Roam Tolling Pty Ltd, in the matter of Lions Transport Pty Ltd v Lions Transport Pty Ltd

1. In respect of the question referred by Registrar Ng: (a) the application for the winding up of the defendant based on noncompliance with a statutory demand is not outside Pt 5.4 of the Corporations Act; and (b) the plaintiff is not prevented from relying on the presumption of insolvency because the affidavit which accompanied the statutory demand was verified on 16 August 2016 being 3 days before the date of the statutory demand.
2. The matter be listed in the Registrars List on Wednesday, 14 December 2016.
3. The plaintiff is to notify the defendant of the adjourned date by express post addressed to the registered office of the defendant to be sent no later than 3.00 pm on Friday, 9 December 2016. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

FARRELL J: 1 On 5 October 2016, Roam Tolling Pty Ltd filed an application pursuant to s 459P of the Corporations Act 2001 (Cth) seeking orders that Lions Transport Pty Ltd be would up in insolvency. Roam Tolling relied on Lions Transport's failure to comply with a statutory demand dated 19 August 2016. The statutory demand was supported by an affidavit affirmed on 16 August 2016 verifying that Lions Transport owed Roam Tolling $28,523.81 for unpaid road tolls. An affidavit of service of the statutory demand affirmed by Rosa Martinez on 30 September 2016 deposes that the statutory demand (which attached the supporting affidavit) were sent by ordinary pre-paid post on 19 August 2016 to Lions Transport's registered office. 2 Section 459E(3) of the Corporations Act relevantly provides: Creditor may serve statutory demand on company … Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that: (a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and (b) complies with the rules. 3 When the matter was listed for first directions before Deputy District Registrar Ng on 11 November 2016, he made orders referring the matter to a judge to determine whether the fact that the supporting affidavit which verified the debt was affirmed three days before the date of the statutory demand was fatal to the winding up application. Lions Transport did not appear at the first directions hearing. 4 Lions Transport also did not appear at the case management hearing held on 1 December 2016. Mr Woods, counsel for Roam Tolling, advised that Roam Tolling had sent a letter to Lions Transport's registered address on Monday 28 November 2016, advising of the time and date of the case management hearing, but no response had been received. He said that no attempt had been made to contact Lions Transport by telephone. Orders were made requiring Roam Tolling to advise Lions Transport by telephone and mail of today's hearing and that if Lions Transport did not appear, the Court would proceed to determine the question referred by Deputy District Registrar Ng. Roam Tolling was also directed to file and serve written submissions in respect of that question by 6 December 2016. 5 Lions Transport did not appear at the hearing today and no notice of appearance has been filed. Roam Tolling relied on an affidavit affirmed by Mr Peter Liedtke, a solicitor employed by Hudson Lawyers. Mr Liedtke deposed that on 2 December 2016 he sent a letter by express post to the registered office of Lions Transport advising of today's hearing. He also deposed to his attempts to contact Lions Transport on a mobile telephone number which he identified from the records of National Credit Management Limited (which conducts debt recovery for Roam Tolling) as a contact number for Lions Transport. Mr Liedtke left a message at that number notifying Lions Transport of today's hearing. 6 Roam Tolling accepts, that an application to set aside a statutory demand will ordinarily be successful where the affidavit verifying the statutory demand is affirmed prior to the date of the demand: see Wildtown Holdings Pty Ltd v Rural Traders Company Ltd (2002) 172 FLR 35; [2002] WASCA 196 (Wildtown) at [58] per Templeman J (whom Steytler and Miller JJ agreed); Wollongong Coal Limited v Gujarat NRE India Pty Ltd (2015) 104 ACSR 425; [2015] FCA 221 at [80]-[84] and [98]-[99] per Wigney J; and In the matter of Unity Resources Group Australia Pty Limited [2015] NSWSC 1174 (Unity Resources) at [4]-[5] and [10]-[11] per Brereton J. 7 Roam Tolling submits that, as the question arises in an application to wind up the defendant, the defect in the supporting affidavit is not fatal. I am satisfied that Roam Tolling has made good that submission provided that s 459Q is complied with. 8 In Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 43 NSWLR 717; (1998) 28 ACSR 175 (Dolvelle) at 184-185, Santow J (as he then was) held that a winding up application based on a statutory demand did not fall outside Part 5.4 of the Corporations Act merely because the accompanying affidavit was "two days premature". Justice Santow found that, while important, the exact coincidence of the date for 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. Justice Santow found that s 459S applied since the issue raised by that ground is not a matter which goes to solvency, there was no argument that the debt had been paid and no argument had been made under s 459G that the debt was genuinely in dispute. He found that 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: 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 be remedied (for example, by an adjournment or an order for costs). 9 In Wildtown at [53]-[55], Templeman J (with whom Steytler and Miller JJ agreed) found that the reason for Santow J's conclusion in Dolvelle that a winding up application did not fall outside Part 5.4 merely because there was not exact co-incidence of the date of verification of the statutory demand and the demand itself lies in s 459Q. Section 459Q sets out the requirements for a winding up application based on the failure to comply with a statutory demand. The winding up application must have attached to it a copy of the statutory demand. It must also be accompanied by an affidavit verifying the debt and the fact that the debt remains due and payable. The affidavit which verified the debt demanded in the statutory demand at the time it was served is not itself relevant to the winding up application. An irregularity in the verification of the statutory demand is therefore not fatal to a winding up application based on the failure to comply with the statutory demand. 10 In Unity Resources at [8], Brereton J accepted the distinction between winding up proceedings and proceedings to set aside a statutory demand where the issue of failure of "exact coincidence" of the date of the statutory demand and the date of the verifying affidavit arises. Referring to Dolvelle, Brereton J summarised the findings of Santow J to the effect that where it is no longer open to set aside a statutory demand, the presumption of insolvency arises unless it can be established that the demand is no demand at all. 11 In CCH Workflow Solutions Pty Ltd v E.Discovery Australia Pty Ltd [2011] FCA 994, Jagot J also accepted that in winding up proceedings, a defect in the affidavit verifying the statutory demand did not prevent the presumption of insolvency from arising. In that case, the defect was that the person who witnessed the swearing of the affidavit was not in fact a Justice of the Peace at the time it was sworn, because their commission had expired and had not been renewed. 12 In Radiancy (Sales) Pty Ltd v Bimat Pty Ltd (2007) 25 ACLC 1216; [2007] NSWSC 962 at [54], White J found that the fact that no oath or affirmation was administered when the affidavit verifying the statutory demand was signed was not a ground which could be raised to resist the winding up application having regard to s 459S(2), since the issue of verification of the statutory demand was not relevant to the defendant company's solvency. 13 Mr Woods has specifically drawn to my attention comments made by Wigney J in Wollongong Coal at [84] concerning the possibility of curing non-compliance with s 459E(3) with an "updating" affidavit served within a reasonable time before the expiration of the 21 days period in which the defendant can apply to have the statutory demand set aside. That case dealt with an application to set aside a statutory demand where the supporting affidavit predated it and Wigney J's comments must be understood in that context. It is to be distinguished from the present case for the reasons given in Wildtown at [53]-[56] and Unity Resources at [8]. 14 I find that Roam Tolling's failure to comply with s 459E(3) by reason that the affidavit verifying the debt predated the statutory demand by three days does not prevent the presumption of insolvency arising under s 459C(2)(a) as a result of Lions Transport's failure to comply with the statutory demand. 15 I will adjourn the application for winding up to Wednesday, 14 December 2016 before the presiding registrar in the corporations list. I will direct Roam Tolling to notify Lions Transport in writing of the next court date. The notice is to be despatched by express post no later than 4 pm on Friday, 9 December 2016. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.