Friday, April 15, 2011

Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186

In the matter of Anton Fabrications (NSW) Pty Ltd - Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186 (Anton Fabrications) was an hearing for the winding up of a company. The main issue was whether the creditor properly served a creditor's statutory demand (the demand).

In Anton Fabrications, a creditor served a demand on a company in respect of a loan for $500,000 said to be made by the creditor to the company. A process server purportedly served the demand in a sealed envelope addressed to the company by leaving it in the letterbox situated inside the boundaries of a residential property which was nominated as the company's registered office.

The Court noted at [17] that the company disputed the debt earlier in the proceeding by claiming that rather than it being a loan to the company, it was repayment by the creditor of a debt and remuneration to the company for prostitution services allegedly provided. Yes, bizarre. But the dispute did not centre on this because the company failed to appear at the winding up application.

The main issue for consideration was whether the company was properly served with the demand under S109X of the Corporations Act 2001 (Cth) and whether it was therefore presumed to be insolvent by reason of its failure to either pay the debt or apply to set aside the demand within 21 days of service of the demand.

S109X provides that service of a document may be effected by 'leaving it at, or posting it to, the company's registered office'. I have previously discussed service by post in my earlier article entitled 'The time of service on companies - s109X and 'deemed' service'.

In Anton Fabrications, Ward J held that service did occur and said as follows at [39]:
I am of the view that where the registered office specified in ASIC's records is a residential address (and is not a particular portion (i.e. suite or unit or room) of the building on the land denoted by that address, as would be the case if the address was a particular unit in an apartment building), then the place at which documents must be left is the house. Nevertheless, I also consider but that documents would be said to be left 'at' that house if left in a receptacle clearly intended for the purpose of receiving documents at that address (at least where, as here, the letterbox is wholly within the boundaries of the block of land and access to the letterbox is open to members of the public). 
Ward J also said at [41] that the question of service might also be tested 'by asking what would have happened had the service been effected at the registered office by post.' Adding to this, Ward J said as follows:
If the envelope had been correctly addressed to the company's registered office and sent pre-paid to that address, then the envelope would have been directed to precisely the same place where it was left by the process server - the letterbox inside the residential premises. A document so delivered to the company's letterbox would effect service under the Act.
Anton Fabrications also has a good discussion of the assessment of actual insolvency (together with appropriate citations) following on from the discussion about whether service was effected.

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