Supreme Court New South Wales Medium Neutral Citation: In the matter of Intercorp Estate Pty Limited [2016] NSWSC 1953 Hearing dates: Monday, 30 May 2016 Date of orders: 30 May 2016 Decision date: 30 May 2016 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Originating process adjourned to 20 June 2016. Grant leave to plaintiff to amend return date on service copy. Direct that originating process, supporting evidence and notice of the date, time and place of adjourned hearing be served on defendant in accordance with requirements of Rules of Court for service of originating process by 6 June 2016. Catchwords: CORPORATIONS – winding up – winding up in insolvency – whether effective service of creditor's statutory demand and originating process – process not delivered personally to director pursuant to (CTH) Corporations Act 2001, s 109X(1)(b) – demand was returned with handwritten markings "return to sender" and "RTS left address" – "fair notice" doctrine – held, service of demand established as markings do not prove letter did not reach relevant address – service of process not established – proceedings adjourned with directions for further service. Legislation Cited: (CTH) Acts Interpretation Act 1902, s 29 (CTH) Corporations Act 2001, s 109X(1)(b) Cases Cited: CGU Workers' Compensation (Victoria) Limited v Carousel Bar Pty Ltd [1999] VSC 227; (1999) 151 FLR 270 Deputy Commissioner of Taxation v Contracts Synergies Administration Pty Ltd [2011] FCA 743 Dwyer v Canon Australia Pty Ltd [2007] SASC100 FP Leonard Advertising Pty Limited v KD Travel Services Pty Ltd (1993) 12 ACSR 136 Perpetual Nominees Limited v Masri Apartments Pty Ltd [2004] NSWSC 500, 49 ACSR 714 Re Future Life Enterprises Pty Limited (1994) 33 NSWLR 559 Re Pacific Mobile Phones Pty Ltd [2008] QSC 210; 26 ACLC 1882 Re Rustic Homes Pty Ltd (1988) 49 SASR 41; 13 ACLR 105 Von Risefer v Mainfreight International Pty Ltd [2009] VSCA 179; (2009) 25 VR 366 Category: Principal judgment Parties: 23 Harrington Street Pty Limited (Receivers Appointed) (plaintiff) Intercorp Estate Pty Limited (defendant) Representation: Counsel: J Bennett (plaintiff) Solicitors: Marsden Law Group (plaintiff) File Number(s): 2016/91549 Judgment (EX TEMPORE) 1. HIS HONOUR: Before the Court is an originating process filed on 24 March 2016 whereby the plaintiff 23 Harrington Street Pty Limited (Receivers Appointed) seeks an order that the defendant Intercorp Estate Pty Limited be wound up in insolvency and a liquidator appointed. Save for two questions concerning service, to which I shall come, there appears to be no other reason why a winding up order should not be made; but questions pertaining to service – both of the creditor's statutory demand and of the originating process itself – arise. 2. According to the affidavit of Christopher James Shipp sworn 31 March 2016, the originating process was served by leaving a copy in a sealed envelope addressed to Mr Elie Elia with a female person at 185 Ash Road Prestons on 30 March 2016. As at 30 March 2016, the ASIC Register disclosed Mr Elie Elia to be the sole director of the company. However, on 6 April, a notice of change of company particulars was lodged with ASIC, the effect of which was to record that Elie Elia ceased to be a director as at 4 October 2015, and Johni Elia became the sole director on that date. The notice also effected a recording of a change of the registered office, with effect from 12 April 2016, from Level 1, 274 Canterbury Road, Canterbury, to 31 Moonbie Street, Summer Hill. 3. (CTH) Corporations Act 2001, s 109X(1)(b), stipulates that service on a company may be effected by delivery of a copy of a document personally to a director of the company. Assuming that, despite the later change of the register, Mr Elie Elia could still be treated as the sole director of the company as at the relevant date, the evidence does not establish delivery of a copy personally to him. In those circumstances, I am not persuaded that there was service of the originating process at that stage on Mr Elie Elia. 4. Having become aware of the potential problems in that respect, on 3 May 2016, the plaintiff delivered sealed copies of the originating process and supporting documentation, together with a letter from the plaintiff's solicitors dated 2 May 2016, to 31 Moonbie Street, Summer Hill, which, on any view, was then the registered office. However, so far as the evidence reveals, the originating process, or its cover sheet, nominated a return date of 28 April 2016, which date by then had passed. The covering letter of 2 May did advise the recipient that the hearing had been adjourned to 4 May, but service on 3 May of documents returnable on 4 May was, in the absence of an authorised abridgement of time, not effective service. 5. On 4 May, the Registrar adjourned the proceedings until today and directed the plaintiff to notify the parties not appearing of the date, time and place of the adjourned hearing and any other orders made. There is no evidence of compliance with that direction. 6. Accordingly, as it seems to me, the defendant does not have proper, if any, notice of the current proceedings. However, that is a matter which could still be cured by appropriate timely notice, or by service of documents with an amended return date, prior to the ultimate hearing, and would not prevent the matter proceeding. 7. On the other hand, if the creditor's statutory demand has not been effectively and validly served, then no presumption of insolvency would arise from failure to comply with it, and there would be no utility in adjourning the proceedings; thus, I now turn to the question of service of the demand. 8. The demand was also purportedly served twice. The evidence establishes, first, that, on 11 January 2016, Cassandra Lee Woods (of the plaintiff's solicitors) caused to be posted a letter, including the creditor's statutory demand dated 11 January 2016, by Express Post addressed to the defendant company at Level 1, 274 Canterbury Road, Canterbury, which, as I have said, was – at least until 12 April 2016 – its registered office. She detached the tracking sticker from the prepaid Express Post envelope and placed it on the photocopy of the letter. On or about 14 January, the documents were returned to the plaintiff's solicitor by Australia Post, marked "return to sender", with the handwritten note "RTS left address" endorsed on the envelope. Only a part of the returned envelope is included in the evidence; it reveals the handwritten endorsement, but it is not possible to see what else, if anything, appears on it. 9. Following the return of those documents in that manner, service was then attempted by delivery to Mr Elie Elia, again by leaving the document with a female person at 185 Ash Road Prestons. As it now transpires, it seems that Mr Elie Elia ceased to be a director before 20 January 2016 but, at that point, ASIC had not been so notified. Nonetheless, assuming that Mr Elie Elia remained a director for present purposes, there was no delivery of the document personally to him as referred to in s 109X(1)(b), so that would not have constituted valid and effective service of the creditor's statutory demand. 10. The question of effective service thus turns on the posting to the registered office on 11 January, from which the documents were then "returned to sender" on 14 January. A number of cases might suggest that in those circumstances there was not effective service. In Re Rustic Homes Pty Ltd (1988) 49 SASR 41; 13 ACLR 105, von Doussa J held that there was evidence of non-delivery, for the purposes of the then equivalent (CTH) Acts Interpretation Act 1902, s 29, where the summons for a winding up order had been returned by Australia Post as "unclaimed". It is not apparent from his Honour's judgment just what was involved in the concept of "unclaimed", but his Honour, referring to the equivalent of s 29, said: Service is deemed to have been effected at the time when the letter would have been delivered in the ordinary course of post 'unless the contrary is proved'. In the circumstances of the present case the contrary was proved by evidence that the document had been returned by Australia Post undelivered. 1. That judgment was followed by Gillard J in the Supreme Court of Victoria in CGU Workers' Compensation (Victoria) Limited v Carousel Bar Pty Ltd [1999] VSC 227; (1999) 151 FLR 270. In that case, a creditor's statutory demand posted to the registered office recorded with ASIC was returned to the respondent endorsed "Return to sender" and "Left address". Following and expressing agreement with Re Rustic Homes, Gillard J said (at [80]): Von Doussa J considered the question of proper service of a summons to wind up a company which was sent to the defendant's registered office and returned by Australia Post as unclaimed. His Honour following the English cases and after referring to the High Court case held that because there was non-delivery the summons had not been effectively served and it was dismissed. 1. In Re Pacific Mobile Phones Pty Ltd [2008] QSC 210; 26 ACLC 1882, White J was concerned with a creditor's statutory demand purportedly served by express post which was returned marked "Return to sender", with the option against "Left address/Unknown" ticked. After reviewing the cases, her Honour said at [23]: The respondent had done all that the Corporations legislation required it to do to register a change of address. Whilst the highest authority recognises that Part 5.4 of the Corporations Act may operate harshly, that is as a consequence of the scheme devised by the Legislature to deal promptly with debts incurred by corporations. The presumption of service will operate even if there is no receipt of the documents for it is for the corporation to maintain a satisfactory address. But proof of non-delivery to that address will rebut the presumption. I have concluded that there was no delivery of the statutory demand to the respondent at its registered address at Ultimo because of the physical impossibility of doing so. 1. In that case, the evidence was not limited to the documents being "Returned to sender", but extended to showing that the premises were inaccessible, so that it was not possible that the documents could have reached their intended destination. 2. The judgments in CGU Workers' Compensation and in Re Pacific Mobile Phones also refer to another line of authority, which descends from the judgment of Santow J in FP Leonard Advertising Pty Limited v KD Travel Services Pty Ltd (1993) 12 ACSR 136 and Re Future Life Enterprises Pty Limited (1994) 33 NSWLR 559. The essential principle which emerges from those cases is that even where there has been service in accordance with s 109X, that may not be conclusive, because it is subject to the "fair notice" doctrine referred to by Santow J in FP Leonard Advertising, and which McLelland J in Re Future Life Enterprises explained in the following terms: The qualification is that unless it is established the creditor has taken all reasonable steps to bring the demand to the attention of the company after the demand has been returned, it would be an abuse of process to bring a winding up application knowing that the demand never came to the notice of the company. But if all steps were diligently pursued by the creditor to bring the statutory demand to the notice of the company, then service would be effective and the proceeding would not be an abuse of process. 1. At first, when it appeared that the attempted service on Mr Elie Elia was on a person who was not then a director, it seemed to me at least possible that the "fair notice" doctrine might be invoked on behalf of the present defendant; but it is now clear that, at the time of service of the creditor's statutory demand, Mr Elie Elia was the only person shown on the ASIC register as a director. Thus, it could not be suggested that the creditor did not take all reasonable steps to bring the demand to the notice of the company. Accordingly, I am not concerned with the "fair notice" doctrine. In any event, as White J explained in Re Pacific Mobile Phones and Gillard J in CGU Workers' Compensation, the fair notice doctrine only arises if there has been effective service. Its operation is that, notwithstanding that there was effective service of a creditor's statutory demand, a winding up summons may be dismissed if there was no fair notice, on the basis that the proceedings are an abuse of process. 2. Thus, the sole question in this case, at least at this stage, becomes whether there was effective service. If so, the fair notice doctrine does not operate as an obstacle, at least on the material currently before me. 3. Against the cases to which I have so far referred, there are other cases which rely on the principle that non-receipt does not amount to non-delivery – the mere non-receipt by the company at the premises recorded as the registered office, and consequent return of mail "Undelivered", does not of itself prove non-delivery, and thus does not deprive a creditor of the ability to rely on s 109X. In Perpetual Nominees Limited v Masri Apartments Pty Ltd [2004] NSWSC 500, 49 ACSR 714, Austin J held that the requirement for service to be effected by post under s 109X(1) was satisfied if the address was the company's registered office at the point of time when the letter entered the mailing system. His Honour said (at [23]) that Acts Interpretation Act, s 29(1), could allow the company to prove that a demand properly addressed to its registered office was not delivered in the ordinary course of post. However, the company had not done so – its evidence establishing only non-receipt, which was insufficient to prove non-delivery. His Honour pointed to the absence of anyone on behalf of Masri having made inquiries at the relevant address to ascertain whether the document was delivered there. However, there is nothing to indicate that in that case the documents were "Returned to sender". 4. In Dwyer v Canon Australia Pty Ltd [2007] SASC 100, Debelle J (at [6]) observed that in order to establish service by post upon a company, it was necessary to prove that the letter was properly addressed, prepaid, posted as a letter and sent to the registered office of the company, and that in determining whether or not service has been or is taken to have been validly effected, there was a vital distinction between non-delivery of a document and non-receipt of it. As his Honour said (at [9]): It is not sufficient to prove non-receipt if it is intended to seek to establish that service by post has not been effected. It is necessary to establish more than a positive fact of mere non-receipt by proving, for example, that the Post Office has returned the documents. 1. In Von Risefer v Mainfreight International Pty Ltd [2009] VSCA 179; (2009) 25 VR 366, Ashley JA – with whom Beach AJA agreed – observed (at [21]): If a person avers that service of a document has been effected by post at the registered office of a company as stated in ASIC records, and if there is nothing which clearly demonstrates that the intended service has missed its target – return of an envelope containing the document with a notation "return to sender", or "not known at this address" would of itself be, I think, merely equivocal – service will be good under s 109X(1)(a) of the Corporations Act notwithstanding that the premises to which the letter was addressed are no longer in fact the registered office of the company. 1. As to the observation that "Return to sender" or "Not known at this dress" would be equivocal, his Honour added, "Something more was demonstrated, for instance, in re Pacific Mobile Phones Limited". That something more was presumably the proven physical impossibility of delivery having taken place. 2. In Deputy Commissioner of Taxation v Contracts Synergies Administration Pty Ltd [2011] FCA 743, Jacobson J was concerned with service of an originating process which had been returned to the plaintiff's solicitors, marked by Australia Post "Undelivered mail. Return to GPO box…". The envelope was also endorsed, in handwriting: "left 3 years ago". After referring to Dwyer and Canon Australia, his Honour said (at [11]): In Fancourt, there was no evidence of non-delivery nor is there evidence of non-delivery in the present case. As Debelle J said at [9], it is not sufficient to prove non-receipt if it is intended to seek to establish that service by post has not been effected. It is necessary to establish more than a positive fact of mere non-receipt by proving for example that the Post Office has returned the documents. That was the case in the decision of von Doussa J in Re Rustic Homes. 1. His Honour then observed (at [12]): The summons for the winding up of the company was returned to the plaintiff's solicitors by Australia Post as unclaimed. It seems to me that this explains the reason why von Doussa J came to the view that the documents which had been posted and returned by the postal authorities undelivered showed that service had not occurred. That is not the position in the present case. 1. His Honour said (at [17]): All that I can infer from the return of the envelope was that the originating process was not received by the company. However that does not establish non-delivery because the position here does not establish that, as in, for example Re Rustic Homes, the petition was returned by Australia Post as unclaimed. Here the handwritten notation on the envelope shows that it was delivered to the address stated. Australia Post's notation "undelivered mail" means only that the envelope was not received by the company. 1. The distinction Jacobson J sought to draw, between the case before his Honour of "Undelivered mail ... left 3 years ago", from the return of the summons "unclaimed" in Re Rustic Homes, was that in Re Rustic Homes, the document had never reached the office to which it was addressed, but had been returned by Australia Post; whereas in the case before his Honour, it had reached the address to which it was posted but returned by the occupant as the addressee was not there. That seems to be the crucial question: if it is proved that the document was not delivered to the relevant address, then "the contrary" will have been proved for the purposes of Acts Interpretation Act, s 29; but otherwise, the contrary will not have been proved, and the deeming provisions of that section will have effect. 2. Against that background, one returns to the evidence in this case, which is in short scope. The documents were returned marked "Return to sender" with a handwritten note "RTS left address" on 14 January, having been posted express post on Monday 11 January. The inference from the handwriting "RTS left address" is, as in Deputy Commissioner v Contracts Synergies, that the letter reached the intended address but was returned from there. In any event, it is not proved that they did not reach the intended address. In those circumstances, s 109X, read with Acts Interpretation Act, s 29, establishes service – at least in the absence of further evidence to the contrary. 3. In those circumstances, I would not dismiss the proceedings at this stage on the basis that they could not succeed. 4. Nonetheless, it will be necessary for proper notice of the originating process to be given to the company, and that may elicit further evidence – whether as to abuse of process or as to service – which will not be foreclosed by the decisions to which I have come to on the material presently available. 5. Accordingly, the Court orders that the originating process be adjourned to 20 June 2016 at 9.45 in the Corporation Judge Motions List. The Court grants leave to the plaintiff to amend the return date on the service copy of the originating process accordingly. The Court directs that the originating process, supporting evidence and notice of the date, time and place of the adjourned hearing be served on the defendant in accordance with the requirements of the Rules of Court for service of originating process by 6 June 2016. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 July 2017