Beralt Pty Ltd v Japaul Pty Ltd [1999] QSC 340

) ) ) ) 375;2.7 s( '1C1 /3>40 State Reporting Bureau TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MUIR J No S7339 of 1999 BERALT PTY LTD AC~ 060 064 020 and JAPAUL PTY LTD ACN 077 823 459 BRISBANE .. DATE 11/11/99 JUDGMENT 1 REVISEO COP:;:.:; ISSUED IState Reporting Bureau Date b //J.. / Applicant Respondent -- 1 of 11 -- 111199 T1/RAG19 M/T 6547/99 (Muir J) HIS HONOUR: I publish my reasons. I dismiss the preliminary point. 10 HIS HONOUR: In order to be safe I reserve the costs of the application until further order. C-J 30 c _40 ( 50 GO 2 JUDGMENT -- 2 of 11 -- ) ) ) ) Applicant: Respondent: Delivered: Catchwords: Counsel: Solicitors: 313~7 SUPREME COURT OF QUEENSLAND Registry: Brisbane Number: S7339 of 1999 BERALT PTY LTD ACN 060 064 020 AND JAPAUL PTY LTD ACN 077 823 459 REASONS FOR JUDGMENT - MUIR J 11 November 1999 CORPORATIONS LAW - application to set aside statutory demand - consequences of service of demands in different states - service requirements - waiver - Corporatio/ls Law s 459G. Mr Hackett for the applicant Mr Barlow for the respondent Colwell Wright for the applicant Russell and Company for the respondent Hearing Date: 30 September 1999 (1] On 26 July 1999 the applicant, by registered post, served a statutory demand ("the demand") on the respondent at its registered office in Sydney. [2] Another copy of the demand was served on the respondent on the same day by Russell & Company, the respondent's solicitors, under cover of a letter dated 22 July 1999. The letter was addressed to- "Beralt Pty Ltd c/- James Tonge 5670 Harbour View Terrace SANCTUARY COVE 4212" -- 3 of 11 -- 2 [3] The body of the letter stated- "Creditors' Statutory Demand We act on behalf of Japaul Pty Ltd. We now enclose by way of service upon you Creditors' Statutory Demand for Payment of Debt in Form 509H together with Affidavit of Jason Paul Schoenauer. Our Town Agents in Sydney are Baker & Mckenzie, (reference: Peter Dwight). Kindly note that service is effected in accordance with the provisions of the Corporations Law." ) [4] The statutory demand (in Form 509H prescribed by regulation 1.03 of the ) Corporations Regulations for the purposes of s 459E(2)(e) of the Corporations Law) gave an address for service of the creditor as follows- "6. The address of the Creditor for service of copies of any application and Affidavit is Baker & McKenzie, Solicitors, 50 Bridge Street, Sydney in the State of New South Wales (reference:Peter Dwight), as Town Agents for Russell and Company, Solicitors, Level 8, GWA House, 10 Market Street, Brisbane in the State of Queensland." ) [5] On I 2 August I 999 an application to set aside the demand ("the application") and a supporting affidavit was served on Russell and Company at their address shown in ) the letter of 22 July 1999. That was also the address of Russell and Company set out in paragraph 6 of the demand. A copy of the application and supporting affidavit was faxed on 13 August 1999 to Baker & McKenzie at their address in paragraph 6 of the demand. [6] When the matter came on for hearing the respondent contended, by way of a preliminary point, that the application had not been served within the time required by the Corporations Law. As argument developed it became apparent that the representatives of each party had not anticipated all the arguments advanced by the -- 4 of 11 -- ) ) ) ) 3 other side. I then invited the parties to make further written submissions and my invitation was accepted. [7] The respondent contends, firstly, that an application must be served on the address for service of the creditor which is given in the demand, and which must be in the State in which the demand was served: Scandon Ply Ltd v. Dome Supplies Ply Ltd (1995) 17 ACSR 662, at 665-6, per Senior Master Mahony; Beralt Ply Ltd v. Joe Battaglia Plastering Ply Ltd (Supreme Court of Queensland, 3 September 1999, unreported), per Ambrose J. at §§ 19, 20, 36, 40.) The relevant State was, in this case, New South Wales. Therefore service at the solicitors' address in Queensland was insufficient. Alternatively, the application can be served at the creditor's registered office: The Rochester Communications Group Ply Ltd v. Lader Pty Ltd (1997) 15 ACLC 570, per Beaumont J. at 584-5; per Moore J. at 599-600; cfrules 105 and 107 for service of originating applications in this Court. But that was not done in this case. [8] Secondly, it is submitted that the documents were not served at the respondent's address for service in New South Wales in accordance with the Service and Execution of Process Act 1992 as that Act does not contemplate service by facsimile: Beralt Pty Ltd v. Joe Battaglia Plastering Ply Ltd at §§65, 68; Ultimate Manufacturing Pty Ltd v. Lyell Morris Pty Ltd (1995) 13 ACLC 1268, at 1269. [9] It is submitted on behalf of the applicant that as the statutory demand was served both in Queensland and New South Wales the applicant was entitled to elect in which forum to choose to have it set aside. It is further submitted that service on the solicitors for the respondent was service in accordance with the Rules of the -- 5 of 11 -- ) ) ) ) 4 Supreme Court and that service by fax in New South Wales of an application commenced in Queensland is permitted by Rule 14 of the Corporations (Qld) Rules. [101 The point taken by the respondent is a wholly unmeritorious one. The manner in [I 11 [ 121 which service was effected, coupled with the wording of the demand, was calculated to engender confusion. The respondent, by its solicitors, received two copies of the application and the accompanying affidavit within the 21 day period provided for in s 459G(3) of the Corporations Law. The documents delivered personally to Russell and Company, were signed for and accepted without demur. In a letter dated 1 September 1999 to the applicant's solicitors, Russell and Company stated - "We confirm that we act on behalf of J.A. Paul Pty Ltd. We currently hold instructions to accept service on its behalf at our offices." On 17 August, after receiving the faxed copy application and affidavit, Mr Dwight of Baker & McKenzie telephoned the applicant's solicitors querying why the documents had been sent to him and the necessity for the involvement of a Sydney agent. He was told that service had been effected on Russell and Company and that service had also been faxed to him "as a courtesy". [13J The respondent's assertions as to non-compliance with s 459G emerged only when the application came on for hearing. [I4J Fortunately, the respondent's contentions can be rejected. The demand was served both in Queensland and in New South Wales. Russell and Company's letter of 22 -- 6 of 11 -- ) ) .. [15] 5 July asserted that the demand was "enclosed by way of service". The way in which the letter was addressed shows that service was intended to be on the applicant, not merely on a director of the applicant. But, even so, was the applicant entitled to effect service on Russell and Company in Brisbane? Section 459G provides - "Company may apply 459G (1) [Application to set aside statutory demand) A company may apply to the Court for an order setting aside a statutory demand serVed on the company. 459G (2) [Time limit on application) An application may only be made within 21 days after the demand is so served. 459G (3) [Requirements for effective application) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company." [16] For the purposes of s 459G(3), "the person who served the demand on the ) company" is the respondent, not the respondent's solicitors, as was submitted on behalf of the applicant. That construction is consistent with the use of language in ) s 459E. I note that a similar view of the construction of s 459G(3) was expressed in Players Pty Ltd v Interior Projects (1996) 14 ACLC 918. However, the respondent nominated Russell and Company as its agent to accept service on its behalf. Having regard to service of the demand in Queensland, paragraph 6 of the demand can hardly be construed as requiring service of the application to set aside the demand on Russell and Company's town agents in Sydney rather than on Russell & Company. To reach a contrary conclusion would mean- -- 7 of 11 -- 6 (a) Accepting that the demand required service on the agents of the solicitors for the respondent rather than on the solicitors themselves. (b) (In the case of the demand served in Queensland which is the one I am presently addressing) accepting that the demand failed to comply with the requirement of Form 509H that the demand include "the address for service of the documents in the State ... in which the demand is served on the company". (c) Concluding that the application failed to specify the address of the solicitors acting for the creditor. Baker & McKenzie's role was merely that of a post box in respect of the service of documents in New South Wales. There is evidence, also, that Baker & McKenzie did not even have instructions to that limited extent. (d) Treating the inclusion of the address of Russell and Company and the description of Baker & McKenzie "as town agents for Russell and Company" as merely excess verbiage. (17) If, contrary to the views I have expressed, service of a copy of the application and a copy of the supporting affidavit were required to be served on Baker & McKenzie in Sydney, I am of the view the respondent, by its conduct, waived that requirement. Principles relevant to the waiver of statutory rights were discussed as follows by Jordan CJ in In Re Jacob Morris (Deceased) (1943) 43 SR NSW 352 at 356-7 - -- 8 of 11 -- ) ) [18] ) ) [19] 7 "It is well settled that a contract is not enforceable if its enforcement would be opposed to public policy: Mogul Steamship Company v. McGregor, Gow & Co. [1892] A.C. 25 at 39, 51. Public policy is not, however, fixed and stable. From generation to generation ideas change as to what is necessary or injurious, so that 'public policy is a variable thing .... When by statute rights are vested in persons of one category against persons of another, the question may arise whether it is contrary to public policy for those in the former category to surrcnder their rights by contract or to waive them. 'Wherever there is a question whether there can be contracting out or waiver of statutory provision, the problem must be solved by a consideration of the scope and policy of the particular statute': Admiralty Commissioners v. Valverda [1938] A.C. 173 at 185 .... 'Where in an Act there is no express prohibition against contracting out of it, it is necessary to consider whether the Act is one which is intended to deal with private rights only, or whether it is an Act which is intended, as a matter of public policy, to have a more extended operation': Soho Square Syndicate Limited v. E Pollard & Co. [1940] Ch. 638 at 644. 'Everyone may waive the advantage of a law made solely for the benefit or protection of him as an individual in his private capacity, but this cannot be done if the waiver would infringe a public right or public policy': Bowmaker Limited v. Tabor [1941]2 K.B. 1 at 6." In considering the provisions of the Limitation of Actions (Personal Injury Claims) Act 1983 (Vic) Mason C] in The Commonwealth v Venvayen, supra, said at 405. "On the footing that the right to plead the statute as a defence is a right conferred by statute, the respondent's contention that the right is capable of waiver hinges on the scope and policy of the particular statute: Admiralty Commissioners v Valverda (Owners) [1938] AC 173, at p 185. The issue is not whether the relevant provisions are beneficial to the public, but whether they are 'dictated by public policy' and enacted 'not for the benefit of any individuals or body of individuals, but for considerations of State' ... Although in one sense, all statutes give effect to some public policy ... , the critical question is whether the benefit is personal or private of whether it rests upon public policy or expediency: Brown v The Queen (1986) 160 CLR 171, at p 208." The provisions as to mode of service in s 459G(I) and in the Regulations are for the benefit of the maker of the statutory demand. That may be seen, inter alia, from the right conferred on that entity to select the address for service to be inserted in the -- 9 of 11 -- ) ) ) ) 8 demand. The mode of service, as opposed to the time for service, is not prescribed in s 459G. That tends to suggest that mode of service is not as fundamental to the operation of the statutory scheme as is time for service. [20] The fact that the provisions dealing with mode of service are procedural rather than substantive in nature also suggests that they are capable of waiver: The Commonwealth v Verwayen (1990) 170 CLR 394 at 406 per Mason CJ. Although an object of the statutory provisions under consideration is to achieve simplicity and promote certainty (David Grant & Co Ply Ltd v Westpac Banking Corporation (1994-1995) 184 CLR 265 at 270-271), there is nothing in those provisions which expressly, or by necessary implication, excludes equitable remedies or principles: c.f. David Grant & Co Ply Ltd at 279 and Rochester Communications Group v Lader Ply Ltd (1997) 15 ACLC 570 at 592. [21 1 It is not necessary for present purposes to distinguish between the doctrines of waiver, election or estoppel. The facts are sufficient to establish a right on the part of the applicant on any such basis. It is probable, however, that what occurred here is best treated as a waiver of a procedural matter of the nature discussed by McHugh J at 497 of Verwayen. [22] If I had not reached the conclusion that service of the application had been duly effected, I would have been disposed to set aside the demand under s 459J on the basis that there was a defect in the demand giving rise to substantial injustice unless it were set aside. Alternatively, I would have set aside the demand under s459J(I)(b) on the basis that the respondent's inappropriate conduct had caused the applicant to act to its prejudice, through no fault of its own. -- 10 of 11 -- ) ) ) ) 9 [23J Having regard to these conclusions, it will be necessary to determine whether, on the material before me, the applicant has disclosed a case of merits. -- 11 of 11 --