1 By its originating process filed on 4 November 2002, the plaintiff makes application under s.459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand served on it by the defendant and dated 14 October 2002.
2 The first two grounds on which the plaintiff seeks the setting aside of the statutory demand are the grounds specified in ss.459J(1)(a) and 459J(1)(b), the plaintiff's case being that, because of a defect in the demand itself, substantial injustice will be caused unless it is set aside and that there is in any event some other reason why it should be set aside, being a defect in the accompanying affidavit. Having today heard argument on those grounds, I proceed to give judgment on them only.
3 There is a question whether, having regard to the content of the affidavit supporting the s.459G application viewed in the light of the Graywinter principle (Graywinter Property Pty Ltd v Gas and Fuel Superannuation Fund (1996) FCR 452), the plaintiff is entitled to rely on these grounds. I shall consider first the substantive questions going to the matters of alleged defect.
4 The plaintiff seeks to rely on one defect in the demand itself and one defect, or perhaps a group of matters making up one defect, in the supporting affidavit called for by s.459G(3). In relation to the demand itself, the plaintiff points to the fact that it does not contain a paragraph corresponding with paragraph 2 of Form 509H as it existed at the relevant time, that is, a paragraph saying that there is attached to the statutory demand an affidavit of a named person, dated a particular date, verifying that the amount specified in the demand is due and payable by the company to which the demand is directed.
5 Despite this omission, the statutory demand was in fact accompanied by, or had attached to it, an affidavit of Ms O'Connor. That, however, is the affidavit that the plaintiff says involves the second defect, in that it fails to conform with s.459E(3)(a) because it does not verify that the debt is due and payable by the company. It is also said the affidavit does not comply with s.459E(3)(b) because it does not comply with the rules, the relevant rule being Corporations Act Rule 5.2 which requires adherence to Form 7 which in turn requires the affidavit to say that the debt mentioned in paragraph 1 of the affidavit is due and payable by the company.
6 Relevant to these assertions on the plaintiff's part is a factual issue which I will deal with briefly. The affidavit of Mr Murphy sworn on 4 November 2002 which is the supporting affidavit for the purposes of s.459G purports to have annexed to it as annexure A a copy of the statutory demand and accompanying affidavit. It appears from the annexure note that annexure A consists of twenty-one pages and, since the demand itself has only two pages, the remaining nineteen must represent the affidavit accompanying the statutory demand, being Ms O'Connor's affidavit to which I have referred. The difficulty is that Ms O'Connor's affidavit purports to have attached to it a number of invoices. There are, in the copy attached to Mr Murphy's affidavit, I think eighteen copy invoices. That is despite the fact that the annexure note in Ms O'Connor's affidavit refers to forty-two pages of annexures. There has been filed in court today an affidavit of Mr Li, the solicitor for the defendant, which is an affidavit of service and has attached to it what he says are copies of the statutory demand and the affidavit of Ms O'Connor as served, including a number of copy invoices in addition to the ones forming the annexure to the annexure to Ms O'Connor's affidavit as annexed to Mr Murphy's affidavit.
7 This discrepancy must I think be resolved by a finding that the documents as served were in the form testified to by Mr Li. I shall explain why. Mr Murphy in his affidavit of 4 November 2002, paragraphs 5 and 6, refers to invoices issued supposedly in response to his company's orders 11117 and 11160. He makes it clear that copies of those invoices were before him when he swore his affidavit. There are no invoices referring to those order numbers among the eighteen copies annexed to Mr Murphy's affidavit, although there are such invoices in the additional pages annexed to Mr Li's affidavit. From this I must infer that when Mr Murphy composed his affidavit, he had before him copy invoices that are not annexed to his affidavit but are annexed to Mr Li's affidavit. It is on that basis I find the documents as served were as testified to by Mr Li.
8 I turn now to the significance of the omission of the words "due and payable" and references to the debt being due and payable from both the statutory demand itself and the accompanying affidavit.
9 The importance of the inclusion of those words was emphasised by me in Main Camp Tea Tree Oil Ltd v Australian Rural Group Ltd (2002) 20 ACLC 726, the principle being that the alleged debtor must be put clearly on notice not only that the debt exists but also that it is both due and payable - in other words, that it is an unconditional and unfettered payment obligation calling for immediate discharge by payment, so that the recipient of the statutory demand and accompanying affidavit is not left in any confusion or doubt as to the immediate and absolute nature of the obligation alleged. There was scope for confusion in the Main Camp case because of collateral correspondence which was at odds with the notion that the debt was due and payable and therefore, when read in conjunction with the defective documents, could well have been the product of doubt in the mind of the recipient.
10 Here, the key words "due and payable" are missing from both the demand and the affidavit. The case is therefore distinguishable from the Western Australian case I mentioned in the course of argument (which is Peak Hill Manganese Pty Ltd v Hydroplant Equipment Pty Ltd [2003] WASC 120) where one of the two documents was deficient because it did not refer to the debt being due and payable but the other did contain the reference ;and the court declined to set aside the statutory demand.
11 The question to be answered on the facts before me is whether the documents (that is, the demand and the accompanying affidavit) clearly notified the debtor that a debt due and payable was asserted, with an immediate and unconditional requirement for payment being made obvious to the recipient of the documents, despite the absence of the precise form of words which, as the decision of Hayne J in Azed Developments Pty Ltd v Frederick & Co Ltd (1994) 14 ACSR 54 shows, is not essential, provided that the required message is otherwise unambiguously conveyed; see also Chadah Pty Ltd v Kubota Tractor Australia Pty Ltd [2003] NSWSC 456.
12 It is necessary to look at the annexed invoices themselves. Each invoice has at the bottom of it the words "total due" followed by an amount of money. Some, but not all, also have, under that, an item "payment due by" followed by a date and after the date the words "30 days from invoice date". In all cases in which a "payment due by" date was stated in that way, the date was well and truly in the past by the time the statutory demand was served, so that any deferral that would have been understood to have come from the reference to "30 days" and the words "payment due by" followed by the particular date would have been seen to be no longer applicable.
13 Each of the annexed documents is entitled "invoice" or, more precisely, "cash sale invoice". An invoice is, in common parlance and unless something to the contrary appears on its face, a document which is generally understood to call unconditionally for immediate payment. The words "cash sale" reinforce the notion that cash is to be paid in accordance with the invoice and that there is an unconditional payment obligation, subject only, in the cases where a "30 day" date is mentioned, to that date having passed.
14 In the circumstances of this case, I am satisfied that a reading of the documents as a whole would not leave the recipient in any doubt that the debts represented by the copy invoices were alleged to be due. The word "due" is clearly used in all of them. Furthermore, there is nothing to suggest the applicability of anything other than the ordinary consequences of the nature of an invoice as the source of an unconditional obligation to make payment ("payable"). On a fair construction of the totality of the material, therefore, I believe that the message required by the "due and payable" specification made necessary by the legislation was conveyed to the recipient of the statutory demand and accompanying affidavit which, as s.459E(3) shows, are intended to be read together.
15 There is a "defect", by way of omission of the precise words required, in both the statutory demand and the accompanying affidavit. But I am not satisfied that substantial injustice on account of omission of the words "due and payable" from the statutory demand will be caused unless the demand is set aside. Nor am I satisfied that omission of those words from the accompanying affidavit can be said to amount to some other reason why the demand should be set aside. These conclusions make it unnecessary for me to consider the Graywinter aspect of the case based on s.459J.
16 The matter must proceed in due course to a trial of the genuine dispute ground on which the plaintiff also relies.
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