Quitstar v Cooline

1886/02 - QUITSTAR PTY LIMITED v COOLINE PACIFIC PTY LIMITED JUDGMENT Background 1 The appellant appeals from a decision of Master Macready ([2002] NSWSC 342) refusing relief by declaration, as well as by order under s.459J of the Corporations Act 2001, in respect of a document dated 19 February 2002 served by the respondent on the appellant which the respondent claims to be a statutory demand in respect of a debt of $17,140. 2 The appellant maintains on appeal two of the objections asserted before the Master, saying that the decision reached by him on both aspects was in error. The first objection is that, if the document was a statutory demand, it did not comply with the requirement as to specification of an address for service upon the creditor and, for that reason, should be set aside. The second objection is more fundamental, namely, that, because the document refers throughout to the Corporations Law rather than the Corporations Act 2001, it is not in truth a statutory demand at all; or, if it is, should be set aside because the references to the former legislation amount to a defect. The Master granted to the appellant leave to amend to include a claim for a declaration that the document was not a statutory demand so that the second part of the appellant's case could be appropriately advanced. The first objection - reference to post office box only 3 The first objection stems from the form of paragraph 6 of the document. That paragraph reads as follows: "The address of the creditor for service of copies of any application and affidavit is: Corporations Group Counsel, GPO Box 2926, Sydney, NSW, 2043." 4 The appellant says that specification of a post office box in this part of the document constitutes a non-compliance with the legislative requirements and that the statutory demand (assuming that is what the document is) should therefore be set aside by order made under s.459J. 5 The requirement that a statutory demand specify an address for service arises indirectly from s.459E(2). I say "indirectly" because s.459E(2) says, in its paragraph (e), that a statutory demand "must be in the prescribed form (if any)" and the form prescribed by reg. 1.0.03 of the Corporations Regulations 2001, being Form 509H, contains the following: "6. The address of the creditor for service of copies of any application and affidavit is (insert the address for service of the documents in the State or Territory in which the demand is served on the company, being, if solicitors are acting for the creditor, the address of the solicitors)." 6 Regulation 1.0.04 says: "A form must be completed in accordance with the directions and instructions specified in the form." 7 The material in brackets in paragraph 6 of Form 509H is, clearly enough, a direction or instruction to which regulation 1.0.04 relates. It follows that, since the case was one in which solicitors were acting for the creditor (there being no dispute that Corporations Group Counsel or GA Corporations Group Counsel is a firm of solicitors), the requirement imposed by the legislation was that there be inserted in para 6 of the statutory demand "the address of the solicitors". 8 The practical need for such an address to be identified arises from s.459G(3)(b) which, dealing with an application by the company for an order setting aside the demand, requires a copy of the application and supporting affidavit to be "served on the person who served the demand on the company". The specification in para 6 of the demand itself is the means the Act envisages for the company to become aware of an address by reference to which the service requirement may be satisfied. 9 The requirement with respect to the copy of the company's s.459G application and supporting affidavit is a requirement that they be "served". The Act does not contain its own provisions concerning service, except in particular cases, being service on "a company" (s.109X(1)) and, in certain instances, on a director or secretary (s.109X(2)). Since the person who resorts to the statutory demand procedure may be an individual, a body corporate which is not a "company", a body politic or any other form of juristic person, there is no place, in the context of s.459G(3)(b), for the operation of any of the provisions of s.109X, the intention being that any mode of "service" may be effected. 10 The general meaning of "service", in the Corporations Act 2001, is to be derived from s.28A(1) of the Acts Interpretation Act 1901. By operation of s.5C of the Corporations Act 2001, the Acts Interpretation Act 1901 as in force on 1 November 2000 applies to that Act. Section 28A(1) is as follows: "For the purposes of any Act that requires or permits a document to be served on a person, whether the expression 'serve', 'give' or 'send' or any other expression is used, then, unless the contrary intention appears, the document may be served: (a) on a natural person: (i) by delivering it to the person personally; or (ii) by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or (b) on a body corporate - by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate." 11 As it says, this provision applies in so far as a contrary intention does not appear. I do not think that the present context is one in which there appears any contrary intention to the effect that the address specified in the demand in obedience to the instruction in paragraph 6 of the form is the only permitted place of service: see Vicbar Pty Ltd v Development Constructions (Newcastle) Pty Ltd (1995) 13 ACLC 1220. But even if such a contrary intention is manifested, it does not, to my mind, confine the mode of service, as distinct from the place of service. 12 Section 28A contemplates, among other methods of service, delivery to an individual personally. It could not be suggested that delivery of the copy s.459G application and supporting affidavit personally to a natural person creditor, wherever he or she happened for the moment to be, was not good service. When it comes to leaving the document at or sending it to an address, it may be (although, as I have said, I do not think it is) that the company is restricted to service at the address inserted by the creditor in paragraph 6 of the demand. Even if this is so, it cannot be contemplated that the creditor may, by the paragraph 6 specification, exclude one of the modes of service made generally available by s.28A, being the mode which involves leaving the documents at an address, as distinct from posting them to that address. It is, of course, not possible for a document to be served by "leaving it at" a post office box. 13 In Sarikaya v Victorian Workcover Authority (1997) 80 FCR 262, Black CJ had to deal with a requirement for the specification, as an address for service, of "the address of a place within the District for the Registry in which the originating process is filed … at which documents in the proceedings may … be left …". His Honour held that a post office box was not such an address: "Whether or not such a box is, in this context, the 'address of a place', is not the address of a place at which a document may be 'left' by way of service." 14 The same approach was taken to a similar provision in Croker v Ewen [2000] NSWCA 186 (Giles JA) and is also appropriate here. There is an intention that service by physical delivery, rather than posting, should be available to a party preferring that method. Strict time limits apply in this area and serious consequences may be incurred if a time limit is missed. The person upon whom the responsibility to serve within the specified time is cast is intended to have the ability to deliver to a physical location at any time within the limit, rather than being forced into the particular mode which involves entrusting an article to the post, with consequent need to do so sufficiently before the deadline to accommodate the ordinary course of post: see s.29 of the Acts Interpretation Act 1901. 15 It follows that completion of paragraph 6 of the statutory demand by inserting the solicitors' post office box address was insufficient to comply with the requirement imposed by means of the direction in Form 509H. There was accordingly an "irregularity", in that compliance was partial or incomplete. The irregularity is, in terms of the s.9 definition, a "defect" and, since it goes to the content of the statutory demand itself, it is a "defect in the demand" as referred to in s.459J(1)(a). That being so, the jurisdiction to set aside the demand because of the defect arises only if "substantial injustice" will be caused unless the demand is set aside. 16 The learned Master treated inclusion of an address consisting solely of a post office box as a "defect in the demand". For reasons I have stated, I consider that categorisation to be correct. The Master was also correct in the way he disposed of the question of "substantial injustice", being the only question then remaining under s.459J: "By arrangement in this case, appropriate service was effected within time and accordingly there has been no substantial injustice." 17 The finding that, through arrangement, the company had been able to serve copies of its s.459G application and supporting affidavit on the creditor within the required time was not challenged upon appeal. Since it is thus clear that the specification of only a post office box in paragraph 6 of the demand did not cause the company to be unable to pursue the appropriate avenues of challenge, the finding that no substantial injustice was occasioned by the availability, within the document itself, of the post office box address alone was obviously both open and correct. 18 To the extent that it is advanced by reference to the specification of the post office box address alone in paragraph 6, the appeal accordingly fails.

The second objection - reference to superseded legislation 19 The main point the appellant sought to make here is that the document dated 19 February 2002 is not, in truth, a "statutory demand" at all. The appellant's argument is, in essence, that, because the document refers throughout to "Corporations Law", rather than "Corporations Act 2001", it is, in terms of the s.9 definition of "statutory demand, neither "a document that is … a demand served under section 459E" nor "a document that … purports to be a demand served under s.459E". 20 The argument is advanced in a context where, on its face, the document followed Form 509H in all respects except that "Law" appeared instead of "Act 2001" in every place where the form uses the expression "Corporations Act 2001". I might add that, curiously, Form 509H, as it appears in the Corporations Regulations 2001 issued by the Australian Government Printer, refers on one occasion to the "Corporations Law". There is a reference in paragraph 5 to "a court having jurisdiction under the Corporations Law". Needless to say, the document of 19 February 2002 was faithful to the form in that particular place. 21 According to the appellant's argument, only a document which, on its face, states that it is based on s.459E of the Corporations Act 2001 is within the definition of "statutory demand"; and a document which fails to use that exact form of words and refers to only to s.459E of "the corporations statute" or of "the law with respect to corporations" or even, perhaps, of "the Corporations Act" without "2001" is not a "statutory demand". A reference to s.459E of the "Corporations Act 2001" is said to be an essential element of the document's content so that, without it, the document is simply not a "statutory demand". 22 The apellant makes the additional point that the Corporations Law has been superseded by the Corporations Act 2001 and is no longer generally in force. The recipient of a document referring to s.459E of the Corporations Law will, it is said, be thrown into a state of confusion, not knowing how he or she is required to respond, if at all, to a demand referring to an enactment no longer in force. 23 These arguments cannot be accepted. 24 It is necessary to have regard to the provisions of the Corporations Act 2001 dealing with transition from the national scheme laws to the Commonwealth Act. The relevant part of s.1407(1) reads as follows: "… a reference in, or taken immediately before the commencement to be in, an instrument … to … (c) an Act, or to regulations or some other instrument, that is part of the old corporations legislation (whether the reference is in general terms or in relation to a particular State or Territory in this jurisdiction); or (d) to a provision or group of provisions of such an Act, regulations or other instrument; is taken, after the commencement, to include a reference to the corresponding part, provision or provisions of the new corporations legislation (unless there is no such corresponding part, provision or provisions)." 25 By virtue of s.1371(1), "commencement" means the commencement of the Corporations Act 2001, that is, 15 July 2001. 26 Section 1407(1) exists in the context of and is affected by s.1370(1), the first provision in Part 10.1 of which s.1407(1) forms part. Section 1370(1) is as follows: "Subject to subsection (3), the object of this Part is to provide for a smooth transition from the regime provided for in the old corporations legislation of the States and Territories in this jurisdiction to the regime provided for in the new corporations legislation, so that individuals, bodies corporate and other bodies are, to the greatest extent possible, put in the same position immediately after the commencement as they would have been if: (a) that old corporations legislation had, from time to time when it was in force, been valid Commonwealth legislation applying throughout those States and Territories; and (b) the new corporations legislation (to the extent it contains provisions that correspond to provisions of the old corporations legislation as in force immediately before the commencement) were a continuation of that old corporations legislation as so applying." 27 Section 1370(2) directs that, in resolving any ambiguity in any other provision of Part 10.1 (which includes s.1407(1)), an interpretation consistent with the object stated in s.1370(1) is to be preferred to an interpretation that is not consistent with that object. Sub-section (3) of s.1370 is irrelevant for present purposes. 28 Particularly in light of ss.1370(1)(b) and 1370(2), I regard s.1407(1) as manifesting an intention that, whenever a reference to a provision of the Corporations Law is found in an instrument to which s.1407(1) applies, including an instrument created after "the commencement", that reference is to be regarded as including a reference to the corresponding provision of the Corporations Act 2001. The words "a reference in … an instrument" are not qualified by any time stipulation. This is in contrast to "a reference … taken immediately before the commencement to be in, an instrument", which shows an intention to limit the effect of s.1407(1), in relation to deemed references, to references produced by a deeming arising before the commencement. No such limit is expressed or implied in relation to actual references as distinct from deemed references: the former, whenever the relevant instrument is created, are intended to include references to the corresponding Corporations Act provisions. 29 The concluding part of s.1407(1) also contains the words "after the commencement". On that occasion, the words identify the point after which the revised reading the section directs is to be adopted. They do not indicate that the references "in" instruments in relation to which the section operates are confined to references that existed before the commencement. 30 Having regard to s.1370(1), such a regime is perfectly understandable. The Commonwealth Act was intended to be, at a day-to-day level, no more than a continuation of the Corporations Laws of the States and Territories. It was no part of the legislative intention that a document created on, say, 16 or 17 July 2001 referring to the Corporations Law rather than the Corporations Act should somehow be deprived of the effect it would have had if created in exactly the same form on 13 or 14 July 2001. The manifested legislative intention rejects any form of sudden verbal death as at 15 July 2001. 31 The legislative provisions and intention to which I have referred apply to the references to the Corporations Law in the document dated 19 February 2002 with which this appeal is concerned. It is an "instrument" referred to in s.1407(1). 32 The learned Master held that the document "purports to be" a demand under s.459E of the Corporations Act. His reasoning was as follows: "It could hardly be thought that a recipient would not think it a formal demand under the laws dealing with companies at the time he received it. The nuances and the differences between Corporations Act and Corporations Law for quite some many months eluded many lawyers and would be something which would be of no interest to any lay person." 33 In reaching this conclusion, the Master referred to the decision of Hill J in Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 13 ACSR 525 and that of Cohen J in Vicbar (above) as to the meaning of "purport". In the former, the view was taken that, in the present context, "purport" has its "more usual meaning" of "profess" or claim". Implicit in the Master's conclusion is the view that a document can profess or claim a certain character without clearly showing that character in so many words, and that there is room for inference from context. That must be so. Where a document claims to be a demand under an enactment dealing with such demands in circumstances where the section numbers, all of which are correctly stated, are the same in that enactment as they are in the corresponding subsequent enactment of substantially similar short title in force at the time of the document's creation and where, in addition, the later enactment (to which no explicit reference is made) is, by its terms, intended to operate as a continuation of the earlier enactment (which is referred to), the situation is easily classified as one in which the document claims to be a demand under the subsequent version actually in force. 34 I would adopt, as applicable to this case (with one adaptation to which I shall come), the following observation of Lockhart J in Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226 : "I do not accept, however, the argument of counsel for the applicant that, because of the nature and extent of its defects, the demand does not answer the description of a statutory demand for the purposes of Pt 5.4 of the Corporations Law. The demand purports to follow the prescribed form of statutory demand, but falls into error in its description of the moneys claimed to be due by the applicant. Nevertheless, it purports to be a statutory demand." 35 In this case, one needs to substitute for the second sentence of this extract: "The demand purports to follow the prescribed form of statutory demand, but falls into error in its description of the name of the relevant legislation."

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