Millerview Constructions Pty Ltd v Palmer Plumbing Pty Ltd

[1] Wilson J: This is an application to set aside a statutory demand pursuant to s 459G of the Corporations Act 2001 (Cth).

[2] By notice dated 13 November 2007 Palmer Plumbing Pty Ltd ("the creditor") required payment by Millerview Constructions Pty Ltd ("the company") of $18,759.41 being the amount of a default judgment obtained on 14 August 2007.

[3] The solicitor for the creditor (Elaine Joy Lawson) has deposed that the demand was served on 13 November 2007. On the other hand the sole director and secretary of the company (Peter Francis Miller) has deposed that it was received at the company's registered office (being the office of its accountants) on 16 November 2007, and that it was received at his office on 19 November 2007. These dates are consistent with date stamps on the covering letter from the creditor's solicitors which accompanied the demand.

[4] Pursuant to s 459G of the Corporations Act -

setting aside a statutory demand served on the company

in accordance with this section only if, within those 21 days:

(b) a copy of the application, and a copy of the supporting affidavit

[5] In David Grant & Co Pty Ltd v Westpac Banking Corporation[1] the High Court held that unless copies of the application and supporting affidavit are served on the person who served the demand within 21 days after service of the demand, the Court does not have jurisdiction to set the demand aside. The Court has no power to extend time.

What is meant by service "on the person who served the demand on the company"? I respectfully agree with Byrne J of the Victorian Supreme Court who said in re Marlan Financial Services Pty Ltd[2] -

"This, it would seem, is not a reference to the process server or other person who actually served the demand, nor to the solicitor who caused it to be served, but to the creditor who is the person entitled to serve the demand under s 459E: Players Pty Ltd v Interior Projects (1996) 133 FLR 265 ... per Lander J)."

See also Australian Corporations Law Principles & Practice at [5.4.0137].

[7] In the present case the demand was signed by Sajen Legal in the capacity of solicitors for the creditor. I am satisfied that the application and supporting affidavit had to be served on the creditor rather than on Sajen Legal.

[8] As Young J said in Howship Holdings Pty Ltd v Leslie[3] s 459G does not deal with what is service. What is required is that the process comes to the notice of the creditor within the 21 days. The legislation provides ways in which this may be achieved, but it is not exhaustive.

[9] Where the creditor is a company, s 109X may be invoked. It provides -

(1) For the purposes of any law, a document may be served

has been appointed--leaving it at, or posting it to, the address of the liquidator

has been appointed--leaving it at, or posting it to, the address of the administrator

(2) For the purposes of any law, a document may be served

secretary by leaving it at, or posting it to, the alternative address notified to ASIC

under subsection 5H(2), 117(2), 205B(1) or (4) or 601BC(2). However, this only applies to service on the director

(b) for the purposes of a proceeding in respect of conduct they engaged in as a director

(3) Subsections (1) and (2) do not apply

under section 9

of the Service

with service whether it uses the expression 'serve' or uses any other similar expression such as 'give' or 'send'."

None of the methods in s 109X was employed in this case.

[10] By s 459E(2)(e) a statutory demand is required to be in accordance with the prescribed form (if any). There is a prescribed form - Form 509H, paragraph 6 of which requires the creditor to state an address for service. Timely service at that address would satisfy s 459G(3).

[11] Other modes of service (for example, by facsimile) may suffice, provided the documents actually come to the notice of the creditor within time. For example, Seventh Cameo Nominees Pty Ltd v Holdway Pty Ltd.[4]

[12] In the statutory demand in the present case the creditor gave its address for service as follows -

"5. The address of the Creditor for service of copies of any application and affidavit is care of Sajen® Legal, Level 4 'Maroochy on First['], 10 First Avenue, Maroochydore in the State of Queensland."

[13] The company purported to serve the application and supporting affidavit -

(a) by facsimile sent to the creditor's solicitors (Sajen Legal) on 4 December 2007; and

(b) by sending it by prepaid express post to the creditor's solicitors (Sajen Legal) at their post office box on 5 December 2007.

There is no evidence that either of these means was effective in bringing the process to the notice of the creditor within 21 days of the service of the demand. The only acknowledgment of purported service is a letter from the creditor's solicitors to the company's solicitors dated 17 December 2007, in which they asserted that the process had not been validly served. It did not reveal when the documents came to the notice of the creditor. (It is not necessary to discuss their contention as to how service ought to have been effected.)

[14] The facsimile was sent to the creditor's solicitors' fax number, which was not included in the address for service given in the statutory demand. According to the cover page 50 pages were transmitted. A transmission report produced by the company's solicitor's fax machine says that 19 pages were transmitted to that number on 4 December. Even if all 50 pages had been reported as having been transmitted, this would not be evidence of receipt of the documents by the creditor's solicitors, let alone that they came to the notice of the creditor itself.

[15] The express post was given a confirmation number CQ9913720. The evidence of delivery is contained in an affidavit by the company's solicitor (Shane Andrew Crew) in these terms -

"I have today contacted Australia Post on 131318 and spoken with a person by the name of Ben. Ben from Australia Post was able to confirm that express post delivery CQ9913720 was scanned into the Maroochy Post Shop, the site of the post office box for Sajen Legal, on 6 December 2007 at 8:38 am."

At its highest that is evidence of delivery to the post office; it is not evidence of placement in the post box.

[16] Counsel for the company conceded that service had not been effected at the address for service shown in the statutory demand, which was the street address of Sajen Legal. But he urged me to retrospectively authorise service by transmission to the solicitors' facsimile number and/or at their post office box pursuant to s 109X(6). Even if there are circumstances in which a mode of service may be retrospectively authorised under the section (which I need not decide), this is not one of them. The Court's jurisdiction to set aside the statutory demand is dependent on service of the process within 21 days after the demand was served; purported authorisation outside that 21 day period would be beyond the jurisdiction of the Court. See Rochester Communications Group Pty Ltd v Lader Pty Ltd[5]; Austar Finance Group Pty Ltd v Campbell.[6]

[17] In summary, the company has failed to prove that the process was served on the creditor within 21 days of the service of the demand. The application must be dismissed for want of jurisdiction.

[18] In the circumstances it is not necessary to deal with the arguments about the existence of an off-setting claim and the genuineness of the debt on which the demand was based.

1. [1] [1995] HCA 43; (1994-95) 184 CLR 265.
2. [2] [1999] VSC 435; (1999) 33 ACSR 259, [12].
3. [3] [1996] NSWSC 314; (1996) 41 NSWLR 542.
4. [4] Unreported, Supreme Court of Victoria, Chernov J, 24 April 1998 - referred to by Austin J in Austar Finance v Campbell [2007] NSWSC 1493, [54].
5. [5] (1997) 143 ALR 648.
6. [6] [2007] NSWSC 1493, [65]-[71].