TQM Design and Construction Pty Limited v Golden Plantation Pty Limited

Judgment 1The hearing of this winding up application commenced at 2pm yesterday. The plaintiff petitions on the insolvency ground, relying on a presumption of insolvency arising from non-compliance with a statutory demand 2Counsel agreed on a course which saw, in the course of the afternoon, attention to a number of preliminary and procedural matters, the reading of all affidavits, the tender of all documentary evidence, determination of objections to evidence and cross-examination of the one deponent required for cross examination. There were then addresses restricted to a discrete issue, namely, whether the relevant statutory demand was served on 4 February 2011 as the plaintiff alleges. 3It was agreed that I should give my decision on that matter before counsel addressed on other matters. It is not in dispute that the plaintiff carries the burden of proving the service it alleges. 4Evidence on the question of service was given in the plaintiff's case by a licensed commercial agent, Mr McKerrell. He deposed to having delivered the statutory demand personally to Mr Kok at Level 8, 37 York Street, Sydney on 4 February 2011. Mr Kok is a director of the defendant. His residential address recorded by ASIC is in a Sydney suburb, from which I infer that he resides in Australia. The registered office of the defendant is at Richard C L Kok & Co, Level 8, 37 York Street, Sydney. It follows that, if delivery was made to Mr Kok personally at that address, there was good service under both s 109X(1)(a) and s 109X(1)(b) of the Corporations Act 2001 (Cth). 5Mr McKerrell's evidence, as it emerged both from his affidavit and from his account given in the witness box, is that he had served documents at the same office address on previous occasions and had, on the afternoon of the immediately preceding day (3 February 2011), gone to the office to serve Mr Kok with some other document, only to be told that Mr Kok had left for the day and that it was his practice to leave at about 2pm. 6On 4 February 2011, therefore, Mr McKerrell made a point of arriving before 2pm. His attendance at the particular address on that day to serve a statutory demand and other documents is borne out by his contemporaneous diary note. The note does not, however, record the time of day. 7Mr McKerrell, according to his evidence, was familiar with the layout of the office. As I have said, he had been there on several earlier occasions to serve documents. 8On emerging from the lift on Level 8, Mr McKerrell had uninterrupted access to the relevant office premises. At the entrance, there was a reception desk. He did not see anyone at it on any of his visits, including the visit in question. Beyond that desk was a glass door leading into the office proper. On the visit in question, Mr McKerrell went to that door and looked through the glass and over a glass panel behind which was a desk. He knew this to be desk of Mr Kok's secretary as he had served documents on the secretary before. He saw no one at the desk, so he went in through the door. He then encountered Mr Kok who was in the process of showing to the exit a man described by Mr McKerrell as Caucasian and of an age similar to Mr McKerrell's own. Mr McKerrell suggested to Mr Kok that the two of them go into one of the rooms within the office premises, which they did (Mr McKerrell did not want to embarrass Mr Kok by serving him in front of the other man). After they had gone into the room, Mr McKerrell handed Mr Kok the statutory demand and other documents he had been instructed to serve. Mr McKerrell then left the premises. 9Mr McKerrell's evidence is that, during his visit, he did not see any person on the premises except for Mr Kok and the Caucasian man he was showing out. 10Mr Kok gave evidence on affidavit and was not cross-examined. He deposed in an affidavit filed on 13 April 2011 that he had no recollection of being served with the statutory demand on 4 February 2011. In a later affidavit (which is undated, except for the Month of April), he said that he had no recollection of being served with the statutory demand on 4 February 2011 at 2pm or at any other time; also that the first time he saw the statutory demand was as an attachment to the originating process. 11Mr Kok, according to the second affidavit, keeps a record of his appointments in his mobile phone. Based on a review of that record, he says that, on 4 February 2011, he had a meeting with a Mr Valentine at the York Street premises at 1pm. He says that the meeting lasted "about 40 minutes" and that he left the premises "before 2pm" as he had to attend a meeting at Warrawee commencing at 3pm. The only matters recorded in the mobile phone appear to be the times of the appointments (1pm and 3pm). The duration of the meeting and the time of leaving the office are thus the product of unassisted recollection at the time of preparation of the affidavit in April 2011. 12Also read in the defendant's case were an affidavit of Mr Kok's son, Paul Kok, who is employed in his father's business as a tax agent, and an affidavit of Ms Tjeng, who is employed as secretary. Neither was cross-examined. 13Each of Paul Kok and Ms Tjeng gave evidence of his or her practice, which is to bring lunch to the office, so that "ordinarily" he or she is in the office at around 2pm. Neither has any reason to believe that he or she was not in the office at around 2pm on 4 February 2011. Neither saw Mr Kok approached by a man at around 2pm on that day; nor did either see Mr Kok served with any documents on that day. At the same time, neither records an actual recollection of having been in the office at 2pm on the particular day or during any particular period leading up to 2pm. 14Ms Tjeng deposed that she generally sits at the front desk nearest to the door and generally sees anyone who comes into the office. 15Paul Kok deposed that he generally sits at the back left hand side of the premises and can hear and see his father's office from his office. 16Each of Paul Kok and Ms Tjeng deposed that, to the best of his or her recollection, the only other persons in the office at around 2pm on 4 February 2011 were the other of them and Mr Kok. 17Paul Kok deposed that, at around lunch time on 4 February 2011, his father had a meeting and, not long after the meeting finished, he and his father left to go to Warrawee. 18I am satisfied that the evidence warrants and justifies a finding that Mr McKerrell delivered the statutory demand and other documents to Mr Kok on 4 February 2011 so that, in accordance with the statutory provisions I have mentioned, there was service on that day. I shall explain my reasons. 19Mr McKerrell's frame of mind, as a result of his visit on the previous day, was that Mr Kok was likely to leave the office at or before 2pm on 4 February 2011. Mr McKerrell knew that, if he was to avoid a pointless attempt at service, he had to be there before 2pm. While his affidavit refers to his having gone to the premises at "around 2pm", it is, in my view, open to me to find on the balance of probabilities that he attended before 2pm in case Mr Kok left at about 2pm as he had told was likely to be the case. I so find. 20According to Mr Kok's account, he and Mr Valentine met in his office at 1pm and the meeting lasted "about 40 minutes". This is Mr Kok's unassisted recollection more than two months after the event. Any such recollection of the duration of a meeting is, of its nature, highly unreliable. A boring and tedious meeting may be remembered as having been longer than it in fact was. An animated and interesting meeting may be remembered as having been shorter than it in fact was. 21Mr Valentine is, from his name, likely to be of Caucasian appearance. Consistent with the accounts of all of Mr McKerrell, Mr Kok and Paul Kok is a finding that Mr Kok and Mr Valentine, having met together in Mr Kok's office within the premises, left that office and headed towards the exit from the premises as a whole some time after 1.40pm. It could easily have been 1.45pm or 1.50pm. No one kept contemporaneous records of time, except that Mr Kok had a record in his mobile phone of 1pm as the time his meeting was due to start. Also, Mr McKerrell said that he arrived before 2pm as he knew that Mr Kok was likely to be leaving at around 2pm. He could easily have arrived at 1.45pm or 150pm. 22Based on the evidence of Mr McKerrell and Mr Kok as to timings, therefore, it is clearly open to find that Mr Kok conducted Mr Valentine towards the exit some time after 1.40pm and that Mr McKerrell entered the premises some time before 2pm. It is significant that Mr McKerrell, on his account, saw Mr Kok showing a Caucasian man to the exit very soon after he arrived. The consistency of this evidence with Mr Kok's evidence that Mr Valentine left at or soon after 1.40pm is a powerful factor in favour of accepting Mr McKerrell's account that, when he arrived, he saw Mr Kok and a Caucasian man who was in the process of leaving. 23The evidence of Paul Kok and Ms Tjeng as to their practices regarding taking lunch to the office is of very limited utility indeed. Neither reported an actual recollection of what in fact happened on that day, except that Paul Kok referred to his father having had a meeting at "around lunch time" and that he and Mr Kok left to go to Warrawee soon after the meeting finished. Paul Kok did not give evidence of having seen the person with whom his father had a meeting. He said nothing about when the person left the premises. Nor did Ms Tjeng give evidence about those matters - indeed, her account does not refer to the presence of anyone in the premises at any time on the day in question except Mr Kok, Paul Kok and herself, they being, on her account, the persons who were there at about 2pm. 24Mr McKerrell's evidence is precise and detailed. Mr Kok's evidence records a recollection of Mr Valentine's attendance at the premises on the day in question and lack of any recollection of attendance by any process server. In that way, Mr Kok's evidence does not directly contradict that of Mr McKerrell. Nor does the evidence of Paul Kok or Ms Tjeng directly contradict that of Mr McKerrell. 25Ms Tjeng's description of the location of her desk leads me to find that it is the desk just inside the entrance that Mr McKerrell knew form previous visits to be that of Mr Kok's secretary. It is significant that Mr McKerrell gave evidence of having looked through the glass door at that desk when he arrived and that, at that time, no one was sitting at it. Thus, while Ms Tjeng's practice, as reported by her, was to take lunch to the office, there is evidence that the desk of Mr Kok's secretary was unoccupied at the precise time of Mr McKerrell's arrival before 2pm. 26It is, in my judgment, significant that Mr Kok gives evidence of lack of recollection of being served on 4 February 2011 and that his testimony is that he left to go to Warrawee some time after finishing his 1pm meeting with Mr Valentine. If, as Mr McKerrell says, he encountered Mr Kok as Mr Kok was showing a man to the exit and went with Mr Kok to a room and gave him the documents there so as not to embarrass him in front of his visitor, it is highly probable that Mr Kok then left that room and continued the process of showing his visitor out, after which he took steps to leave for Warrawee. There is a high probability that Mr Kok, having taken the documents from Mr McKerrell, put them aside in favour of attending to his visitor's departure and leaving for Warrawee. 27Mr Condon of counsel, who appears for the defendant, said that it would be wrong to make adverse credit findings about the defendant's witnesses when they have not been cross-examined. I make no such findings. My conclusion is that the evidence of Mr Kok, Mr Paul Kok and Ms Tjeng, taken as a whole, in no way precludes the findings favourable to the plaintiff that are warranted by Mr McKerrell's evidence. 28I hold that the statutory demand non-compliance with which is relied on by the plaintiff in these proceedings was served on the defendant on 4 February 2011.