Wily v Terra [2008] NSWSC 805

New South Wales Supreme Court

CITATION : Wily v Terra [2008] NSWSC 805

HEARING DATE(S) : 28/07/08, 31/07/08, 01/08/08, 04/08/08

JUDGMENT DATE : 31 July 2008

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

EX TEMPORE JUDGMENT DATE : 31 July 2008

CATCHWORDS : Corporations. Winding up of company in insolvency. Whether statutory demand was validly served by leaving it at the building in which the registgered office was situated. Held it was validly served. Order for winding up.

PARTIES : Andrew Hugh Jenner Wily as Liquidator of Business Australia Capital Mortgage Pty Limited & Business Australia Capital Finance Pty Limited v Terra Cresta Business Solutions Pty Limited

FILE NUMBER(S) : SC 3493/08

COUNSEL : Mr RD Marshall for plaintiff

SOLICITORS : MD Nikolaidis for plaintiff Mr D Gasic, Deacons for defendant

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

THURSDAY 31 JULY 2008

3493/08 - ANDREW HUGH JENNER WILY AS LIQUIDATOR OF BUSINESS AUSTRALIA CAPITAL MORTGAGE PTY LIMITED AND BUSINESS AUSTRALIA CAPITAL FINANCE PTY LIMITED v TERRA CRESTA BUSINESS SOLUTIONS PTY LIMITED

JUDGMENT

1 HIS HONOUR: This is the hearing of an application that the defendant be wound up in insolvency. The plaintiff relied upon the failure to comply with the statutory demand said to have been served on 5 June 2008. The demand was for the sum of $90,928 12 plus interest and was in respect of a costs order made in other litigation between the same parties in this Court. 2 The defendant raised the following matters during the hearing:

1. A defect in the demand; 2. Ineffective service of the statutory demand; 3. An abuse of process resulting from the commencement of these proceedings while other proceedings to wind up the plaintiff were still current; 4. An abuse of process said to be an attempt to obtain a collateral advantage in proceedings 4200 2006 in this Court between the same parties; and 5. The defendant's solvency. Defect in the demand 3 The demand was for $90,928 12 and a perusal of the orders upon which it founds shows that the correct amount is $87,944 37. Whoever issued the demand did not take into account the credit in order 3.2 in arriving at the correct amount due under the orders. 4 This misstatement constitutes a defect in the demand. A demand can be set aside under s 459J(1)(a) of the Corporations Act 2001 for such a defect if the Court is satisfied that substantial injustice will be served unless the demand is set aside. No such injustice was identified in the evidence or submissions. Given that the demand as served attached a copy of the Court order relied upon the mistake was plain on the face of the document. There is, thus, no substantial injustice. In any event such a point can only be taken in proceedings to set aside the demand and no proceedings were taken (see Nay's Works v Allcast (2006) 24 ACLC 41. Service of the demand 5 The affidavit of service was by Mr Opit, a process server, in this form: "1. I did on the 5th June, 2008 at 12.15 o'clock in the afternoon duly serve Terra Cresta Business Solutions Pty Limited with a signed copy of creditors statutory demand for payment of debt and orders dated 15 May 2008, copies of which are annexed hereto and marked with the letters "A" and "B" respectively by delivering same to a male person, apparently over the age of 16 years and apparently employed at Shop 2, 91-93 Longueville Road, Lane Cove. 2. Before such service of assent to the person so served 'I have documents which have to be delivered to Terra Cresta Business Solutions Pty Limited and they state their registered office is that Suite 245?' to which he replied 'they rent the box numbered 245, there is no Suite 245. I said 'can you please place these documents in their box?' to which he replied 'yes'. 3. I am over the age of 21 years." 6 Mr Salmon, the director of the plaintiff, gave the following evidence: "34. I check the defendant's mail twice a week and say that from 5 June 2008 to the date of swearing this affidavit and on each occasion when I attended to the defendant's mailbox there was no letter, envelope or other document that contained or had attached to it any statutory demand or affidavit left in the defendant's mailbox for Suite 245 as deposed to by Mr Opit." 7 Consequently no application to set aside the demand was made. The records of ASIC show the registered office as "Suite 245, 91-93 Longueville Road, Lane Cove West". That was also shown as the address of Mr Salmon in the ASIC records, he being the only director of the defendant. It was also the address used by Mr Salmon in his affidavit, as he declined to give his residential address. He described in evidence the company is only receiving mail via this box. 8 The defendant's submissions on this aspect were: "14. There is no evidence of: (1) the identity of the person that was said to have accepted the statutory demand; (2) the capacity of the person located at Shop 2, 91-93 Longueville Road, Lane Cove; (3) the unidentified person having the authority to accept any documents for the defendant; and (4) the unidentified person actually placing the statutory demand in the defendant's mailbox as requested by Mr Opit. 15. By the plaintiff's own evidence the statutory demand was required to be placed in the defendant's mailbox. 16. The statutory demand was not posted to the defendant's registered office. 17. There is no proof that statutory demand was left at the defendant's registered office as required by s 109X(2). 18. There is evidence from the sole director of the defendant that the statutory demand did not come to his attention (see affidavit of Owen Salmon sworn 21 July 2008 at paragraph 33 to paragraph 36 inclusive.)" 9 Section 109X(2) requires that in this instance the demand be served by "leaving it at the company's registered office". 10 That evidence as to the shops at 91-93 Longueville Road is limited to the fact that the MBE business centre is at that address. The evidence of the person served demonstrates that there was a connection between shop 2 and box number 245, which was the description adopted by Mr Salmon in answer to questions in cross-examination. Accepting as I do Mr Salmon's evidence, then in the absence of evidence from the person in the shop that said he would put the document in the box, I would conclude that he did not do so. It may have been put in a wrong box or simply not processed. Given that the documents were not put in the box the next question is whether leaving them at the premises was sufficient. 11 Section 100 of the Act provides as follows: "100(1) [Contents of notice] Where a provision of this Act requires a notice to be lodged of, or information in an application to specify: