week period had not elapsed at the time of commencement of the proceedings."[12]

26 The High Court decision of Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd[13] also contains important obiter dicta applicable to the present circumstances. There, the majority of Gleeson CJ, Hayne, Crennan and Kiefel JJ said as follows:

The temporal focus of s 459C is upon a period which commences three months before the date of the application for winding up, but the period does not terminate upon the date on which the winding up application commences. The question for a Court is whether any of the identified events has occurred at any time after the commencement of the relevant period. The Act does not require any further consideration of whether the event persists at the date of the application for winding up.

If one of the specified events has occurred at any time during the identified period, the Court must presume that the company is insolvent. But the presumption may be rebutted.[14]

27 However, the decision of Palmer J in Woodgate v Garard Pty Ltd[15] has given rise to a diverging line of authorities on the construction of s 459C(2). His Honour considered the operation of that provision alongside s 459Q with the resulting observations:

One can only make consistent sense of ss 459C and 459Q if one reads s 459C, which deals with an evidentiary presumption in a variety of different circumstances, as qualified by, and subject to, s 459Q, which deals with a particular matter of procedure in one of those circumstances. One then reads the phrase "during or after" in subs (2) distributively among the six events that follow, so that "during or after" does not apply to all six events equally but, rather, "during" and "after" apply respectively only to such of those events as can be relied upon having regard to the provisions of s 459Q.

The result is that, consistently with s 459Q, one can rely upon failure to comply with a statutory demand only if time for compliance has expired during the 3 months ending on the day when the application was made, but one can rely on any one of the other five insolvency events specified in s 459C(2)(b)-(f) if the event has occurred either during the 3-month period before the winding up application is filed or after filing and before the hearing.[16]

28 It is important to note that Palmer J's observations here are strictly obiter dicta. His Honour had earlier found that service of the relevant statutory demand had been effective, that the plaintiff had filed its winding up application after the expiry of the statutory demand and that the presumption of insolvency had accordingly arisen under s 459C(2)(a).[17]

29 In Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd,[18] Barrett J agreed with Palmer J's analysis in Woodgate in finding that the effect of s 459Q of the Corporations Act is to make it "impermissible to file an originating process on [the basis of non-compliance with a statutory demand] until the failure has occurred and particulars of it can be stated".[19] However, his Honour also noted by way of obiter (and apparently citing Woodgate in this regard) that "a presumption of insolvency arising under s 459C(2)(a) from failure to comply with a statutory demand after filing of the winding up application is...available to the plaintiff in cases where the winding up application, when filed, is based otherwise than on such failure".[20]

30 The reasoning of Palmer J was also followed by Gardiner AsJ of this Court in Surdex Steel Pty Ltd v GB Manufacturing Pty Ltd.[21] In that case, there had been an application to set aside a statutory demand which was dismissed by consent. The winding up application had been filed prior to the expiry of the seven day period referred to in s 459F(2)(a)(ii). His Honour considered the two competing lines of authorities and arrived at the following reasoned conclusions (citations omitted):

In my respectful opinion, I prefer the analysis of Palmer J in Woodgate (which is supported by Barrett J in Golden Plantation Pty Ltd_) to that of Santow J in_ Pinn and White J in Missing Link_. The terms of s 459Q(a) state that an applicant for a winding up in insolvency must specify details of non-compliance with the demand. Obviously, that cannot occur if no such event has occurred when the winding up application is filed. The other presumptions mentioned in s 459C(2) do not cut across s 459Q and are capable of grounding a winding up application even if they occur "after the three months ending on the day when the application was made". To allow applicants seeking an order for winding up in insolvency relying on failure to comply with statutory demands to file such applications before those demands have expired has the obvious potential to give rise to an abuse of the statutory demand regime. In addition, the dates of filing of winding up applications have significance to the fixing of the relation back day under s 513A and s 9 of the Act...To allow an applicant to commence a proceeding prior to the event giving rise to the presumption [of insolvency] amounts to permission to commence an application in the court which has no grounds._

As Palmer J remarks in Woodgate_, Santow J's attention was obviously not drawn to s 459Q and there is no reference at all to it in the judgment. In my view, the only manner in which the s 459Q requirements (the provisions of which are mandatory) and s 459C(2)(a) can be reconciled is on an application of Palmer J's reasoning in_ Woodgate.[22]

31 In Lorang Contractors Pty Ltd,[23] Brereton J expressed reservation about, but ultimately followed, the obiter dicta in Woodgate. His Honour noted:

Were the matter to come before me untrammelled by authority, I might have inclined to the view that the requirements of s 459Q were directory or procedural rather than mandatory and substantive. But, in Woodgate...Palmer J reviewed the sections and carefully and thoroughly considered earlier authorities, concluding (at [85]) that s459C(2) must be construed consistently with s 459Q, so that the presumption of insolvency afforded by s 459C(2)(a), which is the relevant one here, arises only where failure to comply with the statutory demand has occurred during the three months before the winding up application is filed - although the presumptions afforded by s 459C(2)(b) through (f) can arise where the insolvency event occurs either during the three months before the winding up application is filed, or after the filing date and before the hearing date.[24]

32 However, in Equititrust Limited v Willaire Pty Ltd,[25] P McMurdo J declined to follow the Woodgate line of authorities. In that case, the plaintiff had filed an application for winding up which relied upon a number of events giving rise to a presumption of insolvency. It later sought to amend its application to rely on a failure to comply with a statutory demand which post-dated the winding up application. In construing s 459C(2), his Honour held:

Within paragraphs (a) through (f), several events are described as giving rise to the presumption. Those paragraphs are preceded within the subsection by the words which require the Court to presume the insolvency of the company if the relevant event occurred "during or after the 3 months ending on the day when the application was made". On the face of this provision, that same qualification as to timing of the event applies to each of the events specified within paragraphs (a) through (f). The event must occur during the three months ending on the day when the application is made or after that period. The words "or after" would seem to unambiguously permit an applicant to rely upon an event although it occurs after the application is made.[26]

33 In finding that the plaintiff was entitled to rely on a later expiring statutory demand to ground a presumption of insolvency, his Honour noted that the winding up application had, in any event, relied on other events giving rise to the statutory presumption and cited Barrett J's obiter dicta in Golden Plantation in that regard.[27] His Honour also considered the passage of the majority of the High Court in Aussie Vic referred to above as being an "authoritative indication of the need to interpret [s 459C(2)] according to its unambiguous terms".[28] Finally and critically, P McMurdo J considered his conclusion to be supported by the purpose of the legislation:

In a case such as the present, the result is thereby one which accords with the evident object of Part 5.4, which is that insolvent companies ought to be wound up. A failure to comply with a statutory demand should be more telling for being more recent at the time of the hearing. To exclude such an event would be anomalous.[29]

34 The reasoning of P McMurdo J was endorsed by Gilmour J in Simpson v CT Partners Australia.[30] The winding up application in that matter relied on two events said to trigger the presumption of insolvency. One was the defendant's non-compliance with a statutory demand. The other arose as a result of a party taking possession of the defendant's property to enforce a circulating security interest. Each of these events post-dated the filing of the winding up application. In addition, the application invoked the just and equitable ground under s 461(1)(k) of the Corporations Act and referred to actual (as distinct from presumed) evidence of insolvency. His Honour found that the application had been duly commenced and that the plaintiffs were able to rely on the rebuttable presumption resulting from the defendant's failure to comply with the statutory demand. His Honour did not consider it necessary to consider whether s 459C(2)(a) had a distinct temporal operation to that of ss 459C(2)(b)-(f).

35 The most recent case to consider s 459C(2) is In the matter of Plutus Payroll Pty Ltd & Ors.[31] In that case, the Deputy Commissioner had applied to wind up eleven companies on the just and equitable ground in s 461(1)(k) on the basis that they were part of a syndicate created to avoid tax obligations owing to the Commonwealth. Almost a month after the originating process was filed, it was amended to join a twelfth company. At the hearing of the matter, the plaintiff was granted leave to further amend the originating process to rely on a statutory demand which had been served on the twelfth defendant company after it had been joined and which had expired unsatisfied. Justice Brereton carefully considered the diverging authorities on the question of whether a presumption of insolvency could be invoked in those circumstances, including his own earlier decision in Lorang. His Honour ultimately concluded as follows:

What Palmer J said in this respect in Woodgate...was obiter dicta. Those cases which have followed it have done so with qualification [citing Golden Plantation] or reservation, [citing Lorang] or in circumstances where it was unnecessary to the decision [citing Surdex]. It has not been followed by two courts of co-ordinate jurisdiction [citing Equititrust and Simpson]. It does not accord with the plain words of the introductory part of s 459C(2). It results in an inconsistency between the application of the presumption when it arises from s 459C(2)(a), and when it arises from any of s 459C(2)(b) through (f). The requirement of s 459Q, even if mandatory, can be satisfied in the context of a failure to comply with a demand occurring after institution of proceedings, by amendment of the originating process after the presumption arises. Conscious of the undesirability of different interpretations by courts of co-ordinate jurisdiction of a national statute, in my view this court should now embrace the view of McMurdo J [in Equititrust], and no longer follow Woodgate...

It follows that where proceedings are commenced invoking grounds other than a presumption of insolvency arising from failure to comply with a statutory demand, but there is subsequent such failure to comply before the hearing, the presumption becomes available.[32]

36 It may be that the requirements of s 459Q of the Corporations Act and r 5.4 of the Supreme Court (Corporations) Rules 2013 have their origin in an earlier rule found in Syd Mannix where Jacobs JA (with whom Holmes and Moffitt JJA agreed) said:

It seems to me that, particularly when the winding up commences from the presentation of the petition, if a winding-up order be subsequently made, it is necessary that a ground for winding-up under s 222 be in existence at the time of the presentation of the petition.[33]

37 That passage was referred to by Finkelstein J in Ann Street Mezzanine Pty Ltd (in liq) v Beck[34] as authority for the proposition that a creditor applying to the Court for a winding up order "is required to establish the insolvency of the company both at the time of filing the application...and at the hearing".[35] However, in CBA Corporate Services (NSW) Pty Ltd & Ors v Walker & Ors; ZYX Learning Centres Ltd (recs and mgrs apptd) (in liq),[36] the Full Court of the Federal Court of Australia (comprising Foster, Barker and Griffiths JJ) was cautious about the application of the particular observations in Syd Mannix because they arose against the background of a materially different winding up regime found in the Companies Act 1961 (NSW).[37] For example, s 233 of that legislation specified that the commencement date for a court-ordered winding up would (except in the case of a voluntary winding up already under way) be deemed to have commenced when the petition for winding up was presented. By contrast, the modern Corporations Act contains more complex provisions dealing with the commencement of a winding up which can be found in Division 1A of Part 5.6. Relevantly, in most cases (including where there is no earlier administration or liquidation), the winding up will commence on the date the Court makes its order.[38]

38 Further, the notion that a creditor is required to establish insolvency at the time of filing a winding up application is somewhat difficult to reconcile with the rebuttable statutory presumption of insolvency now provided for in s 459C.[39] The rebuttable presumption obviates the need for a creditor to prove actual insolvency.[40] In any event, as the Full Court in CBA Corporate Services pointed out, an appeal to the High Court in Syd Mannix was dismissed in circumstances where the High Court found it unnecessary to determine the correctness of the statement that a creditor was required to establish a company was unable to pay its debts as at the date of presentation of the petition.[41]

39 Finally, it is appropriate to mention two decisions of Jacobson J of the Federal Court which employ a pragmatic approach to reconciling ss 459C(2)(a) and 459Q of the Corporations Act: Workers-Compensation Nominal Insurer v Lozito-Strada Pty Ltd[42] and Workers-Compensation Nominal Insurer v Lime Gourmet Pizza Bar (Darby Street) Pty Ltd (No 2).[43] Each case involved dispute as to the date of service of the relevant statutory demand with the result that the originating process was filed prior to the expiry of the demand. In Lozito-Strada, his Honour granted the plaintiff leave to file an amended originating process to refer to the correct date of service of the demand and ordered that the amended originating process take effect from the date of his Honour's orders.[44] In Lime Gourmet, Jacobson J dismissed an application to set aside a winding up order made by a Registrar where leave to amend the originating process had been granted in similar circumstances. In a subsequent application for an extension of time and leave to appeal from that decision, Foster J, exercising the Court's appellate jurisdiction, found that the applicant had failed to demonstrate that the approach of the primary Judge was based on the wrong principle or otherwise incorrect.[45]

40 Uniformity of decision-making concerning the provisions of the Corporations Act is an important objective. In Farah Constructions Pty Ltd v Say-Dee Pty Ltd,[46] Gleeson CJ, Callinan, Heydon and Crennan JJ said that "intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong".[47]

41 The construction of ss 459C(2) and 459Q and the competing lines of authorities referred to in these reasons may require proper consideration by an intermediate appellate court. However, the decisions in Pinn, Missing Link, Equiticorp, Simpson and Plutus are not "plainly wrong" and I prefer to follow them over Woodgate and Surdex.

42 The cases of Pinn, Missing Link, Equiticorp, Simpson and Plutus stand for the principle that a creditor who files a winding up application before the time for compliance with a statutory demand has expired may still rely on the statutory presumption of insolvency afforded by s 459C(2)(a) of the Corporations Act, so long as the statutory demand has expired unsatisfied by the time of the hearing. The words "or after" as they appear in s 459C(2) permit a plaintiff to rely on a company's non-compliance with a statutory demand as the basis for the presumption of insolvency even if that event occurs after the commencement of the winding up proceeding. The provision does not treat this particular event under s 459C(2)(a) as having a different temporal operation to any of the other events giving rise to a presumption of insolvency in ss 459C(2)(b)-(f). Such an interpretation affords the words in s 459C(2) their plain meaning and results in a construction of the provision which is internally coherent. It also results in an outcome which is most consistent with the clear policy found in Part 5.4 of the Corporations Act that an insolvent company should be promptly wound up as a matter of public interest.[48]

43 Further, where a company's non-compliance with a statutory demand post-dates the filing of a winding up application, there is, in my view, no basis to confine the presumption of insolvency arising under s 459C(2)(a) only to cases where the application, when filed, is based upon other events under s 459C(2)(b)-(f) or upon alternative grounds. The decisions in Equititrust, Simpson and Plutus (which declined to follow the Woodgate line of cases) do not, on a proper reading, suggest that the presumption found in s 459C(2)(a) should be restricted in this way. I respectfully decline to adopt the obiter comments of Barrett J in Golden Plantation which may suggest otherwise.[49] In my opinion, to allow such a qualification would again result in treating s 459C(2)(a) as having a distinct temporal operation to ss 459C(2)(b)-(f). It would also lead to undesirable inconsistency in the practical application of the provision.

44 An approach which preserves a prematurely filed winding up application also better accords with the consequences of a "stale" statutory demand (Santow J's proposition (a) in Pinn). Whilst the statutory presumption under s 459C(2)(a) is not available if a winding application is filed more than three months later than the expiry of the statutory demand, it may still be open to a creditor to seek to adduce actual evidence of insolvency in order to prosecute the winding up application.[50] In other words, despite the originating process not having viable grounds at the time of filing, it may still be salvageable by amendment and reliance upon other evidence.

45 Even if the requirements of s 459Q of the Corporations Act are treated as mandatory and not procedural in nature, there is clear authority which suggests the requirements of that section can be addressed by way of amendment to the originating process after the presumption contemplated by s 459C(2)(a) arises.[51]

46 It may also be that s 467A of the Corporations Act can be utilised in this regard. That section relevantly provides that "[a]n application under Part 5.4 or 5.4A must not be dismissed merely because of...a defect or irregularity in connection with the application...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)". Further, s 467(1)(c) relevantly states that "[s]ubject to...section 467A, on a hearing of a winding up application the Court may...make any interim or other order that it thinks fit." Section 467(3)(e) also contemplates that the Court may, on the application coming on for hearing, "allow the application to be amended or withdrawn".[52]

47 As previously noted, the relevant error in the originating process was the assertion that the statutory demand had not been complied with at the time of filing. To that extent, the originating process did not comply with s 459Q. It is also a defect or irregularity in connection with the application for the purpose of s 467A. However, taken at the time of the hearing, the originating process was correct as the statutory demand had well and truly expired unsatisfied. Further, there is no evidence before the Court to suggest that the identified defect or irregularity relating to the originating process has caused any substantial injustice. The defendant has not sought to oppose the winding up application or otherwise engage with it.

48 In the event, it is appropriate to grant the plaintiff leave to file forthwith an amended originating process and supplementary supporting affidavit to achieve compliance with s 459Q and r 5.4 of the Supreme Court (Corporations) Rules 2013. The material changes will include the date the document is filed and its description as an amended document. The amended originating process will also need to attach the statutory demand and accompanying affidavit in conformity with s 459Q(b).[53] I will then order that the amended originating process is to take effect from today. These orders may ameliorate the concern raised by Gardiner AsJ in Surdex about the operation of the relevant relation back day.

49 At the same time, having regard to the requirements of s 459Q, nothing I have said in these reasons should be taken to encourage the filing of a winding up application prior to the expiry of a statutory demand as a matter of course. The Court should guard against any obvious abuse of the statutory demand regime.

50 Having regard to the above, it follows that the statutory presumption of insolvency resulting from the defendant's failure to comply with the statutory demand dated 30 August 2017 is available, notwithstanding the plaintiff filed its winding up application before the time for compliance with the statutory demand had expired. Given the defendant is presumed to be insolvent and all other necessary procedural steps have been addressed, the defendant ought to be wound up.

[1] Section 459C(2)(a) of the Corporations Act.

[2] See the affidavit of Rochelle Richmond, affirmed on 26 September 2017.

[3] See the affidavit of Bernadette Clare Coyle affirmed on 15 September 2017.

[4] Cornick Pty Ltd v Brains Master Corp [1995] FCA 1710; (1995) 60 FCR 565; SV Steel Supplies Pty Ltd v Palwizat (2007) 208 FLR 113; Nutri-Care Ltd v ACN 080 633 754 Pty Ltd [2009] SASC 72; (2009) 27 ACLC 130.

[5] (1997) 138 FLR 417 ("Pinn").

[7] [2007] NSWSC 1377 ("Missing Link").

[9] [1971] 1 NSWLR 788 ("Syd Mannix").

[10] Syd Mannix at 790(E) per Jacobs, Holmes and Moffitt JJA.

[11] (1983) 8 ACLR 330.

[13] [2008] HCA 9; (2008) 232 CLR 314 ("Aussie Vic").

[15] [2010] NSWSC 508; (2010) 239 FLR 339 ("Woodgate").

[18] [2010] NSWSC 1453 ("Golden Plantation").

[21] (2012) 260 FLR 383; [2012] VSC 90 ("Surdex").

[23] [2015] NSWSC 1435 ("Lorang").

[25] [2012] QSC 206 ("Equititrust").

[30] [2015] FCA 1191 ("Simpson").

[34] [2009] FCA 333; (2009) 175 FCR 532.

[36] [2013] FCAFC 74; (2013) 212 FCR 444 ("CBA Corporate Services").

[38] Section 513A(e) of the Corporations Act.

[39] See CBA Corporate Services at 465-466.

[40] See Dooney v Henry (2000) 35 ACSR 155 at [9] per Callinan J.

[41] CBA Corporate Services at 464 extracting from archives the High Court's oral reasons for judgment otherwise briefly noted in Leserv Construction Pty Ltd (in liq) v Syd Mannix Pty Ltd [1972] 46 ALJR 548.

[42] [2013] FCA 625 ("Lozito-Strada").

[43] [2014] FCA 151 ("Lime Gourmet").

[45] Lime Gourmet Pizza Bar (Darby Street) Pty Ltd (in Liq) v Workers-Compensation Nominal Insurer [2014] FCA 567 at [86].

[46] (2007) 230 CLR 89.

[47] Ibid at 151-152, citing Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ.

[48] See Kelly v J Stockland & Co Pty Ltd [2007] NSWSC 2114 at [11] per Barrett J; Equititrust [2012] QSC 206 at [90] per P McMurdo J.

[49] See Golden Plantation at [31] per Barrett J.

[50] See Re Turf Enterprises Pty Ltd [1975] Qd R 266 at 274 per Dunn J; Sheslow v Diamond Rose NL [2005] NSWSC 492; (2005) 54 ACSR 376 at 379 per Barrett J; Gryst v Dromana Estate [2008] FCA 1148 at [14] per Finn J and Leveraged Capital Pty Ltd v Modena Imports Pty Ltd [2009] NSWSC 509 at [11] per Brereton J.

[51] See Lozito-Strada [2013] FCA 625 at [8] per Jacobson J; Lime Gourmet [2014] FCA 151; Lime Gourmet Pizza Bar (Darby Street) Pty Ltd (in Liq) v Workers-Compensation Nominal Insurer [2014] FCA 567 at [86] per Foster J and Plutus [2017] NSWSC at [12] per Brereton J.

[52] In its submissions, the plaintiff placed reliance upon ss 1322(2), (4)(a) and (6) of the Corporations Act as having application here, however, ss 467A, 467(1)(c) and 467(3)(e) appear to be the more relevant provisions in this case.

[53] In the course of preparing these reasons the question arose whether the originating process filed on 28 September 2017 had attached to it the relevant statutory demand and accompanying affidavit at the time of filing. The exhibits to the affidavit of Rochelle Richmond affirmed on 26 September 2017 in support of the winding up application did include those documents as attachments to the originating process but the separately filed originating process itself did not. It may be that the necessary attachments to the originating process were mislaid at, or following, the time of filing.