Case: Livestock Traders International Pty Ltd v Bui (1996) 22 ACSR 51
Outcome: followed
Section 459F(2) provides that, where application is made under s 459G to set aside a statutory demand, the "period for compliance with [the] statutory demand" is, if the Court "makes an order that extends the period for compliance with the demand", the period specified in the order of the Court (s 459F(2)(a)(i)) ; or "otherwise ... the period beginning on the day when the demand is served and ending 7 days after the application under s 459G is finally determined or otherwise disposed of [(s 459F(2)(a)(ii))]". The word "otherwise" in s 459F(2)(a)(ii) is a "laconic" expression of the condition that none of the conditions in s 459F(2)(a)(i) has been fulfilled: see Livestock Traders International Pty Ltd v Bui (1996) 22 ACSR 51 (" Livestock Traders ") at 53. Once one of these conditions in s 459F(2)(a) is fulfilled here, by the registrar's making of the order extending the time for compliance then s 459F(2)(a)(ii) can have no operation. Jenkinson J reached the same conclusion in Livestock Traders where, as in this case, a registrar of the Court dismissed an application to set aside a statutory demand and extended the time for compliance with the demand. There was no compliance with the demand within the extended time, although there was an application on foot to review the registrar's decision. His Honour held at 53, that "once an exercise of the power to extend the period for compliance has occurred no operation is left to subpara 459F(2)(a)(ii)" of the Corporations Law as it then was. This provision is identical to s 459F of the Corporations Act . His Honour said, also at 53, that "[t]he use of the word 'otherwise' in that subparagraph ... compels that conclusion". I agree. 48 Upon G &amp; J Gears' application, the Court would have had power to extend time further at any time after the registrar made the order extending time until the expiry of that time. It would have been open to the company to have made such an application before the end of this period had there been grounds, but it did not do so: see Equuscorp at 701 per French, Kiefel and Sundberg JJ; Graywinter Management Pty Ltd v Deputy Commissioner of Taxation (1996) 22 ACSR 636 at 638 per Finn J; Shakespeares Pie Co Australia Pty Ltd v Multipye Pty Ltd [2005] NSWSC 1201 (" Shakespeare Pie ") at [7] per Barrett J; Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877 (" Australian Beverage Distributors ") at [12] per Barrett J; and Livestock Traders at 54. Once the time for compliance has passed, however, the Court has no such power. 49 This limitation upon the power to extend time is implicit in the terms of ss 459F and 459C . Section 459F(1) operates to fix the time when a company on which a statutory demand has been served is taken to fail to comply with the demand. The significance of a failure to comply with a statutory demand is the subject of s 459C(2)(a) , which provides that the Court must presume that a company is insolvent if, during or after the 3 months ending on the day when the application is made, the company fails to comply with the statutory demand. The effect of ss 459F(1) and 459C (2)(a) is that the Court can only make an order under s 459F(2)(a)(i) extending the time for compliance prior to the end of the period for compliance, i.e., before the company is presumed to be insolvent. Within this period, an order extending the time can be made where a s 459G application has been rejected and that rejection is the subject of review or appeal. This is now well-settled: compare Vista Commercial Construction Pty Ltd v Deputy Commissioner of Taxation (1997) 25 ACSR 285 at 293 per Burchett, Hill and Emmett JJ; Graywinter Management Pty Ltd v Deputy Commissioner of Taxation (1996) 22 ACSR 636 at 638 per Finn J; Graywinter Properties Pty Ltd v Dyer (1997) 15 ACLC 302 at 306 per Ryan J; Buckland Products Pty Ltd v Deputy Commissioner of Taxation [2003] VSCA 85 (" Buckland Products ") at [8] per Phillips JA; Shakespeares Pie at [7] per Barrett J; and Australian Beverage Distributors at [5] per Barrett. As Jenkinson J said in Livestock Traders at 54, ss 459F and 459C (2)(a) of the Corporations Law "premise unalterability of the time as at which a company is to be taken to have failed to comply with a statutory demand once the period for compliance has ended at a time when the demand is still in effect". This is equally true of the equivalent sections of the Corporations Act . The power to extend time after the end of the period for compliance would introduce a degree of uncertainty incompatible with the statutory regime: see also Buckland Products at [8] per Phillips JA. 52 Once G &amp; J Gears is taken to have failed to comply with the statutory demand and to be insolvent, the application to set the demand aside is fruitless and the application to review the registrar's decision, nugatory: compare Livestock Traders at 55. As Phillips JA said in Buckland Products at [9]: "If the company was wishing to appeal it could do so, but unless the appeal was heard and determined before the expiry of the period for compliance otherwise fixed, an extension of the time for compliance had to be obtained. Without it, there could be no point in the continued prosecution of the appeal, for, the period of compliance having ended before the appeal was heard and determined, the consequence prescribed by s.459F(1) attached, with all that followed under the statute." 53 It follows from what I have said that, strictly speaking, it is unnecessary to consider whether an application under s 459G is "finally determined or otherwise disposed of" by the registrar's determination that the application should be dismissed. I would observe, however, that there was nothing put in argument that would lead me to differ from Jenkinson J, who said in Livestock Traders at 53, that he was "inclined to think that 'the application is finally determined' when an order determining the application is made, notwithstanding that the order is, if made by a registrar, reviewable, and that the order is, if made by the court, subject to appeal." See also Buckland Products at [5]-[9] per Phillips JA. 54 In view of this conclusion, it is also strictly unnecessary to consider whether there was any error in the registrar's decision. But as this was the subject of extensive argument, I set out my views briefly.