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[2020] QSC 165
This case considered whether an application to set aside a statutory demand had been filed and served in accordance with s 459G of the Corporations Act 2001 (Cth). Notably, that provision required service of a copy of the application as filed within 21 days of receipt of the statutory demand. In this case the applicant did not receive a copy of the application as filed from the Court Registry, bearing the seal of the Court (or any hearing details), because of disruptions caused by the COVID-19 pandemic until after 21 days had passed. Despite the harshness of the result, Crow J concluded that a copy of the application had not been served in accordance with s 459G.
Crow J
11 June 2020
Background
On 26 February 2020, the respondent served a creditor’s statutory demand on the applicant in accordance with s 559E Corporations Act 2001 (Cth). [7]. On 17 March 2020, the applicant filed an application and supporting affidavit to set aside that demand, pursuant to 459G Corporations Act 2001 (Cth). [9]. However, due to disruptions to registry practice brought about by the COVID-19 pandemic, the applicant did not obtain a sealed copy of the application, with a date affixed for hearing, until 6 April 2020. [9]–[11]. Instead, the applicant’s lawyers emailed an unsealed copy of the application without a date for hearing, along with a receipt of filing, to the respondent’s solicitors on 17 March 2020. [10].
The question was whether service had been properly effected pursuant to s 459G Corporations Act 2001 (Cth) and whether the court was now able to determine the application to set aside the statutory demand.
Corporations Act 2001 (Cth) requirements
Section 459G relevantly provides that an application to set aside a statutory demand is only made in accordance with the section if, within a period of 21 days following receipt of the demand, the application and a supporting affidavit filed and “a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company”. [14]. In David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, Gummow J said that this provision defined “the jurisdiction of the court by imposing a requirement as to time as an essential condition” of the right to seek the setting aside of a statutory demand. [15]. Accordingly, the provision “might operate harshly”. [15].
As to the meaning of service of “a copy of the application”, Crow J reviewed a number of authorities which indicated that this would not be achieved if the document served “failed to reflect the original application in a matter of substance” (per Holmes J, as her Honour then was, in LJAW Enterprises Pty Ltd v RJK Enterprises Pty Ltd [2004] QSC 134). [25]–[29], [32].
The Court’s conclusion
His Honour observed that on the “orthodox application” of the authorities, the failure to serve a copy of the application with a date set for the hearing, within the 21 day time period, had the consequence that the “court does not have jurisdiction to entertain the application as s 459G(3) is not satisfied”. [30]. That was the case here, as the copy of the application emailed to the respondent’s solicitor did not include those details. The registry had been unable to affix details of the hearing date because of impacts on the Court’s calendar due to the COVID-19 pandemic. [33].
Further, his Honour also noted that while it was not necessary for the document served to be “an exact replica” of the one filed, here “the document served was different from the document filed as it omitted the date of filing stamp and the receipt stamp”. [64]. In his Honour’s view, that meant that the copy served was not a “sufficient copy”, as those details provided “the only indication that the application had in fact been filed” and that “curial proceedings had commenced”. Communication of those details was an underlying purpose of s 459G. [62], [64].
Notably, statutory relief provided by the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) was of no assistance here, as the extension permitted by that legislation only applied to statutory demands served on or after 25 March 2020. [44]. Similar Queensland legislation was of no assistance because that only provided a discretion to modify or extend a time period under a Queensland Act (which was not the case here). [42].
In the result, the application to set aside the statutory demand was dismissed. [65].
W Isdale